Procurement professionals are busy. Between juggling multiple projects and communicating across departments, there are many factors that make it necessary to streamline processes to maximize efficiency. With the rapidly growing business environment, the demand for purchasing officers is also rising in every business sector. Boosting the efficiency of your procurement will result in cost savings to your organization.
Perhaps, the procurement manager shall apply straightforward attributes and strategies with a specific end goal to procure goods at lower rates in efficient manner.
Here are seven ways procurement professionals can drive more efficiency among their teams and in their own work.
1. Think Carefully Before Making a Purchase
The main role of any purchase cycle is to reduce the costs of the materials which you need. It is not enough to just process purchase orders whenever there is a need, but you need to monitor what is being ordered versus, what is being used in your manufacturing and trading processes. Given, that you have a contract with most of your key suppliers, it is important that all your purchase orders are available at a single place for your immediate review.
Maybe you can still buy PCs the way you buy staplers: It’s a mature, commodity-style market. But for more sophisticated IT needs — managed services, cloud products, Internet of Things — you need to hone the process. Deeper engagement over system requirements may demand more conversations up front, but it will lead to a smoother, swifter process overall.
2. Build Virtuous Supplier Relationships for efficient negotiations
One of the key ingredients of having an efficient purchase cycle is to build a network of trustworthy suppliers. This automatically eliminates the need to start from scratch for every procurement need that you have. If you have a good working relationship with your suppliers, you can sit back and relax, knowing that you will get the right quality, fair negotiations and timely delivery. Besides, it might also increase your goodwill as a happy supplier might tell others how good you are to work with which might lead to new sourcing avenues. All you need to do is: be fair with the suppliers in your business dealings, ensure that they are paid on time, put out detailed and straightforward RFPs and appreciate their professionalism and skills. Over a period, this will surely convert into an increased market share, better responsiveness to market demand, ..
3. Expand Your Network
It may seem easiest just to take charge of projects and not involve other teams, but working efficiently means involving key stakeholders. Input from other departments widens the perspective on good suppliers, quality, and pushes projects to completion faster. Building close relationships throughout an organization speeds up processes, builds trust, and increases efficiency.
4. Use of Analytical Skills
Between project planning, vetting vendors and bids, and negotiating the best deals, being in procurement means having top-notch analytical skills. Having a full perspective on every part of the process keeps projects on track and finances in check. Most modern contract management platforms have extensive analytics that will make gathering metrics and reporting back simple and effective. A procurement professional needs to walk on fine line as far negotiation is concerned. The struggle is between making the best deal for the company and at the same time makes sure that a good relationship is established with the suppliers. A good way to sharpen your negotiation skills is through advanced simulations and training.
5. Sharpen Your Negotiating Skills
Part of developing good relationships is negotiating well. Making a good deal for an organization while keeping suppliers happy can be a fine line to walk, but developing strategies to make both parties happy is vital to becoming efficient. Face-to-face negotiations can speed up the process tremendously. They build rapport, relationships, and trust much easier than is possible over the phone or through an email. Face-to-face negotiators have the opportunity to read non-verbal signals and body language while also decreasing the likelihood of miscommunication. And those relationships pay off in the long term, in some cases allowing for better collaboration between procurement and suppliers.
6. Think Globally
Often, there are circumstances when the rates of the material which you are acquiring increases in the market. The reasons for the increase in rates are dependent most of the times on global and sometimes on the local market trends. Therefore, as a procurement professional, you must always have an eye on the global trends and shall acquire the redundant material when it’s cost in the market is low.
Today’s economy is global. Often the best deals in the business are in an unexpected location. Building relationships with global partners increases flexibility and options for an organization. Global supply chains often provide more options and better prices than limiting the search to close locations.
7. Move Forward with Technology
Digitizing processes is one of the fastest ways to increase efficiency and be successful. Moving contracts and documents to the Cloud is essential for speeding up processes and becoming a forward-thinking company. Having an automated contract lifecycle management platform in place will help contract creation, real-time negotiations, faster signatures, and automated reminders to increase compliance.
The skills are there and the tools are all within reach. Following these steps will help maximize efficiency and keep procurement departments working faster and smarter.
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