Automating procurement is a simple way to boost procurement teams’ efficiency. It’s also a significant step toward transforming that role from technical operator to strategic driver. Modernising procurement procedures to take advantage of new technology is a difficult task, but teams can swiftly put together a cutting-edge solution with the right plan in place.
Of course, this is easier said than done, especially for those new to the process. If you feel the same way, don’t worry because we’ve listed a five-step process to create an integrated procurement framework.
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1. Find Your Weaknesses
First and foremost, you need to determine why you want to streamline the procurement process.
It’s possible that you’re overspending. Because they have to wait for the tools they require, your staff may be less productive.
Customers may be dissatisfied because you cannot obtain materials quickly enough to complete orders. Bottlenecks could be generated by your forms or a lack of adequate paperwork. You can evaluate your procedure to determine what might be creating the problem after knowing what your purchase issues are.
Centralizing procurement with one person or team is one method to streamline it. Allow people to make requests directly to one procurement agent, rather than going via their department manager, who then goes through the COO, who then goes through the finance manager. Because one person is in charge of the schedule, this can cut down on the time it takes to get orders authorized.
3. Give People More Power
Giving more staff the authority to make purchases is another way to streamline purchasing.
If you don’t specify certain parameters, such as what products and services an individual employee can buy, a limit on how many transactions he can make, and which suppliers he can use, you’ll be exposed to overspending.
Consider giving staff the right to make small transactions, particularly those that are routinely approved, such as office equipment. If you have control over how employees use business credit cards, give them to staff members with purchasing permission so they may make purchases online, in person, or over the phone without requesting a credit card purchase from the accounting department. Establish tight restrictions on the use of company credit cards.
4. Carefully Monitor Vendors
Provide a list of approved suppliers that employees can utilize if they need to examine and verify suppliers every time they buy an item.
This ensures you work with trusted vendors and may lead to bulk purchases that result in supplier discounts. Establish a purchasing system with trusted vendors, so they don’t have to do a credit check every time an employee buys something.
Provide suppliers with a list of people who can place orders or give certain people a company purchasing code. Your people can use a request for proposal form to receive several bids on a project, which will help streamline the process and free the staff from the burden of developing bid documents.
5. Schedule Purchases
If you know ahead of time that you will need to acquire specific goods and materials, plan ahead of time to make these purchases during your company’s sluggish periods. This can prevent purchases from becoming lost in a sea of paperwork, necessitating departmental inquiries and hurried requests.
Ask your senior staff to submit quarterly purchase requests with delivery times and order the procurement department to establish a purchase calendar.
We could’ve added more steps and even elaborate more on the existing ones. However, we believe that following these five points alone will give you an integrated procurement framework down the line.
One of the best ways to improve the overall efficiency of your procurement department is to introduce automation. Using an automated procurement solution will help you save a lot of money, time, and free up your people’s focus to work on the core pillars of your business.
We at Penny can give you such a solution to help you achieve a next-level performance. So, don’t hesitate and contact us now.