If you already have a highly effective procurement department, it’s likely because you understand just how critical the procurement process is to your financial success. But even the best procurement process could use some refinement in order to be even better.
The fact is, in this aggressive economic environment, doing what you’ve always done isn’t good enough anymore. Now more than ever, you’re under pressure to contain costs while also producing results, even under the most challenging circumstances. You need to be best in class—and this might mean totally transforming your procurement process or just improving the operation. To get the most out of your process, consider taking these five steps to making it even better.
Take Social Responsibility Seriously
Taking on green initiatives and ensuring that your carbon footprint is as small as possible is no longer a nicety—it’s a necessity. There’s a reason that some of the largest organizations have gone green. Because consumers take environment impact and social responsibility into consideration when choosing which company to purchase from.
They do not want to buy products from companies that harm the environment or use unethical practices. They want to buy from organizations that take the community, the environment, and animal welfare seriously. If you want to increase your profitability, you need to make sure social responsibility and green initiatives are part of your procurement process.
Use Contract Management
Your company could be working with dozens, if not hundreds, of different vendors every year. There’s no reason to do the same work every time you onboard a new supplier. With contract management and the use of standard templates, you can reduce a lot of wasted time and improve efficiency. Additionally, using standard contracts can avoid the risk of errors being made and ensure that all important concepts and language are included in each and every contract. A contract management system can also help you keep track of your formal documents, to ensure that your high standards are always being met.
Automate Your Process
Your manual procurement process might seem efficient enough, but you won’t know true efficiency until you use automation. With the right e-procurement program, you can conduct supplier research, gather data, gain greater visibility into your spend, ensure your requirements are being met, and ensure you’re making the best supplier choices for your organization. Such a program can also streamline your process, making it easier than ever to create contracts, send payment, and track invoices and shipment in order to drive efficiencies.
Use Supplier Relationship Management
Integrating supplier relationship management into your procurement process can help you reap many rewards. A mutually beneficial relationship between your organization and your best suppliers doesn’t come without effort and hard work. You need to be dedicated to growing your relationships through trust, honesty, open communication, and ethical business practices, like paying fully and on time. In return, you’ll receive better customer service, lower prices, innovation, and myriad other benefits.
Continuously Look for New Opportunities for Improvement
Finally, even at its best, your procurement process won’t always be as effective as it is today. You should never reach a point where you believe that it can’t get any better or need to change. You should review your process and the results you get from it every few months to see if there are any opportunities for improvement.
New tools, technology, or procedures may come to light that could make your process more efficient or cost effective. And new trends or circumstances might occur that force you to re-evaluate your process and make required adjustments for the good of your business. Never get too comfortable with your current process—make changes as they are needed.