The document discusses a purchasing excellence ROI model that measures performance across five stages. A high performing purchasing team in stage 5 will save the business up to 8 times the cost of employing the purchasing resources through net cost savings. Low performing teams in stage 1 or 2 actually cost the business more than the savings they generate. True step change improvement only occurs when supplier relationships are strategic and focused on continuous improvement.

1. “ wait 100 days to improve 100% and
you may. Improve 1% per day for
100 days and you will improve 170%”
How to develop purchase excellence
Focus LifeScience – Purchasing Excellence

2. Focus LifeScience –
Purchasing Excellence ROI Model• Start by measuring ROI based on total
cost ownership. This means net cost
savings (including cost increases) are
either greater or less than the cost to
employ the purchasing resources.
• So in simple terms a very high
performing purchasing team in stage 5
will have net savings much greater
than the cost to employ them – up to
8 times.
• Low performers in stage 1 and
sometimes 2 are cost negative to the
business. So the cost to employ them
is greater than the net savings they
deliver.
• There are many factors leading to low
performance – in our experience it is
generally not the efforts of the buyers.
• We also find that those scoring in the
lower stages are more likely to stay
there or move lower. Those in the
higher stages are more likely to
improve. Improving teams are more
engaged and this is a force multiplier.
• Purchasing excellence creates free
cash flows for investment in R&D and
shareholder/stakeholder value.

3. Focus LifeScience – Purchasing Performance Roadmap
• The model is not a S curve so the
progression of time does not equate
to improved performance.
• Improvement requires a clear plan,
strong leadership and discipline.
• Passing through stage 3 requires
robust change control and lead
metrics driving the right behaviours.
• True step change improvement only
occurs in stage 5 when (key) suppler
relationships are strategic and
improvement focussed.

4. “ Never become too busy to improve”
To learn more about how we can help please connect with us.
T: @MedTechSCM
E: stevenvalentiemail@yahoo.co.uk
Focus LifeScience – Purchasing Excellence