There’s no such thing as a perfect procurement process, but you can get pretty close by making some small adjustments.
Many organizations approach procurement with a lack of strategy. This causes them to sacrifice efficiency and lose money. Before continuing an inadequate procurement process, check out these simple steps you can take to improve your procurement strategy:
1. Centralize All Procurement Information in One Place
If you have supplier and order information stored in multiple locations, you’re asking for inefficiency. Instead, take the time to centralize all information about your vendors, orders, invoices, etc. into one platform. This will make your employees’ lives easier and will help them solve issues more effectively.
2. Create Standardized Policies and Processes
If your team is making up a new process for each step and supplier, you’re losing time. Each vendor may have unique needs, but standardized policies are necessary as a starting off point. If your team doesn’t start from a standardized process, they’ll be at a disadvantage with every new vendor they onboard.
Work with your team leaders to create standardized procurement processes, and publicize these processes in easy-to-access resources. If your team needs to modify them for individual vendors, they can, but they’ll save time if they know where to start.
3. Cultivate Diversity Among Your Suppliers
Supporting diverse businesses isn’t just a feel-good activity. Women-owned and minority-owned suppliers are often excellent business partners, but you may not be able to find them as easily due to certain structural barriers. Additionally, customers want to know that they’re supporting businesses with responsible supply chains. Making the extra effort to build diversity into your procurement processes is one way to gain approval from those customers.
To cultivate diversity without expanding your team’s workloads, consider using a vendor management platform that helps you find and manage diverse suppliers. For example, Certifiably Diverse provides companies a supplier diversity manager toolbox with certification alerts and a communication hub so they can easily contact their suppliers. These types of solutions can help surface great suppliers and streamline supplier management work your team spent time doing before.
4. Look for Ways to Introduce Automation
Automation solutions are growing more advanced every day. There are a number of programs on the market that can take care of the repetitive, routine tasks that eat into your team’s time, freeing them to do more with their days.
Look at your current procurement processes and determine which areas would benefit most from automation – whether that’s an invoice payment, an order submission, or something else. Then, browse the procurement software on the market to see what best fits your needs. Investing in automation often pays huge ROI down the line.
5. Build Positive Relationships with Suppliers
Suppliers are only human. If you treat them as such, instead of as machines that just exist to fulfill your orders, you’ll get much better service.
Even the most professional supplier will want to do more for the customer that treats them well, and less for the customer that doesn’t. When beginning a new supplier relationship, take the time to get to know the people you’ll be in contact with and form genuine relationships with them.
Once you’re in business together, try to be reasonable with your orders and the timelines you set. Also be sure to pay all invoices in a timely manner. Doing so builds up goodwill for any time when you may need to ask for a rush order or otherwise ask the supplier to go above and beyond for you.
6. Have Clear, Straightforward RFPs and Negotiations
Clear communication goes a long way. Any lack of clarity can lead to delays or confusing orders. Make sure all RFPs are as specific as possible so your potential suppliers know what they need to do to win your business. When negotiating with potential partners, lay out your terms as specifically as possible.
Not everyone is naturally gifted in clear communication, so provide your team members with training on how to communicate with suppliers. Wherever possible, create templates and other formal procedures for RFPs, negotiations, and other common forms of communication.
Efficiency in procurement is critical to success, but so often it’s difficult to achieve. Following these simple tips can help you improve and optimize your vendor relationships. This helps the entire business grow in the process.