Tool for Purchasing Positioning – Assessment of Purchasing Maturity and Performance Level

Abstract

This article provides a practical approach to evaluate the performance level of a purchasing organization before (ex ante) and after (ex post) the execution of a cost optimization project.

A purchasing organization is often questioned, when performance (output) is not provided at the expected level (for example poor EBIT contribution). Provided there is a connection between performance level and the positioning of a purchasing organization, the interesting questions are: which aspects influence the performance level (output) and subsequently how can the effectiveness (input) of a purchasing organization be measured.

The aim of this paper is to examine an applicable positioning tool, that helps to analyse and assess performance level and supports the selection of appropriate and tangible measures for sustainable cost optimization as an integrated tool of a cost optimization approach in the analysis phase.

The utilized methodology considers an internet and literature research of typical evaluation methods and approaches, authors observation and synthesis of knowledge.

Based on the research and subsequently logical reasoning a positioning tool is derived. Initially two formulated hypotheses are tested and confirmed through the application of the tool in three executed cost optimization projects and finally validated by semi-structured interviews with six purchasing experts.

More accurate and precise evaluation of a purchasing organization prior to execution of a cost optimization project could lead to a better selection of cost optimization approaches and can help to reduce waste of time, capacity and expenditures. Assessment after project closure help to demonstrate the lift in performance.