What does procurement mean? What of procurement management? A business can only maximize its performance when everyone in the organization delivers at full capacity. As a result, procurement is becoming increasingly necessary and essential to every small and large-scale organization irrespective of what you offer. It is being relied on to deliver the company’s bottom-line results and more crucially, add value to the concerned business.

Therefore, procurement management is the way to go about relieving yourself of the pressure from the workloads of globalization, new technologies, talent/skill gaps, changing values, changing business operations, new responsibilities such as CSR, Risk, and others. If you look at the above features and functions closely, they are relatively inevitable in this present era.

Besides, while technology tools have been an enabler, you cannot despise the truth that they are even contributing more in terms of skill pressures to the already over-utilized department. It is then strange how we all suddenly expect procurement to stand in as an expert in all categories in each market, and in using new technologies.

Little wonder how new skills, new expertise, and technologies are requirements needed to cope with these irresistible demands. As it stands, traditional investment in procurement technology fails repeatedly to return the desired benefits.

Procurement vs Purchasing

Many people use purchasing and procurement interchangeably but as much as they have close meanings, they are different.

 Procurement deals with selecting vendors, establishing terms of payment, strategic vetting, selection and negotiation of contractors and actual purchasing of goods. Procurement talks about gaining (buying) all the goods, services, and work identifiable to an organization.

Purchasing

Since purchasing is only a subset of procurement, it refers to the act of buying goods and services and it often involves receiving and payment. Purchasing is a process within the overarching process of procurement. The purchasing process however entails:

  • Acknowledging the purchase order
  • Notifying advance shipment
  • Receiving Goods
  • Recording invoice
  • 3-Way Match
  • Paying suppliers
  • Procurement as a Service

Strategy and Procurement

In terms of how it relates to strategy; because procurement is an umbrella that covers many business functions, we often consider it a crucial part of the corporate strategy of an organization. As a reminder, corporate strategy entails the identity of the company, placement of the market, capabilities of the company and management issues. A closer look at these elements shows evidently how important and intertwined strategy is with procurement. For instance, if your business has designed its identity around an environmentally conscious ethic, your procurement strategy must reflect that decision. You must enact policies to make sure you are constantly sourcing from companies that have similar ethics or at least sourcing materials that do not make up environmental hazards. Similarly, your market should reflect your branding. Without mincing words, it means customers do not have a doubt, are attracted to the philosophies and practices your business adopts, and most times seek companies who have values that reflect theirs. This is what strategy has to do with procurement.

Why Procurement Management?

Because of the unavoidable impact of technology in driving innovation in the last two decades or more, there is a need to incorporate more efficient workflows, cost-savings, driving tremendous shareholder value and leveraging strategic business advantages. If you are more driven for profit, like we normally would expect, you must not take procurement management lightly.

It is a large component of total revenues recently. Inefficient procurement is a costly decision for the organization. It costs the concerned company a massive amount of cash in delayed purchases, missed discounts, and transaction disputes. The outcome is not always convincing.

Therefore, one way to take advantage of early purchase and payment discounts is to toss the stone-age practices of procurement out of the window and embrace the technological solutions and tools provided in this present age which can ultimately transform a rather slow procurement strategy to world-class performance.

The Procurement Process

The procurement process is the series of processes required to get products or services from the requisition stage to purchase order and until they approve the invoice. It is one thing to align your procurement function with your corporate strategy as a single part of the goal of procurement. It is another thing to make goods and services available for purchase in the long run. Purchasing or buying such goods and services is the Procure-To-Pay Cycle, and the entire cycle can be a process with many steps:

  • Identifying the requirements
  • Authorizing the purchase request
  • Approving the purchase request
  • Procuring
  • Identifying suppliers
  • Making inquiries about the receipt of the quotation
  • Negotiating
  • Selecting the vendor
  • Acknowledging the purchase order
  • Notifying advance shipment
  • Receiving Goods
  • Recording invoice
  • 3-Way match
  • Paying suppliers

While the list is extensive but non-exhaustive, your business’s nature will go a long way in determining the extent of the Procure-To-Pay cycle you must use. Therefore, there is no way we would talk about procurement management and leave out procurement as a service (PaaS) for customers. In a global village that we find ourselves, it is the known method to combine people, technology, and expertise singly as a managed service. Drawing from this much intensity and requirements, The Swiss Quality rises to meet the needs of your firm irrespective of what you offer. We would gladly shoulder the responsibility of managing your procurement to deliver excellently and such that you have a reasonable competitive advantage. We combine people, technology, and expertise excellently to produce a glamorous and worthy representation for the growth of your business.

Do you need help to fill your workforce gaps, and act as an extension to your current teams to accelerate their entire procurement life cycle via enabling the right experts to deploy the right tools and apply the expertise more quickly, easily and affordably, you have them all with The Swiss Quality.

Our procurement management service caters to customers’ needs by optimizing the procurement function across processes, technologies, and people required to enhance the way people consume goods and services in their business. Already, we have hands-on and viable means of integrating a seamless procurement platform into your business which mixes sourcing, purchasing, and intelligence in a single and end-to-end procurement solution.

Why Automate Your Procurement Management Process?

A procurement management process or procurement process is a way by which a company purchases some items from external suppliers. It specifies how to manage supplier relationships to receive a high level of service. This is a critical task that must be undergone in procurement management so you get what you have paid for.

With a solid procurement automation software or tool, you can easily and seamlessly streamline the cluttered procurement process and keep it transparent. That way, you will lose no information, and critically, stakeholders can raise, approve or reject items more timely than ever. In the actual sense, a streamlined procurement process offers more control over the different stages of the procurement life-cycle. As a result, deliberate action or attempt to automate procurement has the following advantages:

  • Minimizes the chaos or troubles caused by paperwork
  • Shortens procurement life-cycle
  • Reduces dependency on human wisdom and efforts
  • Minimizes the workload of all stakeholders
  • Guarantees an accurate and consistent process
  • Infuses transparency into the flow of the process

Whatever procurement tool you choose, there are certain must-have features to achieve much with the software:

  • Spend control
  • Insightful reports
  • On-The-Go Approval
  • Risk mitigation
  • Easy integration
  • Simple customization
  • Pre-built templates
  • Interactive Dashboards.

The management techniques used to execute the efficient functioning of each department within an organization varies from one company to the other. Hence, procurement management is one of the viable means and techniques to make sure the goods and services acquired from an external organization run smoothly. That way, you will save more and better when buying goods or services. The benefits are incredible and mouth-watering. Subscribe to our procurement management service today, and let us handle your business the way proper way.

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