Procurement is a big business – literally. Not to be confused with purchasing, procurement involves buying on a deeper level. It refers to the amalgamation of all the things that must be done before purchasing can take place. There are contracts to be negotiated. For example, sometimes businesses must be well versed in the local law and how it will affect requisitions, sourcing and acquiring. Procurement is a title we can use to generalise and represent all the aspects of business that eventually culminate in the company acquiring sought after staff, work contracts, land or produce, as well as examining ways to improve profits and constantly evolve! What can we learn from the procurement process and the study of it? As it turns out, quite a lot!

 

1. Innovation

 

Since the years of the Industrial Revolution, the Procurement process have been responsible for constantly innovating not only the way companies buy supplies, but also in monitoring the cost of acquisition. Innovations in Procurement have, for example, led to an increase in automation in the production line, thereby saving overall staffing costs and driving prices down. We are now heading to Industry 4.0, the fourth Industrial Revolution.

 

2. Negotiation

 

Any purchaser worth his salt knows the benefits of a good debating tongue. He knows he will be sent to other -sometimes even rival- companies and be expected to be able to win them over to your company’s way of thinking. Negotiation and diplomacy are a huge part of procurement processes. Whether it be contracts or million-dollar deals – we can all take a lesson in politics from them.

 

3. Analytics

 

Procurement was the birthplace of business analysis. What started as a method of examining every aspect of the business to see where it can improve itself or cut costs and improve margins has now developed to graphs and flow charts made easy to read for board meetings. It is perhaps this analysis and ability to improve profit margins that has earned Procurement Managers the world over a permanent place at such board meetings, becoming as essential to the company as production is.

 

4. Cross-Company and Cross-Industry Experience

 

Your company’s procurement team know enough about every aspect of your business that they are able to make improvements on any individual part. This makes them a reliable source of information in your ear. If you hire an outsourced service, then you also gain the benefit of experience across the whole industry. When you outsource your Procurement services there is an argument that says you will be better off, since an outsourced company will have more pre-existing networking experience than your own could possibly have.

 

5. Growth

 

Company growth is one of the driving factors behind Procurement. They want you to do well because it benefits everyone. Their job, in fact, is to increase your chances of doing well by providing you with information on the way things work as well as giving you clues as to how you might improve company efficiency, thereby growing sales and increasing profits. Without their hard work, companies might just stagnate. Nobody wants to hire a company that doesn’t have any forward momentum!

 

 

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