The layman’s definition of procurement is the act of obtaining things. In the business world it is defined as the act of obtaining or buying goods and services. It is one of the most vital processes in any business. In fact most business will have an entire department to deal with the processes of procurement. The processes involved in this sector are numerous. This process commences by planning for what the organisation needs, taking care of whatever the organisation has procured and disposing it after it has accomplished it’s 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. Through your procurement system you are able to take advantage of the best offers in the market. Being smart is how to go in procuring anything for the organization. By having the best practices in you department you gain a competitive advantage in the industry.
The best way is to begin by doing a market research and analysis. By doing this you get to know your market better. You will know the best suppliers to use for everything you need. Strategic sourcing is the main aim here. A supplier may be near you but that doesn’t mean that they will be the cheapest. Procurement research will let you know the advantages and disadvantages of using the suppliers at your disposal. One other important thing is standard determination to ensure that what comes in meet the set standards.
It is good practice to have rock solid system of software to manage all the processes. 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. The ERP tools available to you can make the process run faster and more efficiently.
If you are not in a position to handle the mega tasks of procurement then you can opt to go for procurement outsourcing. You can determine the cost benefit of outsourcing the service by doing a simple spend analysis of the department. This way you don’t have to stretch the resources of the organisation to run the department. The resources that you free from doing the procurement can be used elsewhere.