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Exploring Procurement automation to streamline purchasing at your org? Looking to better manage vendor contract renewals or offload emails from vendors about payment statuses, changes to banking info? Tipalti's Intake, Contract Management and Self-service vendor management functions can streamline procurement, while delivering better visibility to your finance team around spend. https://lnkd.in/gjMqZFDG

The procurement industry has undergone a significant transformation, and Tipalti's Terry LaRock has witnessed this evolution firsthand. Learn how to save your company money and more in our recent blog post. https://lnkd.in/gwyTcvMy

Procurement – what is it and why does it matter? Well, procurement and supply management involve buying the goods and services that enable organisations to operate both profitably and ethically. On top of that, procurement is often responsible for close to 2/3 (!!) of companies' revenue, so small reductions in costs can have a massive impact on profits. Checkout the link in the comments to see the difference we've made for our clients, link is to website and testamonials. Why is your industry important? Wow me in the comments please… #NLAR #Procurement #CostReduction  

PROCUREMENT STRATEGIES FOR COST INCREASES In the face of current cost increases, businesses can adopt various procurement strategies to mitigate the impact and maintain their competitive edge. The strategies require thoughtful planning and collaboration across departments. By implementing a combination of short-term and long-term approaches, businesses can navigate cost increases effectively and safeguard their competitive position. Some of the alternative pricing strategies for cost reduction in procurement are: Revisit Current Contract Terms: Regularly review existing contracts to identify savings opportunities. Contracts not reviewed for more than three years may offer chances for renegotiation. Discuss potential changes to purchasing frequency with suppliers to secure volume discounts. Leverage market research and benchmarking to engage in pricing discussions with suppliers. Challenge Specifications: Evaluate whether products or services are truly necessary by analysing the extent of need and review specifications or design. Base requirements on expected performance or outcome to encourage competition from a broader range of suppliers. Eliminate Maverick Spending: Unauthorized purchasing outside agreed contracts (maverick spending) can lead to waste. Implement controls and automate processes to reduce rogue spending. Challenge Operational Costs: Proper procurement planning ensures efficient use of administrative resources. Streamline internal processes (e.g., procure-to-pay) to reduce transactional costs and documentation. Review Uncompetitive Suppliers: Benchmark contracts to identify other competitive suppliers in your database. Consider alternative suppliers that offer better terms or pricing. Evaluate Total Cost of Ownership (TCO): Look beyond initial prices and consider the entire cost of ownership, including operational, maintenance, and disposal costs. Supply Chain Strategies: Deepen relationships with existing suppliers to find joint solutions. Explore alternative suppliers and evaluate long-term supply chain risks. Make engineering changes to use non-tariffed substitutes if applicable. Customer Considerations: Understand customer behavior and their willingness to accept price increases. Assess relative value and sourcing alternatives for your products. Vendor Relationship Management: Use platforms to improve communication and evaluate supplier performance. Encourage self-service portals for suppliers to manage their accounts. Set Up Reverse Auctions: Let vendors bid on your proposals to reduce selection time and find competitive prices.

PROCUREMENT STRATEGIES FOR COST INCREASES In the face of current cost increases, businesses can adopt various procurement strategies to mitigate the impact and maintain their competitive edge. The strategies require thoughtful planning and collaboration across departments. By implementing a combination of short-term and long-term approaches, businesses can navigate cost increases effectively and safeguard their competitive position. Some of the alternative pricing strategies for cost reduction in procurement are: Revisit Current Contract Terms: Regularly review existing contracts to identify savings opportunities. Contracts not reviewed for more than three years may offer chances for renegotiation. Discuss potential changes to purchasing frequency with suppliers to secure volume discounts. Leverage market research and benchmarking to engage in pricing discussions with suppliers. Challenge Specifications: Evaluate whether products or services are truly necessary by analysing the extent of need and review specifications or design. Base requirements on expected performance or outcome to encourage competition from a broader range of suppliers. Eliminate Maverick Spending: Unauthorized purchasing outside agreed contracts (maverick spending) can lead to waste. Implement controls and automate processes to reduce rogue spending. Challenge Operational Costs: Proper procurement planning ensures efficient use of administrative resources. Streamline internal processes (e.g., procure-to-pay) to reduce transactional costs and documentation. Review Uncompetitive Suppliers: Benchmark contracts to identify other competitive suppliers in your database. Consider alternative suppliers that offer better terms or pricing. Evaluate Total Cost of Ownership (TCO): Look beyond initial prices and consider the entire cost of ownership, including operational, maintenance, and disposal costs. Supply Chain Strategies: Deepen relationships with existing suppliers to find joint solutions. Explore alternative suppliers and evaluate long-term supply chain risks. Make engineering changes to use non-tariffed substitutes if applicable. Customer Considerations: Understand customer behavior and their willingness to accept price increases. Assess relative value and sourcing alternatives for your products. Vendor Relationship Management: Use platforms to improve communication and evaluate supplier performance. Encourage self-service portals for suppliers to manage their accounts. Set Up Reverse Auctions: Let vendors bid on your proposals to reduce selection time and find competitive prices.  

Procurement vs. purchasing: what’s the difference? Procurement and purchasing are related concepts within the broader field of supply chain management, but they refer to distinct activities: Procurement: Procurement is a strategic function that encompasses the entire process of acquiring goods, services, or works needed by an organization. It involves a comprehensive approach that includes planning, sourcing, negotiating, contracting, and managing supplier relationships. Procurement focuses not only on obtaining the required items at the best possible price but also on maximizing value, managing risks, and aligning procurement activities with the organization's strategic goals. It involves evaluating suppliers, selecting the most suitable ones, and establishing long-term relationships to ensure a reliable and efficient supply chain. Procurement extends beyond the transactional aspects of purchasing and encompasses strategic decision-making to optimize the organization's overall supply chain performance. Purchasing: Purchasing is a subset of procurement and refers specifically to the transactional process of buying goods or services from suppliers. It involves activities such as issuing purchase orders, negotiating prices, confirming delivery schedules, and processing invoices. Purchasing focuses primarily on executing the procurement plan and acquiring the required items efficiently and cost-effectively. While procurement involves strategic decision-making and supplier relationship management, purchasing deals with the operational aspects of placing orders and managing supplier transactions. Purchasing typically occurs within the context of the broader procurement framework and is guided by the procurement strategy and policies established by the organization. In summary, procurement is a strategic function that encompasses the entire process of acquiring goods, services, or works, while purchasing refers specifically to the transactional activities involved in buying from suppliers. Procurement focuses on strategic decision-making, supplier management, and value optimization, while purchasing deals with the operational aspects of placing orders and managing transactions. #procurement #procurementprofessionals #auction #auctionsoftware #reverseauction #reverseauctionsoftware #forwardauction #forwardauctionsoftware #software #logistics #rfq #rfi #rfp #savings 

𝐓𝐡𝐞 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫 𝐑𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩𝐬 𝐢𝐧 𝐏𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭: https://lnkd.in/d_eRhv9M In procurement, the relationships we build with our suppliers are more than just transactional interactions; they are strategic partnerships that can significantly impact the success and efficiency of our operations.

Preferred Supplier Lists are commonly used in various industries to streamline the procurement process. Benefits Access to trusted vendors PSLs provide businesses with a list of preapproved suppliers known for their expertise, reliability and quality of service. Financial benefits Companies may receive reduced fees from suppliers included in the PSL, as suppliers are incentivised to maintain their preferred status. Efficiency in procurement Having a PSL can speed up the purchasing process since the assessment of suppliers has already been done. Risk reduction PSLs help identify critical suppliers and monitor their performance, reducing risk of non-compliance with contractual obligations. Improved relationships Long-term partnerships with suppliers can lead to better understanding of business needs and culture, which can be beneficial in the talent search. Drawbacks Potential for complacency Businesses might become too reliant on their PSLs, potentially missing out on innovative solutions or better pricing from non-listed suppliers. Limited flexibility Relying solely on a PSL can limit a company’s ability to respond quickly to changes in the market or to specific project needs. Reduced competition A PSL might discourage competition, as suppliers outside the list may not have the opportunity to offers their services, which could lead to a less competitive pricing. It is important for businesses to regularly review and update their PSLs to ensure they continue to meet the company’s needs and adapt to market changes. Balancing the use of a PSL with the openness to new suppliers can help maintain the benefits while mitigating the drawbacks.

Effective supply chain and procurement process management is essential in logistical operations. In these operations, administering Requests for Quotations (RFQs) is essential as it allows suppliers to be sourced and competitive bidding to occur. This article thoroughly explains RFQ management and how the Indian logistics industry may use it to its advantage. #Fleetx #RFQManagement #SupplyChain #Logistics #Transportation #FleetManagement #ProcurementProcess https://lnkd.in/gKSfxSYM

7 ACTIONS THAT CAN HELP OUR ORGANISATIONS ACHIEVE SAVINGS FROM THE PROCUREMENT PROCESS 1 - Maximising competition in tenders: Invite multiple suppliers to bid on contracts, creating competition that can drive down prices. Continuously search for alternative suppliers to identify cost-effective options without compromising quality. 2-Focus on Total cost of ownership: Standardize product or service specifications to simplify procurement processes, enable bulk purchasing, and leverage economies of scale. Standardize product or service specifications to simplify procurement processes, enable bulk purchasing, and leverage economies of scale. Analyze historical spend data to identify cost-saving opportunities, negotiate better contracts, and eliminate unnecessary expenditures. 3-Strategic Sourcing, Process and Technology Centralize procurement activities to streamline processes, improve visibility, and negotiate better terms with suppliers. Invest in continuous training and education for procurement staff to enhance their negotiation skills, market knowledge, and cost-saving techniques. 4-Utilize eSourcing Tools Host reverse auctions where suppliers bid down prices to win contracts, helping to achieve competitive pricing. Utilize electronic procurement systems to streamline processes, reduce paperwork, and automate transactions, leading to cost savings. 5-Supplier Performance & Relationship Management (SPRM) Assess suppliers' performance and pricing regularly to identify areas for improvement and negotiate better terms. Embrace supplier diversity initiatives to foster competition, drive innovation, and access cost-effective solutions from a diverse range of suppliers. 6-Optimize of Terms of Purchase Establish clear policies and processes for returns and exchanges to minimize associated costs, such as restocking fees or shipping expenses. Collaborate with suppliers to design packaging that minimizes waste, reduces transportation costs, and optimizes storage space. 7-Sustainable & Responsible Sourcing Adopt environmentally friendly purchasing practices that reduce waste, energy consumption and overall costs. overall costs. This aspect is at the agenda and should be proposed to all stakeholders in its supply chain.