How the Purchasing Manager Benefits from R-pM
Purchasing Managers are important capital managers
Are you a Purchasing manager, responsible for purchasing, maintaining supply inventories, and recording supply expenses? How do you approach your work? As a routine function? As responsibility for the enterprise supply line to ensure that the right supply capital items are provided on time to produce enterprise results?
If your answer is closer to the latter, you will clearly benefit from R-pM.
Result-performance Management (R-pM) organizes the business for 21st century management
The means to understand the actual business that you support is through Result-performance Management (R-pM). The enterprise business and your business is defined by only two entities:
- Results: The economic outputs that create the value from the business
- Performance Solutions: The capital consumed in performance to generate the costs incurred by the business to produce result value
You manage only these two entities in your business, as a sub-set of the enterprise business. Planning, gathering information, and managing other entities like activities, tasks, functions, positions, etc. diverts your time away from managing your business.
The 20th century enterprise has never managed the business
The dilemma that you face is that your enterprise has never managed the business. Some of the results you produce may be defined as separate entities such as purchase order completed, supplies received, supplies issued, etc.
Results are the economic outputs that can be counted and measured that you and the human capital working under you must produce, and that you must manage. You have one set of results that you are responsible for. Some results may be completed and new results may be added. Many of these results likely are not defined today, but they are part of your business.
Your business also includes your capabilities, the capabilities of those you manage, the processes you follow, the information you use, and other performance solutions you use. You might be identified as an employee and your office and equipment may be fixed assets or property. but likely most of the performance solutions you utilize are not defined and may be classified as “intangible assets”. The set of performance solutions you need to produce your results is likely not defined or managed. Some capital like human resources and equipment may be administered, but no one is responsible to provide the performance solutions you need to produce high value-quality results.
R-pM incorporates purchasing in Facility Supply Capital Management
R-pm manages three groups of results:
- Revenue results: the results produced by the line business to produce revenue results and meet enterprise objectives
- Capital results: the results that manage capital utilized and provide specific performance solutions to produce all results
- Investment results: the results in development to produce new capital and performance solutions
R-pM incorporates the purchasing function into Facility Supply Capital management. Facility supply capital management produces capital results to provide facility supply performance solutions to produce other results. Facility supply capital is one class of Facility Capital, which includes:
- Facility Equipment Capital: Reusable facility assets including equipment, infrastructure, buildings, computer and communication networks, financial investments, etc. as Readiness Capital
- Facility Supply Capital: Consumable supplies as Production Capital
- Facility Records Capital: Financial and non-financial records on the full business cycle of results and performance as Information Capital
Facility supply capital includes the provision of all consumable assets utilized to produce results. Facility supply capital includes working capital and petty cash, traditional supplies, credit facilities, travel tickets and accommodations, expense reimbursements, and other items that may be consumed to produce enterprise results. Facility supply capital normally includes accounts payable to manage and pay suppliers.
Facility Supply Capital is Production Capital that is utilized to produce actual results. Production Capital includes:
- Business Process Capital: Manual and information system processing to produce results
- Human Capability Capital: The specific human capabilities to produce the result
- Facility Supply Capital: The supplies consumed in producing the result
- Management Tactics Capital: The policies and directives that guide results produced
Production capital is integrated with the business process and utilized together to produce actual results.
The Facility Supply Manager is responsible for managing supply capital and providing supply solutions to produce results. Supplies are not provided to responsibility centers. Supplies are provided to and charged against results. The result may be and end-result produced directly for performance or a set-result that includes a defined number of end-results. Supply managers manage supply costs to provide the supply solutions needed at a low cost to increase result value-added. In a large enterprise, there may be a separate supply performance manager under the supply manager to work with result managers to define and provide the specific supply solutions needed and to meet supply performance expectations.
As the Purchasing Manager, you have the opportunity to adjust to R-pM and be responsible for Facility Supply Capital Results.
R-pM provides the solutions needed to produce value-quality capital results
R-pM enables you to focus on producing Facility Supply results. Unneeded or low-value results are discontinued. As supply capital manager, you produce capital results as a sub-set of enterprise capital results. You have your own result-performance business structure to manage. Your results may form a result value-quality chain to produce final results that go to the internal customers who utilize supply capital.
R-pM enables you to manage the performance that produces each result
With R-pM, you quickly become used to managing the results and performance solutions under your responsibility. A performance manager is responsible to provide the solutions you need to produce results. Solutions have performance expectations to qualify solutions provided and manage the adequacy of solutions. Your normal set of performance solutions is defined as a performance module to be managed as a whole. The supply solutions you provide are also part of your performance module
You have a wider span of result responsibility and specific result goals to achieve. Goals can plan the volume, timing, costs, or quality of your results. You use information technology to quickly add and deactivate results and the solutions you use. You define specific results and goals to be produced by those you manage.
You set the value of your results with the internal customer who wants you to produce results. You and the customer can evaluate the result and know the cost of producing the result. This lets you know and manage the value you add.
You manage performance costs against result value for result value-added
You and those you manage enter personnel and capability time against the results produced. Other performance costs are preset or are captured against results produced in facility records capital management. This enables you to manage the result value-added. If a result value-added is negative, you must reduce the performance costs or work with customers to increase the value of the result and decrease the value of another result in your chain. Or else, the result should not be produced.
Even as a supply capital manager, you manage the effectiveness of the solutions you utilize to produce quality results. The business process and other solutions are utilized result by result. If a defective result is produced, it is brought up to quality or replaced in the result value-quality chain.
You optimize your performance to produce value-quality results
The information you use to manage focuses on the results produced and the performance solutions utilized. The impact between others results and your results can be managed. You can optimize the costs, effectiveness, and capacity of performance solutions you utilize against the value, quality, and volume of results you produce. You can see the value you add to the value of enterprise capital results.
R-pM provides the environment to increase your capital worth
R-pM enables you to eliminate wasteful activities performed today. You can focus on producing value-quality results. You are supported by performance managers for the business, human, facility, and management solutions you utilize. The integrated information solutions you need are delivered by result and performance solution. You are able to increase the known result value you provide to the total enterprise result value. You increase your human capital worth and the worth of those you manage.
21st Century Management eliminates 20th century problems
Eliminate costly 20th century problems by organizing your business for 21st Century Management. Slash costs, simplify business management, and boost your competitive advantage through Result-performance Management (R-pM), the conventional method for 21st Century Management.
Download your 21st Century Management Manual today
This article included only pieces of R-pM, and may have left you confused. Go to result-performance-management.com to learn more under What is R-pM?.
Your 21st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21st Century Management. Learn more about the R-pM breakthrough for 21st Century Management and subscribe to your 21st Century Management Manual, including free updates through 2009, at result-performance-management.com.
