Allowing Users to Contact Suppliers Directly

This general method or approach involves different kinds of low-dollar systems. Procurement cards technically qualify as a system that allows users to contact suppliers directly. Online ordering systems also allow users to contact suppliers directly, or the system may involve nothing more than a multiple part form, such as a limited purchase order, that users complete as they initiate an order. FedEx refers to its “pick up the phone” system, which allows users to contact suppliers directly, as its convenience ordering system.

Approaches that allow users to contact suppliers directly shift responsibility for the transaction from purchasing to the user. Even for items with no established supplier, purchasing still may have limited or no involvement unless the requirement reaches a predetermined dollar or activity level. If an item becomes a repetitive purchase, then purchasing may determine if the item warrants a blanket purchase order. Blanket purchase orders usually allow users to contact suppliers directly when a need arises for material. The following Good Practice Example describes a system that allows users to contact suppliers directly below some dollar threshold level.

Why is it important to capture the transaction-level data associated with all elements of the P2P process? This answer is discussed in Chapter 6 on sourcing strategy. Specifically, from time to time the firm must identify opportunities for savings through a process known as a spend analysis. A spend analysis becomes a critical input into building sourcing strategies, the topic of Chapter 6.