Monday, 16 May 2016

Easy way to reduce procurement cost by building relationship

Managing procurement spend with inadequate procurement process and limited resources is a hard task and tough challenge for procurement experts. The more competence, resourceful and equipped procurement department is, the more likely it for procurement department to provide better results to overall business. However, a lack of procurement resources can make it even more difficult to achieve tangible cost savings, given shrinking buying power, inability to invest in spend analytics, or for other reasons.

As an procurement official looking to build such connections, start by taking an ideal opportunity to understand functions of different offices, and imparting your enthusiasm for making life easy and more efficient, as by not only concentrating on cost saving mission. In the event that you concentrate on finding out about the work of other departments, and look to facilitate the obtainment encounter, the savings will come automatically.

Other departments may be reluctant to provide information or support to procurement by having a fear to lose control over relationships with vendor or decrease the quality of product and services. To overcome these fears, procurement leaders need to find a way to build relationships of trust with their executive colleagues outside of procurement.

Enhancing god terms among all organization departments provides another great benefit, once you have a strong rapport within the company, it is increasingly likely that you will gain insight into potential economies that were not otherwise obvious to you. By observing spends of different categories to find opportunities of major spend or other major element that can increase organization sourcing and bring cost saving for your company.

A lack of resources or incompetence in procurement processes may lead procurement department towards frustration as they do not have enough resources to produce require results on what they are planning to and this will also add more hurdles to an already challenging arena. However, by leveraging internal and external relationships creatively, today’s procurement leaders may have more opportunities for cost savings than they realize.

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