It is no secret that the world economy has been showing us “pepper” (local parlance for ‘trouble’) in recent times. As the world economy is still trying to bounce back from the effects of the pandemic, many families are taking steps to reduce their expenses.
No more buying frenzy, more people are now carefully weighing their buying decisions. I am sure the situation isn't different on your end, or is it🤷♀️…
Organizations are not left out. Many have been taking steps to streamline their operations and reduce costs.
Now, how can you as a procurement professional ensure that your organization is getting the best value for the goods and services it procures even in these trying times?
Optimizing your procurement processes to save costs is one way to achieve this.
Here are 5 Easy ways to optimize procurement processes to reduce costs:
📍Streamline Your Procurement Process: This involves identifying any inefficiencies in the process and finding ways to eliminate them. For example, you could automate routine tasks such as purchase order processing or supplier communication, to save time and reduce the risk of errors.
📍Consolidate Suppliers: Having too many suppliers can lead to higher procurement costs and is more difficult to manage efficiently. By consolidating your suppliers, you can simplify your supplier management process, achieve more visibility across the chain and negotiate better prices too.
📍Conduct Regular Spend Analysis: This would help you identify areas where you are spending more than you should, and find ways to reduce these costs. For example, you may find that you are spending more on certain types of goods or services than necessary, or that certain suppliers are consistently more expensive. Regular spend analysis will highlight these areas and allow you take action as necessary.
📍Negotiate Better Contracts: Most contracts don’t come out until there is an issue to be resolved. However, a review of your current contracts portfolio will help you identify areas where you can renegotiate better terms with your suppliers. For example, you may be able to negotiate better prices, longer payment terms, or more favourable delivery terms.
📍Implement A Procurement Management System: By implementing an appropriate procurement management system, you get real-time visibility into your procurement activities. Procurement management systems also provide you with data analytics, which can help you make more informed decisions and track your progress toward your cost-saving goals.
Need more support in optimizing your procurement process? Then visit academy.efemini.com to enroll in a course or book a coaching session.
Comments