Procurement underlines a great deal of what we do in business. If we want to expand, we have to invest; if we invest, we want to see a good ROI. Procurement can make or break a business. When done well, it cuts costs and increases the bottom line, if managed badly, your company could be haemorrhaging money without you even realising. But how do you recognise whether your company is getting the most out of its procurement, and how can you improve it further?
Investing in procurement training might be seen as a waste of money by some, but the short-term cost is undoubtedly outweighed by the long-term gains related to capital and other benefits too.
What characterises good procurement?
- Strategic thinking:
Strategic thinking is vital if you want your team to improve your procurement process – going through the motions as a means-to-an-end will only stagnate any goal of consistently finding ways to improve and cut costs without missing out on valuable investments.
- Embracing technology:
Using eTools to sort out the mundane and repetitive tasks involved in procurement. Your team can then start putting the extra time and training into coming up with better solutions to improve the process further and really focus on what your business needs. If you want to read more of what to focus on and avoid when implementing a new eTool, click here.
- Operational excellence:
Are your team, your eTools and your procurement system working together flawlessly? Each part of your overall procurement should be mutually supportive and beneficial to the other parts. There’s not much point in investing in procurement training for your team if you haven’t selected a suitable eTool or your SRM needs improvement, as their time will probably be spent picking up the slack.
- Great talent
Having a talented team is one of the best assets you can have. They can spot what is working and isn’t working in your procurement process and think up solutions that ultimately increase the bottom line.
However, research has shown that hiring managers adopt a strong ‘natural talent bias’. Don’t just count on this. It’s one thing to have a natural flair for something and a completely different story to have that talent nurtured. Investing in your already skilled employees should see them excel and reach their potential.
- Focus on results
Interpreting the success-level of your procurement into actionable improvements is going to be the primary driver of solutions. Of course, your team need the right training to do this consistently and effectively. Investing in procurement training could be the answer you’re searching for.
Improve your relationship with your supplier
Procurement and supplier management tend to go hand-in-hand. A recent survey found that supplier performance improves because of work done by procurement. Investing in procurement training should see your SRM improve alongside your procurement, enabling further savings and process efficiencies that you could then invest in further growth.
The relationships you have with your suppliers are important cogs in the machine that is your business. Supplier communication and innovation need to happen seamlessly for it to work and for the opportunity of increasing productivity. If you want to find out more about the costs of poor supplier relationships and how to improve them, read this article.
Establishing procurement training that ensures the following of best practices by your team has the potential to make a significant impact on your business. You should see your investment go a long way in saving money where it was wasted before and making sure all your future investments have a good ROI. If you’re interested in how investing in procurement training could improve the running of your business, get in touch!
At Bromley Wood Associates, we have extensive experience in conducting quick diagnostics of client’s businesses and giving them options they can act on. If you would like to learn more and arrange a procurement checkup, get in touch.