ABSTRACT
A review is made of all materials across all programs or product lines in the site or sites. The materials are expensed when received, and the costs are part of the material burden overhead. Suppliers are audited to ensure compliance, and companies do not pay for items until they are delivered or in some cases used. The strategic materials group is responsible and accountable for managing the partnered suppliers. The buyer is forced to learn about each commodity as they proceed, so they become cross trained. A better metric is to work to reduce the number of components in an assembly or to reduce the overall cost of materials by a significant percentage. Commodity teams is a strategy which may be utilized in larger companies to consolidate the individual plant’s purchasing requirements to obtain better pricing and supplier partnering.
