5 steps to create an efficient Procurement System

Efficient Procurement System benefits your Organization ability to grow, decrease expense and increase their bottom line.

5 steps to design a solid Procurement Management:

Internal Analysis:

Need to analyse the current situation and benchmark this performance to identify its needs, company objectives and budget before developing Procurement Strategy.

Gain Insights in this Procurement Process into spend categories.?From the view point of Procurement, need to collect data to answer two questions:

How will Procurement create value to your Organization?

How Business current operational efficiency can be understanding?

In the initial stage, which procurement tactics provide benefit to your Business.?Regardless of company's size, strategies that any company need to implement are:

1. Reduction of cost
2. Supplier Optimization
3. Risk Management
4. Green and Eco-friendly Purchase
5. Global sourcing

Assessment of suppliers:

Identify the potential vendors to source the raw materials, required Products and services.?Your company’s reputation and Performance depends on the ability to deliver the service as promised.?B2B transactions from referrals, it’s good to analyse the vendor through case studies and testimonials.

Enhance Sourcing Strategy:

After identifying the supplier, need to create a Outsourcing strategy includes acquisition, Direct purchase, Strategic partnership.?Choosing the right strategy depends on the several factors, risk tolerance, company’s business strategy etc.,

Implement Sourcing Strategy:

Implementing your plan requires strong bonding between you and supplier.?For direct purchases, Company need to submit Expression of Interest(EOI) and need to prepare RFP to obtain bids from suppliers.

Selecting the right supplier:

Organization has to evaluate the bids, Proposals and quotes from vendors and examine which is best suitable for your business.?After evaluation and narrowing down the most suitable supplier, your procurement specialist can try to negotiate for best pricing.

Procurement is about to find the right supplier with fast service and with minimal issues.?When implementing the planned strategy, it will not go as planned one.?By better understanding of company’s procurement process and evaluates your supplier, reduce your company’s expenditure leads to reach their business goals.