The layman’s definition of procurement is the act of obtaining things. The business community defines it as the act of buying goods and services. Any business will agree that procurement is very critical to its survival. In fact most business will have an entire department to deal with the processes of procurement. These processes can be quite elaborate. The entire process begins by planning for what needs to be acquired, ensuring that it is used accordingly once it has been procured and getting rid of it the moment it is no longer useful. In other words all the property of the organisation goes in and out only 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. You need to be smart and efficient during any kind of procurement. Good practices will give you an edge in this competitive market.
Market research and analysis is the first thing you need to do. This gives you proper knowledge of the market dynamics. You will know the best suppliers to use for everything you need. This allows you to do strategic sourcing of the resources of the organisation. 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. You also need to do standard determination to ensure that everything you bring into your organisation meets the required standards.
It is good practice to have rock solid system of software to manage all the processes. The best would be an ERP software. But it is important to know the right kind of ERP software 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.
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. If it is cheaper to outsource then you will have the opportunity to relieve the resources of the organisation from the task of procurement. You can engage the resources that were previously doing the procurement in other areas.