Download Performance Measurement and Incentive Systems in Purchasing: by Erik Hofmann PDF

By Erik Hofmann

In recent times, buying functionality size have progressively won in significance in thought and perform. but, in lots of instances, the point of interest nonetheless is still on rate goods, specially discount rates. additionally, said functionality ratios in buying are often referred to as into query by way of their quantity and efficacy. as a rule, there is not any tie-in in any respect with employees compensations. to fulfill those and different demanding situations, this booklet provides a holistic procedure for buying functionality dimension and the motivation platforms linked to it. the next themes are handled intimately: • procuring functionality size at the point of commodity teams and the procurement association • provider review and function size at the point of the buyer-supplier dating • finished platforms for getting functionality size, reminiscent of the procurement worth further and the deciding to buy balanced scorecard • Performance-oriented incentive platforms and bonus funds for purchasers, procurement organisations and providers Readers are therefore supplied with finished instructions for the implementation and consciousness of sustained functionality dimension and incentivization in paying for.

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Furthermore, the calculation must also take into account that fast obsolete commodity groups, such as computers, cannot be directly compared since newer versions will generally provide higher performance or service. Re-specifications of requisitions may also result in savings or price increases. Thus changing to a supplier with better delivery periods may result in a reduction of inventories and thus tied-up capital. 8 Moreover, the market development is left out of account in this method. The application of the period-to-period comparison method also shows direct savings or, respectively, price increases in the P&L account.

With regard to value and the quantities to be procured, B-commodity groups are between the A- and C-commodity groups. • X-commodity groups stand for constant consumption and must be accordingly regularly procured. Z-commodity groups are subject to major fluctuations in demand and procured rather rarely. The demand of Y-commodity groups fluctuates within a limited scope; for example, where the production of seasonal goods is concerned. Consequently, rarely procured commodity groups which cannot be planned ahead are not in the direct focus of optimization, although this is not impossible as such.

For these goods as well, suitable methods for performance measurement are to be selected and used. 2 Methods for Performance Measurement on the Commodity Group Level To be able to measure performance in purchasing, methods should be developed and implemented in the company which are able to comprehensively determine and evaluate the performance of employees. This should take into account both savings and successful performances which are reflected in the profit and loss account as well as those not reflected in it.

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