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How can procurement be the highest contributor to an organization’s total cost savings?

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Kobster eShop Pvt Ltd
Kobster eShop Pvt Ltd

Organizations should analyze past procurement spending and create quarterly spend maps to improve procurement processes and manage risks. Monitoring procurement expenditures helps identify opportunities to reduce costs through new products. Companies must manage supplier databases and understand internal and external procurement usage to forecast needs and costs. Regular monitoring of procurement transactions and establishing time-based delivery schedules helps procurement teams work efficiently while controlling spending.

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How can procurement be the highest contributor to an organization’s total cost savings?
Many organizations focus on cost-savings and optimizing their budgets. Though other organizational departments can help achieve this goal, but procurement department plays a vital role when it comes to cost-savings.
Organizations should invest in analyzing their past-procurement and build a spend map for every quarter, to improvise processes from finding a supplier to finalizing the supplier, from placing of the order to packaging, from delivery to installation, from maintenance to disposal of the procurement. The spend map is essential as it helps in overcoming procurement risks, improving a buyer-supplier relationship and also provides a foundation for cost reduction.
It is important for organization’s to be aware of their procurement spends. With latest procurement systems, it has become a simple process for procurement team to understand the expenditure and control it at regular intervals. Constantly monitoring the spend helps in identifying room for new products that can help in achieving the cost-reduction goal of the organization.
Every company deals with a range of products that need to be procured consistently. From administrative supplies to production of raw materials, companies deal with two major procurement channels. Therefore companies need to maintain a quality check on the type of products purchased and balance it with the budget allocated.
Companies deal with multiple suppliers to procure their organization’s requirement. It is important for companies to manage their supplier's database thoroughly and know about what product they procure from the suppliers. Having a clear analysis of internal and external procurement usage will also help in forecasting future requirement with cost-reductions.
50% of companies are not aware of the number of times they place procurement orders to suppliers. To avoid the lack of understanding, generate time-based or regular procurement deliveries that can help the procurement team work efficiently and systematically. Also, have a know-how of the procurement transaction on a time to time basis.
To overcome the challenge of the low standard of procurements in your organizations, ensure procurement is monitored regularly to achieve your organization’s biggest challenge of cost-savings.
How can procurement be the highest contributor to an organization’s total cost savings?

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How can procurement be the highest contributor to an organization’s total cost savings?

  • 2. Many organizations focus on cost-savings and optimizing their budgets. Though other organizational departments can help achieve this goal, but procurement department plays a vital role when it comes to cost-savings.
  • 3. Organizations should invest in analyzing their past-procurement and build a spend map for every quarter, to improvise processes from finding a supplier to finalizing the supplier, from placing of the order to packaging, from delivery to installation, from maintenance to disposal of the procurement. The spend map is essential as it helps in overcoming procurement risks, improving a buyer-supplier relationship and also provides a foundation for cost reduction.
  • 4. It is important for organization’s to be aware of their procurement spends. With latest procurement systems, it has become a simple process for procurement team to understand the expenditure and control it at regular intervals. Constantly monitoring the spend helps in identifying room for new products that can help in achieving the cost-reduction goal of the organization.
  • 5. Every company deals with a range of products that need to be procured consistently. From administrative supplies to production of raw materials, companies deal with two major procurement channels. Therefore companies need to maintain a quality check on the type of products purchased and balance it with the budget allocated.
  • 6. Companies deal with multiple suppliers to procure their organization’s requirement. It is important for companies to manage their supplier's database thoroughly and know about what product they procure from the suppliers. Having a clear analysis of internal and external procurement usage will also help in forecasting future requirement with cost-reductions.
  • 7. 50% of companies are not aware of the number of times they place procurement orders to suppliers. To avoid the lack of understanding, generate time-based or regular procurement deliveries that can help the procurement team work efficiently and systematically. Also, have a know-how of the procurement transaction on a time to time basis.
  • 8. To overcome the challenge of the low standard of procurements in your organizations, ensure procurement is monitored regularly to achieve your organization’s biggest challenge of cost-savings.