The Argument for a Centralized Procurement Strategy

It's important to get as much spend as possible under procurement's control rather than scattered in the departments where it is handled locally.  The following arguments can be used to try to convince senior management of the wisdom of this approach.

1. Personnel in local departments who spend time on procurement activities are doing so at the expense of their primary goals.
2. Procurement personnel are trained in cost savings, negotiation and contract management, and should be able to get lower prices and better service than employees in local departments who are experts in their own areas.
3. Procurement personnel have exclusive access to tools such as eSouring systems.
4. Procurement professional  are skilled at sourcing alternatives, and then guiding the the organization to select the best option. Internal customers are more likely to select the first supplier found, and this can lock the organization into a sub-optimal arrangement for years.
5. Procurement  works with all internal departments and so they are aware of enterprise-wide needs.  They can leverage aggregated volume to achieve lower costs, minimize inventory, and avoid products that have previously been shown to be less than satisfactory.
6. Suppliers have been known to charge different prices to different departments within the same organization. Having a centrally-led approach can avoid this practice, and ensure that all departments are benefitting from the organization's leveraging power.

Adapted from:What Justifies An Increase In Purchasing's Scope?  by Charles Dominick http://bit.ly/9Hf7n0