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Procurement management: how to manage to save money?

Procurement management: how to manage to save money?

An important aspect in the procurement process is the examination of suppliers' proposals and their reputation in the market.

An unscrupulous supplier in the supply chain can have a negative influence on the company's operations. The supply of the necessary materials after the planned time can disrupt the commitment fulfillment for the client.

Low-quality materials affect the quality of products, and poor equipment reduces the employees’ efficiency.

Purchasing management is not only the order and delivery of the necessary goods. In fact, this is a complex process, at each stage the purchasing manager makes responsible decisions.

Let's consider each stage of the procurement process.

1. Determine your needs

It is very important for companies to determine which product or service will meet the company's expectations the best.

Also, keep in mind the volume of required goods by analyzing the demand for them in the company.

It is best to make a forecast of needs in order to have time to choose the best supplier and at a moderate pace to agree all the conditions. Such a forecast can be implemented based on the analysis of purchases of past periods.

2. The best quality with the best price

After determining your company's needs, proceed to find a supplier.

There are two key criteria to choose a proposal: price and quality. You need to make sure that the supplier can execute the order on time. At this stage, you should remember that if the proposal sounds too good to be true, most likely it is not. Send requests to the suppliers, estimate the average prices of the goods in the industry you need to make sure that you buy on profitable, but real conditions.

3. Negotiations with the supplier

If you work with a supplier for the first time, the negotiations ensure the coordination of the conditions that suit both sides. The key advantage of conducting negotiations is the establishment of trust between their participants.

4. Signing a contract

If all important details in the contract suit you - sign a contract right now.

5. The supply

To ensure that all the terms of the contract are fulfilled, the procurement manager must check everything, and then confirm receipt of the order by the supplier. So both sides will be sure that everything went well.

6. Analysis of the results

This is the last stage in the procurement process. The information obtained from such an assessment can be used for purchases in the future to save time and resources.

 

As you can see, the costs in the procurement process аре related not only to the cost of the order but also to the organization of the supply chain. So the optimization of this process now becomes a source of competitive advantages. Don’t miss this opportunity with the help of smart purchasing management.

 

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