4 Ways to Step-up Your Procurement Cycle

Maintaining efficiency in the procurement cycle has a positive chain reaction within the organization as a whole. The key objectives of a procurement process extend to far more than merely obtaining goods and services to satisfy the internal requirements. A successful procurement process aims to optimize business operations and create a significant business value. Having a highly streamlined procurement cycle is vital to the financial success of a company. But even the best procurement process often require refinement in order to yield better returns. But in today’s highly competitive world, if you keep doing what you always have been doing, chances are that it might become obsolete. To survive, companies need to keep constantly updating themselves on the market trends and ensure that the procurement cycle is best in class. Consider incorporating these methods to improve your procurement process:

• Incorporate contract management system

Companies can use technology to improve the procurement process is by incorporating a contract management system. It will alleviate the whole task of creating new contracts every time the company onboard a new supplier. Contract management and the use of standard templates is more time-saving and facilitates the improvement of efficiency. Furthermore, standard contracts can avoid the risk of errors being made in the procurement cycle and ensure that all important concepts and language are included in each and every contract.

• Maintain good supplier relationship

Ensuring a good relationship with the suppliers is critical in a good procurement cycle. A mutually beneficial relationship between the organization and suppliers comes with a great deal of effort and hard work. It is important that businesses are dedicated to growing relationships with their vendors and suppliers through trust, honesty, open communication, and ethical business practices. It will also result in improved goodwill as a happy supplier will most likely spread a good word about the company, leading to new sourcing avenues.

• Automate processes

A company’s procurement cycle might function well manually. But its full potential and true efficiency can be realized with automation. With a good e-procurement program in place, companies can gather data, conduct supplier research,  gain greater visibility into the spend, and ensure the requirements are being met. Furthermore, this can help streamline the procurement process, making it easier than ever to create contracts, send payment, and track invoices and shipment in order to drive efficiencies.

• Employee training and development

Well trained employees can contribute majorly towards an efficient procurement cycle. Training and development create scope for employees’ personal evolution but also has a significant impact on the company’s productivity and profitability as a whole. It reinforces the goodwill of the business and allows it to maintain the competitive edge. Furthermore, it leads to higher customer satisfaction, lower costs and faster growth.  As a form of effective communication, training can lead to an increase in productivity and allow employees to make the best decisions for the company’s progress.

To know more about the steps involved in procurement cycle and the challenges in the procurement process

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