In Global organizations there is mounting pressure on managers to cut costs because of which most of these companies have started re-evaluating their procurement processes so as to redesign them in order to be more viable. In a bid to align themselves to this objective many companies are resorting to outsourcing, which in turn makes procurement decisions increasingly critical.
There are several valuable implications of putting in place an effective procurement strategy:
• Immediate control on maverick spends
• Improved operations.
• Building stronger relationships with suppliers.
• leveraging relationship with suppliers to bargain more.
Today many companies have made significant changes to their bottom line margins by focusing on their procurement function. If there is a robust procurement process in place, it is bound to positively impact the purchasing decisions of the company along with increasing bargaining power with suppliers, and generating more value for the investor. Below are some of the industry wide approved best practices that should be followed in order to maximize procurement gains
1. Identifying the organizations requirements in terms of procurement. The most important part of the procurement process is the requirement planning documentation. It is quite obvious that a plan may have changes even in the final stage, thus it is essential to ensure thorough version adherence and procurement document management. In order to anticipate the risks it is advised to simulate the supply chain scenario in-house. Once you have gathered probable risk data, it must be analysed.
2. Aligning the procurement goal.
The alignment of the procurement objectives with the corporate goals is highly desirable. A costs – benefits analysis is a must have.
3. Supplier selection. The selection of suppliers can be initiated by choosing amongst the pool of tried and tested ones with whom the company did some business before or by simply floating a request for proposal. After a thorough analysis of the responses to RFPs, the selection of suppliers can be finalized.
4. Checking supplier performance. There should be high priority on monitoring supplier performance. This ensures that the supplier contract is fully conformed to and any non compliance is brought to notice. The supplier performance report needs to be generated at regular intervals during the entire span of the project and if it shows any such obligations which are not catered to, then appropriate feedback to the supplier needs to be communicated.
5. Procurement closure. While concluding the procurement process, it is important to review that all contracts are completed. A critical assessment of the achievement of procurement objective is to be done. If there is any scope for any qualitative improvements then the same needs to be documented for future process.
Summing the above we can say that a strong procurement strategy along with a deep understanding of the broader corporate objective behind the procurement is indispensible for the organizations competitiveness.
GainEdge Consulting is one of the leading sourcing consultants in india. GainEdge consulting is the one-stop-solution for all your outsourcing needs. Tailormade solutions to meet your requirements (Procurement Consultant) & goals.
There are several valuable implications of putting in place an effective procurement strategy:
• Immediate control on maverick spends
• Improved operations.
• Building stronger relationships with suppliers.
• leveraging relationship with suppliers to bargain more.
Today many companies have made significant changes to their bottom line margins by focusing on their procurement function. If there is a robust procurement process in place, it is bound to positively impact the purchasing decisions of the company along with increasing bargaining power with suppliers, and generating more value for the investor. Below are some of the industry wide approved best practices that should be followed in order to maximize procurement gains
1. Identifying the organizations requirements in terms of procurement. The most important part of the procurement process is the requirement planning documentation. It is quite obvious that a plan may have changes even in the final stage, thus it is essential to ensure thorough version adherence and procurement document management. In order to anticipate the risks it is advised to simulate the supply chain scenario in-house. Once you have gathered probable risk data, it must be analysed.
2. Aligning the procurement goal.
The alignment of the procurement objectives with the corporate goals is highly desirable. A costs – benefits analysis is a must have.
3. Supplier selection. The selection of suppliers can be initiated by choosing amongst the pool of tried and tested ones with whom the company did some business before or by simply floating a request for proposal. After a thorough analysis of the responses to RFPs, the selection of suppliers can be finalized.
4. Checking supplier performance. There should be high priority on monitoring supplier performance. This ensures that the supplier contract is fully conformed to and any non compliance is brought to notice. The supplier performance report needs to be generated at regular intervals during the entire span of the project and if it shows any such obligations which are not catered to, then appropriate feedback to the supplier needs to be communicated.
5. Procurement closure. While concluding the procurement process, it is important to review that all contracts are completed. A critical assessment of the achievement of procurement objective is to be done. If there is any scope for any qualitative improvements then the same needs to be documented for future process.
Summing the above we can say that a strong procurement strategy along with a deep understanding of the broader corporate objective behind the procurement is indispensible for the organizations competitiveness.
GainEdge Consulting is one of the leading sourcing consultants in india. GainEdge consulting is the one-stop-solution for all your outsourcing needs. Tailormade solutions to meet your requirements (Procurement Consultant) & goals.
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