Five Things You Must Know About Procurement

One important role of the procurement specialist is to seek quality services or products to meet the needs and goals of the organization, and acquire them at an acceptable cost. They must thoroughly understand the policies, issues and risks that can accompany the procurement process and the ensuing steps in the supply chain. If these tasks can be accomplished successfully, the role of the procurement specialist can have a positive impact on the organization’s overall cost efficiencies and bottom line, validating the importance of their role.

In general, the classic procurement process involves five steps, which must be thoroughly examined. They are as follows: Define requirements, select supplier, produce agreement, administer day-to-day, and assess performance.  These steps are essential, regardless of the amount of automation or e-sourcing that may be involved.

With that in mind, organizations can benefit from a procurement function that has these five main features:

• A detailed spend map that cuts across an entire organization and is updated regularly so all purchases can be analyzed continuously for need, value, pricing and quality.
• The ability to drive savings across the organization by continuously ensuring the right products come from the right vendors at the right price to meet organizational goals.
• The ability to engage with the entire organization to evaluate how reduced costs can be enjoyed across the value chain.
• An organization-wide focus on ensuring value through contract management and supplier relationship management.
• The ability to deliver acquisitions through an operating model that connects technical and commercial capabilities to drive organizational goals and optimum client outcomes.

The purchasing and supply management profession is clearly transitioning from placing purchase orders to establishing and managing comprehensive contracts with strategic suppliers. This has created a need for purchasing and supply managers to develop and refine contract preparation and contract management skills.

Lean Six Sigma impact on procurement:

Six Sigma based processes have the ability to measure the level of risk in a process and analyze the process using statistical data in order to measure the level of deviation from normal (defects), thus exercising a level of control over the process and forcing improvement. Lean Six Sigma methodologies allow organizations to streamline their procurement processes, simplify supply chain complexity and reduce overall purchasing costs. Procurement projects that would most likely benefit from leveraging Lean Six Sigma tend to center around: cycle-time reduction, transaction quality, technology adoption within the supply chain process, and compliance. Determining potential projects to improve should focus on ensuring the process being targeted is specific enough to be addressed within a realistic timeframe and has the potential to produce ample return on investment of resources.

There are several additional disciplines and credentials available that can empower you with enhanced expertise in the various phases of acquisition, procurement, purchasing and logistics.

• Gaining expertise in contract management best practices, commercial or government helps you master the contracting process from negotiations through contract closeout.
• Project management allows you to successfully manage your projects including budget, scope, resources and timelines.
• As a holistic management approach, business process management facilitates the improvement of procurement processes on a cross-functional organization-wide scale.
• Business intelligence training helps procurement professionals drive enterprise system and allows you to identify and organize data to make informed strategic decisions.

In today’s hyper-competitive job market, Villanova University’s professional online programs offer a variety of dynamic certificate programs designed to meet the needs of the procurement professional.

Take the next step toward investing in yourself and reaping the benefits! Contact a program representative today to learn how easy it is to get started.