4
Improving Value Creation in Procurement and Manufacturing
The power of manufacturing excellence in providing a company with a significant competitive edge has long been unquestioned. For firms in many manufacturing industries, such as home appliances and automobile components, materials, and manufacturing costs account for over 75 percent of total cost. Thus misalignment between the way decisions are made by the Procurement and Manufacturing functions and the way decisions should be made to optimize value creation can be very damaging. This chapter applies the five keys to value creation in the specific context of the Procurement and Manufacturing functions.
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