For any company in any industry, procurement management is
an essential practice for safeguarding effective and efficient operational
processes. Procurement management is a strategic approach that is widely used
in the business landscape to manage and optimize the process of acquiring
products and services from another firm, and as a result, minimize the
organizational spend. Considering the importance of having everything you need
at the right time and at the right place, smart procurement management practices
are vital for your organization’s performance and long-term success.
Key elements of a
successful procurement management
- Planning. A comprehensive procurement plan must be in place before
the procurement management process is rolled out. The plan should be specific
and detailed enough, encapsulating timings, budget and an overview of the work
to be done. Although you should allow some flexibility, you should nevertheless
keep in mind your initial procurement plan in order to avoid any errors,
omissions or duplications.
- Supplier Selection. Another important element of successful
procurement management is the selection of your suppliers. It is vital that you
make enough research to identify and select the best suppliers that match your
company’s goals and objectives. Ensure that you take into account different
variables, such as costs, vision, response time and availability, health and
safety measures, support, quality control and delivery times.
- Ongoing Control. Nevertheless, your work doesn’t stop at the moment
when you agree on a contract with a supplier. It is important that you are
constantly monitoring and evaluating your supplier’s performance across various
dimensions, such as the products’ quality, the delivery times, the support
offered and so on. Regular weekly/monthly/annually meetings with your suppliers
are highly advisable in order to keep close contact with them and make them
aware of what you are expecting from them.
- Evaluation. This is a highly important element that is often
overlooked by many companies. The entire procurement process must be thoroughly
and regularly examined and assessed against Key Performance Indicators (KPIs).
By shifting your focus to the evaluation and assessment of the procurement
process, you can look into any problem areas that need to be improved or
changed. This way, you are preventing bigger problems from occurring and as a
result, you are aiding in the overall long-term success of the entire
procurement process.
Why it’s important to
digitize your procurement management process
Without a doubt, keeping everything manual requires a
significant amount of time, effort and resources. Although this might be okay
for smaller sized firms, it starts to become a major problem as the
organization grows and expands. If this is the case, it is important to
consider digitizing your procurement management process. It definitely has a
lot of benefits to offer, including:
- Significant reduction in
omissions and mistakes caused by human error
- Reduction in processing times
and improved efficiency
- Reduction in costs and
enhanced spend management
- Easier and faster
monitoring of your organizational spend
- Enhanced information
preservation.
- Elimination of space used
for paper storage and reduction in off-site document storage fees.