Procurement is no longer the administrative function of purchase-order processing of yesteryears. Often relegated to an ancillary function of the main enterprise business, procurement can be complex and a linchpin to an organisation’s success, affecting the enterprise’s bottom line.
In a challenging economy, the role and value of skilled procurement can’t be underplayed. This article explores how a well-defined procurement training programme can increase your organisation’s financial performance and overall financial position and drive an enterprise’s bottom line.
Enhancing Cost Efficiency
What if you have a team that can consistently discover new savings opportunities, negotiates more favourable deals, and grows the effectiveness of the procurement process? Through procurement training, this is a common achievable result.
Professionally trained procurement staff use their skills to analyse spending data, optimise supplier selection, and effectively implement cost control measures. The ability to ask the right questions to understand the entire procurement chain from source to vendor means they have a unique vantage point to pinpoint inefficiencies or problem points that may go unnoticed by others.
For example, a well-trained procurement department might notice a trend in purchasing that allows them to bulk buy at a discounted rate or identify alternative suppliers likely to provide the same quality goods and services at a reduced rate.
While each saving may seem small, it’s unwise to ignore the fact that these efforts have a snowball effect. Over time, they add up and eventually lead to substantial dire savings. Less spending leads to increased overall profitability because of the overall elimination of unnecessary output.
Improving Supplier Relationships
Creating strong relationships with suppliers is a critical element of doing business. Skilled procurement professionals can negotiate favourable buying terms, build trust, and work with suppliers to their best efficacy. The ultimate goal is not only to get the best price but to forge a relationship that will benefit both the buyer and the seller.
Well-designed procurement training teaches professionals how to maintain these relationships to negotiate for the best prices, achieve desired service levels, create stable procurement chains, and be active and profitable contributors to company growth. Any company that makes an effort to invest dedicated learning into these relationships as rewards will see less risk of getting stuck without necessary supplies.
Risk Mitigation and Compliance
Global sourcing creates several risks, including regulatory changes, currency fluctuations, and market volatility. The procurement professional must be able to predict the sometimes unpredictable and act quickly when something does go awry.
In addition, effective procurement training can help employees understand and implement industry and regulatory requirements. Purchasing staff who are the most knowledgeable save companies large amounts of money in compliance-related fines or litigation.
Driving Innovation and Sustainability
Innovation and sustainability can no longer be considered value-added features that set you apart from the competition. They have become critical components of solid business practice. Procurement professionals with the appropriate training are suitably positioned to identify new technologies, processes, and approaches that can drive efficiency improvements and cost reduction.
Whether you choose to deploy a new digital procurement solution or identify a more sustainable source of relevant materials, the opportunity for procurement-led innovation is very often one that delivers the highest return in financial terms. Sustainability, in particular, has become non-negotiable. As an imperative, businesses are being called upon to reduce the impact they have on the environment, and procurement plays an obvious role in this.
Investing in Procurement Training
Committing to procurement training is a bet placed on a course of action with the potential to deliver very high returns on a company’s balance sheet going forward. From realising cost efficiencies and relationship-building with suppliers to mitigating risks and promoting organisational innovation, the benefits of training are fairly transparent while accrual to the bottom line of any given business.
