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Having the wrong purchasing channel for a commodity can lead to some funky results: Let's take office supplies as an example ✏📝🖱🖨 The optimal purchasing channel for 'Office supplies' is a catalog connected to your Purchasing system. This allows you to: — Facilitate supplier price audits — Control the scope of items offered — Improve reporting on office supply usage — Remove the need for expense reconciliation — Remove the need for price maintenance in your system — Enforce minimum order amounts given by suppliers (e.g. 50$) BUT, if you let people expense their purchases directly because it's "easier" than setting up catalogs, you can get some interesting results! For example, this Burger joint changed the name of their products to office supplies so employees could order food, get an office supply receipt and expense it. If only we were as creative when solving problems as we are when trying to bypass rules 😅 Source: Good Fortune Burger, 2021 P.S. What's the cheekiest purchasing process bypass you've seen? Let me know in the comments 👇 ________ If you liked this, press the 🔔 on my profile and consider subscribing to my newsletter. It's all about how to best leverage technology in your Procurement processes. Join 1,600 Procurement professionals: https://lnkd.in/ef_NUKza

Satınalma Akademisi A.Ş. TOTAL COST (TC) Nowadays, marketplace, where every penny on a count, requires an innovative approach to spending funds and optimizing results. While we all seek the best prices on the needed items, it’s not always easy to determine whether the price was truly money well spent, leaving us to wonder “How much money did we actually spend on this purchase? Is there any unforeseen trap for the company and exactly what that entails, including potential hidden, ongoing and opportunity costs?”. This very question is at the heart of why we must look at the importance of total cost. TC is a methodology in procurement for calculating all the costs associated with a particular purchase over its entire lifecycle. It provides a comprehensive picture of the true cost of a purchase which enables to make more informed decisions in terms of sourcing and procurement. The costs include not only the initial purchase price but also any costs associated with maintenance, repairs, upgrades, and disposal. We can categorize the TC into four categories:  Procurement costs: The amount paid to the supplier for the product or equipment.  Acquisition costs: The cost of delivering the product or equipment to the customer.  In-use costs: The cost of converting the purchased item into the finished product and through its useable life. End-of-life costs: Costs associated with the end of a product's or equipment’s usable life, such as disposal costs. Taking into account the aforementioned points we can begin the market research and draw up suppliers’ shortlist in terms of “cost quality”. Afterward, based on the formula below, move to the negotiation process with selected suppliers to optimize the cost of the product: Total Cost (TC) = Total fixed cost (TFC) Total variable cost (TVC) Where, TFC=Costs that do not depend on the amount of goods to be produced. TVC=Costs, depending on the amount of goods to be produced.  Example: For our residential building project, the construction site sent an order for the partition doors for the first 3 floors. Based on the order we met with the technical office and quality control team to draw up the technical specifications of the necessary product. After determining the requirements begins market research - the RFQ process. At the end of the research we created a shortlist of the best suppliers. Being aware of the expenses which create the TC, negotiating with the construction site and technical office, we should determine the number of doors for the whole project. Then set a meeting with the shortlist suppliers and discuss their price offer for the revised quantity of items for cost savings – optimizing/decreasing the TC of the order. With an increase in the number of doors, due to a decrease in Variable Costs, i.e. costs for the development of production drawings, electricity,transportation,wages for production workers, as well as material savings per unit of product, the cost of doors is significantly reduced.

Some humorous takes on types of procurement: 1. **Impulse Procurement**: When you buy something you didn't need just because it looked cool or was on sale. "I definitely needed that inflatable unicorn, right?" 2. **Procrastination Procurement**: Waiting until the last minute to buy supplies, then frantically rushing to get them. "Whoops, I guess I should have ordered those office supplies before the meeting started!" 3. **Mystery Box Procurement**: Ordering something online and being surprised by what actually arrives. "I thought I was getting a set of pots and pans, but I ended up with a miniature garden gnome collection!" 4. **DIY Procurement**: Attempting to make something yourself instead of buying it, usually resulting in questionable quality. "I tried to save money by making my own furniture, but now I have a chair that looks like modern art." 5. **Ninja Procurement**: Sneakily acquiring office supplies from other departments without anyone noticing. "Shh, don't tell anyone, but I've been borrowing paperclips from accounting for weeks." Remember, while these are humorous takes, it's always best to stick to responsible procurement practices! J.A.

Understanding #RFP #procurement in 7 simple steps: https://hubs.la/Q02fDtXY0

5️⃣ steps to get visibility and control of your construction project costs at every stage using LiveCosts. Here's how: ➕ Just tell LiveCosts what materials you need for your project, and LiveCosts will instantly find you the best prices from your supplier history. ➕ Flip those Quotes into Purchase Orders with 1 click - no more ringing around suppliers. ➕ When those materials are delivered to site, LiveCosts will track those deliveries and catch if you've been sent the wrong quality or quantity of what you ordered. ➕ When the Invoices start coming in, LiveCost will match them against your Purchase Orders and Deliveries, so you'll never be overcharged for a material cost again. Take a free 14-Day free trial of LiveCosts here: https://hubs.li/Q02hXWtd0 #Construction #ConstructionCosts #RFQ #Procurement #POs #PurchaseOrders #Invoices #Deliveries #Xero #Sage #QuickBooks

5️⃣ steps to get visibility and control of your construction project costs at every stage using LiveCosts. Here's how: ➕ Just tell LiveCosts what materials you need for your project, and LiveCosts will instantly find you the best prices from your supplier history. ➕ Flip those Quotes into Purchase Orders with 1 click - no more ringing around suppliers. ➕ When those materials are delivered to site, LiveCosts will track those deliveries and catch if you've been sent the wrong quality or quantity of what you ordered. ➕ When the Invoices start coming in, LiveCost will match them against your Purchase Orders and Deliveries, so you'll never be overcharged for a material cost again. Take a free 14-Day free trial of LiveCosts here: https://hubs.li/Q02hXWtd0 #Construction #ConstructionCosts #RFQ #Procurement #POs #PurchaseOrders #Invoices #Deliveries #Xero #Sage #QuickBooks

I’m just going to leave this video here... join me on my #categorymanagement quest. 😉 Purchase your copy of 5th edition Category Management in Purchasing from Kogan Page Publishing - use code SM5CM20 for 20% off! https://lnkd.in/efhrn4GJ. #digitalcategorymanagement #digitization #procurement #purchasing

Exciting update from Plexa! 🚀 Check out our new feature: Digital PO Books for Construction Procurement. Simplify your procurement processes, increase transparency, and control costs effectively. Learn more in our latest post! #ConstructionTech #Procurement #DigitalTransformation