Procurement Best Practices for Companies
Earlier, procurement had a simple mandate of keeping the cost low. But nowadays, procurement has become much more complex and requires a set of procurement best practices that can help companies to gain visibility into the operations through accurate data. Such practices improve procurement outcomes apart from identifying sustainable cost reduction opportunities and help companies to gain competitive advantage. Therefore, we have defined procurement best practices benchmarks set by leading organizations to increase productivity and profitability.
Procurement Best Practices #1: Online procurement
Merely optimizing the website doesn’t improve the organization’s procurement process. Having a digital procurement strategy that incorporates data from different sources such as sensors in warehouses, mobile technology and addresses the consumer needs is must. Online procurement creates a predictive approach and enables organizations to provide products and services according to demands, reducing waste and increasing efficiency of organizations.
Procurement Best Practices #2: Centralize supply management
A centralized supply management system utilizes information gained from various departments and makes purchasing and sourcing decisions based on that information. It mitigates the risks and threats associated with indirect spend and minimizes maverick spend occurring due to unapproved suppliers. Implementing such practices results in substantial returns for companies.
Procurement Best Practices #3: Develop a procurement spend map
Most organizations do not have a proper spend map and rely on poor quality information to understand spend at an organizational level. A spend map provides the basis for identifying opportunities and risks and helps companies to improve supplier value apart from implementing cost reduction initiatives. Mapping spend provides valuable insights into the total spend the company, improves transaction processes and monitors the administrative cost.
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