Defined in simple terms, procurement is a strategic function to minimize the efforts of the organisation’s resources while at the same time increasing the organisation’s profitability. It is a strategic function to obtain raw materials, services or any kind of supplies essential for the organisation’s functioning without stressing existing resources.
This identification of potential vendors and the subsequent purchase of required goods and services is the primary goal of a procurement department or agency and one that makes all the difference in optimal functioning of businesses.
How to achieve primary goals of procurement
The primary goals of procurement is to obtain best services and goods at a suitable cost with an aim to increase over-all productivity. Outsourcing of this function ensures superior quality of goods and services at the best possible cost as well as the updation of market database and the knowledge of market changes and their impact.
As the business world undergoes a series of changes, it is time for organisations to review their current processes and update them to integrate new innovations.
The basis of an optimum procurement process is finding the right source at the right time at the best price in comparison to existing procurement standards.
Procurement for your business
While the standard rules of procurement apply across verticals and industries, it is essential to customize procurement processes according to the needs of your organization. Suppose vendors in Haryana are working at a cost much lower than vendors in Delhi, is it wise to procure from Haryana because the cost of transport would be similar to cost of goods or would it be sustainable to devise a strategy to achieve the best of both worlds?
Procurement consultants excel at strategy building in an effort to cut costs, create a viable database and ensure the best use of resources for maximum output.
Considered to be simply a value-added function, procurement in reality can lead to incremental savings and efficiency across business functions of human resources, finances and operations. Offering a better visibility into company spends and budgets, financial efficiency through procurement processes can hugely impact an organisation’s profit potential.
Preparing an organization for risks
A lesser known and mostly ignored impact of procurement is the ability of an organization to prepare itself for risks. Offering transparency into operational and financial functions, procurement also enable a business to take stock of its overhead expenditure and skewed financial processes.
To learn more about how procurement can lead to incremental savings, you can get in touch with our consultant at email@example.com