Let’s collectively rejoice as the days of driving growth at any cost are over. But, when the celebration slows and the dust settles, the question remains: Moving forward, how do you drive a new culture that still encourages growth but with efficiency?
We take a closer look at procurement process, adoption, spend visibility, spend efficiency, capital efficiency, and more to help you develop a proactive plan to achieve exponential growth optimally and efficiently. Think of it as positive and controlled growth, and we are offering you the secret recipe.
Spoiler alert: It’s all about having the key ingredients, then following simple (measured) steps with care (and a dash of passion helps too). Pay close attention, as no one wants to speed things up too quickly and get burnt.
Why Procurement Needs to Drive Spend Efficiency
Don’t get us wrong, growth is good, but not when that growth comes at too high a price. After all, procurement is a strategic function aimed at improving an organization’s profitability. But ideally, your procurement processes will achieve bottom line growth and drive business value.
That’s why spend efficiency is so important. Companies need to change their culture to focus on growth and efficiency, rather than just pushing for growth regardless of the costs. Wondering how you can do this at your business? The following are some easy steps to grow your procurement process and improve spend efficiency.
8 Steps to Grow Your Procurement Process and Improve Spend Efficiency
- Improve efficiency by identifying inefficient processes: Carefully review your existing processes with an eagle eye looking out for any red flags, such as factors causing bottlenecks, etc.
- Consolidate your supplier lists: Streamlining your suppliers will not only simplify things for you. It will also aid in the reduction in maverick and tail-end spending, reduce the administrative burden of managing a huge supply base, and improve overall operational efficiency.
- Educate your workforce: When you educate employees, they understand the purpose behind your procurement processes and can easily navigate them. In the end, educating your workforce will help you curb maverick spend and encourage buyers to spend with preferred suppliers.
- Clearly define expectations for your supply base: Lack of proper communication is the main cause of issues between buyer and supplier. A lack of clear expectations regarding target goals is responsible for wasting time and losing money.
- Implement an automated purchasing system: An automated system can reduce maverick spend and enable procurement to track business costs in real-time, leading to improved visibility and heightened accuracy.
- Implement a standard procurement process: Without standardized procurement processes, you’ll struggle to drive efficiency or effectively monitor your organization’s spend. While ad-hoc procurement systems might occasionally be appropriate for start-ups or smaller businesses, a larger team needs a more unified and formalized approach to procurement.
- Source locally to increase procurement efficiency: Local sourcing not only reduces transportation time and shipping costs but also provides crucial support to the local economy and promotes greater sustainability.
- Simplify your supplier onboarding processes: Simplifying the steps it takes for your team to identify, assess, qualify, and onboard a prospective vendor will result in leaner, faster procurement. It will also give your supplier’s a break and make their lives much easier.
Procurement professionals are increasingly agile, innovative, and creative while initiating cost savings. They also play a vital role in driving diversity and sustainability in the supply chain. Are you ready to be one of them? We can help.
If you’re looking for a way to streamline your procurement process, request a demo of Zip today!