Procurement Excellence

Procurement Excellence

Here are 20 things you can do to start building Procurement Excellence:

  • Make sure you know how much money you are spending – and what you are spending it on.
  • Do not buy things you do not need – concentrate on needs and not wants.
  • Work closely with your business colleagues – it is their money which you are spending.
  • Describe clearly what you want to buy – write a specification (however simple) but listen to suppliers’ ideas as well.
  • Talk to suppliers – they are good sources of information about the market and about the competition.
  • Get to know some salespeople and understand how they see the world – often they are more interested in getting the sale than maximizing their price.
  • ‘Shop Around’ – do not just keep going back to the same supplier, competition is good and can bring in new ideas.
  • Do not tell a supplier your ‘budget’ – or you will pay that price, one way or another.
  • Remember that price sometimes has little to do with cost – it depends on the market.
  • Negotiate hard and always ask for a discount – people who ask for more usually get more.
  • In a negotiation you usually have more power than you think – try to put yourself in the position of the other party and see how it looks to them.
  • Never sign anything which you do not understand – take legal advice if necessary.
  • Beware of long-term contracts – things can change very fast.
  • Take specialist advice in specialist areas – leasing, commodities, fashion etc.
  • Pay your bills on time – this is part of a successful supplier relationship.
  • Manage your suppliers – be tough but fair and remain in control.
  • Be honest, reasonable and fair – do not abuse your position, respect confidentiality and forge relationships built on trust.
  • Set savings targets and measure your performance against these – otherwise you will not know how well you are doing.
  • If you really want to save money then reduce how much you buy – do not just work on reducing prices.
  • Bank the money saved – do not just spend the ‘budget’.