The pursuit of excellence in procurement is, in many ways, a test of commitment – commitment to continually evaluate and critique your systems to identify weaknesses make improvements.
As an industry, procurement provides plenty of opportunity for all of the above. With so many variables in play at any one time, your purchasing never stands still.
It will be no surprise to you then, when we say the common factor in every great procurement strategy is adaptability.
Aside from this, what are the fundamentals of procurement excellence? To answer this question, our experts put together their top advice on how to create the perfect procurement strategy.
Take the Time to Analyse Data
As you well know, procurement is a numbers game – the more you gather, the fuller the picture you have of how your strategy is functioning.
Yes, data is king in the world of purchasing. So, taking the time to analyse your processes is essential in order to identify areas of your procurement that could be strengthened.
The importance of analytics is hardly a secret, and many procurement professionals have experience with spend analytics. The challenge now is finding the time to process the big data that advancing technology allows you to harvest.
How you do this is open to debate. Hiring new analytics experts or simply outsourcing the this challenge are two accepted strategies, but more and more, businesses are investing new digital technologies to make the most of their data.
Speaking of tech...
Embrace the Technological Revolution
Every area of business has been transformed by technology to some extent over the last few decades, and now procurement is going through its latest transition.
By far the greatest impact technology has had on procurement is in relation to how purchasing is coordinated, with cloud-based digital platforms facilitating the move from a paper-based process to an online one.
The benefits of this are numerous. But in short, by keeping all elements of your buying – from demand forecasting to supplier sourcing – within a single system, you can improve the efficiency, accuracy, and reliability of task completion.
More than this though; these digital platforms can be used to automate many of your processes, such as recognising low stock and making replacement orders, or triggering payments.
According to the a recent study, 61% of supply chain leaders felt this automation was the likely to play the largest role in determining procurement strategy competitiveness.
With these repetitive tasks taken off of your team’s shoulders, everyone has time to focus on more complex tasks and develop your overall procurement strategy.
Invest in Expertise
While technology may be able to automate and streamline your procurement, there is still no replacement for human expertise.
High levels of knowledge are crucial to procurement excellence and should be found in all areas of your procurement strategy, including your team and your supplier’s staff.
When determining your own team’s expertise, the first step is to look inwardly at your own training systems. The prominence of social media, video games, and other virtual tools is changing how young professionals process information.
Therefore, to guarantee that your procurement strategy is able to achieve excellence in the years to come, it’s worthwhile integrating new training systems – such as microlearning and gamification – into your existing process.
This is clearly a long-term strategy, but ensuring you have expertise in the short term is perfectly attainable too. This comes down to your supplier selection process.
When sourcing new suppliers, cost is often a major consideration, but all too often a myriad of other factors are not given the attention they deserve as a result.
One of these factors is industry expertise. Finding a supplier that is a true industry-leader, as opposed to a jack-of-all-trades, is worth a few pounds more.
Appreciate Supplier Relationships
When there are so many variables to consider in procurement, it’s not surprising that businesses come up with wildly different strategies.
One major debate that often crops up is the question of whether increasing competition is more beneficial than nurturing supplier relationships.
Clearly, there are conflicting schools of thought. At SF Taylor, we come down firmly on the side of developing supplier relationships.
While increased competition may yield lower price-points for your buying, the continual tendering process is a drain on both time and money. More worrying is the fact that, by having a high turnover of suppliers, you reduce reliability and increase the risk of poor service.
Taking the time to build a relationship with suppliers allows you to benefit from their industry experience and use the data you gather to improve the efficiency of your own procurement strategy.
In the long run, nurturing suppliers helps you to move forward in your pursuit of procurement excellence.
By following these fundamentals, you can not only improve your procurement strategy now, but also lay the foundations for continual improvement over the coming years.
Implementing these systems is certainly worth the time it takes, but for those who require a more immediate strategy for improvement, outsourcing areas of the procurement such as printing can provide all the fundamentals we have already spoken about.
If you’re looking to make savings in your procurement, our eBook, The 4 Stages of Print Management, is available and free to download now.