Purchasing and supply strategies' contribution to company's competitiveness. Royal Philips Electronics case study

Philips Royal Electronics is continuously improving its purchasing and supply strategies to maximize its efficiency in this area. All improvements are based on in-depth analysis of changing conditions of supply markets and company's needs. Basically three types of analysis are being conducted. First of all Philips aims to acquire broad knowledge about direct impact of purchasing strategies on company's financial achievements. Thus purchasing services have decided to implement Balanced Score Card, dedicated tool to procurement area. Secondly, all purchasing processes are precisely monitored and evaluated against 14 criteria. It is believed, that process improvements indirectly enhance company's competitiveness through its innovativeness, cost efficiency and quality culture. Finally, purchasing managers in Philips regularly appraise all current suppliers in order to motivate them to improve their performance. Philips suppliers are seen as core company's assets, which can determine ability to gain advantage over competitors.