What are the best procurement strategies?
The best procurement strategies are ones that simplify your complications and streamline the procurement process. They are driven by data and insights and seek to minimize unpredictable elements. Let’s go through some of the best strategies you need to employ.
A cost-minimizing approach is not enough; you need to have a risk-assessment strategy in place when you’re onboarding suppliers. Draw up criteria and relevant KPIs, and research their past performance for relevant statistics, like financial health. This will let you avoid any problematic vendor with reputational or regulation issues, and you will be able to identify backups when any external factor, like an environmental disaster, affects your supply chain.
You also need to strategize to develop relationships with vendors that perform well. Consolidate such vendors to minimize your risks and get the maximum value for the procurement function. Monitoring performance with KPIs can let you identify new valuable partners. Invest in long-term relationships with them.
Centralizing and digitalizing procurement through software is also a well-known, tried-and-tested strategy. It enables organizations to bring all procurement and sourcing-related activities to one platform, enabling transparency and oversight. Employing automation streamlines operations and allows better policy compliance.
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