The action of obtaining things is how someone can define procurement. The business community defines it as the act of buying goods and services. Its importance in any business cannot be overlooked. In fact most business will have an entire department to deal with the processes of procurement. This field has very many processes. They will range from planning for a purchase doing the actual purchase, controlling what has been purchased and disposing it after completing its intended purpose. This means that almost everything that an organisation owns will come and go through the procurement department. It therefore goes without saying that the processes in this area cannot be allowed to go below certain standards.
The practices of a good procurement department are those that ensure that values like integrity and transparency are embodied in the entire system. It is your procurement systems that will determine if you can take advantage of what the market has to offer. You need to be smart and efficient during any kind of procurement. By having the best practices in you department you gain a competitive advantage in the industry.
Market research and analysis is the first thing you need to do. This gives you proper knowledge of the market dynamics. It gives you knowledge of all the suppliers and the best ones to use for all your needs. Strategic sourcing is the main aim here. A supplier may be near you but that doesn’t mean that they will be the cheapest. The pros and cons of all the suppliers become clear when you do this research. One other important thing is standard determination to ensure that what comes in meet the set standards.
Having a system of software to manage your procurement processes is also a good practice. This can be achieved using ERP software. You should however first establish which software is good for you and how to use it. It is advisable to get ERP consulting to help you understand the system well and how to get maximum value out of it. You will get ERP tools that help you to streamline your processes and bring efficiency to the department.
Procurement outsourcing is also another way of doing business if you are not in a position to do your own procurement. You can do a quick spend analysis to determine if it would be cheaper to engage an outsider to help you with this duty. This way you don’t have to stretch the resources of the organisation to run the department. You will have more resources to use in the organisation after freeing them from the procurement process.