Top tips for successful procurement

 

Top 5 tips for successful procurement

 

"Procurement is the business function  ensuring the appropriate acquisition of goods and services, taking into consideration the purpose, the cost and quality, and time for the benefit and use of the organisation."

 

Despite what it is perceived to be, procurement doesn't mean the lowest cost. Taking the necessary time to review your spending habits to make informed decisions on what to buy, and where to source you goods from will have a positive impact on your business.  

Procurement can be challenging, even the savviest operator needs to stay on their toes. GSB have produced the following tips to help you save time and money, as well as avoiding risks in the purchasing process.

  

It is not all about price

Price focused procurement misses the point. Too often people negotiate and focus on price, without understanding the 'whole of life costs' and ignoring the question of 'value' to the organisation. Smart procurement will take account of these factors and will select the options with the best  total benefit.

  

Allocate the right resources  

Best practice procurement will undoubtedly deliver benefits, significantly improving your bottom line. But achieving maximum procurement savings will depend on the allocation of appropriate resources in the right areas.

Resources need to be targeted on the strategic spend areas for your organisation and have the essential expertise for the categories they are sourcing.

 

Understand your spending habits 

"You can't manage what you can't measure". Undertaking thorough spend analysis allows you to improve your procurement, including supplier rationalisation & eProcurement suitability. This in turn allows you to increase your leverage with your remaining suppliers in order to get superior pricing as well as improved terms and conditions.

 

Know your key suppliers 

It can be a powerful exercise to map each supplier according to how much you buy and their risk to your business. This means understanding the value of the relationship in order to forge the correct strategy for managing the supplier base.

Organisations often focus on sourcing, but have too little time actually measuring performance. It is important to develop KPIs that focus on measurable outcomes for both you and the supplier. These KPIs should be analysed and incorporated into a regular programme of supplier reviews and used to inform future tender/negotiation processes.  Work with your suppliers, they will often have great ideas on how you can save!

 

Leverage your buying power through group buying 

For products and services that are essentially common commodities it makes sense to consider opportunities to join buying groups and leverage the volume of other organisations. This can allow an organisation to take advantage of better pricing and more attractive terms and conditions that smaller operations might not be able to access on their own.

 - written by GSB - Group Buying Power

 

More about GSB 

GSB - Group Buying Power is the country's largest procurement organisation, with 7,000 member organisations, including central and local government bodies, state-owned enterprises, crown research institutes, district health boards, education providers and qualified private sector businesses.

"We've been overwhelmed by the positive feedback we've received from our members on the extensive range of contracts, great savings and ease of becoming a member."

Dr Karyn Martin, General Manager for NZHEVAC Ltd (GSB Member).

GSB provides you access to 150 supply contracts across 18 different categories; ranging from freight & courier, furniture, building & engineering supplies to health & safety supplies, ICT and vehicle and fleet services (including fuel). If you are looking to reduce your business costs, contact GSB today.

ask@gsb.co.nz - 0508 20 30 40 - www.gsb.co.nz