siliconindia | | January 20199decent credit period? Are they providing you discounts on the basis of your goodwill and business relationship? In short, are they just looking at some short-term gains, or are they genuinely invested in a long-term association with you?· Material Quality: Quality can mean multiple things to you, based on the segment you belong to. But overall, you can look at durability, consistent timelines of delivery and reduction in wasted resources, as a true measure of how the quality of your input materials or raw materials are contributing towards your purchase performance.Now that you may have got a fair idea of how efficient your current purchase process is, let's look at five ways in which you can become more efficient. How to make your Procurement Process more efficient?Evaluate Each PurchaseThe main role of any purchase cycle is to reduce the costs of the materials, which you need. It is not enough to just process purchase orders whenever there is a need, but you need to monitor what is being ordered vs. what is being used in your manufacturing and trading processes. Given that you have a contract with most of your key suppliers, it is important that all your purchase orders are available at a single place for your immediate review.Build Strong Supplier RelationshipsOne of the key ingredients of having an efficient purchase cycle is to build a network of trustworthy suppliers. This automatically eliminates the need to start from scratch for every procurement need that you have. If you have a good working relationship with your suppliers, you can sit back and relax, knowing that you will get the right quality, fair negotiations and timely delivery. Over a period, this will surely convert into an increased market share, better responsiveness to market demand, increased ROI and shortened order fulfilment lead times, all for you.Implement a Contract Management SystemNegotiation is an important part of developing good relationships with your supplier network, and it is important to have a strategy in place, which is beneficial for both parties involved. Negotiations typically involve a contract, and often that means that documents are mailed back and forth, in order to reach an agreement. This could cause confusion, as different people may have been involved in multiple conversations, at different points in time. Implementing a contract management platform makes project planning, vendor management, bid management and negotiation much simpler, as everyone is now able to review orders at one place.Use Analytics to Make Intelligent DecisionsHaving a 360-degree view on every part of your purchase process helps you to track your projects and keep your finances in check. In reality however, any business works with hundreds of vendors every year, and managing multiple contracts becomes time consuming and cumbersome, making analysis difficult. Thanks to technology, businesses can implement systems, which not only make managing contracts easier, but also provide you with powerful analytics and reports. At the end of the day, you can use analytics and technology to take the right decisions at the right time.Integrate Your Purchases with Your Sales TrendsOperationally, there is a limit to how much efficiency you can bring into your purchase cycle. To make the procurement process truly agile, you need to integrate your sales data into it. Who is your customer, what do they want, how often they want it, are important points for you to consider. With this approach, you can optimise your procurement process to service your sales cycle, rather than selling as per your internal processes, which is obviously not going to work.If we quickly summarise all the steps listed above, which can make your purchase process efficient, a common link that will emerge is technology. Indeed, automating your purchase cycle is one of the fastest ways to increase efficiency and be successful. Most importantly, an optimized procurement process will positively affect your bottom line and increase your efficiency and profitability. An optimized procurement process will positively affect your bottom line and increase your efficiency and profitability
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