Procurement has become something of a hot topic in the current economic climate; whether that be public sector procurement or e-procurement. Companies and governments have been focused on finding savings in the supply chain process where they can, and procurement is often the solution.
With that in mind, Supply Chain Digital has researched the best advice for companies looking to transform their procurement process. These tips should help guide businesses that are new to procurement, and also those who simply want to refine their existing procurement operations.
Zycus, which specializes in spend management technology, recently published a white paper entitled A 4 Step Guide to Procurement Transformation. The paper identifies the four key areas of transformation:
1. Ensure seamless integration between your spend management systems to ensure maximized savings.
2. Integrate and automate the entire supplier management process from supplier discovery to supplier performance management.
3. Entail central level management support and utilize automation to ensure alignment of procurement goals and organizational goals.
4. Ensure easy to use solutions and easy to adhere processes to get employee buy-in and guarantee transformation.
Automation not only streamlines business operations but can help companies to make significant cost savings. In its white paper, Zycus continued: “An integrated spend management system can create a continuous cycle of savings. The automation of processes will help identify, realize and negotiate on the identified savings as well as enforce process compliance.”
The Local Government Task Force Guide Ten Top Tips for a Successful Procurement Process (www.bipsolutions.com/pdf/tentoptips.pdf) takes companies step-by-step through what can be a complex process to navigate. Its tips are:
1. Spend plenty of time planning
2. Establish roles and responsibilities
3. Ensure transparency of proceedings
4. Observe legalities
5. Accommodate innovation and secure Best Value
6. Prepare sound and complete tender documents
7. Consider monitoring and payment arrangements at the outset
8. Ensure procedures provide for probity and accountability
9. Think before you act
10. Learn from the process
The same advice applies to procurement on a local, national and international level. Observing legalities and regional laws and regulations is vital for companies that choose to procure from other countries. All too often, the process fails where organizations have ignored or just have not recognized local business practices.
Mark Masterson, Capgemini Procurement Services’ (formerly IBX) UK Director, told Supply Chain Digital that procurement should be all about creating value and driving up overall value specifically.
So if you are planning to refine your company’s procurement process, start by breaking the process down into manageable parts. That way, you can map out the exact route to achieving your overall target, whether that be increasing value, reducing costs or streamlining operations. As the saying goes: Fail to plan, plan to fail.