Continuing from last week, here are some more best practices in procurement that you can implement at your workplace.
A governing policy: Every organization has its own rules and regulations governing procurement. Some organizations frown at purchasing from anyone who has an adverse impact on the environment while some organizations do not like to procure from vendors belonging to a certain country.
To ensure that such rules are being followed, it is advisable to have a sound procurement policy in place. Apart from the above, it can also dictate the process design and other details like approvals and stakeholders. A sound procurement policy also ensures that there is no scope for ad hoc or maverick purchasing.
Supplier performance management: I mentioned this point in another blog post. Just as we measure the performance and effectiveness of our employees and business units, it is essential to measure the performance and effectiveness of suppliers. A firm’s reputation and business operations depend to a certain extent on its suppliers and it always pays to watch out for any signs of the supplier not making good on his promises.
Using technology: Today, more and more vendors are offering procurement software solutions that help with the management of the entire procure-to-pay cycle. These solutions can bring significant benefits if used the right way.
It is a good idea to automate your procurement process using this software. But be warned. You need to find the right solution that suits your needs or the whole exercise of the deployment of software will be a wasted one that will eventually cost the organization a lot, and not just in money.
Transparency and visibility: Traditionally, procurement has been left to the procurement department and procurement professionals. As a result, there is not much visibility into the process, which can lead to some unwanted circumstances like fraud and overspending. It is always best to ensure that the function is as transparent as possible and offers complete visibility into operations.