Revolutionize Your Purchasing and Supply Chain Management Practices Today!

An Activity Analysis is a valuable tool for evaluating the workload and efficiency of purchasing positions, offering actionable insights into the alignment of assigned tasks with available work hours. By analyzing time spent on various procurement activities and comparing the results to the standard 2,080 hours per year, an Activity Analysis can identify whether a purchasing role is overburdened or underutilized.

For overburdened positions the excess workload can lead to critical tasks, such as strategic sourcing supplier negotiations and cost reduction initiatives, being deprioritized or left incomplete. This not only negatively impacts the organization’s ability to achieve cost savings, but also hinders the development of long-term supplier relationships and operational improvements. Conversely, underutilized roles may signal inefficiencies or opportunities to reallocate resources for greater impact.

As businesses grow and the volume of transactions affecting company assets increases, it becomes critical to establish an agency doctrine to ensure efficient and consistent decision-making. When the complexity and frequency of transactions surpass the capacity of one or two individuals to effectively manage them, the absence of a clear framework can lead to delays, errors, or mismanagement of resources. 

An agency doctrine provides a structured delegation of authority, empowering designated individuals to act on behalf of the company within predefined limits. This system ensures accountability, reduces bottlenecks, and enables faster decision-making. By clearly defining roles, responsibilities, and approval thresholds, the doctrine mitigates risks of unauthorized actions and financial exposure. 

Implementing an agency doctrine also strengthens internal controls, improves operational efficiency, and aligns decision-making with organizational goals. Ultimately, it fosters a sustainable approach to managing transactions while safeguarding the company’s assets and supporting strategic growth. 

Authorization to Commiting Company Funds Table establishes clear rules about who within a company has the authority and at what level to act on its behalf—such as signing contracts, committing funds, or making binding decisions. More importantly, it helps employees undertand the approval process so they can avoid making costly mistakes for the company and any disciplinary actions that might result.

What does it accomplish?

• Defines authority: Clarifies who can act for the company in specific roles or transactions.
• Reduces risk: Prevents unauthorized commitments or legal liabilities.
• Improves control: Aligns decision-making with corporate strategy and financial oversight.
• Supports scalability: Enables structured delegation as the company grows.

What does it accomplish?

Without this document in place, employees may make decisions without or  beyond their authority, leading to unauthorized deals, legal exposure, and financial loss.