Procurement: Tips for Success
Procurement plays a critical role in the supply chain. It defines and shapes the relationship between buyers and sellers. Procurement processes aim at streamlining these relationships, which, in turn, help improve supply chains’ performance, as well as creating competitive advantages.
Procurement is not a new concept; it has existed since the dawn of time. However, its importance cannot be overstated today. The change in the business environment has led to an increase in demand for procuring products from suppliers around the world. In addition to that, there are now more players involved in supply chain management than previously as technology has made it easier for businesses to procure goods and services from multiple sources without losing control over their operations or finances.
To make good procurement decisions, here are a few tips to follow:
- Implement end-to-end automation for freight procurement
Make sure that your freight procurement solution is integrated with the latest technology. By automating routine and repetitive purchasing processes, the procurement team can focus on more critical and strategic tasks and reduce administrative effort.
- Ensure demand-driven decisions
To obtain a holistic view of demand and volume requirements across all business units, demand forecasts from corporate sales and operations planning should also be integrated with a centralized transportation planning service. This results in forward-looking transportation planning instead of looking backward. Rather than relying on historical information, shippers can reduce the price by using predicted volumes
- Analyze carrier performance metrics (KPIs) – figure out what the
carriers are spending on freight.
KPIs can help you identify the right carrier for your business and determine where gaps exist in the process by measuring carrier performance. You can also discover better cost-optimization strategies, make data-driven decisions and be proactive in addressing any challenges that arise. It will help you control costs and increase profitability if you keep a carrier performance scorecard with metrics such as the number of damage claims, billing accuracy, and associated transportation expenditures. You will be able to access all these features from a unified dashboard with any digital procurement software.
- Market trends should be closely monitored
It is crucial to maximize your profitability to be able to capitalize on fluctuations in transportation rates by taking advantage of various modes and lanes. The procurement process should be flexible and companies should be in a position to negotiate discounts with carriers or leverage spot rates.
- Stay on top of market trends
Taking advantage of fluctuations in transportation rates that occur on various lanes and modes of transportation is the only way to gain an advantage in the supply chain. Flexibility in procurement is important for maximizing the use of spot rates and negotiating discounts with carriers.
- Developing a freight procurement strategy
Your rate procurement strategies will be more efficient and effective if you have a fully integrated supply chain. Through your digital supply network, you can leverage better information and more sophisticated analytics. Having a routing guide, tracking supplier safety metrics, and comparing actual safety, fuel, and budget forecasts will help your company to comply with routing guidelines.
In addition, your company is better prepared to respond quickly and effectively when unexpected issues arise, reducing the chance of disruptive events. To stay competitive in the world of freight procurement, you need to keep up with trends like easier rate management and collaborative transportation sourcing.
At TGL we provide top-notch procurement and end-to-end services. We purchase items at the right cost, from the right source, with the right specification, in the right quantity, and deliver them at the right time to our clients. We also provide full business-to-business capabilities to enable integration with freight forwarders and vendors.
Also, we understand the importance of providing swift, affordable, and safe delivery of your goods and are readily available in assisting your business to achieve its business goals while maximizing profit and reducing cost through our supply chain solutions.
With a team of over 50 years of combined experience in freight forwarding, outbound, and inbound international logistics, compliance/documentation, and core technology services, we bring to the table a firm promise to provide a reliable platform for end-to-end logistics solutions for B2B and B2C businesses
Get in touch with our experts to discuss your logistics requirements
Email: info@tgl.ng