Business procurement includes many activities involved in obtaining goods and services. This process aims to obtain competitively priced supplies and deliver the most value to your customers. However, this definition may change depending on the business.
For example, some startups think procurement encompasses gathering business requirements, sourcing suppliers, and everything. Other businesses may focus on one stage, like making payments or purchasing orders. Regardless, understanding your supply chain is vital.
You can change your supply chain if you can examine and monitor it. Or even better, you can increase collaboration, become more sustainable, and optimize procurement opportunities.
How to Improve Your Procurement Process Right Away
Procurement leaders face constant challenges to streamline the entire process. However, it’s possible to save time, cut costs, and achieve positive results by adopting the following strategies.
1. Use the Right Digital Procurement Software
A high-quality procurement management tool allows an organization to automate key functions, such as maintaining an inventory and purchasing materials. For example, procurement software can create purchase orders, execute orders, match invoices to receivables, and pay bills on time.
Locating and sending information likely takes up hours in your day, which could be better used elsewhere. Fortunately, centralized procurement software can limit a lot of back-and-forths and cut back on tedious tasks, improving overall productivity, efficiency, and focus.
2. Organize and Manage Your Inventory
During the pandemic, inventory management felt like an impossible task. You’re shorting other businesses or plugging up the supply chain if you order too much. If you order too little, you can’t serve your customers. Fortunately, prolonged or massive shortages don’t happen very often.
Typically, it’s a good idea to keep a healthy stock of materials on-site in cases where demand is high. An inventory management tool can help minimize human error, so you avoid filling your warehouse with stock that won’t sell. This allows you to tap into extra cash flow when needed.
3. Invest in a Quality Digital Adoption Platform
We’re in an age where software adoption is necessary to do business, but some of these tools are incredibly complex and difficult to use. A digital adoption platform (DAP) can help new users facilitate software proficiency by guiding them through tasks using contextual information.
Onboarding is often hard for procurement leaders, as there’s so much to learn. A DAP program can provide new hires with interactive walkthroughs and customizable guides, making the training process less intimidating. Plus, DAPs can gather data to improve the process further.
4. Improve Workforce Onboarding and Training
According to research by Brand Hall Group, a strong onboarding process can improve new hire retention by 82% and productivity by 70%. There’s no doubt that a customizable DAP program can improve workforce onboarding and training, but you’ll need more than software to succeed.
The recruitment process has to be just as good as your onboarding and training strategies to work, as it’s nearly impossible to mold the wrong employee. Ensure you’re attracting the right people for your organization and paying attention to their learning styles.
5. Define Strategic Procurement Policies
Finding the best wholesale suppliers for your business isn’t simple. You must qualify them using a long-winded security procedure, take on high risk, and have a backup plan if the arrangement goes South. Without a checklist, you could miss a few steps or procedures.
Instead, formalize the entire process by writing it down and sharing it with your team members. While you should track supplier performance, don’t forget to conduct due diligence and train and onboard suppliers. Consistent communication will help improve your supplier relationships.
6. Standardize What Can’t be Automated
The software can automate most of the procurement process, but it can’t do everything. You won’t get far without a standardized process, even if it can. It’s better and faster to follow a set of rules created to conduct the purchase. With that said, standardization begins with consistency.
It can be tempting to change the process whenever you partner with a new supplier, but try to avoid this habit. Unless the supplier needs something specific, you won’t need to adjust too much. However, it’s still good to be flexible and accommodating during negotiations.
7. Communicate Effectively With Your Team
Communication is important in any relationship. Sustainable success is only achieved when all stakeholders are on the same page, but you won’t know if they are unless you ask. Listen to your team and suppliers and try to identify their pain points to eliminate inefficiencies ASAP.
Trust is a key component of communication. No one likes to be micromanaged; if they have to be, you may need to adjust your onboarding process. Still, conflicts and supply chain disruptions will happen, and a trusting relationship can help minimize the impact.