10 Ways to Deliver Smarter Procurement

Given that margins are determined by the difference between the customer and procurement supply chains, it’s an important element in determining business profitability. We’ve detailed 10 tips on how you can do this better.

What is procurement? Well, we define procurement as “the everyday activity of obtaining goods and services a company needs to support its operations including sourcing them, negotiating terms, contracting, ordering, delivery, receipting and inspection, and then of course, keeping and maintaining records.” These products and services can either form part of your resell to an external end client or be consumed within the business itself.

Given that margins are determined by the difference between the customer and procurement supply chains, it’s an important element in determining business profitability. While it can be a complex and broad area, we’ve detailed 10 tips on how you can do this better:


  1. Ensure that your Procurement function outcomes are aligned with your business strategy and Business Planning process, especially where it relates to the trade-off between quality and price.

  2. Procurement risk should be understood and managed at a tactical level and ideally reported using risk heat maps (impact vs likelihood) at appropriate levels in the business.

  3. Embrace automation to reduce processing costs, and improve processing timelines and reliability of information. That in turn enhances the customer experience.

  4. Benchmark your procurement KPI’s against available metrics to identify room for improvement and prioritise the delivery of these.

  5. Source locally where you can. Shorter supply chains are less prone to disruption and inflationary pressures.

  6. Ensure that cyber fraud detention measures are in place and that staff know what to look for.

  7. Have one or more “procurement champions” within your business with clear expectations to constantly evolve the function.

  8. Procurement digitisation (automation) should be aligned with your broader enterprise-wide digitisation plan and at every level, provide value for money and an appropriate Return on Investment.

  9. Embrace data analytics and a more detailed analysis of procurement activity, to raise awareness of data trends on a real-time or near real-time basis, through both a customer and procurement supply chain lens.

  10. Ensure that all commercial commitments are documented and that the ensuing obligations on both parties are managed and delivered throughout the contract term.

When you get it right, the procurement process adds a huge amount of value to the business in servicing your customers, plus it's an enabler for organic growth at any pace.



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