Purchasing controlling

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Purchasing controlling is a sub-area of ​​the corporate management system as a sub-discipline of corporate controlling, the main task of which is the planning, management and control of the corporate procurement function. Purchasing, accounting, materials management and external procurement market data come together in purchasing controlling.

Origin and organizational integration

Purchasing controlling has its origins in practice. It was introduced in many companies since the 1970s, initially under the term purchasing reporting. The starting point for this development was the increasing need for transparent data structures in purchasing and materials management in order to make the complexity of procurement management manageable. Purchasing controlling is closely related to the tasks of corporate controlling.

In practice, the function of the purchasing controller is usually a staff function for purchasing management. Purchasing controlling as an operational part of corporate controlling is rarely encountered because, similar to sales controlling, a high degree of procurement-specific knowledge is required.

tasks

Basic scientific understanding of purchasing controlling

The scientific discussion of the term purchasing controlling began on a broader scale in the 1990s. The first basic understanding of purchasing controlling in terms of time corresponds to that of corporate controlling and similarly assigns the task of providing business information for management purposes to both functions. In this sense, purchasing controlling should fulfill an economic transparency function. "Business management" is understood in the sense of "(success) goal-oriented" or "result-related". Specifically, in corporate controlling, the information to be supplied is, in particular, costs and revenues, i.e. calculation variables that come from internal accounting. As part of purchasing controlling, the costs are analyzed in detail from the perspective of the procurement market. The procurement objects are sorted according to product groups and changes in costs compared to previous business periods are evaluated. These cost trends are compared with the data from the purchasing planning derived from the corporate planning and areas for optimization are shown. In many cases, a comparison of the market development based on external indices with the internal cost trends is carried out. Here, purchasing controlling aims to ensure that the correct purchasing-related decisions are made with this information.

Management-related basic understanding of purchasing controlling

The second basic understanding of purchasing controlling that follows in terms of time also relates to activities in the area of ​​management. According to this, the task of purchasing controlling is to take care of the target-related, success-oriented control of purchasing. Purchasing controlling is concerned with the following requirements:

  • systematic definition and assignment ("operationalization") of the objectives to be pursued
  • Measurement of target achievement
  • Determination of target-actual deviations
  • Development of measures to eliminate them

In other words, purchasing controlling aims to guide purchasing through and with the help of planning. Controlling in this fundamental sense can thus be understood as a cybernetic process that is controlled with the control loop of planning and control.

Basic cybernetic understanding of purchasing controlling

In terms of purchasing controlling, a cybernetic process is a process in which qualitative and quantitative goals are initially derived from the corporate goals for purchasing. To measure the achievement of objectives, key figures are defined for each objective, in which the current status and progress in the achievement of objectives are measured. This also includes the development of rules and processes, which must be taken into account when generating the key figures but also during the upstream creation and collection of the data. Measures to be taken result from the deviation between the target values ​​and the actual values ​​of the key figures.

According to current project management theory, these measures are enriched with responsibilities, deadlines and a control body for monitoring progress. The control loop is closed by regular testing of the effectiveness, i.e. the degree of target achievement and the efficiency, profitability of the entire process. According to Charles Darwin, every organism and consequently every system is only functional in the sense of long-term viability if, according to the evolutionary principle, there is an optimal adaptation to the environment ("survival of the fittest"). Thus, the entire control loop is periodically checked for the need for adaptation ("generation of fitness") due to external market influences or internal organizational requirements and, if necessary, changed and optimized.

Planning-related basic understanding of purchasing controlling

This third basic understanding of purchasing controlling builds on the second: In this sense, only those who have the information required to plan the results and are supplied with the required actual data for control can proceed “systematically”. Planning in the sense of controlling always also means invoicing; numerical values ​​are required for calculation.

Coordination-related basic understanding of purchasing controlling

In the endeavor to assign controlling an independent function, the coordination-related basic understanding of controlling arose. This initially envisaged coordinating the planning, control and information systems with one another. It is not the planning, information supply and control themselves, but their coordination that makes controlling so special. This perspective was later expanded in terms of content to include other sub-systems of leadership, especially the organizational and personnel management system. This entrusts controlling with the task of coordinating the entire management system.

Rational basic understanding of purchasing controlling

According to a fourth basic understanding, purchasing controlling has the task of ensuring the rationality of management. A different demarcation from known management functions is chosen: It is not the function as such (e.g. planning or information supply), but the associated purpose (ensuring management quality) that makes up the core of controlling. This conceptual understanding also differs significantly from the other conceptions in its basic assumptions. Ensuring rationality presupposes that there are any rationality deficits at all. Such are not provided for in the other controlling concepts; they are implicitly based on the image of homo oeconomicus. The view of controlling as a safeguard of rationality, on the other hand, is explicitly based on cognitively limited and potentially opportunistically acting people, an image that is often much closer to reality than the assumption of homo oeconomicus. The latest controlling view can therefore be classified as behavior-oriented.

aims

  • Establishment and operation of purchasing controlling (organization, processes, systems)
  • Definition of the content and key figures - matching the company-wide target figures
  • Control and support of purchasing based on defined target values
  • Creation of ad-hoc evaluations as required
  • Post calculation of purchasing costs and purchasing cost drivers

literature

  • Christian Dechêne: Fulfilling buyer's dreams - knowing the costs of the suppliers. In: procurement current . Issue 12, 2008, pp. 42–44.
  • Christian Dechêne, Hugo Eckseler, Michael Nießen, Hartmut Reinhard: Procurement optimization with the help of transparent product cost structures. In: Jürgen Weber , Hendrik Vater, Walter Schmidt, Hartmut Reinhard (eds.): Turnaround - Navigation in stormy times. Crisis management measures and effects on the roles of CFOs and controllers. Wiley-VCH-Verlag, Weinheim 2011, ISBN 978-3-527-50532-6 , pp. 381-397.
  • Steffen Eschinger: Management of purchasing value creation through purchasing controlling. Conceptual considerations and implementation examples. In: Controlling. Journal for success-oriented corporate management. Vol. 26, Issue 1, 2014, ISSN  0935-0381 , pp. 19-25.
  • Gabler-Wirtschaftslexikon. (accessed April 23, 2013).
  • Haufe Academy, Steffen Eschinger training documents, seminar “Purchasing Controlling - How to Increase Your Purchasing Performance”.
  • "Purchasing Metrics Guide - The 100 Best Purchasing Metrics". E-book, Eschinger Consulting GmbH, 2013.
  • Gerrit Kehrenberg: Instruments of procurement controlling. Strategic tools for optimizing corporate success, GRIN Verlag, Munich 2010, ISBN 978-3-640-66967-7 .