Establishing a procurement process is essential for every organization irrespective of the size and nature of the business. Every activity in the procurement process is connected and inter-linked with several other core organizational functions and operations. Being a part of the organization’s corporate strategy, the procurement process is the most vital element that helps in achieving the business objectives and ensuring an effective supply chain management. In order procure correctly and achieve their goals, the business needs specialized professionals who can help them to achieve their revenue targets, minimize costs, and drive profitability.
What is Procurement Process?
Any organization spends more than half of its capital on sourcing and purchasing goods and services; thereby making an effective procurement management habit evitable. The chief procurement officers (CPOs) are well aware of the fact that a slight change in the purchasing costs can have a direct impact on the bottom-line and everything depends on one single decision. Companies must put in place a standard procurement process to eliminate wastage, minimize costs; thereby, ensuring an effective supply chain management. A procurement management process will help organizations to complete purchase orders, facilitates supplier relationship management, approve vendor payments, review supplier performance,
Achieving Procurement Process Benefits in 4 Ways
A procurement process coupled with supply market intelligence can be extremely beneficial for the organization and helps in streamlining its purchase activities. Let’s see how a procurement and sourcing process can drive benefits for the organization.
- Conduct a spend analysis every quarter and assess it by developing an in-depth map of your organizations overall spend
- Minimizes costs by eliminating wastage in every function across the organization which results in substantial cost-savings. The procurement process helps the business create, drive, and optimize spend activities
- Educate and inform every function in the organization on how to drive cost savings and maximizing returns by critically assessing its purchase and spend activities
- Leverage supplier relationship management and contract management programs to evaluate suppliers, conduct a supplier risk assessment, and ensure friendly procurement terms that streamlines the procurement management process
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