Multiple enterprise resource planning (ERP) systems scattered throughout your manufacturing company, plus different component numbering schemes, can obscure the fact that various departments may be buying the same parts under different names — and at different prices. That’s where strategic procurement and its accompanying software tools come into play. Strategic procurement’s goal is to identify multiple orders of the same parts regardless of ERP system or part number.

The process begins by analyzing current components and categorizing them according to form, fit, and function. For example, every bolt you purchase would be logged by type of metal, length, diameter, thread, etc. Once everything is logged into the system, you have a clear picture of all your bolt purchases — including duplicates. (Consider using bar coding to do the logging. See the article below.)

Using the information, you can now select the most appropriate vendor for your needs. No doubt price will be a consideration. But you don’t want to overlook other factors such as service, quality, frequency of deliveries, minimum order quantities, and payment terms.

Proponents of this philosophy and software users say you are likely to see reductions between five and 15 percent in purchases from consolidations across divisions, elimination of duplicate holdings of slow moving parts, and lower administration costs.