No choice has been made for either centralised procurement or decentralised procurement. The level at which to pursue strategic procurement processes is determined for each sub-segment. The BAM model can therefore be best qualified as a 'coordinated' approach.
As regards organisational structure, there are roughly three procurement levels within BAM:
- BAM Strategic Sourcing (BAM Group level)
- Procurement department at BAM operating company level
- Procurement department at regional level according to BAM operating company
The relationship between these levels is functional. Hierarchically, the procurement function remains as close as possible to the primary process responsible entities. In terms of its place in the organisational structure, the specific situation of the operating company/region/BU will play a leading role. Procurement positions should be positioned in the organisation with a view to optimising the contribution made to the strategy and objectives of the respective BAM organisational element.
In order to maximise the use of the Group's resources and to continue to realise a continuous line of procurement improvements of primary processes, joint consultation will be pursued between and with:
Procurement Steering Committee
Operating company management and the Executive Board
BAM Procurement Consultation (according to country)
Overarching management of operating company procurement activities
Operating company procurement consultation
Operating company procurement officers
Levels of contract
Given that the basic nature of BAM's organisational structure is decentralised and that, despite this, it aims to achieve economies of scale, a deliberate choice in terms of the level of segment, contract and coordination is essential. BAM's decentralised organisational structure clearly impacts the management and organisation of the various procurement processes and positions. The basis is the diagram below, which identifies four levels:
Level 1: Contracts used by various operating companies
These fall under the management/responsibility of BAM Strategic Sourcing (for the entire BAM organisation);
Level 2: Operating company-specific contracts used by various regions within these operating companies
These fall under the management/responsibility of the operating company Procurement Manager;
Level 3: Region-specific contracts used for several projects specifically within these operating company regions
These fall under the management/responsibility of the procurement department of the operating company region/BU;
Level 4: One-off project contracts
These fall under the management of the procurement department of the operating company/BU.