Understanding Procurement is Important for Your Company

3 Mins read

There are plenty of great ways to help your company have more success, and one of those is focused on the kinds of parts and products you’re sourcing. If you’re not getting quality, or things aren’t coming in on time, you could be having trouble keeping up with customer demands and expectations. Naturally, that may not end well for any company that’s having issues and can’t make changes to correct the problems. Customers expect quality and value, so you need to be sure you’re giving them that. Here’s how.

What You’re Procuring Matters

It’s important to understand how procurement affects the bottom line for your company. A lot of companies start buying from one supplier, and they just stay with that option because they’re used to it. But if you’re only procuring from one place, and you’ve been doing that for years, it’s quite possible that you’re missing out on getting items and products from other suppliers that might be a better fit. That’s why it’s so important to revisit procurement procedures frequently.

Then you can feel confident that you’re getting the right items from the right suppliers, and for the right cost. There are so many factors that go into procurement, that it’s not just about who has the lowest price on the bottom of the invoice. It’s also about making sure that your company is getting products quickly and efficiently, and also being sure that items are coming in when they’re needed. If you can’t get things on time, your customers could be losing out and moving over to working with your competitors.

Get Items from Trusted Sources

You need to trust the sources you’re using for your company. A big part of procurement is working with sources you can rely on, and if you’re finding that’s not the case for your company, it may be time to make some changes. Those changes could be big, or they start smaller and build on the momentum. Either way, though, they’re changes that are needed if your company doesn’t have the procurement confidence it would like to have from the sources it currently works with. Proper sourcing is extremely important.

Remember That Price Isn’t Everything

The price of the items you’re getting definitely matters. If you’re paying too much, you won’t be able to sell to your customers at a fair price. But it’s not just about the price, because the lowest price isn’t necessarily the best option. If the quality is bad, for example, you may find that your customers aren’t happy, even if they aren’t paying a lot for your products. Customers want a good price, but they also want something they can rely on not to break right away. If you aren’t giving them that, looking at your procurement procedures may be a good first step.

Value is What’s Going to Matter

The value you’re giving to your customers will likely correlate directly with the value you’re getting from your suppliers. That’s a big part of the reason that procurement is so important. If you don’t get the value you need from the suppliers and sources you’re using, it may be time to make a change. Not only is that value highly important to your customers, but your employees will appreciate it, as well. When you’re not providing value, you could be accidentally telling customers that they aren’t important to you, or they don’t deserve good quality. That might lead them to stop working with your company, but strong procurement can reduce that risk.

Check in With Your Customers

Checking in with your customers should be part of your procurement strategy. You need to know what customers want, whether they like your current offerings, and whether they think you’re giving them the quality and value they need. If there are other things they’d really like, you should be talking to them about those, as well. You may not be able to get anything else that customers want from your company, but there’s no chance of doing that unless you know what those things are. By asking customers about their preferences, you can show that your company is proactive, and potentially adjust your procurement strategy accordingly.

Get Feedback from Employees and Competitors

Your employees can provide quality feedback, and so can your competitors. Talking to employees in the procurement process, finding out where the issues are, and getting to the bottom of any problems can really make a difference. But you also want to pay attention to what your competitors are doing. If they have items that are far different from yours, or if they seem to be much more successful in getting items to customers, finding out what they’re doing differently from you could really change the game for your company and its future.

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Ryan Kh is a big data and analytic expert, marketing digital products on Amazon's Envato. He is not just passionate about latest buzz and tech stuff but in fact he's totally into it. Follow Ryan’s daily posts on Catalyst For Business.