5 Tips: How-To start effective and sustainable procurement
Know what stage of growth you’re in. It’s not as easy when you’ve been doing business for generation(s) and need to start asking qualitative questions to secure supply – not just cheapest price – to evaluate suppliers. Why is it cheaper is one way to get to qualitative questions.
Think of purchasing not just as daily firefighting transactions receiving/sending goods but as part of product development and a contributor to revenue (and of course, cost).
Gather and examine your purchasing data by building a picture. This includes knowing your top purchases by dollars and specific volume, your vendors, and any key objectives for vendors during the year.
Know your scale in context to the industry and your competitors. For example, is your volume in units like “truckloads”? Does it fill a freight car? This determines what kind of negotiation and framework you can play with.
Have regular meetings that include R&D, Sales, Purchasing and Operations so product development is cohesive and thought out to lower risk. For instance, you may not want to develop a special tomato sauce if tomato crop is bad this season.