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Procurement Best Practices: 9 Things to Do Now

By Avetta Marketing
April 20, 2022
8 minutes
Procurement Best Practices: 9 Things to Do Now

Procurement managers face a lot of challenges. From finding and qualifying suppliers to forecasting and troubleshooting problems, the list of things to do is lengthy. 

Fortunately, Avetta has the advice and tools you need to keep yourself and your supply chain on track. Thanks to procurement best practices, you’ll see the difference in how smooth and streamlined your supply chain runs from beginning to end. 

Follow these nine procurement best practices, and you’ll find yourself completing your to-do list effectively and thoroughly: 

  1. Identify suppliers who meet your standards.
  2. Create and monitor supplier KPIs.
  3. Set a supplier audit schedule.
  4. Centralize your documentation.
  5. Gain greater visibility.
  6. Diversify against forecasted problems.
  7. Analyze the data.
  8. Digitize the procurement process.
  9. Use the proper tools.

Now let’s go into each of these procurement best practices in greater detail.

1. Identify Suppliers Who Meet Your Standards

The main goal of every procurement manager is to obtain quality supplies while simultaneously minimizing expenses. This goal is most easily achieved when suppliers are qualified to meet your organization’s ecological, social, and safety standards.

Best-in-class suppliers work hard to build and maintain the trust of their business associates. They take their responsibilities seriously and strive to remain compliant at all times. These are the suppliers you want as your allies. 

How do you find and secure such qualified suppliers? Simply search Avetta’s network of over 100,000 qualified suppliers based on trade, location, and specific compliance criteria. Doing this ensures you get quality products and services while also developing stronger, strategic supplier relationships. 

The result is a smoother, more reliable procurement and supply chain process. 

2. Create and Monitor Supplier KPIs

As a procurement manager, you have plenty of KPIs to meet. One of them should be to create and monitor KPIs for your suppliers. Supplier KPIs could cover establishing expectations, strategizing on essential product delivery, maintaining clear and open communication, or several other topics. 

Holding suppliers accountable for their KPIs, contracts, and agreements is essential to the procurement process. Doing so eases each step in procurement. As far as the supply chain/supplier relationship goes, it becomes stronger as it's built on cooperation, collaboration, and trust. 

Just be sure you’re also holding yourself accountable.

3. Set a Supplier Audit Schedule

Another procurement best practice is to set an audit schedule and adhere to it. Supplier audits benefit both suppliers and clients alike. They:

  • Uncover lead indicators of risk and disruption by combining lagging and leading indicators.
  • Recommend ways the supply chain can achieve a high record of safety and sustainability.
  • Increase confidence between suppliers and stakeholders.

To make the most of supplier audits, they must be actionable and objective. When an audit is both actionable and objective, it improves supply chain performance and increases trust between partners. Actionable audits don’t only identify gaps; they also offer professional guidance and coaching for improvement. Objective audits count on stringent outside assessment to give an accurate view of supplier risk, as opposed to preexisting relationships that can skew opinions.  

Choose Avetta whether you need a safety manual audit, implementation audit, field audit, or sustainability audit. Our professionals will conduct the proper supplier assessments, give recommendations you need, and coach you to move forward with confidence. 

4. Centralize Your Documentation

Having a multitude of contracts and forms is a challenge for procurement managers to overcome. Some of the complications of misplaced, inconsistent, or incorrect documents include:

  • Not finding or having access to necessary information
  • Causing contract complications
  • Delaying or missing deadlines
  • Making errors and suffering their ensuing consequences

There’s a simple solution to this complicated problem. Centralize all your contracts, agreements, forms, and other documents in an accessible cloud-based integrated procurement management system.

5. Gain Greater Visibility

Transparency in procurement allows everyone involved to complete their respective responsibilities on time and to the best of their ability. This leads to improved accountability and a thriving supply chain. 

You can’t be left in the dark regarding purchasing, invoicing, and vendor monitoring. You need to see everything clearly if you want to guarantee a reduction of maverick spending and an increase in better strategic purchasing practices. 

As a procurement manager, you want accessible, up-to-date, and accurate information. The terms broad, deep, entire, and whole apply to the visibility you must have to make the right decisions at the moment they need to be made. 

6. Diversify Against Forecasted Problems

Relying on a sole supplier isn’t a smart strategy. Diversifying your suppliers is a much wiser choice that helps guarantee against supply chain delays and disruptions caused by:

  • Poor supplier relations
  • Company closures
  • Labor shortages
  • Rising material costs
  • Local political unrest
  • Geopolitical issues
  • Climate events
  • Pandemics

The purpose of this procurement best practice is to establish alliances with various key suppliers from multiple regions. This helps mitigate the above risks that threaten the procurement part of the supply chain. 

A related procurement best practice is to engage with your diversified suppliers in collaborative strategic sourcing. This practice helps ensure the availability of supplies, streamlined processes, and lower total costs.

7. Analyze the Data

With the constant pressures of needing to cut costs and streamline processes, procurement managers can’t avoid or disregard data. If optimizing the procurement process is going to be a successful endeavor, detailed data must be gathered and analyzed at each stage of the process. 

Parts of procurement that always seem to be due for optimization include:

  • Digital transformation
  • Supplier visibility
  • Change management 
  • Risk preparation

Data analytics helps focus on, develop, and update these areas through its ability to cut through the commotion of what doesn’t matter to find exactly what does. Then, predictive analysis gives you deeper insight into the issues so the right choices are made.

8. Digitize the Procurement Process

Digitizing and automating the procurement process comes with many benefits that outdated legacy systems can’t offer. 

Significant benefits that come with the removal of manual processes include:

  • Fewer mistakes. Human error is an ever-present problem with manual and repetitive processes. Automation ensures order numbers, dollar amounts, and deadlines are all exactly what they should be. 
  • Faster processing speeds. Saving time on processing purchase orders and follow-ups helps the entire supply chain move quicker. Additionally, eliminating human errors reduces interruptions that cause delays.  
  • Cost savings. A significant cost savings is the end result of an increase in speed and accuracy and a decrease in interruptions and labor needs.

It’s not difficult to implement a digitized system into the procurement process. Avetta’s highly configurable Avetta ConnectTM platform integrates swiftly and seamlessly into your current procedures and operations.  

9. Use the Proper Tools

With the proper tools, you can solve your procurement problems. Avetta’s technology, network, and platform all integrate with your current processes. Together we can form a seamless solution that keeps your processes running fluidly.  

Here is just a sampling of tools that can strengthen your supply chain:

  • Supplier Prequalification simplifies compliance for every supplier. It keeps all your supplier documentation available, accurate, and up to date.
  • Financial Risk Mitigation gives suppliers a Financial Stability Risk Score that indicates their capability of fulfilling all their service and contract obligations.
  • Insurance Monitoring tracks supplier coverage and documentation in real-time to protect your company from unnecessary risk and give you peace of mind.

Learn How to Optimize Your Procurement Process

Now that you’ve reviewed these procurement best practices, you’re ready to optimize your procurement process. It may seem there is a lot to do, but Avetta can help lighten your load by giving you all the best tools and getting the experts on your side.

To learn more about what Avetta can do for your supply chain, take a self-guided tour.

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