4 basic guides to effective Procurement Strategy

in Supplier

The need for procurement to be a more strategic function has never been as important as in this current volatile scenario (supply chain disruption caused by the recent Japan earthquake is one example). After witnessing scenes of rising costs and profits spiralling downwards, procurement now needs to go beyond being a catalyst for cost savings and supply chain performance. Instead it now needs to undergo a complete transformation and become a driver in every strategic business initiative. Industry experts as well as procurement professionals unequivocally accept that the necessary transformation of procurement processes can be achieved only if there is a shift to automated systems.

In order to ensure an effective procurement strategy in place, the following 4 steps need to be implemented:

1.Ensure seamless integration between the spend management system: An integrated spend management system will lead to benefits of identifying more savings opportunities, executing on these savings to realize all potential opportunities as well as complying to processes that will ensure further savings.

2.Integrate and automate the entire supplier management process from supplier discovery to supplier performance management: The entire supplier cycle can only be made effective through proper automation. Begin with identification of the right supplier through supplier portals or supplier networks, measure and analyze supplier risk through a risk management solution, and finally define and manage supplier performance through a supplier performance management system.

3.Entail central level management support and utilize automation to ensure alignment of procurement goals and organizational goals: Create a single platform where all the metrics of procurement performance- potential savings, actual achieved savings, contract performance etc. can be visible easily and then tracked to organizational goals of generating efficiencies and reducing costs.

4.Ensure easy to use solutions and easy to adhere processes to get employee buy-in and guarantee transformation: For automated solutions to be drivers of increased process efficiency it is essential that the necessary steps are taken to increase their user adoption. Easy to use solutions, incentives and rewards for early adopters, proper adoption tracking and user training create increased adoption and help derive accelerated ROI from these solutions.

 

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zycus has 27 articles online

Zycus Inc. is a global provider of Spend Management solutions (Spend Analysis, Strategic sourcing, Contract management,procurement strategy,Supplier Performance Management) that are world renowned for delivering an accelerated return on investment through superior user adoption to create Maximized Savings. (http://www.zycus.com/solution/spend-management.html) With more than 200 global proven implementations, Zycus' solutions have emerged as the global favorite.

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4 basic guides to effective Procurement Strategy

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This article was published on 2011/06/14