A well-managed procurement chain is the key that gives your business the means to achieve its goals.
Procurement management may still lie somewhat “under the radar” in Québec, but it is a vital way to improve efficiency. Every dollar saved in procurement is an additional dollar in direct earnings for your organization. To succeed in optimizing your purchases, you must understand how to buy efficiently.
An obvious reality, perhaps, but many businesses do not pay sufficient attention to this important strategic aspect – often because of a lack of time or a shortage of specialized resources.
If you are lacking resources to help ensure the long-term survival of your business, ask yourself if you are doing business with the right suppliers and, especially, if they can do more for you.
The foundations of a procurement chain
Efficient purchasing rests on two fundamental pillars:
- The strategic pillar: your employees must understand the dynamics and the needs of your market. You must also be able to understand what you are buying, and why.
- The logistical pillar: it is essential to work in concert with suppliers and closely monitor all stages of the purchasing process, from defining and validating the need right through to delivery.
Procurement management: a matter of human relations
Are your business relations with your suppliers limited to exchanges of emails? Do you take the time to meet your partners in person and sit down with them to discuss your common goals? These are vital questions to ask yourself. You should seek to develop a long-term, win-win relationship with your suppliers.
“As time passes, many managers tend to forget that their purchasing department is first and foremost a relations department. This kind of closeness cannot be achieved by indirect contacts from behind a screen: you have to go out to meet your partners in the field to develop better strategies,” says Michel Frison, Business Development Manager at J2.
Taking the time to cultivate personal relations with your suppliers brings a host of advantages:
- Long-term human and professional relations
- A better understanding of the market
- Insight into your suppliers’ situation
- An understanding of the environment in which your purchases are produced
- Better prices through negotiation
These advantages cannot be gained through impersonal messages. You must take the time to cultivate a meaningful understanding with your partners.
Buying better = selling better
This is a simple accounting calculation. When your purchasing department secures better prices through effective strategies, your margins are more attractive and you can offer your customers better prices.
This is when procurement management expertise shows its true value – when you are short of the time, resources, knowledge or the technologies needed to optimize your purchases. Developing this aspect has become of paramount importance if you want to stay competitive in the industrial field.
An expert procurement chain management service will let you:
- Deal with talented people
- Develop you working methods
- Bring value to your business
- Better manage your business strategies and better track your purchases
- Enjoy a consulting service tailored to your situation
Calling on outside experts can bring in a fresh vision, a fresh understanding of the current market situation. This kind of strategy can prove of immense benefit to your business.
What are the keys to improving your procurement chain?
Here is a selection of tips to guide your strategic thinking:
- Give your employees time to understand, analyze and take a detached view of their purchases
- Stay connected to the market by keeping yourself informed (attending conferences or events on manufacturing production can prove especially helpful)
- Anticipate and understand new, innovative purchasing practices
- Periodically sit down with your long-standing suppliers to seek better prices
J2: expertise at the service of your business
J2’s purchasing specialists can help you clarify your strategies and develop the best game plan for your market needs.
Don’t hesitate to contact us for personalized service to obtain concrete results and stronger profit margins.