Lack of Visibility Into Spend
One of the biggest challenges facing procurement managers is lack of visibility into company spend. Without knowing where your money is going, it's difficult to make informed decisions about where to cut costs or where to allocate additional funds.
The solution? Implementing a spend analysis tool. Spend analysis tools give you a complete picture of your company's spending patterns so you can see where every dollar is going.
This information can then be used to negotiate better deals with suppliers, identify cost-saving opportunities, and make more strategic decisions about company spending.
Another common problem in procurement is reliance on manual processes. From requisition approvals to purchase order creation and vendor management, manual processes are time-consuming and prone to error. In today's fast-paced business world, manual processes simply can't keep up.
The solution? Automation. By automating key procurement processes, you can eliminate errors, speed up approvals, and free up your team's time so they can focus on more strategic tasks.
Lack of Supplier Diversity
Many companies struggle with supplier diversity—that is, ensuring that a diverse range of suppliers are being used in the procurement process. A lack of supplier diversity can lead to higher prices, lower quality products/services, and decreased innovation.
The solution? Make supplier diversity a priority in your sourcing strategy. Set targets for the percentage of spend that should go to minority-owned businesses, women-owned businesses, etc., and work with your team to develop relationships with these types of suppliers.
By increasing supplier diversity, you'll not only improve your bottom line—you'll also help support businesses owned by underrepresented groups.
Procurement problems are inevitable—but that doesn't mean they have to be disastrous. By keeping an eye out for common issues and implementing simple solutions, you can keep your procurement process running like a well-oiled machine.