Managerial recommendations

This subchapter provides practical answers to the main research question “How to develop further purchasing procedures after implementation of a shared service center?”. The findings indicate that there are some additional tasks that could be transferred to GBS’ responsibility. The additional tasks include checking that the quality documents (e.g. certificates) have been received from the supplier. At the moment, there is no process for checking this. Thus, it sometimes happens that the documents have not been received from the supplier, even though there has been a requirement on a purchase order. Then the documents have to be asked from the supplier afterwards and at this point the need can already be urgent. Another recommended additional GBS’s task is proactive delivery control concerning deliveries with FCA term and deliveries coming from afar. At the moment this is not done, but it would be a very important thing to do. That would ensure that possible problems, e.g. delays, are found out earlier, which in turn improves chances to take some actions that minimize the negative impacts. In addition, it could be considered that GBS was responsible for collecting document packages for RFQs as well as asking for quotations for clear and simple items. The final decision about the supplier could still be done locally.

It could be considered that local purchaser’s involvement in everything that requires decision making – or nominal decision making, was diminished. The aim could be that local purchaser is involved only if it brings added value. For example, GBS could in the future be responsible for controlling some of the stock items. Purchase requisitions of selected stock item categories could be steered directly to GBS’s purchase work queue instead of local purchaser manually transferring those from his/her purchase work queue to GBS’s. Before placing a purchase order, GBS purchaser would check the stock situation of the item in question in case there is a need for requesting the delivery earlier than suggested by the system. At least at first these stock items would be ones with low cost and short delivery time. Hence, the consequences of items going out of stock would not be severe, because replenishment is quickly available. However, handling of stock items by GBS should not be expanded to the most difficult stock item categories.

The findings indicate that GBS could in the future contact independently goods reception and TMC. Direct communication between GBS and goods reception would for example enable GBS to investigate why goods receipt is missing.

However, it would be recommended that they put local contact in the cc field when communicating via e-mail, so that he/she knows what has been discussed. In addition, it could be considered that GBS contacted mechanical design engineering independently in situations where it is about forwarding suppliers’ questions to designers. Direct communication would save time, which is an important advantage especially when the questions are urgent.

What comes to communication between GBS and category managers, there could be more of it. GBS could be instructed to inform category managers if they notice that a supplier constantly confirms orders later than within the required three days.

Also, if GBS purchasers notice problems that might negatively effect security of supply or hear about suppliers’ contact person changes, it would be recommendable to inform category managers.

Furthermore, it is suggested that GBS should be given more responsibility and authorization for example what comes to invoice and price difference approval

limits. If GBS was given higher invoice approval limits, there would be less invoices coming to local purchasers. Higher limits for approving price differences between estimated and confirmed prices would make daily work more reasonable and efficient. More responsibility and authorization given to GBS could even affect positively their work motivation.

Even though the above-mentioned tasks would be suitable for being on GBS’s responsibility in the future, an important basic prerequisite is to ensure that there are enough resources for these additional tasks. Otherwise there is a risk of deteriorated performance levels. After ensuring the sufficiency of resources, processes and SOPs should be updated or new ones created, if needed. So far, attrition rate has been quite high in GBS. As mentioned in theoretical part, SSC’s too heavy cost saving pressures can result in reducing the number of personnel and thus cause work overload and higher attrition rate in SSC (BDO Hungary 2014). In GBS’s case, the number of personnel has not been reduced. However, the above-mentioned consequences – work overload and higher attrition rate – can for sure occur also if the number of personnel is originally too small. So also for this reason, case company should ensure that there are enough resources in GBS.

What comes to system related issues, it should be investigated if it is possible to have also purchase requisition’s handler’s name on purchase order. At the moment, only purchase order’s creator’s name is visible on purchase order. It would ease for example goods receivers’ and suppliers’ work if they knew who the responsible local contact person is (i.e. the person who handled the purchase requisition).

Finally, in order to increase GBS purchasers’ understanding of the whole, facilitate communication and emphasize the feeling of belonging to the same team, it would be recommended that GBS purchasers were given a chance to visit Helsinki factory.

Also, if local purchasers were able to visit GBS more often, that would show interest towards GBS personnel and operations and diminish the feeling of facelessness.

These face-to-face meetings would help to avoid “alienation challenge”, presented in the theoretical part, that can occur if the relationship between SSC and customer is distant (Knol et al. 2014). Also, as already mentioned, the development of a

business partner relationship between local business unit and SSC is very important, because with team relationship between the groups and ongoing strong communication, issues are more easily resolved than in an uncooperative environment (Moller et al. 2011).