Purchasing Best Practices You Want to Implement at your Workplace

Procurement or purchasing is an important organizational function, quite often even a strategically important one, and therefore, it is in the best interest of organizations to implement the best practices in procurement at their workplaces. In this post, we will detail some of these best practices.

Standardize the process

In many organizations, due to the lack of standardization, procurement specialists engage in ad hoc and maverick procurement. Also, since there is no standardization, the process takes longer than it should, and will cost the organization more than it should. Therefore, it is important to standardize the procurement process, and make it mandatory for everyone to follow their roles and responsibilities.

Cultivate excellent supplier relationships

Suppliers are more than just vendors – they are important stakeholders for the smooth running of the organization. Therefore, it is a good idea to cultivate excellent relationships with suppliers and function with them in a more integrated manner. This not only helps organizations ensure timely deliveries and excellent service but also low costs and discounts. Also, with a procurement solution, organizations can let their vendors maintain a catalogue of their products and services so that sourcing and selection issues do not rise. Since most, if not all, employees will be familiar and comfortable with e-commerce; this works great for them as it cuts red tape and unnecessary steps in the process. Of course, enough checks and balances can be established to ensure that no one is taking undue advantage of such facilities.

In managing suppliers, organizations must also organize periodic suppler audits to measure their performance against expected standards. From consistency in their delivery times to the quality of goods, everything has to be measured to ensure that the organization is getting the best possible deal.

Encourage collaboration among the stakeholders

Collaboration is one of the most important aspects of procurement. Almost every business function needs to work with procurement, and procurement functions need to work with their internal customers as well as their external ones, the suppliers. Without proper collaboration among all these stakeholders, the whole process will fail, and the organization will get hurt.

It is therefore essential to establish effective communication channels among all the stakeholders, and ensure that these channels are being used with good effect.

Digitization and automation

The procurement function can be hugely benefited from digitization and automation. From ordering to scheduling to verification and approvals, every part of the process can be automated partially or fully, allowing procurement specialists to get more done with less resource. Also, with automation and digitization, visibility into procurement will increase, which is great for the entire organizations since costs are controlled and deliveries are made in time.

Take ordering for example. In organizations that do not have automation or digitization, all the tasks such as filling out requisition forms, gaining approvals, sending them to the procurement team, the procurement team then coordinating with the vendor, and so on have to be done manually, wasting a lot of time. Instead of this, the entire process can be automated from the beginning to the end, saving resources, time and effort.

Also, it is important to note that there is no point in deploying individual solutions for different tasks in procurement. For example, many organizations deploy a solution for sourcing and ordering, use other apps for processing invoices, and yet another for maintaining track of deliveries. All these different apps confound the process and make an already complicated process further chaotic. What is more beneficial to organizations is to deploy an integrated platform that can handle all these tasks from a single interface. SaaS integrated platforms come with a number of capabilities that allow organizations of all sizes manage their procurement processes comprehensively from a single location.

This also improves visibility and ensures that the chances of fraud or reduced. Further, it is important to note that this platform approach ensures collaboration, eliminates manual data transfer, and saves time for everyone.

Online procurement solutions

While having any procurement solution is highly beneficial, online solutions are more beneficial in that they allow for access of data from anywhere. Also, the solutions can be accessed via mobile devices, which mean that procurement specialists and line managers can complete their tasks at any time. These solutions are also easy to deploy and maintain, and are very useful for small businesses.

Analytics

Lastly, coming to analytics, this has the power to revolutionize the way procurement is carried out in organizations. Using analytics, many of the problems associated with procurement can be solved easily. Analytics are available for everyone, and therefore, will improve the way all the stakeholders work. For example, the procurement specialist will be able to understand the lead and lag times easily, while the line managers will have analytics that tell them how their teams are performing, and if anything is out of order.

These analytics can also be automated with the solution, and the results can be automatically delivered to the stakeholders anytime.

All in all, there are a lot of best practices in procurement that organizations can employ at their workplace to ensure that this complicated task ceases to be so.

Guest article written by: James Maron is an author at SutiSoft, Inc. He shares his views on SaaS and Cloud-based business management solutions.