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The role of purchasing departments in modern companies extends beyond simple order fulfillment and cost control. The pandemic has amplified the purchasing function within organizations, and now there is a strong emphasis on generating "value." But what exactly does this "value" entail, and how does it relate to industrial automation and the effective sourcing of control system integrators?

While keeping costs under control remains a primary responsibility of buyers, modern organizations recognize and consider the benefits of partnership relationships with business partners and the long-term advantages, including:

• Increased Production and Process Efficiency: Streamlining operations to maximize output and minimize waste.
• Cost Reduction: Achieving both short-term and long-term financial savings through strategic sourcing and negotiations.
• Innovation: Leveraging the latest technological advancements to stay competitive and drive growth.
• Improved Safety: Ensuring that all systems and processes adhere to the highest safety standards, protecting both workers and equipment.
• Risk Minimization: Reducing sourcing and investment risks through diversified and reliable suppliers.
• Optimal Project Management: Efficiently managing projects to ensure they are completed on time and within budget.
• Timeliness: Ensuring that all procurement activities and project completions adhere to strict timelines.

Directs,  CAPEX, Value

The role of direct procurement and capital expenditures (CAPEX) departments in manufacturing firms is undeniably strategic. From greenfield projects to ensuring production continuity and implementing development projects to enhance efficiency, their activities are crucial. Their work, based on close collaboration with the engineering or production departments, increasingly focuses on generating value for the entire organization beyond just cost considerations.

By maintaining constant contact with the external world and units outside the organization, purchasing departments naturally become conduits for the latest technological innovations, solutions, and tools directly from competing suppliers. This external engagement allows them to bring in cutting-edge advancements that can significantly benefit the organization.

Suppliers as a Source of Value in Manufacturing Companies

The role of suppliers in the process of generating and contributing value to organizations has long been discussed. However, value doesn't necessarily come solely from groundbreaking innovations. The potential lies in minor adjustments, improvements, and particularly, in the case of manufacturing companies, stability, timeliness, reliability, and expertise.

Let's be honest with ourselves. Ultimately, financial results, costs, and savings matter. However, in the pursuit of short-term targets, significant long-term costs can arise. Oversights, unforeseen requirements, component shortages - the supply in many purchasing categories can be severely limited. An ideal supplier is one that provides us with quick wins and ensures strategic security and stability in the long term. Ultimately, this translates into financial results and KPIs.

Read on in our specialized compendium of knowledge on value in procurement and control system integrators.