To meet your organisation’s core objectives, you need a long-range plan to ensure timely supply of goods and services. That is why procurement planning becomes so important in your business mix.
Procurement planning is the process of putting in place an efficient system to optimise and fast-track sourcing.
There are several strategies that MSMEs can use to lead your industries through effective procurement management:
Determine which goods and services are most critical to your company's operations and prioritise their procurement. This can help ensure that the company has the necessary resources to meet its business objectives.
Identify potential suppliers that can provide the goods and services the company needs. Research their capabilities and evaluate their performance to select the best suppliers.
Once potential suppliers have been identified, negotiate contracts that are favourable to the company. This includes securing competitive prices, favourable payment terms, and appropriate delivery schedules.
Developing long-term relationships with key suppliers can help ensure a stable and reliable supply chain. This can be achieved through regular communication, collaboration, and mutually beneficial agreements.
Properly managing the flow of goods and services from suppliers to customers can help optimise the procurement process and improve efficiency. This includes monitoring supplier performance, managing inventory levels, and identifying potential disruptions to the supply chain.
The procurement plan needs to be in alignment with different teams across the organisation, everyone believing and working towards the company’s goal. Going by the sheer number of people involved, implementing these steps only using manpower can be tricky.
That’s why Bizongo’s ProcureLive is the answer for you. ProcureLive can help you with e-cataloguing, e-PODs, digital order management, live order tracking, digital invoice mapping, digitised payments report and online dispatch tracking. This clever software takes a lot of headache out of your business.
A flexible and robust procurement strategy can help minimise errors, find savings opportunities on procurement soends, and eliminate maverick spending. It can also help ensure compliance with company policies and regulations.
Having a flexible procurement strategy means that the company is able to adapt to changing circumstances and needs, such as changes in market conditions or shifts in business priorities. This allows your company to be more responsive to changing circumstances and helps to avoid errors or problems that may arise from inflexible procurement processes. Procurement planning paves the way for efficient production planning and fast tracks go-to market.
A robust procurement strategy, on the other hand, is one that is well-defined and comprehensive, covering all aspects of the procurement process from vendor discovery to digital vendor management (DVM). With the help of a correct DVM partner like Bizongo’s ProcureLive, one can track order status and manage all paperwork digitally without manual follow-ups. More helpful features like e-cataloguing, e-PODs, digital order management, live order tracking, digital invoice mapping, digitised payments report and online dispatch tracking, most of the procurement management process can be automated and hassle-free.
A robust procurement strategy helps to ensure that the company has access to the goods and services it needs in a timely and cost-effective manner.
Here are a few steps you can apply to get ahead of the curve.
It is important to conduct an analysis of your current spend culture before making any changes to your procurement strategy. This will allow you to understand the current state of your procurement processes and identify areas for improvement.
Obtaining data from internal stakeholders, suppliers, and other parties involved in the procurement process can provide valuable insights into how your organisation currently approaches procurement. This information can help you identify any inefficiencies or problems in the current process, as well as any potential savings opportunities.
Using tools like Bizongo’s ProcureLive can also be helpful in identifying and analysing unknown costs associated with an item or service, in addition to its initial purchase price. DVM features like e-auctioning can help save on procurement spends. This tool can help you identify potential cost-saving opportunities.
It is crucial to understand your organisation's needs and engage in a fact-based analysis to design a robust procurement strategy that aligns with your business goals. This will help ensure that the procurement strategy is focused on meeting the needs of the organisation and contributing to its overall success.
Use AI and Machine Learning technologies in factories to increase visibility for buyers and increase transparency through floor level information. By questioning the obvious and considering different scenarios, you may be able to identify innovative approaches that can help you identify potential savings opportunities and achieve your procurement goals.
Collect data from suppliers and potential suppliers to understand the current state of the supply markets and identify any trends or changes that may impact your procurement needs.
Determine the key areas where the procurement process can be improved, and prioritise them based on their impact on the company's bottom line. Use a SWOT analysis to identify the current state of your procurement functions and identify any risks or challenges.
Develop a set of best practices that will help eliminate inefficiencies in the procurement process, and modify your procurement policy to address any risks identified during the SWOT analysis.
Implement a procurement management system to streamline the end-to-end procurement process and reduce the risk of errors or delays. With Bizongo’s ProcureLive, you can manage multiple vendors in one place, manage supplier base, streamline transactions, negotiations, communications, maintain long-term relationships with suppliers and execute your procurement plan effortlessly.
One way to leverage a stronger working capital is to ensure that you have sufficient cash on hand to pay for the goods or services that you need to purchase. This can be achieved by carefully managing your accounts receivable and accounts payable, and by maintaining a healthy balance of cash and liquid assets. You can look for opportunities to reduce costs and improve efficiency in your operations. You can also consider using financing options, such as a line of credit or a short-term loan, to help bridge any gaps in your working capital. Partners like Bizongo help MSMEs with business financing through strategic partnerships with a multitude of businesses providing finance to help in working capital management.
Implement your procurement strategy at Bizongo’s ProcureLive, and involve other departments as needed. Track and measure the progress and success of the implementation, and make adjustments as needed to continuously improve your results.
Clever procurement management devices are aimed at managing supplier base, negotiations, communications, and maintaining long-term relationships with suppliers. Procurement planning also deals with the development of cost-saving communications and IT, improved procedures and logistics, managing high consumer demands, increasing transparency requirements, and staying ahead of dynamic competition.
By implementing these procurement planning strategies, companies can lead their industries by effectively managing the acquisition of goods and services, which is a critical component of business success.
By minimising errors, finding savings opportunities, and eliminating maverick spending, a flexible and robust procurement plan can help a company reduce costs and improve efficiency. It can also help to ensure compliance with company policies and regulations, which can help to reduce risk and protect your company's reputation.