Making the most of the indirect procurement process

When the average business leader thinks of procurement management, he or she typically dwells on the products or services being sold to the public. Yet, in their own way, corporations are themselves consumers, obtaining whatever necessary assets required to have their operations run as smoothly and efficiently as possible. Systems utilized by the marketing department, financing team and others must be affordable, without sacrificing quality - the exact attributes direct acquisition teams look for. 

According to Supply Management, Brian Davy, head of non-production procurement at Jaguar Land Rover, attended the ProcureCon Indirect conference in London on April 1 to discuss the importance of developing an obtainment strategy for non-market derivative goods. The professional noted that the first step involves creating a positive image within the company. 

"If you think that you are a second-class citizen versus direct procurement, then you are going to get that reaction," said Davy, as quoted by the news source. "We're not the poor relation of direct purchasing, what we do is fascinating and varied."

Making the strategic sourcing of the indirect procurement team attractive to the room of C-suite executives is part of attaining the best materials for a business. A corporation cannot function on raw monetary capital alone, which is why it needs to be invested in both physical and intangible products that can improve the overall functions of the workplace. 

Hopping on the technology wagon 

Cloud computing has presented businesses throughout the world with new opportunities for expansion, offering a more flexible environment that streamlines communication between departments and branches. Data is now more easily accessible and can be translated into actionable insight. The question for the indirect procurement team is what kind of software would be most applicable to their operational needs?

Pat Garrehy, CEO of Rootstock Software and contributor to Manufacturing Business Technology, noted that enterprise resource planning can offer companies the opportunity to reduce excess inventory from 20 to 30 percent, as it provides them with a better way to manage raw materials, parts and finished goods. Ultimately, a cloud-driven ERP solution allows indirect obtainment teams to anticipate product requirements, leading to firmer commitments with predictable lead times. 

Furthermore, the cost savings associated with ERP and procurement software can result in significant reductions in labor expenses. The amount of time it takes to assemble spreadsheets and send emails regarding inventory is diminished, because all of the necessary information is managed and organized on a comprehensive system that can be accessed by all employees. 

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