Procurement is the business process of acquiring goods and services that allow a company to turn around and then produce a product or service to its customers, or in the case of government to the public.
Procurement involves setting up quality standards, funding purchases, bargaining over prices, buying goods, tracking inventory control levels and discovering effective ways to decrease waste. Procurement managers have a multitude of ways to improve their process, and each industry has its own unique set of opportunities and challenges.
The rise of the internet and technological advances have led to procurement becoming a science all its own, yet despite all of the improvements made to the procurement process in the last few decades, there is still room for improvement. According to a 2015 report by research firm Ardent Partners, nine out of every 10 Chief Procurement Officers said that their procurement departments could do a better job at what they do.
Key principles to keep in mind
No matter what industry you are in, your procurement staff needs to be well-supplied and properly trained. ‘Supplies’ might include access to tracking software or function digital scanners. If your inefficiencies in the procurement process can be addressed by technology, consider purchasing the appropriate tools.
Like most aspects of business, procurement is based on relationships, and management should work to maintain a good relationship with its top suppliers. Since you and your suppliers have a mutually beneficial relationship, two-way communication is key to solving problems and spotting inefficiencies.
Procurement management should also work to keep inventory at optimum levels. Continuously review stock to make sure it’s being maintained at ideal levels, as holding far more inventory than required may result in considerable costs. Better organization and projection can help keep inventories lined up with the company’s needs.
Leverage Vendors for Savings Procurement Solutions
Vendors are more than just potential suppliers – they can also be a source of ideas and savings. Prior to rendering requests for proposals, give likely bidders a chance to suggest any modifications to your standard requirements that would bring about big cost savings with little effectiveness loss or suggest different ways the agency could design the contract to save money. Have the quality of recommendations an evaluation factor for the proposals.
The Wright Brothers built their plane to enter into a flying-machine contest, and many organizations have held competitions to inspire new technology or novel solutions. When done appropriately and effectively, a competition can spur innovation from both companies and individuals at a very modest cost.
At ZDA, we specialize in providing organizations with custom talent acquisition solutions. We’re also looking to work with our partners for ways to improve the talent procurement process. An expedited process means quicker access to the most qualified candidates and smaller costs associated with the hiring process. Contact one of the top supply chain recruiters today to get started.