ePerhaps the single most important tool to determine the effectiveness of your Purchasing Department is by benchmarking. HRH Partners has used benchmarking extensively and continues to rely upon this as the cornerstone of its consulting practice. By benchmarking, we mean comparing your current prices, service level, payment terms and inventory arrangements to your industry peers. Any negative discrepancy must be addressed immediately.
Often, companies compare their purchasing prices to a budget that has been set based on historical prices paid. This is a mistake. Purchasing prices must be benchmarked against the latest market prices and trends. Performance bonuses and finished goods pricing must reflect actual market prices. Purchase Price Variances should be measured against the lowest market prices, not what was paid last year.
HRH Partners thoroughly investigates all market factors to determine if your prices are competitive. We examine your most important purchased items and services and we make sure that you are correctly positioned to compete.
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