The first step of procurement is choosing your supplier. Your supplier could either be a lifesaver or real headache. Hence, selection of the right partner is a critical decision. There are several procurement problems you might face on the supplier front. As much there is a chance for them to be unexpected, some are foreseeable and hence avoidable. Here are some of the problems you might face in the supplier front, followed by some faced in the legal framework. Also, discussed are some golden rules to evade them.
Understand the Suppliers:
Understand the suppliers’ worth and put them to proper use. Keep regular assessment patterns to not lose track of performance. Once you have their strength and weaknesses memorized, the supply chain will be smoother. Also, it is important to list out your requirements from the supplier in a well-defined bid. The clearer the picture, the better the supplier can match the company with the right supply.
Fine line of trust:
Your suppliers should be your strength. You should trust them in every stage of your business, but not blindly. Maintain a professional relationship that values their suggestions and situations. This will be of help in the long term when you are in a tricky situation with a wrong bid, sudden demand, or a financial cringe.
Cost and Control:
The end goal of all companies is to maximize profits. Reducing expenditure is the best way and the first way to go about it. Right at the stage of supplier recruitment, make sure they offer a certain level of flexibility. As the business could be fluctuating, we will always need their discounts and adjustments in the process. It is always better to choose wisely than to regret later. Time is also a crucial parameter in any partnership. Certain additional benefits from the suppliers can be received after a period of dealership and trust. Look at both the short term and long-term benefits when you get into any dealership. However, negotiations can be made at every stage of the process along with the growth of your brand name and scale.
Consumer Feedback:
Eventually the product is only worthy if you could draw out a cost-quality balance to the end-user – whether business or consumer. So, as much as you try to negotiate with the suppliers on the cost quality graph, the eventual decision must be made to befit the target audience and their satisfaction. Keep in mind that the customer values the speed of availability as well, along with cost and quality.
‘Organize’ for an easy life:
It is always better to have a well-defined protocol to follow for the procurement process. Once you have decided upon a set of key performance indicators, stick to them to create a process to pay system. Double-check the digits and quality not just on paper but also in person with each acquisition. Strategic sourcing would be a clever way to go about it, as a dynamic plan would be better in place, especially during this era of e-procurement.
Lethal illegal:
The paperwork, conditions, rules, and regulations might seem to tire you down extra in the process. But rest assured, these will be your savior from falling into greater depths and debts eventually. The supply deal, big or small, long term or one time, all the processes should pass through the tunnel secured legally. Dark purchases can cripple the company financially, ideologically, and socially.
Trust the Right:
The law and order must be established only after analysis of previous patterns, situations and number. However, our legal work could be only in place, if we are basing the analysis leading to them on accurate data. The data must not be overlooked by any magnitude here, but only analyzed in more depth to see the unseen.
Majorly the procurement problems faced in any business could be resolved through sticking to a methodological plan and via choosing the right set of suppliers. Introducing a system in place can lead to increased processing times, permissions, and paperwork, but will be worth it at the end. Happy Procurement!!