Page 28: of Maritime Reporter Magazine (April 2000)

Purchasing

Strategic Value Adding Purchasing

Robert Lee Gordon — director of purchasing for Ocean Development Company and one of the world's most sought after projects, the building of the Project America cruise ships — shares with MR/EN the process of selecting a coatings manufacturer

An effective purchasing strategy is at the core of successful purchasing departments. Strategies that offer total value to an organization should be the goal of all purchasing organizations.

Purchasing professionals around the world are always in search of new strate- gies that creatively reduce costs and add previously unrealized value to an orga- nization. Since motivating multi-com- pany groups is difficult, the purchasing department must offer a clear strategy that offers value to all involved. Hence.

Purchasing Programs, procuring prod- ucts plus services, is a strategy that can be employed successfully to bring value to all involved.

The theory of Purchasing Programs is to leverage vendors to offer products and services — whereas previously — ven- dors were only offering products. The approach is to challenge vendors to offer significant value in areas not previously realized. This shift requires that the pur- chasing department refuse to purchase products based solely on the acquisition cost of the product. The evaluation of the total purpose of the product and ser- vices within an enterprise is the key.

Purchasing Programs utilize the ven- dor's services to enhance the value of commodity purchases. Purchasing Pro- grams focus on buying service plus products, not simply products. This concept is simple, however the applica- tion of such a methodology of purchas- ing within an organization is difficult.

Unlike purchasing to simply reduce the purchase price of a product, Purchasing

Programs need careful planning prior to the solicitation of requests from ven- dors. Effective Purchasing Programs must have clearly defined objectives, a process to review these objectives, and a method to evaluate the objectives of the process.

American Classic Voyages (AMCV) had been struggling with coating tech- nologies, and had diversified their ven- dor and product base in the hopes of finding the most effective mix of prod- ucts and vendors. AMCV also spent "thefrietuCCyffag"

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