If your business is growing space in the market, rethink your purchasing strategies can differ from a success to a failure situation. Large and small companies are investing in outsourcing procurement as a strategy to save money and maximize profits. The goal is leveraging their operations by delegating its purchasing department to a third party specialized in vendor management that can source the most effective solution available for goods and services from sourcing to payment.
Understand your procurement journey is a challenge, especially when it is the right moment to unleash better results in your purchasing department. An effective procurement journey happens when it includes:
Control: a professional procurement team who provides complete visibility and better business outcomes with a collaborative outsourcing process.
Efficiency: increase performance by reducing waste and errors including order compliance that ensures transparency in commercial partnerships avoiding time-consuming errors and protect from legal issues.
Savings: leverage savings and discounts by analyzing and comparing vendor alternatives before committing to a long-term contract.
Create Value: provide better vendor management aligned with the company’s values, policies, and rules ensuring compliance and better adherence with lower total acquisition costs.
So, what are the main benefits of outsourcing procurement? More than savings, it adds value to your business such as:
- Highly skilled specialists with access to extensive networks.
- Advice on total acquisition cost.
- Sourcing for the best materials and prices in the market.
- Negotiating better supplier terms and conditions.
- Boost vendor management relationships from existing vendors to establishing new connections.
Although outsourcing can result in higher efficiency, there can be concerns that the business will lose control compared to in-house resources. Look at a different view: your business will be exposed to a qualified team that can be instructed to deliver very specific performance to attend what your business needs. The common goal is to increase the profitability of the business. By delegating your purchasing area to a third party, their responsibility is to act as controllers to ensure conformity to budgets evaluating products from the ground up forecasting, planning, logistics and warehousing.
Have you ever thought that procurement service can be offered by 3PL companies? One of the advantages of having a 3PL partner is that it will be able to offer a complete portfolio to solve needs from end-to-end for your logistics operations. From negotiating day-to-day purchasing transactions, better supplier terms/conditions and foreseeing inventory space, your outsourcing procurement process is at the centre of a successful supply chain management.
Read more about what a 3PL company can do for your business.