7 Steps Of The Strategic Procurement Process
Strategic procurement refers to the process of purchasing goods and services. At ProcMarket, we have goods and services that are available within the 26 industries, which include construction, agriculture, food, beverage, recreation, education, healthcare, finance and many more. Within these industries, there are 157,000 categories and subcategories available for strategic purchasing through the Procurement Marketplace platform.
Many businesses find that maintaining their product and service quality while trying to reduce costs at the same time is a never-ending struggle. Fortunately enough, businesses can easily achieve this through strategic procurement.
Strategic procurement services are important as they not only allow businesses to enhance their automation in sourcing and procurement processes but also offer a number of modules that enhance purchasing accountability, supplier base management and even help with building and refining supplier relationships. Hiring a procurement management consultant can be very cost-saving, offers greater value-added and is very time-saving for your business operations.
Below we have outlined the seven steps of the strategic procurement process.
1. Identify The Needs Of Your Business
The first step of strategic procurement services begins with evaluating your current performance and deciding what is required to meet these specific goals.
There are numerous ways in which a procurement management consultant can assess your organisation’s existing operations and predict its expected future growth. Such ways include communicating with your various departments, analysing workflows and even gathering customer feedback.
2. Gauge The Supplier’s Market
Recognising the prospective sources of raw materials, components, finished goods, or services is one of the central obligations of a business procurement consultant. If there are certain needs for your business, the number of suitable vendors may be limited.
3. Collect Information About The Provider
It is very important to choose your business suppliers competently as your business may encounter significant losses if your supplier does not match your selection criteria. It is best to consider looking over the supplier’s portfolio on how they have been transacting business. Customers of a provider would also be able to outline their experiences if possible to do so.
In order to produce a competitive environment, selecting more than one provider is beneficial to inhibit supply disruptions. Large international companies would be able to benefit from this strategy the most as it provides them with more centralised control but regional distribution.
4. Develop A Purchasing Strategy
The data that has been acquired from the previous steps can be utilised to create a company’s sourcing or outsourcing purchasing strategy. Whether it be direct purchasing, strategic partnership or acquisition, these are all forms of sourcing.
5. Implement Your Sourcing Plan
In this step, your business procurement consultant will produce your sourcing plan. It is a major commitment to obtain goods and services or collaborate with other businesses. In these cases, suppliers are likely to have the following characteristics:
- Involvement in activities core to the buyer
- Vendors have a unique collection of tools and technology, and highly-trained people
- Part of a broader business strategy
6. Negotiate With Supplier And Bid Selection
A procurement management consultant will evaluate responses from suppliers and apply its evaluation criteria.
The strategic procurement team will then assess the bids, quotes or proposals that have been received and use the selection criteria and a process to either shortlist bidders to provide more information or select a first and second successful bidder. Once the review is finalised, the strategic supply chain team will initiate negotiations with the successful bidder.
7. Execute A Turnaround Strategy
When bringing on new suppliers to your business, it is important to hand over information and, form connections to logistics and communication systems, provide training as well as certain physical assets if needed. The implementation of such tasks takes time and expertise, and all expectations should be agreed upon during contract negotiations.
The transition from in-house services to an outsourced service provider can be quite risky, which is why transparency and preparation are vital to this aspect of the sourcing strategy.
Do You Require Strategic Procurement Services? Get In Contact With ProcMarket Today!
Here at Procmarket, we have highly skilled and talented procurement management consultants who are able to help you develop successful strategies.
We utilise a user-friendly interface that provides an Interactive Categorisation Engine, Collaboration Zone, and our Procurement Marketplace. In our Interactive Search Engine, we display 157,000 categories and subcategories to choose from within our industries, with photos to guide the process.
At ProcMarket, we offer a wide range of products that include procurement strategies, risk assessment and treatment plan, scope of work, evaluation criteria and response schedules, request for x document, source to contract, evaluation facilitation and report, spend analytics and sustainability solutions.
If you have any questions about our procurement processes or services, our business procurement consultants are able to assist you with your query. Feel free to get in touch with our friendly team by submitting a contact form or by telephone at +61 432 779 620. Our highly experienced and professional team will be able to guide you on the path that best solves your specific procurement requirements!