Procurement strategy companies: Everything you need to know
Are you interested in how procurement strategy companies can take your organisation to the next level? In this blog, we reveal everything you need to know!
What is a procurement strategy?
Simply put, a procurement strategy details how an organisation plans to navigate the procurement process. This could include anything from procurement goals to the steps required to meet them.
Why do you need a procurement strategy?
Organisations should consider producing a procurement strategy as soon as they decide to procure goods or services from elsewhere. This will enable them to drive greater value from the procurement process and, ultimately, cut costs and save money.
However, it’s also a good idea for organisations to develop a procurement strategy if they’re unfamiliar with the process. This will make it easier to keep track of their procurement activities and strategically source goods and services from suppliers.
Types of procurement strategies
Procurement strategy companies can help you identify your needs and help you choose a strategy that meets your requirements. The different types of procurement strategies include:
- Outsourcing – With this strategy, the work is outsourced to a third-party supplier.
- Insourcing – With insourcing, the work is completed in-house.
- Low-cost country sourcing (LCCS) – This involves sourcing materials from countries with lower labour costs.
- Global sourcing – With global sourcing, goods and services are sourced from international markets.
- Prime/sub arrangements – With this strategy, the outsourcing process is completed by a third-party outsourcing company. So, most of the transactions take place between the outsourcing business and the subcontractor.
What should a procurement strategy include?
If you’re not sure what to include in your procurement strategy, then procurement strategy companies can help you with this. However, generally, your strategy should include the following:
- Objectives
- Desired results
- Timeframe(s)
- Tactical plan
- Key performance indicators (KPIs)
- Dedicated tools.
How can procurement strategy companies help?
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Find the right strategy for you
As we’ve already stated above, procurement strategy companies will help you find the right strategy for you. To do this, they’ll evaluate your requirements and desired results. Then, they’ll help you find the strategy that will help you reach this outcome.
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Help you save money
A procurement strategy company will also help your organisation save money. Through strategic sourcing, they’ll help you tackle your procurement processes in a strategic, tactical way. They’ll help you evaluate suppliers to find the most economically advantageous tender, otherwise known as the MEAT. In public sector procurement, this means that the buyer is looking for the highest quality services for the lowest price. So, procurement strategy companies can help you find the best value for your money.
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Improve your current strategy
If you’re familiar with the procurement process, then you might already have a strategy in place. If that’s the case, you might not need someone to develop a fully-fledged strategy for you. Instead, you might just need someone to help you make improvements. That’s where procurement strategy companies come in!
The support on offer from procurement professionals is vast. They can support with all areas of your procurement strategy. From refining your tender documentation to staying competitive in your sector.
What if you need help with creating a procurement strategy?
If you don’t have a procurement strategy in place and need help creating one, here’s what they can do:
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Analyse your spending behaviour
Procurement strategy companies can assess your current spending behaviour and help you organise your future spending. Following this, they will help you categorise your key spend areas into:
- Critical and non-critical
- Domestic and international
- Direct and indirect.
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Research the supplier market
Before you actually publish a tender notice, procurement strategy companies will help you research the supplier market. To do this, they’ll look at different suppliers in your sector. They’ll assess:
- What is their market standing?
- How have they performed on previous contracts?
- Are there any risks associated with each supplier?
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Produce tender documentation on your behalf
Procurement strategy companies can also produce tender documentation on your behalf. This could include:
- Description of what’s required
- Specification, including the marking criteria
- Delivery details, such as time and location
- Terms and conditions, including express terms and implied terms
- Service Level Agreement (SLA).
They can ensure that everything that potential suppliers need to know is included in these documents. As a result, you have the best chance of securing suitable, high-quality businesses for your project.
In summary
A procurement strategy details how an organisation plans to navigate the procurement process. This could include anything from procurement goals to the steps required to meet them.
Organisations should consider producing a procurement strategy as soon as they decide to procure goods or services from elsewhere. This will enable them to drive greater value from the procurement process, cut costs and save money.
Procurement strategy companies can help your organisation in a number of ways. They’ll help you find the right strategy that suits your needs and goals. They can also assess your current spending behaviour and help you improve for future procurement activities. Finally, if you already have a procurement strategy in place, they can help you improve. So, you’ll be ready to find the best suppliers for your business.
How can Hudson Procure help?
Procure Consult
With Procure Consult, we offer support with tender management and ad-hoc procurement consultancy. Our expert team will manage the end-to-end procurement process or offer assistance with any stage, as and when required.
Procure Health Check
With Procure Health Check, we’ll conduct a full review of the strategic and operational procurement processes within your organisation. We’ll identify the areas that need improvement and help you drive greater value from the procurement process.
Procure Analyse
The purpose of Procure Analyse is to conduct a high-level analysis of your spending activity. We’ll help you understand your current strategic purchasing behaviour and highlight areas that can deliver greater value. Procure Analyse is also offered as part of Procure Health Check or as a standalone service.
Procure Outsourcing
With Procure Outsourcing, we deliver a range of procurement solutions on an outsourced basis, completely bespoke to you. This can range from delivering multiple tender projects as a package to delivering the full procurement function of your organisation.
Procure Post
Are you trying to find a supplier for your project? Post your tendering opportunity onto any of our 11 sector-specific portals for FREE with Procure Post!
Housed by our sister company, Hudson Discover, our portals host thousands of tendering opportunities for organisations of all sizes. For an additional cost, we’ll even help you identify your requirements and find the most suitable suppliers for your business.
Get in touch for a consultation and find out how we can help your business drive better value from procurement.
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