A “buying channel” is a process to specify a need, locate the supplier of that need, determine the terms of acquiring the need and executing an agreement for the supplier to fulfill the need. An efficient and effective procure to pay process contains processes and buying channels that are designed to “fit” different situations and circumstances encountered by end users of the P2P process.

The overall objectives of the JKDA buying channel analysis are:

  • ensure that internal customers are satisfied, with the right materials procured from the right supplier for the best overall value and delivered to the right place at the right time,

  • accomplish this at the right operating costs balanced by the value and importance of the goods / service purchased. enable effective efficient communication between requester,

  • buyer and suppliers, enable and high level of data integrity to enable accurate tracking of costs,

  • provide usable leverage for sourcing and negotiating material contracts.

The multiple buying channel approach allows a procurement organization to gain greater transparency and control over its external spend while providing maximum flexibility to ensure the diverse needs of the organization are met.

Read recent research by Dr. McCormack about channel optimization.

channel article
© 2011 Kevin McCormack