Many people have multiple questions when it comes to procurement. Even the word alone scares some off. But in deconstructing procurement we are trying to educate the masses about what it is exactly and should your business even bother with establishing a procurement section in your business or go about your merry way. The team at ThunderQuote would like to help more people understand the importance of quality procurement.
So what is procurement?
Procurement basically involves the process of selecting vendors, acquiring services, negotiating prices of goods and contracts that you are wishing to establish. This basically means that it is the act of acquiring a service or goods for your business. This team, that will deal with the procurement is a vital part of your business organisation and should be taken more seriously.
Why is procurement important?
So why is it important you ask? Well, in the private sector, procurement is seen as strategic team that works to ensure that the company gains profits from every angle. It is known to be a very tedious process of ensuring that they can reduce cost of materials and basically identifying a better source of materials to better ensure a flow of increased income into the company. A procurement team will also ensure growth of the company.
It helps your company stay streamlined. Having a team completely dedicated to procuring materials and vetting vendors and getting contracts just ensures that everyone is on the same page thus making sure that a streamlined process is present. This is great news for productivity and moving the company forward.
What do procurement teams do?
The main duties of a procurement team is to prepare and publish any procurement opportunities to the public to gauge interest from vendors so that you will have a buffet of vendors to pick and choose from.
In addition to that the team will coordinate the receiving of tenders and the evaluate the proposals and quotations given by your vendors. They are basically the screening process before anything gets to the main management team. They are required to sift through the applications and proposals to pick the ones they think is best for the company.
The Role of the Procurement Manager
The Procurement Manager, the team leader is mainly responsible for the process of procurement across the company and they are the ones ensuring that their teammates and other employees stick to the guidelines given in their procurement strategy. This ensures that the company does not go over budget and this also helps the manager plan for future spending.
The biggest task that a procurement manager has is basically securing purchase deals. The main role of procuring is the buy and obtain the best services and goods needed for the company. The best way to do this is to start with market analysis. The manager needs to sit down and scour the market for the best deals. He needs to be up to date with all the latest services coming up in the industry, he also needs to make sure that he has a proper inventory to make sure he doesn’t over-purchase or under-purchase.
The Manager needs to be well-educated and has a great understanding of the market because they are the ones in charge of making the final calls. They also need to have impeccable marketing skills since it is such a niche department. In addition to that, being the manager, he or she needs to evaluate the suppliers. This is something that is extremely important because you do not want to end up with a supplier that cannot be trusted. He needs to attend trade shows and conferences in order to search the market and find the right people to potentially work with in the future.
Being the manager, he/she also has to manage the staff and also works to ensure that everything that is planned for the procurement team is executed in a timely manner. He will do well if he organises meetings weekly and keeps tabs with everyone he is working with.
What Are The Benefits of Procurement Planning?
Procurement planning brings about a huge amount of benefits and it is because of these benefits that we think you should definitely care about procurement if you are in charge of a big company.
If you have a procurement plan it will be the best time to get everyone together and talk about the company and where you want it to go in the future. Getting all the stakeholders together and giving everyone a chance to speak will be great because it’ll help steer your ship in the right direction. You can talk about certain vendors and certain materials you would like to procure and figure out the relevant timeframes needed for all this to happen. Therefore, effective procurement planning will be hugely beneficial to all.
In addition to that with procurement planning, you are allowing your company to open up more doors to get to know other companies. In the business world, it is impossible to work alone. Therefore, this is where procurement comes into play. It helps you expand your business whilst making connections.
The planning process also helps to create a certain level of standards that your company would like to portray. You will have a set of requirements and this just ensures that the services procured will be planned properly and executed without a hitch. Just like the saying goes, if you fail to plan, you plan to fail.
So Should Your Company Care About Procurement?
If the past few paragraphs above doesn’t convince you to actually start off by hiring and building your procurement team, we do not know what else can convince you. The benefits are endless. A procurement team or just someone in the office who is specifically designated to handling procurement is essential to ensure your business runs smoothly. It is just another limb to your business and it is highly beneficial.
ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.