Why procurement matters
Does procurement matter? It’s just businesses buying stuff, right? Well, seeing as procurement can equate to 70% of a company’s costs, yes procurement and how it is done is very important. A simple change in procurement processes can save a business a lot of money!
There are multiple reasons why procurement matters at all levels of an organisation. Better procurement leads to improved business performance and is fundamental to achieving success. To employ the best procurement specialists, consider a procurement recruitment agency like Talent Drive.
The savings that can be made through procurement practices directly impact the company’s bottom line. To increase profitability and shareholder value, a good procurement policy is essential. This can be achieved through choosing the best suppliers and negotiating the best contracts.
The key to success is to support the organisation’s needs with the following:
- Fully understanding the business needs
- Purchasing services and goods at the best price
- Purchasing these goods from the best source
- That goods and services are procured in the right amount
- That goods and services meet the needs of the customer
- That goods and services are delivered at the right time
A procurement team must also be able to identify opportunities to add value to the business. This can be achieved by:
- Evaluating suppliers contracts to ensure they are meeting contractual obligations
- That all purchases are run through established procurement processes
- Suggest alternative sources that could save the company money.
As you can see, procurement has a much deeper impact than simply ‘buying’ things for an organisation.
