By Laura H. Baldwin
To aid the Air strength within the strategy of altering how it purchases providers, this record studies comparable advertisement quarter practices and indicates metrics to trace growth and refine prone procurement efforts over the years.
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For example, cost analyses are reportedly more difficult for services because there are fewer models for the total cost of ownership and fewer formal training opportunities for service acquisition activities. 2 Two important dimensions of this approach that are discussed as best practices in the literature and implemented by the well-respected practitioners who were our interviewees are (1) the use of “commodity councils,” which are centralized cross-functional teams, to develop and implement optimal purchasing and supply management strategies that are linked to corporate objectives for some categories of services and (2) the application of performance metrics.
To counteract maverick buying, one of our interviewees reports the most serious cases—and their associated costs—to top management in order to obtain management’s support in aligning customers’ actions with the corporate strategy. Some firms also implement internal surveys to assess satisfaction with the purchasing organization. Surveys are conducted on a periodic basis such as semiannually. One interviewee suggested that the optimal range for customer satisfaction with purchasing was 80 to 90 percent.
These surveys can be conducted in-house by the buying firm or by a third party. Third-party surveys ensure confidentiality and may encourage more-honest responses from suppliers. Supplier surveys can be costly for both the buying firm and suppliers. One interviewee indicated that the firm’s survey cost approximately $200,000 to construct and implement. These surveys can be very time-consuming for buyers and suppliers as well. To minimize the financial and time costs, the firms conduct supplier surveys only annually or biennially.
Air Force Service Procurement: Approaches for Measurement and Management by Laura H. Baldwin