Procurement strategies - The basis for effective procurement

Why does it make sense to develop procurement strategies at all?

You surely know this: You work in procurement and know that your daily decisions have a significant impact on the success of the company. Your department is no longer just an "order acceptance", but a strategic business partner. Therefore, it is essential to develop a clear procurement strategy. But why is this so important?

First, the procurement strategy ensures that all procurement activities are aligned with the company's goals. It's not just about procuring the right products at the right price. It's about designing the purchase in such a way that it makes the greatest possible contribution to the success of the company.

Second, a well-thought-out procurement strategy helps you manage risks. Suppliers can fail, prices can fluctuate, markets can change. With a procurement strategy, you can anticipate such risks and take measures to minimize the impact.

Third, a procurement strategy allows you to identify and exploit opportunities. Perhaps there are new suppliers who offer more innovative products. Perhaps there are opportunities to achieve better conditions by bundling purchases or long-term contracts. With a procurement strategy, you can systematically identify and exploit such opportunities.

Developing a procurement strategy is not a chore, but an opportunity. It allows you to take procurement to the next level and make an even greater contribution to the success of the company. If you have become curious and want to learn more, I invite you to delve deeper into this exciting topic.

What procurement strategies are there?

If you want to take your procurement area to the next level as procurement manager, a strategic orientation is essential. The choice of the right procurement strategy is crucial. The following overview distinguishes four levels of procurement strategies: the overarching framework strategy, the sourcing or commodity group strategy, the negotiation strategy, and the supplier strategy.

Let's start with the overarching framework strategy. The key to an effective procurement strategy is to have a clear vision and mission for procurement that is aligned with the company's overall goals. This way, your procurement area can strategically align itself and create real value for the company. It is important to identify and use processes, resources, and technologies that contribute to achieving these goals. The framework strategy should also include a clear plan for implementation and measurement of progress.

The sourcing or commodity group strategy focuses on optimizing the procurement process for specific goods or services. This involves identifying the best sources for products and services and building relationships with these suppliers. This strategy can include a variety of tactics, such as consolidating purchases, leveraging group purchasing power, or developing long-term partnerships with key suppliers.

The negotiation strategy is about negotiating the best terms for your company. It can be helpful to master various negotiation techniques and to know when which technique is best used. An effective negotiation strategy can help reduce costs, improve quality, and optimize service. It is important here that you always keep the big picture in mind and do not just look at the price.

The supplier strategy focuses on the development and maintenance of relationships with suppliers. This involves selecting the suppliers that best fit the needs and goals of your company, and then building long-term partnerships with these suppliers. This can help improve quality and service, minimize risks, and increase efficiency.

In summary, choosing the right procurement strategies is crucial to be successful in today's competitive business environment. It is important to have a clear vision and mission, select the right suppliers, negotiate effectively, and build long-term relationships with suppliers. With the right strategies, you can strategically align your procurement area and create real value for your company.

What should be considered when developing procurement strategies?

If you, as a specialist or manager in procurement, are preparing to take procurement to the next level, you must consider a strategic approach. The development of efficient procurement strategies requires a certain amount of finesse and understanding of the four levels of strategy development: the framework strategy, the sourcing or commodity group strategy, the negotiation strategy, and the supplier strategy.

Let's start with the framework strategy. This is the overarching strategy that sets the direction and goals for the entire purchasing process. It should be in line with the general business strategy and reflect the goals and priorities of the company. When developing the framework strategy, you must consider both internal and external factors, such as the financial situation of the company, market dynamics, and the supply chain. A critical success factor here is the ability to communicate a clear vision and define the goals to be achieved with the strategy.

The sourcing or commodity group strategy focuses on the specific products or services to be purchased. It includes decisions about which goods or services should be produced internally and which should be sourced from external suppliers. The challenge is to find the optimal balance between quality, cost, and delivery capability. Here it is important to conduct market analyses and benchmarking in order to make informed decisions.

Next comes the negotiation strategy. It determines how negotiations with suppliers should be conducted. This can range from the selection of negotiation partners to the setting of negotiation goals to the choice of negotiation tactics. A critical success factor in the development of negotiation strategies is the ability to build and maintain effective relationships with suppliers. That means you must be able to build trust while at the same time safeguarding the interests of your company.

Finally, the supplier strategy is a crucial aspect of any procurement strategy. It defines how the company wants to manage and develop its relationships with its suppliers. This can include the selection and evaluation of suppliers, the management of contracts, and the monitoring of supplier performance. When developing a supplier strategy, it is important to have a clear understanding of the strengths and weaknesses of each supplier and to develop strategies to maximize the benefits and minimize the risks.

In summary, it can be said that the development of effective procurement strategies at these four levels requires both strategic thinking and a deep understanding of your own company goals, the supply chain, and market dynamics. Through careful planning and execution, you can ensure that your procurement strategies contribute to taking your company to the next level.