Business professionals working on procurement efforts need to focus on delivering value rather than becoming distracted by everyday details like soliciting bids and signing agreements. A good CPO keeps the end goal of their function in the company in mind by avoiding excessive focus on day-to-day procurement.
The following are four useful tips on delivering value to the company/companies you serve by re-centering your focus to the following needs rather than day-to-day demands:
Consider Supplier Relationship Management or SRM
Negotiated savings are hard to realize if there is not enough focus on SRM. A good relationship with suppliers means efficiently and economically getting the needed products and services.
Other benefits of good SRM include accuracy in pricing, more successful troubleshooting efforts, and a helpful boost to supplier programs functioning in various divisions and offices within a company. Supplier behavior needs to be carefully tracked to ensure that service level agreements are kept.
Getting contract agreements signed and implemented is not enough. Looking at the big picture when it comes to contract agreements involves analyzing the many ways that contract value can be maximized to pursue a company's interests.
Contracts need to be optimized so that they can be tailored to a company's needs. Don't fall into the trap of agreeing to a standard contract's terms without analyzing how these terms might be adjusted to meet the unique needs of the company you are serving or representing.
The Bottom Line
There are enormous opportunities for savings that are frequently overlooked because of inadequate attention to the spend categories that have the most influence over bottom line. Procurement professionals ought to recognize savings potentials in areas like travel and HR benefits.
At times, it's easy to overlook such benefits because of an unwillingness to rock the boat by making changes or because of contractual complications. However, stirring things up by negotiating for savings on certain spend categories can drastically improve a company's bottom line.
Comply and Standardize
Negotiated contracts can only be perfected at a company when the CPO succeeds in overcoming barriers that exist between a company's various business units. Overcoming these barriers is about truly achieving procurement leadership that directs the company toward ever greater value.
Contracts offer enormous savings potential, but this savings potential can't be realized before everyone at a company grasps a certain standardization of executing purchasing decisions with the appropriate supplier. From large scale company purchases to seemingly insignificant expenses like office supplies, complying to standardization in purchase decisions is vital to gearing procurement efforts toward a better bottom line.
For more information, contact LogicSource, Inc. or a similar company.