Make rapid efficiency savings in your business by bringing in experienced, extra procurement capacity…

In many organisations, the procurement function is often under-resourced and under-valued; as a result, the team struggle to deliver value. This does not make good business sense in any economic climate, but the current crisis is focusing attention on these deficiencies as never before.

“Traditionally, CEOs have focused on the ‘front-end’ of the business such as new markets, new products and sales growth,” says Nigel Scorey, Managing Director of supply chain specialist, Procure4. “Taking cost out of the ‘back-end’ of the business wasn’t seen as sexy and businesses generally concentrate on ‘front-end’ disciplines such as marketing and sales. As such, the procurement teams struggle to secure the mandate needed to drive cost reduction.”

Today, the whole business landscape has changed and the City has realised that like-for-like growth in the current marketplace is almost impossible, so it has suddenly become legitimate to increase profits through a process of cutting costs.

The role of procurement
The problem that organisations face, is how? The procurement department’s primary role is to obtain goods and services in response to internal needs, but in many organisations, this role needs to develop and expand to help the organisation cut costs and drive value to the bottom line. A procurement department must understand the wider business requirements and support them, as well as identify saving opportunities. This has become increasingly difficult as procurement departments have suffered from a lack of resources and funds and are kept away from some larger areas of spend.

Many in-house procurement departments are capable of identifying potential savings but they do not always have the capacity and authority within the organisation to push them through. To overcome this issue, an organisation could look to increase their in-house procurement function through recruitment but this takes time and adds overhead – and talent is scarce.

The difficulty is that everyone is waking up to this issue at the same time; consequently, many companies are fishing in the same small talent pool. With a lengthy recruitment process and notice periods, if you find someone good it could be six months before they start working for you and even longer before they can start saving you money.

Cost reduction
One solution is to outsource procurement to speed up savings. By doing this, you bring in credible, experienced capacity, broader market insight and proficient process and governance. These attributes could take years to develop in-house, but by outsourcing, you can achieve a return on investment within six months.

A small number of procurement specialists, including Procure4, work on a risk/reward basis. They receive payment based on the results achieved; this ensures the client will always realise a net saving. The benefit of this model is to minimise the risk to your organisation, to regulate cash flow against budgets and increase incentive to optimise delivery. In addition, it is a simple and fair remuneration policy to administer.

This type of model is appealing to organisations as resources are limited; consequently it is the smart CEOs and CFOs who will look outside the organisation for assistance to help achieve rapid cost reduction. Procure4 will do this by providing a team of experienced supply chain specialists to an organisation to identify and deliver cost savings.

Procure4 brings the expertise and skills to consider the wider business objectives and through a ‘One Team’ approach persuade all relevant stakeholders across the business to align behind a common sourcing strategy, with complete transparency. They do this by establishing and developing the necessary relationships with the in-house teams to create a strategy supported by processes that ensure savings are locked-in and maintained.

Over the years, the specialists at Procure4 have worked across a wide variety of industry sectors and categories allowing them to develop an objective and analytical view of the market. They have a comprehensive understanding of supply chain structures from diverse industry sectors and they can transfer their knowledge to ensure maximum results are achieved for your organisation. They can deliver best practice procurement, know the latest commodity pricing, how it affects your prices and appreciate varying supplier capacities.

Significant savings can be made in an impressively short space of time as the quickest wins are often achieved by relatively straightforward means. An organisation can consolidate to fewer suppliers, leveraging the opportunity for discounts or amalgamate specifications to improve efficiency. In addition, an organisation must look at streamlining the supply chain and the procurement process. This can be achieved through the use of electronic procurement tools, which aggregate orders or increase competition enabling suppliers to bid for contracts.

Procure4
Procure4 utilise these leading edge procurement processes and innovative tools to deliver measurable and sustainable cost reduction. They can source the finest suppliers who are able to offer the best mix of price, quality and service for your company. Once the deals are complete, discipline must be put in place to ensure processes are adhered to and benefits are locked-in.

Procure4 will present a full report of all savings on completion of the project, along with a robust forecast of the benefits still to come. Procure4 will share their expertise with your organisation so you can benefit from system and process improvements, as well as the development of organisational design, enabling you to continue to gain savings.

By working with an organisation like Procure4, you are able to bring in extra procurement capacity, greater market-insight and tools and raise the profile of procurement. Procure4 will work with your organisation to achieve aligned objectives giving the department increased credibility and awareness throughout the organisation. Savings will be realised and value created, which can be re-invested across the business.

Contact details
For further information:
info@procure4.com
tel: 0845 1300 161
www.procure4.com