BUSINESS SEMINAR: SELLING & SOURCING & PURCHASING IN INDUSTRIAL BUSINESS
SELLING & SOURCING & PURCHASING IN INDUSTRIAL BUSINESS
Sourcing of product suppliers, procurement and purchasing in industry are extremely important elements of modern business. Companies may routinely purchase up to 60- 80% of their total turnover from various kinds of supplier companies. Main companies have their own supplier manuals. Even the last and smallest seller must conform to these requirements. Procurement departments of companies manage 60% of purchases in industry and energy sectors. The number of suppliers may be in hundreds or even in thousands of companies. Excellent product and delivery quality is a “must”. Products must meet certifications and required standards, like ISO, QHSE, GOST-R, etc. Company level procurement and quality standards for deliveries are an increasingly routine requirement. It becomes almost impossible to enter as seller of products without meeting the set requirements. A very substantial development in this respect has taken place worldwide recently in 2014-2015. Methods and principles among the leading industrial companies are quite similar.
Since the 1980`s the procurement and sourcing functions have developed substantially. Early phases were matters like Tier-1, -2 and -3 systems, quality, total productivity, just-on-time, etc approaches. E-commerce and E-procurement with internet and electronic communication has revolutionized sourcing and procurement to an entirely new level. This phase is now in progress and settling permanently in business. For instance NOKIA requires that its suppliers must have a supplier base strategy. OUTOTEC reports that it purchases practically 100% from a wide base of suppliers. STATOIL`s procurement has 12.000 supplier companies and their share of deliveries is 60-95%. BECHTEL`s annual procurement is US$ 18 Billion worldwide. Leading companies have their own supplier approval processes. Excellent examples are companies in international automotive and air & space industries with tens of thousands of supplier companies involved.
This seminar will clarify the present situation and future practices of sourcing, procurement and selling in industrial business. The impact will be actually the very same to all and any branches of business. This will concern all sizes of companies, both nationally and internationally. A very important background matter to companies is the reduction of companies risk of litigation: court cases and penalty payments: a key aspect in QHSE-matters in all branches of energy industry and petrochem (quality, safety, health, environment). Company`s positioning in the supply “feeding chain” network is critically important: “where are you in the feeding value chain”. Getting into an “Approved Vendor List AVL” is a key factor of business success to small and medium sized companies
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