Best Value is a philosophy that addresses a different approach of organizing of and collaborating in the supply chain. Best Value aims to bring better results: lower cost and a higher quality. This starts with knowing and acknowledging everyone’s interest in the suppy chain, by making room for expertise and accepting the value of expertise. An important foundation of Best Value is to create a win-win situation for everyone and to ensure that everyone want to add value to the end result.
Important principles of Best Value are:
- Less management, inspection and control
From this philosophy a method has been developed that is used to find and select an expert vendor for a service or project.
The work systems we are used to are often designed to achieve our own success and offer little room to act from an overall perspective. If an organization imposes a cost reduction on a procurement division, cost reduction will be seen as a successful transaction. Other divisions in the organization will,on the other hand, experience the downside of the cost reduction (such as quality loss or higher maintenance costs) and will not consider the cost reduction a success
Using the Best Value approach creates room for expertise that will help the whole supply chain to become more efficient and effective. We achieve this by changing the system that govern the way we think and work. From a focus on own interest and success (in the silo) to a focus on the interest and success for everyone involved (across the silo’s).
Best Value Procurement minimizes activity of the entire supply chain. Experts should know what they are doing. The expert vendor is best suited to solve the client’s problem. This implies that a client should not tell the expert vendor what to do or how to deliver a project or service. Therefore the client does not specify his needs in detail, but uses a deliverable with project goals. If a clients has a detailed specification, an expert vendor is prevented from using expertise.