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Posts Tagged ‘sourcing solutions’

Why Is It Important To Constantly Review Your Procurement Strategy?

Thursday, September 27th, 2018

An organisation’s procurement policy is the crux of operational efficiency. The difference that an intelligent procurement strategy can make to businesses is difficult to fathom. In light of the increasing need to perfect procurement functions and policies, organisations have started hiring top procurement companies to help them and enable them to meet their needs.

In the scenario that your organization employs an outsourcing agency to manage procurement functions, it is important to consistently review performances and ensure all organizational demands are met.

Another important thing to factor in is the cost of procurement – if your cost exceeds the input, it’ll lead to imbalance in company expectations and output.

What should you be reviewing?

Cost

For any organization, cost plays a very important role. From sourcing to vendor management to ensuring the company doesn’t face any issues due to procurement are some of the key areas where an outsourcing company comes to your rescue.

In terms of cost, it is definitely advisable to express and ensure budgets are not exceeded and also that budgets are utilized to their full potential.

Output

Another important thing to review is the output of the procurement function. If the output is drastically reduced and there is a noticeable change in delivery of goods, mismanagement of funds or a general stagnancy, it is a clear indication that the procurement strategy needs an overhaul upgrade.

Consistency

Consistency though is one of the most ignored factors, it’s an important measuring tool. To know what works and doesn’t work, it is important to consistently work with a certain section of vendors at a particular cost and then measure if it is working for you and your costs.

If you’d like to understand more about procurement management and its benefits, you can get in touch with our experts at www.vpurchase4u.com or write to us at info@vpurchase4u.com.

What Are The Advantages of Procurement Planning?

Friday, September 21st, 2018

Procurement is an important part of business transactions for organisations around the world. The planning for procurement though depends on a number of factors which define a procurement plan for present and future needs.

Businesses around the world hire top procurement companies in an effort to perfect their procurement function and ensure efficiency in all related functions.

However, the question may arise why organisations shouldn’t procure directly and spend time and money for outsourcing? To put it simply, in comparison to both processes, outsourcing procurement is far more profitable. Let’s take a look at why:

Reduced costs

Direct procurement can lead to very high costs since an organization will not have access to the market intelligence that an outsourcing company will have. Also, direct procurement can lead to consumption of more time and resources which can be focused on internal company functions.

Another point to note is that organisations sometime need to make small scale purchase which will cost them much more than their budget. Additionally, vendors don’t offer one time discounts to buyers who buy sporadically whereas an outsourcing company will ensure that you get the price for the services and goods you need.

Quality standards

Let’s be real, it’s almost impossible for organisations to focus completely on the standard of goods when their core function is focused on bringing profits. This leads to a weak procurement system where standards are not as per the amount spend.

Let’s assume the quality of goods are not upto the mark for a period of six months, but the procurement function is overburdened and doesn’t realize the issue till it’s out of hand. In that case, finding new vendors in a budget which suits your organization becomes a difficult task.

Handling relationships

In a country like India, vendor and buyer relationship holds a lot of importance. In case of emergency or lack of quality goods or delay in payment, a healthy relationship with a vendor can last a long time. If you hire an outsourcing company, the company will be responsible for handling all relationships with vendors and will also insure they put in time and effort in researching the best vendors in fields related to your organization. The responsibility of vendor management, procurement, payment to vendors, market intelligence lies with the outsourcing company thus drastically reducing the burden on your organization.

However, before hiring a procurement company, it is important to analyse and investigate if your organization needs a procurement company at all. Once the organization has decided on a course of action, the procurement company will take over and work on actionable points.

To understand more about procurement and how it will benefit your company, visit www.vpurchase4u.com or write to us at info@vpurchase4u.com.

How Efficient Sourcing Solutions are Helping Businesses Worldwide

Thursday, August 30th, 2018

Sourcing has been the cornerstone of efficient business processes since time immemorial and with changing times, the landscape of the process is drastically undergoing a change. Considered to be secondary processes at one point, today the entire gamut of sourcing solutions is considered vital for business growth. Especially in a country as vast as India, sourcing solutions have become a value addition for businesses. Strategic sourcing solutions include procurement solutions, strategic vendor management and an intelligent system for smooth functional flow.

Sourcing solutions in India

The country is witnessing a transformation across industries and business practices. Ease of doing business is highly promoted and has become the end goal for businesses in the country. In this respect, though sourcing solutions is a comparatively new practice, but is picking up rapidly. Sourcing solutions experts are effectively providing intelligent solutions with far reaching impact to organisations and gradually more organization are jumping the band-wagon.

In a country like India where 60% of labour is recognized skill labour and the price of goods and services changes at every corner – market intelligence is gold. If your organization is completely dependent on vendors for goods and services, it is vital to hire a sourcing solutions agency to help you understand the many nuances of this dynamic industry.

Tail spend management

Mismanaged tail spends can cost an organization almost 20% of what could have been incremental savings. In the past decade, tail spend management has cost multi-nationals a huge amount of precious money owing to staggered processes, excessive paperwork and the lack of structure.

A sourcing solutions agency can drastically change the way an organsiation manages their tail spend and bring in a much needed functional change. Operational efficiency is the impact of an effective sourcing strategy and is marked by integrating neat processes in the over-all functioning of an organization.

Save money and time

The essence of money and time has been stressed upon consistently and the efficient utilization of both while concentrating on core business processes is a difficult task.

Smart procurement strategy, event management, simple source to pay solutions are key areas where sourcing solutions can effectively make a change and can benefit organizations holistically. The first rule before hiring a sourcing solutions expert is to first understand the needs of your business and how experts can help your organsiation. In conclusion, the framework of efficient processes is marked by an efficient sourcing solutions strategy.

To understand more about sourcing solutions, please visit www.vpurchase4u.com

How Can Benefit from Modern Sourcing Solutions?

Monday, August 20th, 2018

The primary objective for a company is to consistently increase its profit, expand and explore more opportunities. The objective can have multiple layers but in itself, it remains the same across industries – to garner more profit with minimum investment.

The business eco-system today is going through its fair share of changes and is discovering a system of efficiency that is positively affecting tail spend management.

Proving this fact is the rising popularity of sourcing solutions as a strategy to save money while maintaining operational efficiency.

Reduce:

Reducing the time taken for operational processes including vendor management, sourcing of goods and services impacts the over-all time and energy spent. Sourcing and procurement management need to be processes that don’t take from your core business processes but instead contribute to over-all growth.

Improve:

Review, analyse and make improvements to existing processes in an effort to bring more efficiency. Consistent vendor reviews, collecting market intelligence and sourcing at a reasonable cost are all steps one can undertake for long-term strategic planning.

Eliminate:

Eliminate processes that hinder your business processes and restrict your business from achieving operational efficiency. Processes tend to become clogs if not reviewed consistently. They are affected by both external and internal factors and need to be analysed objectively for them to have any long-term impact.

Outsource:

Outsourcing most of your processes will relief resources from undue burden and will drastically improve performances. The operational success of any organization is dependent on the utilization of two very crucial resources – time and manpower. If vendor management, which is an integral process of any business, is outsourced to experts, not only do you save money but also gather a huge market intelligence which didn’t exist before. The complacency of existing redundant processes is immediately traced and removed by outsourcing expects to recognize the needs of your business.

The need to recognize loopholes and close them with stronger processes is the need of the hour for any business looking for long-term growth. Short sightedness to save money leads to a series of processes which don’t benefit your business but instead create a circle of unending paperwork, approvals and tedious processes.

Sourcing solutions experts understand the needs of your business, the existing processes and the areas which need immediate attention. They bring seamless processes which promote transparency and accountability while at the same time saving money, energy and resources for the growth of your business.

To understand more about sourcing solutions and how it can help further your business, visit www.vpurchase4u.com.

How to cut your tail spend by 80%

Tuesday, June 19th, 2018

The age old problem of unmanaged costs has driven established organisations to take drastic steps. Every organization strives to excel at – minimum input for maximum output, though what they forget is dynamic external factors. Best industry practices are a guiding path for new, growing and to some extent established businesses; however for tail spend management, it is crucial to form a structure that is best suited to your needs.

What is tail spend management?

In simple terms, tail spend is a series of small purchases that are either too big or impromptu to be handled by procurement agencies. Organisations are policy-driven with a stack of paperwork to be fulfilled for each transaction. Though this holds true in 85% of organsation based transactions, it may not be true for the other 15%.
Lengthy paperwork, redundant contracts, sudden demands, low quantity and unreliable vendors are all contributing factors to a significantly high tail spend. In the last decade, companies of all sizes have gradually shifted focus to sourcing, vendor management, tail spend management and resource management. What earlier was considered as extra, unnecessary cost, today has become a key area for organisations to focus.

The need to focus on core business

The ability for a business to focus on their core functional areas while at the same time maintaining low tail spends is optimal. However it is observed that attention on reducing tail spend takes away from the core business which leads to an unbalanced work structure. It’s best to employ a third party tail management agency which not only identifies areas that need attention but also predicts potential troubling areas and thereafter prepares a plan of action.

An effective strategy

Tactical buying, spend analytics and local market knowledge are significant areas through which an organization can concentrate on their progress rather than managing time consuming functions.
Analyse and construct a strategy that works for your business and turns extra tail spend into incremental savings. If this investigative process is not a feasible option for your business, it is best to concentrate on employing a third party agency which understands your business, industry and work ethics. Not only will a third party agency nurture your current work flow but will also bring in an uncomplicated approach to reduce tail spends.

Get in touch with our consultants for a more thorough understanding of tail spends and how you can reduce it for your organization. Write to us at atul.masih@ascgroup.in

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