number one priority this year. However, 62 percent expressed dissatisfaction with the execution of their respective procurement strategies. So, needless to say, there's room for improvement.
Below are five tips that can help enhance procurement performance:
1. Develop strong risk management policies
Between the vast array of digital disruptions, including security breaches and system failures, and the myriad other unexpected events that can interrupt business processes, such as natural disasters, there is an overwhelming amount of threats procurement leaders have to prepare for. Unfortunately, as we previously covered, many are failing to do so.
Knowing ahead of time what the procedures and plans are in an emergency, as well as which parties are responsible for which tasks, is necessary to ensure business continuity. Make sure that all involved members throughout the organization are informed on the risk management policies, as incident response plans are only as effective as their execution.
2. Prioritize supplier relationships
Procurement professionals must maintain strong relationships with the business's suppliers, which includes establishing clear lines of communication and building trust. It is essential to make sure that both parties are on the same page and have definitive goals and plans of action laid out. In addition to evaluating supplier contracts on a regular basis to ensure performance and compliance from vendors, procurement departments should also be looking for ways to improve their relationships with them. Simply asking what they could be doing better or how they might help them better serve their customers can go a long way.
3. Invest in the right supply chain talent
Procurement managers can help elevate supply chain efficiency, optimize workflow and drive performance by ensuring the right skills and tools are being onboarded. This isn't just for employees, but for the technologies and systems that are invested in as well.
4. Assess key performance indicators
To gain a comprehensive understanding of how well procurement is operating and which areas can be improved, it is important to make sure that success and performance are being measured against the appropriate metrics. It is worth noting that these indicators may change over time, which is why this evaluation should be conducted on an ongoing basis.
5. Take advantage of outsourcing opportunities
As with the supply chain, outsourcing procurement functions can increase the productivity and value of internal staff by handing over the tasks that could be done faster or more effectively by a third party. According to Deloitte, more than a quarter of CPOs are looking to increase outsourcing for operational buying and 12 percent plan to do so for strategic sourcing and category management. Enlisting the help of a consultant can result in long-term ROI for companies because these experts offer an unbiased yet knowledgeable perspective on the changes that should be made to improve the bottom line.