Most modern-day businesses are running after procurement excellence to enhance their competitiveness and improve their productivity. Here emerges a question- what is procurement excellence? Definition of procurement excellence may differ from one organization to another, from one profession to another. Organizations and businesses may have different concepts of procurement excellence, but everyone admits that it originates from an organization’s ability to exemplify excellence and improvement in certain areas, such as spend analysis, strategic sourcing, contract management, and supplier relationship management.
Procurement excellence matters a lot for businesses having global recognition. These businesses often encounter challenges when they try to manage their international procurement. If you are in the same boat, you must learn about the four things that can help you gain global procurement excellence – People, process, technology, and supply chain. Some businesses are hiring global procurement services to deal with procurement without any hassles.
Read on this blog to explore more about these four pillars of global procurement excellence.
4 Pillars of Global Procurement Excellence
Why people, processes, technology, and supply chain are important? Let’s try to delve into a deeper level of understanding with the help of an example. Logistics must be operated with utmost care to ensure consistency in the delivery of required technologies to each location. Sometimes, tailored inspections, missing paperwork, and local regulatory requirements can cause a delay in product delivery. Identifying a trusted supplier abroad can become a daunting task for growing companies that are trying to inaugurate new facilities in different parts of the world. This challenge can be eased with the help of a procurement service provider. Also, you can establish an in-house procurement team to look after this; but it would be a costly and time-consuming affair.
Growth strategies also have impacts on global procurement policies. Mergers and acquisitions are used for straining supply chains, and they can lead you to a complicated web of vendors that need to be well-organized. The consequences of M&A activities have been compelling the businesses to:
- Invest more money in technology
- Focus on ways to keep up with recent technology standards
- Pay puffed up prices for products and services
- Face failure in capitalizing opportunities for better control costs in different locations
Working with one of the renowned global procurement services can help you manage procurement in a better way. It becomes even more crucial for branching out into multiple locations across the world. When it comes to managing international procurement, all the four pillars, mentioned above, need to be considered.
Procurement can never walk alone. For managing complex global supply chain calls, meant for reinforcements from other parties, you will need an expert team. Also, you will need an eligible workforce for finding the right suppliers, checking the quality and quantity of the delivered products, and looking after the shipping and final delivery to your location. This skilled workforce needs an experienced and qualified manager who can supervise the team and lead them in the right direction. Both the team and the manager must know global procurement policies. To save money and time needed for setting up an in-house team, many companies are heading towards third-party global procurement services.
Your global procurement operations must be empowered by automation and transactions of dollars to optimize your systems and processes. Whenever, you are dealing with a new customer, supplier, or a critical transaction, you will need an efficient and well-streamlined process that can keep up with global procurement practices. The procurement process may differ from one business to another. It will depend on the nature and goal of the business. Startups should analyze their business objectives, nature, and industry trends carefully, before deciding on a process. If needed, you can seek assistance from a renowned procurement service provider. Considering your business’s specifications, they can strategize an effective process.
Technology is controlling every sector; procurement is not an exception. You will need to run your solutions in patented technology so that you can allow your clients to buy products from multiple OEMs in diverse currencies. You should deploy technologies that can make some functions easier for you, such as:
- Adding new tools to catalog
- Dealing with vendors
- Maintaining transaction flows in an automated manner
Regardless of the geographical position of your business and currency in your region, you will need robust technologies for leveraging all benefits discussed above.
This is perhaps the most important thing for attaining global procurement excellence. For many businesses, manufacturing businesses in particular, success depends on their supply chain management. The quality and quantity of the manufactured products depend on the quality and quantity of sourced raw materials. Therefore, it is important to ensure that you are supplying the best raw materials in the right quantity. Many tasks are associated with supply chain management, including:
- Monitoring the inventory
- Tracking and storing what it needs
- Deciding on the quantity you need
- Listing several trusted suppliers
- Selecting the right suppliers
- Negotiating with the suppliers and managing the transactions
- Ensuring that you are getting the right quantity and quality through multiple quality inspections
To deal with all these tasks with efficacy and improve your supply chain management, consider consulting an experienced procurement service provider.
A Final Takeaway
Procurement is the backbone of most businesses. Therefore, you need to make it a strength of your venture. To gain global procurement excellence, you must pay attention to the four pillars discussed in this blog.
One very important piece in the Procurement area that is generally missing in the Industry and the entire business ecosystem is “Procurement Strategy”.
A lot of companies have a 5 years plan for sources of revenue with detailing of product / SkU / geography/ demography and various other slices. However we’d rarely be finding very few companies with a detailed similar road map for Cost (read Procurement).
Those who keep it in the foray, manage crisis like war, disruptions relatively better.