Tag: procurement process

procurement process

3 Strategies to Get More Out Of Your Procurement Process

SpendEdge, a leading provider of procurement market intelligence solutions, has announced the launch of their latest newsletter on the strategies to get more out of your procurement process.  A robust procurement process can help you to realize immediate upfront cost savings by procuring items, services, and contracts at the best prices.

Why It’s Time to Improve the Pharmaceutical Procurement Process?

Our analysts have noted that aggressive competition on generics pricing, expensive clinical trials, slow drug approval process and growing expectations of patients are creating different challenges for companies, globally. While top companies are opting for better procurement management to save costs, we have noticed that there are certain challenges that you need to address to ensure profitability in the pharma industry. This article will help you understand how an improved procurement process can control spend and improve supplier efficiency to create more opportunities for innovation. Also, it will provide key insights regarding the role of the procurement process in managing the indirect spend.

Truth About Purchasing and Procurement

Most of us have started using the terms purchasing and procurement interchangeably. But that does not mean they are same. They have certain similarities but have different meanings. This article will help you differentiate between the purchasing and procurement process.

The article will show how procurement is used as an umbrella term that includes several core business functions apart from purchasing. Procurement deals with the sourcing activities, negotiation and strategic selection of goods and services whereas purchasing mainly deals with the process of ordering goods and services. Purchasing can also be described as a transactional facet of the overall procurement process. The understanding of basic difference purchasing, and procurement process will help you effectively manage the entire procurement process and reduce revenue spent on purchasing goods.

Procurement Process Steps You Need to Know

An efficient procurement and sourcing process can successfully lower costs, enhance efficiency, increase profit margins for companies and improve contract management. However, you must agree that the procurement  and sourcing process is more complex than it might seem to be.

To help you improve the process and reap above mentioned benefits, you need to select the most reputable vendors and minimize order delays and mistakes. The article will help you gain knowledge about the key steps involved in improving the procurement process. This will ensure that you don’t end up paying too much while procuring goods and services. The article also highlights how vendor selection, getting approvals from internal departments that control finances, and complying with guidelines is critical for the procurement process.

procurement process

Procurement Market Intelligence: Streamlining Procurement Process and Achieving Savings of $19 Million for a Healthcare Products Manufacturer

Recent changes in the Canadian healthcare sector has set the stage for new opportunities for revenue generation. However, recent changes have created the need for companies to improve their procurement process flow and address problems in healthcare procurement.

The Business Problem

The client is a leading manufacturer of healthcare products in Canada and generates an annual revenue of over $70 million. However, the country’s complicated procurement system, coupled with numerous jurisdictions, each with its own legislative framework, was creating a complex healthcare ecosystem. The client was also sourcing products from multiple suppliers and receiving multiple deliveries and invoices, which was leading to excess spend. This compelled the client to map the procurement process flow and leverage SpendEdge’s procurement market intelligence solution to gain detailed insights into the commodity categories and meet regulatory requirements.

Understanding the procurement process flow is crucial for companies to reduce excess spend. Request a free proposal and access our complete portfolio of procurement market intelligence solutions for free.

Solutions Offered and Client Journey

To help the client correctly map their procurement process flow, the experts at SpendEdge identified gaps within their process and consolidated the requirements of all departments within the organization. They also gained visibility into the spend areas and specialty categories to help the client identify cost-saving opportunities.

Insights obtained from SpendEdge’s solution helped the client to track and manage information on supplies, labor, and other expenses. This helped them to identify related goods that can be purchased from fewer suppliers, leveraging larger spend to negotiate better pricing. Also, evaluating suppliers on the basis of the quality of service, warranty, and customer service helped the client to improve the procurement process flow. The solution delivered enabled the client to benchmark pricing and ensure procurement costs were in line with the average market prices.

Wondering how you can improve the procurement process?

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Key Findings and Outcome

Achieved significant savings

The improved procurement process flow ensured that the single purchase order and shortlisted vendors could meet the needs of the entire company. This reduced the time taken by the client to process the requests. The solution provided further helped the client to develop a good working relationship with the suppliers and negotiate the best deals. This minimized the time spent on low-value items and helped the client to achieve savings of over $19 million. 

Maintained regulatory compliance

The experts at SpendEdge realized that the government policies and regulations seek to strengthen healthcare security and safety at a macro level. Therefore, they identified laws and regulations that must be followed by the client to sustain themselves in the healthcare market. They focused on compliance, ethics, and risks to drive awareness throughout the enterprise and improved compliance. For detailed insights into the solution offered, request for more information.

What are the Best Practices in Procurement Process?

Since the efficiency of the procurement process can decide the success for businesses, it becomes imperative for companies to follow procurement process steps and map the procurement process flow. Here are a few procurement best practices that companies can follow:

Automate data gathering process: Conducting research on suppliers can be a time-consuming process. By automating this process, companies can ensure the availability of information without spending a lot of time and effort.

Involve in strategic sourcing: The best-in-class organizations obtain feedback and information regarding their objectives and strategies from different functions. This helps them to ensure availability of supplies, reduce the total cost, and streamline the procurement process.

Make continuous improvements: It is advisable for companies to never assume that the procurement process flow is perfect. Make continuous improvements to tap new opportunities and gain greater efficiency.

Want to map the procurement process flow? Get in touch with our experts today!

direct procurement

Key Challenges Companies Face in Direct Procurement Management

Today, organizations are increasing their focus on financial processes and are designing strategies to reduce indirect spend. However, the value of such strategies and solutions are limited to industries where indirect spend is less than the direct spend, as direct procurement management involves a different set of requirements. 

Direct procurement management is an extensive process that entails multinational suppliers, lengthy lead times, and heavy reliance on logistics. Direct procurement management also requires extensive collaboration among different parties to manage the supply chain. It has a greater impact on organizations’ customer retention, as failures in supply chain management and product delivery affect customer experience and loyalty, as well as business success and growth. Therefore, in this blog, we have highlighted the key challenges that companies face in direct procurement management.

Developing a robust direct procurement process requires updated market data. Request a free demo to know how our experts can help you with precise market insights.

Challenges in Direct Procurement Management

Complex supply chains

The supplier base for direct procurement is usually much wider and complex when compared to that of indirect procurement. This puts valuable goods at stake and increases the possibility of process inefficiencies. Factors like supply chain movement, supplier base health, and brand value play a critical role in direct procurement management.

In addition, direct procurement process requires companies to engage with suppliers directly for placing orders and sharing forecasts. This involves multi-tiered supply chains making it even more difficult for companies. 

Improving visibility into all supply chain processes will help organizations track their shipments and keep the production going. Also, gaining supply chain financing will provide access to capital when required and maintain the efficiency of the supply chain and the supplier base.

Wondering how improving direct procurement process can impact the growth of organizations?

Request a free proposal and access our complete portfolio of procurement market intelligence solutions.

Globalization

Globalization has been a critical factor in transforming the way how organizations have been managing their procurement. Global direct procurement management requires businesses to manage an expensive and diverse supply chain that operates across different borders. More touch points are needed to gain accurate data in real time for the efficient flow of goods. In addition, shipping orders across borders entails extensive documentation to clear customs, as well as requires detailed coordination between organizations, trading partners, and even local governments.

The complexities further escalate with the involvement of a range of business partners, the types of transactions, and the flow of financial assets. To gain detailed insights into the direct procurement and indirect procurement, request more information here!

Logistics management

In direct procurement, a long term financial planning is imperative for a successful supply chain. Although logistics do not have much role in indirect procurement processes but in direct procurement management, it directly impacts customer experience and business success. Proper management of the extensive amount of data among different parties is must to ensure that the suppliers are packing, producing, and shipping orders correctly to ensure the safe delivery of products in an efficient manner.

Visibility into inventory, purchase orders, shipments, and payments, will help in developing a robust supply chain. Also, improving transportation procurement will enable companies to prevent goods shortages and build a positive customer experience.

Wondering how logistics management can impact your supply chain. Get in touch with our experts for better insights.

cost benefit analysis

Understanding the Basic Difference Between Purchasing and Procurement

What is Purchasing and Procurement?

Purchasing and procurement stand for far more complicated processes than simply bringing goods and services to an organization. They are the foundation of strong, collaborative relationships with suppliers. However, often, purchasing and procurement are used interchangeably and are misunderstood. Through this blog, our experts try to clear the difference between purchasing and procurement.

Procurement is a business management function that involves the acquisition of products and services. It covers a set of activities from identifying the need for goods and services in the organization to strategically acquiring them. The procurement process usually involves activities such as:

  • Selecting vendors
  • Establishing payment terms
  • Negotiating contracts
  • Purchasing goods

(more…)

Answers to the questions

5 Key Procurement Trends That are Crucial for Procurement Organizations in 2019

Top Procurement Trends for 2019

With the procurement industry experiencing continual transformations, companies are facing the dire need to look for new ways to assess, increase, and monitor the efficiency of their procurement process. They are now expected to devise an effective procurement plan that can enhance their sourcing and procurement process.

However, doing this is it is not as easy as it appears to be. Companies are driven by different environmental and social risks and require transparency in their supply chains. As a result, more comprehensive methodologies need to be embedded in the procurement process and to ensure sustainability.  At SpendEdge, we understand that procurement is not just limited to minimizing costs or mitigating risks. Therefore, in this blog, our team of experts has highlighted the key procurement trends that are going to impact businesses in 2019.

Have you ever thought why some procurement organizations fail to keep up with the demands? It’s because they fail to predict future procurement trends. Get in touch with our experts and know how major procurement trends can affect your business. 

Top procurement trends for 2019

Surge in digital technologies

Digital technologies such as blockchain, cryptocurrency, cloud, and artificial intelligence (AI) are among the top procurement trends for this year. One of the key reasons behind the emergence of digital technologies is the willingness of companies to make the digital business a top priority. Companies are now finding significant automation potential in transactional activities and strategic tasks and bodes well for most businesses since it will enhance their efficiency.

Cybersecurity threats

Although digitization is taking a leading edge, the growing amount of data is leaving the entire supply chain vulnerable to cyber threats. This is the reason why cybersecurity is considered to be one of the major procurement trends for 2019. Organizations can adopt various strategies such as limiting supplier access to IT systems and ensuring compliance to enhance their procurement process.

Focus on reducing indirect spend

Indirect spending has always been a prime concern for procurement organizations. It involves a large supplier base and a comprehensive governance process to avoid leakages, contract terms, and paperwork.  Over time, these factors become so complex that organizations start losing out on crucial opportunities. Therefore, organizations have started looking for automated financial and tail spend management solutions that can ease out the complete process for them.

Interested in reducing the indirect spend for your organization?

Request a free proposal and know how understanding the latest procurement trends and leveraging tail spend management solutions will help you reduce indirect spend.

Prominence of big data

Disruptions in the supply chain can lead to increased costs, labor unrest, and customer service challenges. Big data can provide critical insights required for predicting events or disruptions. Businesses just need to collate data points from all sources and align them to their business operations to make the most of big data solutions. These benefits are making big data one of the main procurement trends for 2019.

Enabling sustainable procurement

With procurement functions shifting beyond cost management, procurement organizations have started employing sustainability as a lens to identify environmental and social risks. This is because environmental risks such as resource and raw material scarcities are increasing. Also, risks associated with social factors are becoming more visible and less acceptable as the younger generation of consumers is entering the prime purchasing age. Analyzing procurement trends will help businesses in sustainable procurement and entailing performance-based metrics into each phase of the procurement plan.

Analyzing procurement trends helps organizations to keep themselves prepared for the changing market dynamics. However, it requires thorough market knowledge and expertise. Request a free demo and know how our experts can guide you in analyzing the recent procurement trends.

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supply management

How Purchasing and Procurement Can Impact the Efficacy of Businesses?

Until now, purchasing and procurement were a necessary part of multinational corporations but seldom celebrated. But changing times have compelled organizations to acknowledge the role of purchasing and procurement when it comes to driving the success of organizations. Through this blog, we are discussing the difference between purchasing and procurement process and how it can impact the quality, innovation, efficiency, and savings of an organization.

Mostly, purchasing and procurement are considered to be synonyms by people. They never consider purchasing and procurement as different terms as both are related to the acquisition of goods or services for companies. Therefore, it becomes vital for companies to understand the difference between procurement and purchasing to understand the impact on their organizations.

At SpendEdge, we understand the impact that a process can have on your organization. Therefore, our team of experts has highlighted some major aspects that are influenced by the procurement purchasing process.

Are you interested in analyzing the impact of purchasing and procurement activities for your organization? Get in touch with our experts and know how your procurement and purchasing impacts your business.

What’s the difference between purchasing and procurement?

Procurement is a broad and comprehensive concept. However,  procurement can be defined as a set strategic, tactical, and operational processes that are required to optimize the supply outcomes for needed external goods and services. It also involves processes such as spend analysis, sourcing, inventory management, and operational purchasing.

Purchasing, on the other hand, can be considered to be a part of the procurement process. It is a transactional process that deals with how goods or services are ordered. The purchasing process primarily focuses on stock purchases (inventory), non-stock purchases (expense), and subcontracting.

Importance of purchasing and procurement process for organizations

Improve quality

Purchasing and procurement departments can control the quality of products and services by setting target performance levels for quality. This helps them track the quality of products against set parameters such as durability, the look, or the delivery timelines. In some companies, purchasing and procurement departments even work in alignment with their vendors to develop processes and ensure quality.

Want to know how improving quality can benefit your business?

Request a free proposal and know how our procurement experts can help you enhance the purchasing and procurement process.

Pursue innovation

Since the purchasing and procurement department is always in contact with innumerable businesses, they are in the ideal position to source innovative goods and services. Such a form of strategic sourcing provides businesses with the required competitive edge in terms of price, quality, or convenience.

Increase efficiency

Many companies consider procurement purchasing process as a one-dimensional process. However, when implemented strategically within the organization, the procurement and purchasing process can lead to greater efficiency. An optimized purchasing process can enhance the sourcing capabilities and ensure timely delivery of goods and services.

Achieve savings

Purchasing and procurement have a considerable impact on the bottom line of any organization. They directly impact the sales and costs of the company. Efficiently managing procurement and purchasing allows organizations to achieve immediate cost savings by procuring items, services, and contracts at the best possible prices.

Improving the bottom line of any organization requires consistent efforts and expertise. Request a free demo and know how our purchasing and procurement services can help your organization.

 

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IR15

Procurement Cycle Challenges and Ways to Overcome Them

Modern companies are operating in increasingly intense scrutiny driven by technology, customer reviews, and expectations for service improvements. Their main objectives are to minimize cost by improving the procurement cycle, manage risks, maintain vendor relationships, and streamline processes.

However, reducing costs still remains the top priority for businesses. Procurement professionals need to think before making any purchase. It might sound an easy task, but only experts will understand the difficulty involved in selecting and creating purchase orders for every request that comes to their desk. This is where unnecessary expenses start. Therefore, it is important for companies to profile the challenges faced during the management of the procurement cycle that can lead to the failure of the project.

Key procurement cycle challenges

#1 Inaccurate planning

Mostly, the decisions made while planning for purchase and delivery are crucial as they affect the overall schedule and total cost of the operations. Improper planning in the procurement process may result in material shortages or surpluses, cash flow problem, and unnecessary delays. Therefore, companies should follow procurement best practices and prototype planning models to facilitate pre-tender and procurement processes and improve their procurement cycle.

Want to avoid unnecessary material shortages and cash flow problems? Get in touch with our experts and know how they can ensure best in class procurement cycle for your organization.

#2 Reducing costs

The process begins with the proposal of the annual budget. However, the reduction of costs majorly depends upon effective supply chain management. Even small reductions in material costs in a company’s total operating budget can impact the organization positively by increasing its profit margins. Therefore, professionals managing the procurement cycle must adopt procurement best practices and negotiate effectively to obtain materials of the highest quality at the lowest cost.

#3 Legal and political environment

Legal environment refers to a broad legal framework that governs all business activities including research and development apart from procurement rules and regulations. It involves various aspects such as manufacturing, finance, marketing, and contracts of the procurement management system. Similarly, the political environment includes trade associations, professional associations, and business firms or companies that are engaged in the procurement process.  Their varied interests affect the overall budget of the procurement management system and disturb the complete procurement cycle. Such an environment requires companies to include detailed provisions in their contracts and develop a strong coalition among policy makers, bureaucrats, and interest groups to get their procurement process in place.

Interested in reducing costs for your organization?

Request a free proposal and know how improving procurement cycle can help you cut costs.

#4 Maintaining vendor relationships

Vendor relationship management is an intellectual approach to manage relationships with vendors who supply goods and services to the organization. The methodologies of vendors pre-qualification in the procurement cycle vary from company to company but the relationships strengthen when procurement professionals follow mutually agreed upon standards to assess the performance. 

How to manage your procurement cycle?

Our team of procurement experts at SpendEdge realizes that ensuring efficiency in the procurement process has a positive chain reaction within the entire organization. Therefore, we are highlighting four steps that are critical to step-up your procurement cycle:

  • Incorporate a contract management system
  • Maintain a good supplier relationship
  • Automate processes
  • Employee training and development

Making changes in the procurement cycle may seem a daunting task at first but it is extremely beneficial in the long run. Request a free demo and know how our experts can help you improve the procurement cycle.

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IR7

Top 3 Procurement Challenges and Solutions Companies Need to be Aware of in 2019

The future of supply chains is not just confined to ensuring reduced price and timely delivery of goods. It is dominated by various other factors such as legal issues, sustainability concerns, and regulatory compliances. This creates the need for companies to utilize procurement services that can enhance the speed, efficiency, and accuracy of their processes. Through this article, we’ll discuss what are the major challenges that companies face while procuring goods and services and why they need procurement services providers like SpendEdge.

Why use procurement services? 

Maintaining domain expertise in every category of spend is still an expensive and difficult task for many organizations. Leveraging a procurement service provider can assist companies to conduct a rapid analysis of an organization’s spend, negotiate with suppliers, and avoid the burden of building an effective procurement infrastructure for non-strategic categories.

At SpendEdge, we understand that not every organization can employ a strategic sourcing process and train employees on sourcing automation tactics and category and supply market assessments. Therefore, our team of experts has highlighted some major challenges that companies face while sourcing good/services and have offered viable solutions that procurement services can offer.

Want to leverage the benefits of procurement services for your organization?

Talk to our experts and know how our procurement methods can be leveraged to design an effective procurement strategy that can suit your business needs.

How can procurement services address top supply chain challenges?

Challenge 1: Complex spend

Every year, businesses make millions of purchases that are either too small to be handled or are too infrequent to be included in a single vendor catalog. For most businesses, such categories are sourced manually using internet searches or emails, increasing the complexity of the process.

Solution

By utilizing strategic procurement services, companies can prioritize categories on the basis of market size and product innovations and provide a comprehensive overview of all efficient suppliers in the market. Companies can even employ online procurement solutions to decrease the complexity of spend.

Challenge 2: Risk

Not only big businesses, but mid-market companies are also becoming vulnerable to various strategic and operational risks in their procurement process. They require a holistic risk strategy that can minimize total risk exposure and enhance their supplier risk management.

Solution

Procurement services help companies with risk mitigation investments and risk transfers. They analyze the suppliers before onboarding them and continuously monitor them to improve supply chain visibility and reduce the risks of working with new vendors. Also, procurement services help companies to evaluate the procurement process and manage procurement risks across various business units.

Devising a holistic risk strategy can be a herculean task for many companies. Request a free proposal and know how our portfolio of procurement services can help you successfully mitigate risks.

 

Challenge 3: Information

Companies sticking to traditional methods can never gain a competitive edge in the market. They need their procurement department to be comfortable with advanced data mining and analysis technique in big data to become market leaders.

Solution

Firms offering procurement services possess the capability to analyze data from multiple sources and prioritize business processes. They help companies to recognize the equipment and applications associated with each business process and provide the needed procurement services.

Want to implement advanced techniques for extracting valuable insights from data?  Request a FREE demo below and know how our procurement services can help you.

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