0:07 do you know how your company's roi can
0:09 grow with a well-structured procurement strategy
0:10 strategy
0:13 bet you didn't imagine such a number
0:16 if your strategy is planned thoughtfully
0:18 and aligned with the business goals you
0:22 can expect a 3.8 times higher roi
0:24 quite impressive isn't it
0:26 wondering how to achieve similar results
0:28 and build an effective procurement strategy
0:29 strategy
0:32 we are here for you in this video we
0:34 will cover everything you need to know
0:36 about procurement strategy development
0:38 and its implementation let's start from
0:40 the basics
0:42 what is a procurement strategy
0:44 imagine you're planning to organize a
0:46 birthday party for your friend
0:48 you should consider quite a lot of
0:50 things calculate the budget rent a
0:52 proper place invite guests as well as
0:55 order catering decorations and presents
0:58 it's necessary to have a step-by-step
1:00 plan to prevent chaotic acts and make
1:03 everything in the best possible way
1:04 the same thing with procurement
1:07 management all processes from purchasing
1:10 to cooperation with suppliers should be
1:12 well organized to improve operational
1:15 efficiency and reduce costs with a
1:17 procurement strategy you can provide
1:19 visibility for all stakeholders within
1:21 the chain outline budgets build
1:23 long-term relationships with competitive
1:25 suppliers acquire the necessary goods or
1:27 services in a specific cost range and
1:29 have them delivered on time [Music]
1:31 [Music]
1:33 what is the purpose of a procurement
1:35 strategy if you're wondering why you
1:36 need a separate strategy for your
1:39 procurement process the answer will be
1:40 pretty obvious
1:43 an effective strategy will help you to
1:45 allocate efforts and resources in the
1:47 right way to make your purchasing
1:50 workflow as beneficial as possible
1:53 strategic procurement allows you to
1:54 ensure that the right products are
1:56 delivered on time
1:58 obtain well-structured data to
2:00 prioritize purchases
2:04 minimize possible risks with suppliers
2:07 reduce costs and control spending how to
2:10 select relevant procurement strategies
2:12 everything starts with the goal if you
2:15 clearly understand the unique company's
2:17 objectives you have a clear course to follow
2:18 follow
2:21 there are several procurement strategies
2:22 that you can implement in your company
2:24 let's go through each of them cost
2:27 reduction if you want to increase
2:28 profits by recognizing saving
2:30 opportunities and decreasing the total
2:34 cost of ownership tco this model is the
2:37 best variant cost reduction is a complex
2:39 and multi-layered process
2:42 it's influenced by various decisions
2:44 made across the company's departments on
2:46 many hierarchy levels
2:49 it involves negotiating with suppliers
2:50 adjusting internal administrative and
2:53 operational expenses and optimizing specifications
2:54 specifications
2:57 risk management giving preference to
2:59 this strategy you can minimize the
3:01 impact of unfortunate events on the
3:03 procurement process
3:05 this strategy allows you to develop
3:08 appropriate responses to potential risks
3:10 core elements of risk management
3:13 strategy include the following steps
3:15 monitor and identify the risks
3:18 understand their origin nature and
3:21 possible impact prioritize and mitigate
3:23 risk events based on the impact force on business
3:24 business
3:27 communicate risk management practices to
3:29 teams involved in procurement
3:32 supplier management optimization and
3:34 relationship building
3:36 this strategy is about managing
3:38 suppliers and building relationships
3:39 with partners
3:41 with it you can
3:43 choose an optimum mix of partners who
3:45 would offer the best cost of goods or services
3:47 services
3:49 delete inappropriate suppliers from the
3:51 supply chain alter the supplier base
3:53 whenever you want to achieve a specific
3:54 procurement goal
3:58 monitor suppliers performance
3:59 vendor development
4:02 this is a win-win strategy for you and
4:03 the vendors
4:06 through close cooperation feedback and
4:08 suggestions you can help them develop a
4:11 way to offer better or cheaper products
4:13 assist suppliers in implementing
4:16 processes to get required quality levels
4:18 improve cooperation with them and
4:20 achieve vital strategic goals with the
4:22 help of loyal vendors
4:25 global sourcing global sourcing brings
4:28 substantial benefits to your company you
4:30 can lower costs increase the volume of
4:33 produced and offered goods and use
4:35 international technology
4:36 by choosing this strategy you can
4:39 discover and utilize cost-effective
4:41 sourcing possibilities in a specific
4:43 country or part of the world where
4:44 required goods can be produced more
4:47 economically however adopting the global
4:50 sourcing strategy you should be aware of
4:54 the severe challenges it implies
4:57 long delivery time complex supply chain
5:00 issues of legislative and human rights
5:02 the difficulty of monitoring the
5:05 production process quality levels and costs
5:06 costs
5:08 green purchasing
5:10 this strategy is a good fit for you if
5:12 you're concerned about the environment
5:14 and human health it gives you the
5:16 possibility to purchase from suppliers
5:18 that follow sustainable processes and
5:21 offer so-called green items produced
5:23 with minimal environmental impact
5:25 recycled or recyclable
5:28 corporate social responsibility csr is a
5:31 company's strategic initiative that aims
5:34 to contribute to societal goals
5:36 csr compliance principles are being
5:39 integrated into contracts at every step
5:40 of the procurement process
5:43 as a part of csr practice you will audit
5:46 suppliers and examine practices in place
5:48 such as sourcing raw materials and
5:50 producing goods shipping methods work
5:53 conditions pay levels etc
5:56 total quality management tqm
5:58 such a procurement strategy evolves
6:00 around an ongoing process of
6:02 optimization through discovering errors
6:04 and opportunities for improvement using
6:07 a tqm strategy you can focus on the
6:10 entire transaction life cycle
6:12 from selecting goods and services to
6:13 invoicing and payment
6:16 procurement training if you're looking
6:17 for the most important procurement
6:20 strategy this is the one you should take
6:22 into account to make your procurement
6:23 workflow as efficient as possible
6:25 consider training the following skills
6:26 of your team
6:29 hard skills such as the ability to use
6:31 specific tools or software
6:33 skills of effective negotiations to
6:35 maximize the procurement team's
6:37 potential ensure the team's alignment
6:40 when upgrading procurement practices
6:42 how to develop an effective procurement strategy
6:43 strategy
6:45 once you select the appropriate
6:46 procurement strategy it's time to
6:49 implement it let's figure out what
6:51 crucial aspect you should take into
6:53 account at this stage
6:55 step 1 assess the current procurement
6:58 process and scrutinize the working
7:01 ecosystem it's not a secret that all
7:02 strategy development starts by
7:05 understanding the basics and analyzing
7:07 the overall situation
7:09 that's why you need to take the
7:12 following actions foremost analyze the
7:14 current spending culture of the company
7:17 identify business units and departments
7:20 involved in the procurement process
7:22 define inefficiencies
7:25 evaluate the total cost of ownership tco
7:27 to consider any overlooked costs of
7:29 goods and services that are not obvious
7:31 upon initial purchase
7:35 review weak spots or maverick spending
7:39 step 2 determine business needs figure
7:42 out current and further business needs
7:45 check contracts speak to stakeholders
7:47 and procurement professionals to get a
7:49 better hands-on understanding of whether
7:51 your procurement practices are aligned
7:54 with the company's business needs
7:57 step 3 conduct market analysis
7:59 procurement market analysis will help
8:02 you get vital insights and collect
8:03 relevant information
8:06 monitor market conditions as they might
8:08 change rapidly and frequently
8:10 pinpoint different market players such
8:12 as suppliers and distributors partners
8:15 and competitors clients etc
8:17 identify the market threats and opportunities
8:18 opportunities
8:21 step four set clear and specific
8:23 procurement objectives
8:25 defining strategic objectives is about
8:28 balancing desired goals and resources at hand
8:29 hand
8:32 always ask a what-if question to ignite
8:34 a conversation about the businesses
8:36 objectives relevance
8:39 remember that objectives must be aligned
8:41 with the company's vision and global
8:44 policy but stay specific and realistic
8:47 step 5 convince stakeholders to revamp
8:49 procurement strategies
8:51 develop your procurement strategy in
8:54 collaboration with stakeholders and partners
8:55 partners
8:56 those involved in the procurement
8:59 process should be on board with creating
9:01 or revising the strategy and know
9:02 precisely how they are expected to
9:06 contribute step 6 define procurement policies
9:07 policies
9:09 review existing procurement policies and
9:12 adapt them to current business needs
9:14 at this stage you should take the
9:15 following actions
9:18 identify existing procurement policies
9:20 for each department create a list of
9:22 preferred suppliers add additional specifications
9:24 specifications
9:26 make sure that procurement policies are
9:28 available to everyone involved in the
9:30 purchasing process
9:33 step 7 outline a procurement strategy
9:36 describe the current situation list
9:38 strategy goals and create a tactical
9:41 plan for its achievement make sure to
9:43 set smart goals when preparing a
9:45 procurement strategy
9:46 every goal should be
9:50 specific define clear goals
9:53 measurable identify the needed criteria
9:54 to measure results
9:57 achievable make sure you can achieve
10:00 goals with available resources
10:02 relevant check if your goals are aligned
10:04 with the company's particular needs
10:08 time bound set a clear timeline for
10:09 achieving your goal
10:13 step 8 implement procurement software
10:15 the procurement process is quite complex
10:17 and includes multiple steps to be
10:20 followed precisely to prevent possible
10:22 errors find the appropriate digital
10:25 solution procurement software will help
10:27 you eliminate manual data entry automate
10:30 time-consuming purchasing operations and
10:33 boost employment productivity step 9
10:35 evaluate human capital and conduct training
10:36 training
10:38 learn about where your team stands in
10:40 understanding ways to achieve
10:42 procurement goals and purchasing
10:44 processes specifics
10:46 organize training and make sure your
10:48 team is aligned with the key objectives
10:50 of the procurement strategy
10:53 step 10 execute evaluate and refine the strategy
10:55 strategy
10:57 finally it's time to execute the
11:00 procurement strategy and no it's not the
11:03 end although this is the final step
11:05 everything is just beginning it's a
11:08 process that must be overviewed analyzed
11:10 and measured constantly
11:13 always track the following aspects
11:16 cost and savings how do prices change
11:18 and how are we saving
11:21 spend how effectively are we spending
11:23 contracts how well are contract
11:26 conditions fulfilled
11:29 suppliers how efficient is spending per supplier
11:31 supplier
11:34 competition how high is roi compared to
11:36 the market players
11:39 processes how efficient is each step of
11:42 the processing time and cost wise
11:45 customer satisfaction how satisfied are
11:47 end customers
11:49 even if your procurement strategy
11:51 completely satisfies you and affects
11:53 your company in a good way don't forget
11:55 to analyze the success metrics and
11:57 identify areas that can be improved in
11:58 the future
12:01 review your strategy periodically
12:03 take into account factors as market
12:06 fluctuations business growth technology
12:09 development policy changes etc
12:11 ready to simplify your procurement
12:14 strategy with cloud-based solution
12:16 sign up for a 14-day trial or book a
12:19 demo on our website to see how easy the
