A guide to organising a successful purchasing process Always have enough office supplies available.
This white paper will show you how to get results
And on the best possible terms. That's easier
with a well-organised purchasing organisation.
said than done! However, as a buyer you have
It gives you six pointers on how to successfully
a good overview of what is going on in the
introduce this into your organisation. Get a tighter
company and are best placed to ensure that
grip on your purchasing and save time, money
your colleagues have everything they need.
and energy by making things easier for your team and your colleagues. This will give you more time
Once upon a time, your primary responsibility
to tackle other challenges that will help move the
was ensuring stock levels were high enough,
monitoring the budget and putting a big smile on your colleaguesâ€™ faces. Nowadays, more and more is expected of you. But how can you meet these expectations when you barely have enough time as it is? In practice, purchasing involves hours of searching, comparing and ordering each month. And it doesn't stop there: managing order information, deliveries and invoicing is no mean feat, as every supplier has their own processes and terms and conditions. And then, of course, you have your colleagues coming to you with very specific requests. That is, at least, if you are involved in this; after all, you may find that they are using their own purchasing policy! You're convinced that there has to be a more efficient way of getting things done. But how?
No. 1 According to purchasing managers, the top priority is measuring purchasing performance.
Six steps to a well-organised purchasing process
How do you bring structure to the growing number of tasks and responsibilities yet still ensure that you meet the high expectations so that, as a purchasing team, you contribute to the success of the organisation?
Analyse the current situation (& potential improvements).
There are no opportunities without knowledge. The first step is to gather information about current purchasing processes. Just ask yourself the
A well-organised purchasing process can give
organisations a considerable advantage. Clear agreements and standard processes will give you clarity on who can order, where, and how. You can agree better terms and conditions with fixed
Who buys what?
Are my colleagues happy with the purchasing process?
suppliers when it comes to price, speed of delivery and even procurement and return costs. Bringing routine into your activities and encouraging your colleagues to embrace the specified procedures will What are the hidden costs?
leave you more time tackle other challenges that will help to move the organisation forwards. However, setting up a well-oiled purchasing
How much time is taken up with managing purchasing?
machine is easier said than done. It requires preparation, persuasiveness and the support of your colleagues. The following steps will deliver a well-organised purchasing policy that works:
Who are the suppliers?
What are the total expenses?
Map the expenses for the past year and create an overview. You can decide to break the costs down
by branch, department or user so that you get Report and improve
Plan your purchasing
more insight into consumption. This information will help you to discuss matters with your supplier, who can compare your situation with that of similar organisations and show you where you can make savings.
From good plan to good results
Improve your purchasing organisation
All the more reason to regularly review your vendor
with the help of a purchasing plan.
ratings, which will give you the opportunity to
Talk to other departments: What is expected of your purchasing team this year? What does the future look like? The purchasing plan will help you to work towards goals in a structured manner and prepare for future developments. An increase in the number of employees, for example, means an increase in the materials required. Working together with other departments is important to take the purchasing team to a higher level.
measure and assess the performance of your current suppliers on the basis of fixed criteria. This should include the products or services that they can deliver, to achieve greater efficiency by reducing the frequency with which orders are placed. You can achieve this by limiting overlap or grouping various different products under one supplier. But won't the changeover to a new supplier incur high costs and a high degree of complexity?
The incidence of cross-functional cooperation is
21% higher in the highest performing organisations
Aren't all processes always tailored to your current suppliers? Yes and no. A changeover can be complex and time-consuming, but there are suppliers who will bear the lionâ€™s share of the costs for support and implementation. Talk to the suppliers you have selected about your specific requirements and discuss what they may mean for
Involve your key colleagues in the purchasing plan.
What goals do other teams such as finance, HR and product development have, for example? What are their needs? Tailoring the process to the purchasing objectives and good budget planning are key to improving efficiency. And if purchasing wants to
Criteria for vendor rating Price is in line with market
contribute to the success of an organisation, it can
Quality of range
no longer afford to work in isolation.
Service quality Practical knowledge and expertise Opportunities for growth
Go for the best offer, select the right suppliers.
A long-standing relationship with your current supplier(s) is no guarantee that you will be offered the best deal. Organisations that regularly carry out supplier audits will often benefit from better solutions at a cheaper rate and on more favourable terms.
Sustainability Good reputation References
How you can help move the organisation forwards by bringing order to the chaos:
Easy ordering process for colleagues
Better purchasing quality
Insight into ordering behaviour
A clear overview of expenses
Time for supplier relations
Create order from the chaos and provide purchasing processes
You can have a very clear goal, but you can only maintain control if you impose guidelines and
40% of purchasing managers say that they have adopted a clear, automated strategy
everyone sticks to them. Clear agreements with standard processes will give you clarity about who can order where and how. Do you order via an (internal) order form, via
Take control of your purchasing with automation options
the supplier's website or maybe even a standard catalogue?
The purchasing team often spend a considerable amount of time on a small part
And then you need to bear in mind that the organisation will not simply adjust. A successful approach requires awareness among colleagues. Promote the benefits of the change and the disadvantages of not following through. If you want something to change, you must make the current culture work for you. You can stimulate change by being consistent, valuing good behaviour and fostering results.
of a job. These time-consuming tasks often lend themselves extremely well to automation. E-procurementâ€” automating your purchasing processâ€”lets you save costs simply by working more efficiently. A streamlined process makes it easier than ever to draw up contracts, make payments and digitise invoicing. And a detailed insight into your expenditure, contracts and suppliers will make it easier to spot potential for improvement.
62% of purchasing managers say that they have insufficient capacity and skills in their team to implement a purchasing strategy 4
Make the best choices for your organisation in future with e-procurement!
Turn a good plan into good results
A well-organised purchasing system is more than a project: it is a change in organisation. Longstanding agreements suddenly look a little different, prerogatives no longer apply, ways of working are overhauled and the focus shifts. A new approach requires a lot from colleagues, in terms of time, flexibility and adaptability. How do you translate a good plan into good results?
Report and improve
A clear purchasing process will provide a wealth of information that is vital for your organisation. Here are a number of actions
Share the results with the whole of the organisation,
you can implement to enthuse
not just with your manager. Provide the whole
organisation with information about where and how money is being spent. This will broaden the
scope for improving purchasing behaviour. Sharing
No basis for change without understanding "why". Explain why you are making the changes to the customer (they are ultimately why you are doing this) and to your colleagues (what does it mean for them?).
information will therefore help save money, improve
Involve all stakeholders To lay the foundation for good results across the organisation, it is essential to involve key stakeholders at an early stage, so you can count on their support.
Simple communication Explain why a purchasing policy is necessary, what the advantages of introducing it are and the disadvantages of not introducing one, and make sure that the stakeholders can convey this.
efficiency and stimulate growth. The focus on purchasing has since moved from being a tactical operation to a strategic initiative. Which results should you be sharing? - Total expenditure - Main cost items - Cost savings - Time saving - Improvement in quality - Employee satisfaction or number of complaints
Highlight the results
Think about how you will make your goals
Recognise and promote the results of the various departments. Make sure that all colleagues know how they can give feedback and what can be done with it.
measurable and translate them into KPIs (key
have met your objectives. These benchmarks will
Stick consistently to the process and keep exceptions to a minimum. Be bold and intervene if colleagues deviate from the process: an agreement is an agreement.
help you illustrate the progress you are making
performance indicators). KPIs are benchmarks that you can use to measure the extent to which you
towards reaching goals. KPIs act as conditions for success and help you to improve by focussing on greater efficiency and effectiveness.
Analyse your current situation, plan your purchasing, select good suppliers, make sure you have clear processes, turn a good plan into good results, and report and improve. You will see that these six steps bring greater routine to your activities, you will be giving your colleagues greater autonomy by ensuring a clear process, and you will have more time to tackle new challenges. And why not ask your current supplier for advice as well? They are more than used to being asked for this and will be able to set you on the right path or put you in contact with others who are further down the same road as you. You are not the first one to tackle this issue! A well-organised purchasing process requires thorough preparation. However, this investment pales into insignificance compared to the progress that you will be able to make for your organisation, the team and your colleagues.
Sources: - The Deloitte Global CPO Survey 2016: Procurement, at a digital tipping point? - 2015-2016 Global Chief Procurement Officer Survey from Capgemini Consulting - Aberdeen Groupâ€™s research
If you have any questions, contact the Staples Advantage Team! Click here to find out more.
Staples Business Advantage
Staples Advantage UK