Procurement - how hard can it be?
Research from the procurement conference organisers found that of the 120 purchasing professionals questioned, 60.3% cited relationship management as a primary skills gap within their organisation's procurement teams.
This was not the only issue flagged up in the survey; 51.7% of respondents said risk analysis is an area that needs to be addressed, while 39.7% highlighted supply chain analysis as a key skill their business is lacking.
The results show there is obviously room for improvement in the procurement activities of businesses of all sizes, regardless of which market or industry they operate in. Many staff in charge of procurement at their employer may not be doing the job to the best of their ability due to gaps in their skillset, so what areas should businesses be focusing on in order to ensure their procurement is up to scratch?
Always look ahead
Even if everything is running smoothly right now there is no guarantee that will still be the case six months or a year down the line, but potential problems can be avoided by a procurement leader that has the foresight to spot potential problems and put the necessary plans in place. For example, if your company requires a specific material that is only available from a few suppliers, keeping an eye out for any events that could cause supply to be limited - such as a civil unrest in a country where a manufacturer is based - will enable you to increase your order to build up a stockpile, or switch supplier before your competitors do.
Network, network, network
This goes hand-in-hand with managing relationships and is crucial to successful procurement. A Manager who has a library of backups they can call upon should their main supplier let them down is worth their weight in gold to a company and may mean the difference between success or failure if there is a problem at a key time, such as in the run-up to a product launch. Of course, maintaining close relationships with suppliers even when you are not constantly in business them is very tricky, but even making small-talk at business events and keeping in touch via email could make the world of difference if the worst happens.
Know your staff
As a Procurement Manager it can be all too easy to spend most of your time focusing on maintaining relationships with suppliers, and take your eye off the ball when it comes to getting the best from your staff. Although the former is of course crucial, don't underestimate the importance of having the right person allocated to the right role. If you have a member of staff with particularly good attention to detail, then use them to check over things like contracts before they go out to suppliers, while those who don't mind being on the road a lot could be a perfect fit for heading out of the office to meet potential new business partners.
Negotiation is key
Being able to negotiate effectively could arguably be the most important aspect of successful procurement. Tracking down the right supplier, and then working with them until you get what you want on your terms, can save businesses huge sums of money over the course of a year, money which can be invested elsewhere to ensure the company stays ahead of the competition. But negotiation is not only important when speaking to suppliers; it can be just as critical to solving internal issues too, especially if different departments have their own - often misguided views - about who should be supplying everything from paperclips to company cars.