Strategic procurement in an organization must aim to deliver improved business performance. The focus must be on making bottom-line savings. Managing and sourcing the supply base in an efficient manner is the key to success in that direction. Strategic procurement is a process that works with the aim to continually re-evaluate and improve the activities pertaining to purchases made in an organization. As far as organizations involved in production are concerned, it is considered to be a component of the SCM (supply chain management). But whether your business is involved in production, services, or any other industry it is prudent that you also apply the techniques of strategic sourcing. The purchasing department must make an assessment of the company’s present spending as well as the supply market. The total cost analyses have to be done and suitable suppliers must be identified. A sound, strategic procurement strategy must be devised and negotiations must be made by the purchasing manager.
Making sustainable improvement is important since procurement is not a one-time activity. It goes on indefinitely in an organization as long as the company is functioning.
Procurement must provide source of value. The approach must include support for full-scale transformation of procurement and targeted improvement as well. Strategic procurement helps realize tangible benefits in that favour the organization.
Strategic procurement must result in value creation. It is an important tool in conceptualizing novel business models that seek improvement in efficiency.
The success of implementing strategic procurement depends on three pillars:
So what does strategic procurement look like in your organization? How will you get there? It has to start somewhere so why not take the imitative today?
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