Streamlining Purchasing Processes and Maximizing Savings Potential: A Procurement Plan for City Global Bank

QUESTION

You have just been hired as a Procurement Consultant for City Global Bank (CGB), which has 15 branches in Canada,
OGB is growing at a rate of over 20% annually with its exceptional customer service and financial solutions, especially in unavoidable unplanned circumstances. The head office is located in Ottawa, and each field office has a branch manager who is solely responsible for the profit and lass of its branch Their goals are aggressive and focused on achieving revenue.
All branches meet or exceed the budget each year.
Costs are rising at the same rate, which is not a good sign.
With the increase in business volume, the corresponding savings have not been realized. There’s a general feeling…”Wt we need it, well buy t*_.
There are cases of maverick and rogue buying, often with a lack of focus on the total cost of ownership (TCO)
CGB has a cantral supplier or management department, but the purchasing function is not centralized.
As a consultant, you have been given a complete travel and expense budget and have a 4-month period to develop a future purchase plan. The CEO is willing to centralize the purchasing activities of all 20 branch offices to the headquarters for all purchasing in Canada.
Any future proposals would also have to allow the 15 branches not to be hampered by new processes that could distract them from their goal of hitting revenue profit targets,
Accountants (centralized at headquarters) said that 70 percent of paid invoices were from similar suppliers, and in many cases, all 20 branches purchased the same products and services.
At least ten branches have warehouses, albeit of different sizes, with similar material handling equipment. The remaining 5 shared warehouses because they are all in big cities and close to each
other.
Accounting advice from an accounting perspective, they have eight excellent, “accounting role models and 5 “disaster” branches. There is a clear opportunity for improvement in accounting advice balances The accountants were amazed that they were doing well in meeting their profit targets and thought it
had a lot to do with a sound economy and cost control.
You have a total travel budget and per diem, and you have four months to complete your future stat advice: (minimum 2-page, single space).
1. Outline the steps to understand the current state or “as is” of the 15-branch purchasing process?
2. Who will you meet and consult to understand current savings potential and develop future budget goals?

ANSWER

Streamlining Purchasing Processes and Maximizing Savings Potential: A Procurement Plan for City Global Bank

Introduction

As the newly appointed Procurement Consultant for City Global Bank (CGB), tasked with centralizing purchasing activities for all 15 branches in Canada, my objective is to understand the current state of the purchasing process and identify opportunities for improvement. This essay outlines the steps to assess the existing purchasing procedures and highlights the key stakeholders to be consulted in order to develop future budget goals and achieve maximum savings potential.

Understanding the Current State or “As Is” of the 15-Branch Purchasing Process

To gain a comprehensive understanding of the current purchasing process, the following steps will be taken:

a) Gathering Documentation: Collect all relevant documents, including purchase orders, invoices, contracts, and expense reports, to analyze the existing purchasing patterns and supplier relationships.

b) Conducting Interviews: Engage in interviews with branch managers, procurement personnel, accounting staff, and other relevant stakeholders to gather insights about their procurement practices, challenges, and goals.

c) Process Mapping: Create a visual representation of the current purchasing process, identifying key activities, decision points, stakeholders involved, and any bottlenecks or inefficiencies.

d) Analyzing Data: Evaluate historical purchasing data, expenditure reports, and supplier information to identify patterns, duplicate purchases, and potential areas of cost reduction.

e) Identifying Maverick Buying: Investigate instances of maverick and rogue buying, documenting the reasons behind such behaviors, and assessing their impact on the organization’s financial goals.

Stakeholders to Consult for Understanding Current Savings Potential and Developing Future Budget Goals

To gain insights into the current savings potential and establish future budget goals, it is crucial to engage with the following key stakeholders:

a) Branch Managers: Meet with branch managers individually to understand their profit targets, revenue goals, and challenges faced in meeting their objectives. Discuss their purchasing requirements, preferred suppliers, and their perspective on cost control.

b) Procurement Personnel: Consult with procurement staff at each branch to analyze their purchasing practices, supplier selection criteria, and their understanding of total cost of ownership (TCO). Identify their current challenges, concerns, and opportunities for improvement.

c) Accounting Department: Collaborate with the central accounting department at the headquarters to gain an in-depth understanding of the financial aspects related to purchasing. Discuss the accounting team’s assessment of cost control, accounts payable, and the potential for streamlining processes.

d) Suppliers: Engage in discussions with the existing suppliers to understand their relationship with CGB, negotiate better terms, identify potential volume discounts, and explore opportunities for strategic partnerships.

e) Warehouse Managers: Meet with warehouse managers to assess the inventory management practices, stock levels, and identify any duplication or excess inventory. Discuss potential consolidation of warehouses and streamline material handling equipment.

Conclusion

By following the outlined steps to understand the current state of the 15-branch purchasing process and consulting with key stakeholders, a clear understanding of the existing challenges and opportunities for improvement can be gained. With insights from branch managers, procurement personnel, accounting professionals, suppliers, and warehouse managers, it will be possible to develop a future purchase plan that centralizes purchasing activities while ensuring minimal disruption to revenue generation and profit targets. The ultimate goal is to maximize savings potential, achieve cost control, and enhance efficiency across all branches of City Global Bank in Canada.