Procurement Outsourcing – Part of Your Supply Chain Management System
Solutions for Your Challenges
Are you looking for procurement outsourcing solutions and supply chain management systems services?
We act as your purchasing department – handling the buying and the follow-up on purchases; setting inventory levels and re-order points as needed from a supply/demand perspective. We can source suppliers; review logistics plans and outcomes; conduct service audits on suppliers; build custom procurement strategies, engage in contract reviews and more – and do as much, or as little, as your business needs.
These services are key elements of a comprehensive supply chain management system. We are experienced in developing an effective procurement management plan for business to consumer (B2C) and business to business (B2B) industries.
Why is supply chain management so important to your business?
Every business needs to be aware of the importance of supply chain management (SCM); it needs to be both a key part of your strategic plan and your value chain.
In every business there is a need to build an effective purchasing plan: the procurement of the supplies and materials needed to operate the business and to meet your customers’ expectations. In today’s digital environment, if you don’t have the inventory or the goods or services when your customer wants it, they will move on and search for another business that can deliver.
Your supply chain can range from buying office supplies such as toner, cell phones, postage, stationery, and more, to the complex purchasing that marries consumer and/or customer demand with the goods and/or services that you supply.
Why is Outsourcing Procurement a Good Solution?
Often new businesses assign the purchasing responsibilities to administration personnel (for example, accounting, shipping/receiving, reception, production assistant), however most of those individuals do not have the supply chain management and logistics training, education or experience to understand the impact of their decisions and many of those individuals also have competing job priorities.
Managing the supply chain effectively is more than simply placing and order for supplies or materials. And the connection between supply chain management systems, marketing and business planing and strategy is integral to the success of businesses.
We work with small to mid size businesses in the Greater Vancouver region who do not have the internal resources, or the time, to manage procurement, logistics and supply chain management systems and planning.
We are not a high priced consultancy. We are a cost effective solution with more than 10 years experience in supply/demand challenges and are focused on providing a value added return to your business.
We can provide support to your staff, or we can handle all, or part, of the purchasing, strategic sourcing, inventory management, supply chain planning, and value chain analysis services needed for your business.
Contact us at firstname.lastname@example.org to book an appointment for a meeting to discuss more about your business and how we can help.
A Real Example of the Importance of Building Your Procurement Management Plan
- A manufacturing company with $6.5 million in annual sales has the shipper, the receptionist, the accountant, and the production scheduler purchasing about $700,000 in supplies and services annually.
- Recently, the manufacturer placed an order for a key material used in their manufacturing process. Normally, that material takes one week to deliver (it comes from a location approximately 3700 kilometres or 2300 miles away).
- The order did not arrive within the week but the individual who had placed the order was busy with his other responsibilities – scheduling the production in the plant – and did not check up on the order. Another week passed before the production office realized that they were now out of the material necessary to produce a rush custom order that they had promised to ship within 3 days.
- On realizing that they were out of the needed material, the production scheduler got on the phone to find out where his order was – he found out that it was back-ordered and not due to ship for another week.
- While he was frustrated at his supplier’s lack of communication, he didn’t have time to follow up on why it happened and to ensure it didn’t happen again – he had to find an alternative supplier. He spent the next four hours on the phone looking for this specialty material. He found a supplier but it wouldn’t be delivered for 4 days, it was a higher cost (that he couldn’t pass on to his customer), and he was going to have to pay to have the order air freighted. On top of the added costs, he was going to have to have his sales manager call the customer and advise that the promised date could not be met.
Problem definition: The scheduler’s primary job responsibility is not to purchase supplies and materials – it is much lower on the list of responsibilities until something goes wrong.
Additionally, it is unlikely that the scheduler is doing regular audits, contract and/or pricing reviews, setting up reorder points, and more.
Solution: Outsourcing Procurement. In this specific case, outsourcing procurement to a professional supply chain management specialist that focuses on procurement programs and services would solve this challenge.
A procurement specialist is responsible for ensuring that orders are placed as required by your business needs, that orders are followed up (no surprises), and that suppliers are committed to providing not only good pricing but also exceptional services. While procurement outsourcing sounds like an additional cost to the business, most often it provides you with exceptional savings while allowing your employees to do their primary jobs (such as scheduling, shipping, accounting, or whatever you have hired them to do.
Contact Paul Bovay at email@example.com to find out more about what we can do to add value to your business.