BEST PRACTICES MATRIX
Obtaining Materials and Supplies

High USAGE Percentage of companies that use a practice Low

Quadrant IV Quadrant III Expected Have market penetration and growth plans that are in agreement with your major suppliers' expectations Meet with key suppliers at least annually to review mutual business objectives and market plans Compare your customer needs with your suppliers' offerings Have your sales force jointly target and call upon key prospects with your suppliers as appropriate Have suppliers give adequate lead time and support on new product introductions Analyze profitability by supplier line Set frequency of payment to suppliers based on supplier relations, discount policy, cash flow Evenly and efficiently distribute accounts payable workload based upon voucher complexity and amount of payment Proven Centralize accounts payable / decentralize accountability, error correction, authorization approval verification Integrate purchasing, A/P, and receiving systems Quadrant I Quadrant II Innovative Quantitatively prove your value-added services to your manufacturers Determine your likely position if key manufacturers consolidate within their channel segment Use EDI with suppliers for ordering, price changing, accepting receipts/invoices, and payments Pay upon receipt of materials rather than receipt of invoice Use paperless storage ( records retention ) and reporting Formally measure the number of purchase invoice lines processes per FTE Have written agreements with key manufacturers over the respective roles and activities for both you and your manufacturers Differentiated Empower and enable employees closest to the user to authorize supplier payment and charge appropriate accounts Edit check only those vouchers which are significant in dollar amount or unusual in nature Formally measure the purchase discounts actually taken as a percentage of the purchase discounts available Have a formal system in place to analyze manufacturer performance Quantify purchase transaction costs GAP High Degree to which the percentage of high-ROTA firms using a practice exceeds the percentage of all companies using it Low