Why businesses are struggling with procurement?

There are many external factors that give businesses a hard time in the procurement process. Some of these are recent politics, currency fluctuations, incorrectly determined strategies, implementation mistakes, and wrong or poorly timed investments. Although some businesses can turn these troubles into advantages and reach positive results, it is not the case for all firms, of course. To be prepared for these possible scenarios, all companies should prioritize keeping the profit margin at its maximum. If you are selling a product, there are two ways to increase your profit.

The first one is that you can increase your sales price while the cost of the product is stable. And the second one, you can keep the sales price the same, and you decrease the costs of the product. Since the market prices are what creates the competition, altering the supply process costs would of course bring you more profit. If you are working on a project with a deadline and a set price, you need to keep your expenses at a reasonable rate. We can increase our post-project profit margin through alterations in the procurement process.

With our hard work on both sales prices and costs, you can reach the maximum profit rate. Of course, you can make use of this increased profit for your investments both within your firm and your outgoing businesses.

Construction field brings together and manages many products from external sources. And so, the supply processes should be carried out in a very careful manner. When the products to be supplied are in great numbers, they affect one another in the system. And they need to fulfill a certain standard. We know you need a good technic crew and serious planning work.

“You can’t manage what you can’t measure!” – Peter Drucker

Procurement is a critical business process – but are you doing it right?

Procurement is the sum of the actions taken by a business to purchase goods or services from the right source, at the right time, in the right amounts and in good quality. In our constantly changing world, the success of the procurement process is based on your ability to make good decisions. 

Get Prepared for the Perfect Procurement Process!

This process can be divided into three phases as pre-procurement, procurement, and post-procurement.

  1. Pre-Procurement Process: Consists of the completion of initial preparations meeting the right people, research on the supply firms, quality-price-time comparisons, arranging vendors and bringing the project to an agreement stage.
  2. Procurement Process: Conducting the purchases, providing the product and service controls through contacting the relevant departments. 
  3. Post-Procurement Process: In this process, possible problems after the procurement are tried to be eliminated, such as stock control, dismissal of packaging and pallets.

Why Procurement is NOT the Same as Purchasing? Supply Chain?

Purchasing is where sales relevant procedures are held. These are: ordering the product or the service, confirmation of the product’s or the service’s purchase, receipt registries, and completing the payments.

Procurement is the sum of all actions taken for a product or a service to be acquired. So, purchasing process can also be seen as a part of the procurement process. 

Supply chain frames a bigger set of processes. The procurement, quality control, sales and alike actions starting from the production of the raw material up until the delivery to the final customer are conducted under the supply chain process.

Cut Costs By Working With A Expert Procurement Consultant !

A procurement consultant is an expert that works on every step for a business to acquire a product or a service, all while taking into consideration the direct and indirect costs. The procurement consultants that conduct this process effectively make the business owners’ jobs considerably easier. They increase the profit margins and save time. When a procurement consultant is technically equipped in the field of the requested product or the service, it provides a great advantage for the evaluation of supply and production firms.

Alongside this, if they have good relationships with the sellers, it makes the negotiations easier on technical and financial issues, and would benefit the agreement terms. Also, they share their ideas on the bettering of the supply processes and help develop the procurement system within a company.

Learn How To Lower Your Business Costs With A Procurement Consultant in Turkey by click here on FREE Pre-Procurement Report.