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Procurement Excellence Monitor

While purchasing spending is a significant share of total revenues, many companies do not fully embrace it as an important value lever. But when organizations carefully examine how they approach procurement, improving performance can often result in material cost reductions.

BCG’s Procurement Excellence Monitor (PEM) helps organizations assess their internal processes, policies, governance, tools, systems, and practices to identify areas for improvement. It also provides clients with analytical tools and reports, as well as peer benchmarks—everything you need to understand your procurement performance and how to improve it.

Five Pillars of Procurement Excellence

BCG’s PEM tool analyzes five core dimensions that drive excellence in procurement.

  • Strategy and Role. What is your overall procurement strategy? What is its role within the company, and does it comply with mandates, policies, and governance requirements?
  • Organization Design. Does the organizational structure adequately support procurement processes and interfaces?
  • People. Does your procurement team have the necessary skills and training? Is talent effectively allocated? Is your team motivated to pursue procurement excellence?
  • Tools, Metrics, and Systems. How are you measuring procurement excellence? Do you have adequate support systems in place?
  • Value Delivery. How well does your company perform in specific categories? How well are your supplier relationships managed?

After this analysis is complete, PEM results can be used to develop a detailed assessment report showing how your current procurement performance compares to industry best practices as well as the rest of the company, industry peers, and a geographical average. It will also highlight where internal alignment regarding procurement’s performance exists, as well as gaps to close. The assessment report also recommends specific actions that can help achieve a higher level of sustainable excellence ranked by priority.

Real Results

23 twenty three percent annual savings in purchasing volume financial services telecom

PEM has helped clients achieve a 23% annual savings in purchasing volume within financial services and telecommunications sectors.

22 twenty two percent annual savings purchasing volume pharma health care

PEM has helped clients achieve a 22% annual savings in purchasing volume within pharmaceuticals and health care sectors.

20 twenty percent annual savings purchasing volume retail energy utilities

PEM has helped clients achieve a 20% annual savings in purchasing volume within retail, energy, and utilities sectors.

Procurement
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