Streamlining Purchase Processes: A Guide

It’s no secret that a severe talent shortage is causing businesses everywhere to rethink their purchase or procurement processes. You can adjust or create purchasing steps that reduce the time between requesting something and receiving it. Additionally, you can change who’s involved and establish expectations with your vendors. Streamlining purchase processes is the best way to ensure smooth operations.

Identify Areas of Opportunity

Even without a change management professional, you can take a few days to analyze the processes in your procurement system. Assess not only the steps in your procurement process but your staff as well. Employees may be losing time because they’re waiting on equipment or formal approval. These holdups aren’t always clear when laying out the steps of a process.

Identify areas where change is both possible and reasonable. This is your chance to find bottlenecks. It’s also the chance to find out if there are any gaps in authority. The identification process should have someone “live” through it, and it may take 3 days to a week.

Implement an Authority Position

Having a purchasing authority can resolve a lot of purchase process problems. Specifically, it can step into place to eliminate bottlenecks. But before you take this to a manager or executive for approval ensure that implementing an authority position will be useful in the long run.

Typically, an authority purchaser can carry on procurement purchases within a set of limitations. For example, they will often have a cap on spending and a short list of approved vendors. When you consider giving an employee this level of responsibility, the concern is usually on monitoring spending.

You can monitor and restrict the use of any company card. Only issue cards to staff members who have the authority to make purchases and be sure that their purchases only go through approved vendors or punchout catalogs. Your accounting department can audit spending and ensure that all use is within company policy.

Central Systems

When it comes to streamlining a procurement system, the problem often lies in either a centralized or decentralized system. Both systems come with benefits and setbacks, and it’s not fair to say that either method is better.

If you’re having problems with overspending, or extremely long approval timelines, centralizing your processes can resolve these issues. Centralizing relies on one person or one department to authorize purchases. In some companies, they choose a procurement agent who has the authority to make purchases and decisions regarding vendors.

Decentralized Systems

If your centralized system is falling apart, then it’s time to change things up a little bit and implement a decentralized network. Centralized systems are excellent until the procurement agent can’t keep up with the company’s demands.

When your procurement agent is overwhelmed, move the authority for purchases and order placing to the department heads. When each department head is responsible for their own materials, you’ll typically see a drop in costs. However, the issue with decentralized systems is that you’re trying to make many moving parts work together.

Working with Approved Vendors

Established companies might have vendors that they’ve worked with for years. But that doesn’t mean they’re getting the best price. Procurement agents are the best at finding great rates for high-quality products or materials. Instead of risking resources including time and money, by sticking with one vendor, have a running index of approved vendors.

When your procurement agent or department head find a good vendor, someone reliable, fast, and with a quality product, keep their information. This will eliminate a substantial amount of time spent researching vendors after individual purchases.

For large scale purchases, many companies feel safer working with procurement vendors or punchout catalogs that allow them to build a cart and then order the materials from vendors that are already vetted.

Depend on Forecasts and Establish A Purchasing Schedule

One of the largest areas for opportunity when it comes to streamlining a procurement process is scheduling. When you need to purchase supplies or anything very specific, you should plan these out during your company’s slow period. You can eliminate the chance of your order being lost in the massive amount of paperwork or emails the come with busy times.

Additionally, you can work with people to expedite requests during slow times. Create a calendar for your purchases, and when a new project comes up, work it into your schedule. For recurring orders, use forecast methods that are relevant for your industry.

As part of planning, you can implement more strict quality or receiving time specifications. Putting more time into the forefront of the procurement process through the planning process will allow you more room to negotiate and make more impactful purchasing decisions.

If you’re noticing that your company is having problems with its procurement process, it’s likely that a number of the core problems are from poor planning.

Author’s Bio: Samantha Wallace is a veteran tech writer and editor who has worked in several eCommerce companies. She has been covering technology online for over five years. She is the Content Advocate for Greenwingtechnology.com.