As we enter the new year of 2023, it’s important to reflect on the past and consider how we can improve in the future. One area that organisations should focus on is procurement hygiene.
Identify opportunities and clean up your act
Procurement hygiene is a crucial component of any successful business, as it helps ensure that an organisation is able to obtain the necessary goods and services at the right price, while also maintaining strong vendor relationships and adhering to ethical and legal standards. Unfortunately, procurement can often be overlooked or given less attention than other business functions, leading to inefficiencies and potential risks.
This is why 2023 should be the year of procurement hygiene. By prioritizing procurement and implementing best practices, organisations can improve their bottom line, reduce risk, and maintain a positive reputation.
6 procurement hygiene priorities
Here are some key ways to focus on procurement hygiene in the new year.
- Develop a procurement strategy: A procurement strategy outlines an organisation’s goals and objectives for purchasing goods and services, as well as the processes and procedures that will be used to achieve those goals. Having a clear and well-defined procurement strategy helps ensure that all purchasing decisions align with the overall goals of the organisation and helps avoid unnecessary or wasteful spending.
- Establish clear policies and procedures: It’s important to have clear policies and procedures in place to guide the procurement process and ensure that it is carried out consistently and ethically. This can include guidelines on vendor selection, contract negotiation, and the handling of any potential conflicts of interest.
- Implement a robust vendor management program: A strong vendor management program is essential for ensuring that an organisation is working with reputable and reliable suppliers. This can include conducting thorough due diligence on potential vendors, establishing clear performance metrics, and regularly reviewing and evaluating existing vendor relationships.
- Utilise technology to streamline the procurement process: Technology can greatly improve the efficiency and effectiveness of the procurement process. For example, using an e-procurement platform can help automate and standardize the purchasing process, making it easier to track and manage orders, compare prices, and negotiate contracts.
- Foster a culture of ethics and transparency: Ensuring that the procurement process is ethical and transparent is essential for maintaining a positive reputation and avoiding legal or regulatory issues. This can be achieved by promoting a culture of ethics within the organisation, as well as implementing measures such as a robust code of conduct and whistle-blower policies.
- Use spend analytics: By analysing spend data, businesses can identify patterns and trends in their purchasing behaviour, negotiate better prices with suppliers, reduce costs and improve efficiency. Spend data analysis can also help businesses identify opportunities for cost savings, ensure compliance with regulations and industry standards, and gain valuable insights into the effectiveness of their procurement processes.
By prioritizing procurement hygiene in 2023, organisations can improve their bottom line, reduce risk, and maintain a positive reputation. By developing a procurement strategy, establishing clear policies and procedures, implementing a strong vendor management program, utilizing technology to streamline the process, and fostering a culture of ethics and transparency, businesses can ensure that they are purchasing goods and services in an organised, efficient, and ethical manner.
Comprara provides procurement consulting services to assist you with strategy, policies, and procedures. Our ProcureTrak procurement analytics platform will aid you in cleaning up your procurement data, visualising opportunities and risks, and driving efficiency. Contact us to learn more about how you can gain more ground in procurement by working with Comprara.
