When it comes to Procurement, many companies regard this function as primarily limited to sourcing and pricing. Nothing could be farther from the truth, as Reggie Peterson, Director of Supply Programs at Corcentric explains.
Too many stakeholders lack a clear understanding of the vital role Procurement plays in the success, productivity, and profitability of a company. Best-in-class companies establish end-to-end processes and procedures that need to be strictly followed in order to ensure the desired results. To optimize workflows, reduce cycle times, and avoid rework, organizations must insist on consistency in the way goods and services are sourced, paid for, and contracted.
There are four main processes that every successful Procurement team must follow:
Spend Analysis – Leveraging spend data is the first step before any initiative is undertaken. Whether the goal is savings or supplier consolidation, purchasing data is essential to smart decision making.
Strategic Sourcing – Repeatable and sustainable strategic sourcing processes help minimize inefficiencies and ensures a more nuanced understanding of Procurement’s essential role.
Contract Management – Clear, consistent processes for managing contract lifecycles means taking a proactive, hands-on approach to ensure that businesses are prepared for critical dates like expirations and contract renewals.
Supplier Relationship Management – Once the contract is signed, it’s crucial to establish systems for assessing relationships and ensuring they remain fruitful by emphasizing mutual respect and cultivating a culture of continuous process improvement.