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Procurement Techniques

View our library of procurement management techniques

Agency Theory

Overcome problems and conflicts that can stop your business developing productive and profitable relationships

Agile Supply

Not all firms can succeed with agile supply; but those that do are more responsive

Automated Buying

Get better control and visibility of your spend on suppliers

Bullwhip Effect in Supply Chain

Understand the dynamics in your supply chain to control costs

Business Ethics

Long term success depends on an ethical approach to doing business

Buyer-Seller Improvement Teams

Work more closely with your suppliers and customers to deliver better mutual benefits

Capacity Requirements Planning (CRP)

Know what resources you need when and where - to ensure greater efficiency

Catalogue Management

Use catalogue management to cut costs and reduce staff time wasted

Category Management in Purchasing and Supply Management

Take a rigorous approach to getting the best value from your supplies spend

Centralised/Decentralised Procurement

Know how to get the best value from your procurement team and processes

Change Management

Change management can be hard; master the key success factors

Closed-Loop Supply Chain (CLSC)

There may be value in reusing the products your customers have finished with

Cloud Computing in Supply Chain

If your supply chain is important to your cost and customer services, cloud technologies can get better results

Co-sourcing

Savings of 30% could be on offer with the right co-sourcing decision

Collaborative Planning, Forecasting and Replenishment (CPFR)

Reduce lead times by 18% by working collaboratively with your trading partners

Collaborative Relationships in Procurement

Know when to work in a collaborative, or adversarial, relationship with your suppliers

Commodity Strategies

Secure, and get the best price, for your key supplies

Competitive Intelligence (CI)

Keep your friends close, but keep your enemies closer? Keep one step ahead by knowing what your competitors are doing

Complex Procurement

More than just contracting, complex procurement may need specialists

Continuous Improvement

If you are not doing things better your competition will be. You can lose at least 20% sales if you do not keep offering more to your customers

Contract Management

In an ongoing relationship, the most of the value comes after the deal

Cooperation and Mutuality in Procurement and Supply Chain

Reduce your supply chain costs by working cooperatively with your suppliers

Corporate Social Responsibility (CSR)

A very effective way to make your business stand out from competitors

Countertrade

Crisis Management

Before catastrophe strikes, know your Business Continuity Plan

Cross-Docking

Improve the efficiency of your logistics with cross docking

Cross-Functional Supply Management

Improve your responsiveness to customers by joining up your internal teams

Delivering Policy Through Procurement

You can use your purchasing budget to achieve bigger objectives than cost cutting

Demand Management

Understand, respond to and manage customer demand to grow sales and margin

Demand-Driven Supply Chain

Setting up a demand driven supply chain can result in 35% shorter cash-to-cash cycle times than typical companies

Due Diligence

Know what you are really buying or selling, and with who, with due diligence

e-Auctions (Reverse Auctions)

e-Auctions can deliver savings of 10%+, but are not without risk

e-Business

Your business could generate many mutliples more revenue by maximising your online capabalities

e-Commerce

It is essential that your online presence reflects your business well. Do it right

e-Procurement

Trading electronically with your suppliers can reduce process costs and improve spend control and visibility

e-Sourcing

e-sourcing can deliver major savings, but must be embedded into your overall strategy

Early Supplier Involvement (ESI)

Working closely with suppliers when you are developing a new product can bring fresh innovations into the design and smoother roll out later

Economic Order Quantity (EOQ)

Order the right amount of goods and services to optimise costs and profits

Economic Production Quantity (EPQ)

Optimise your profitability by only stocking and making what you really need

Emergent Change

Planned or not, change will happen in, and outside your organisation - understand this to stay on track

Empowering Employees

Your staff will work harder and be more loyal if they feel trusted and able to make some of their own decisions

Enterprise Content Management (ECM)

Investments in ECM can result in signficantly improved efficiency, better control, and lower costs - adding signficantly to the bottom line.

Ethical Purchasing/Ethical Procurement

Ethical business can support the long term value of your brand

Exit Strategies

Before you get in to a contract, know how you will get out when the time comes

Financial Management in Procurement

Make sure your business has accurate financial management in the purchasing function an control costs

Forward Integration

As your business grows it could have a long term profit impact to acquire other functions/companies associated with delivering your products or services

Future Supply Chains

Being future proof is key to long term business success. Understand what your supply chain might look like and be prepared for the changes

Global Procurement

Some of your materials may come from abroad, if so it is important to understand how best to manage this process

Green Logistics

Lower your business costs whilst being environmentally friendly

Group Purchasing Organisations (GPOs)

It costs less to buy in bulk. Can your business make substantial cost savings and improve bottom line performance?

Horizontal vs. Vertical Integration

Understand where there might be opportunities for your business to collaborate - it could be in similar or different areas

Information Management (IM)

Be sure your business decisions are based on the right information

Innovation in Public Procurement

The Government is increasingly looking to include smaller firms in public sector contracts. Understand how this is happening so your business can benefit

Internal Strategic Integration

When all business functions are aligned to the overall strategy the collective results are likely to improve

Just-In-Time (JIT)

How to manage stock and inventory levels at the absolute minimum to keep working capital free

Keiretsu

The original form of collaborating "companies". This approach can offer huge potential to smaller firms

Kraljic Matrix

One of the dominant strategic tools guiding purchasing activities in organisations

Labour and Human Rights in Purchasing & Supply Management

Lean Manufacturing / Production

Eliminating waste from your organisation can impact on your costs dramatically

Lean Supply Chain (LSC)

Keep as much excess out of your supply chain as you can - your business will be more efficient and cost effective

Leasing vs. Purchasing Technology

Leasing gives you the latest technologies (before budgets allow), costs are predictable, and purchases can be offset against tax liabilities.

Lifecycle System Approach

Being able to manage your products and services over their lifecycle is key for your business success

Long Tail

Similar to Pareto's 80/20 - approximately 80% spend will be covered by 20% of the suppliers and conversely 20% of the spend will be comprised of a long tail of suppliers - 80%. Whether you are a buyer or supplier you need to know how to manage this

Loosely-Coupled vs. Tightly-Coupled Supply Chain

Collaborating in a supply chain can create a competitive advantage through sharing information, making joint decisions, and sharing benefits

Marketing Services Procurement

Using a specialist marketer could be a quick route to raising awareness of your business

Mass Customisation

Raise the bar for your customers by giving them unique product and service experiences.

Mass Production

Radically improve your efficiency and bring products to market even faster.

Material Requirements Planning (MRP)

If your business is producing goods this is a must-know technique

Multidivisional (M-Form) Organisational Structure

Negotiations in Procurement

Being a skilled negotiator can make and save you money

Optimised Production Technology (OPT)

If you can minimise and production bottlenecks you will be able to maximise the profitability of your business

Outsourcing

Dramatically cut costs and increase efficiency and learn how to outsource effectively, safely and profitably.

Outsourcing in Procurement and Supply Chain

It is often better to let someone outside of your business manage something which is not your main strength so you can focus on growing your business

Paradigm and Paradigm Shifting

Procurement Transformation

Re-think the way your business buys - the cost savings could be significant

Public Goods

Work with government and build important, high-quality relationships.

Purchase to Pay (P2P) Process

The quicker your purchasing function is, the more time there is available for looking at growth and profitability

Purchasing Cards (P-Cards)

Purchasing cards can be useful to consider in order to reduce the amount of time spent on paperwork and allow more time to focus on growing your business

Purchasing Strategies

Have a clear plan for what you need to buy to make sure costs stay low and profitability is maximised

Purchasing Structures/Models

Make sure the buying for your business works in the right way and keeps your costs down

Quality Management

Buy cheap, buy twice. Garbage in, garbage out. Make sure your business is a quality business

Relationship Models

Work with other businesses and people to maximise value in both your business and collaboratively

Resources and Competencies in Procurement

Make sure you have the right people with the right skills buying on behalf of your business. Getting this wrong can be costly

Reverse Supply Chain / Reverse Logistics

Your business can often re-use materials and processes produced in the supply chain. Doing this well can lead to large cost savings and increased profitability

Risk Management in Purchasing and Supply Management

Be fully aware of any risks in your supply chain at all times as it could affect your business's ability to sell your products or services

Shared Services

Cut costs and save time - learn how to be more efficient by sharing services

Shared Services in Procurement and Supply Chain Management

As your business grows, sharing some of the different buying functions could bring substantial savings

Single Sourcing vs. Sole Sourcing

Are you going to be able to choose a single supplier or are you forced to?

Sourcing

Companies that source materials and components well can make huge cost savings - Volkswagen increased operating profit by 50% by changing the way they did it

Sourcing and Procurement Industry Standards and Benchmarking

A key challenge of benchmarking is finding useful sources of comparison data – don’t feel constrained if competitor information is not available directly.

Spend Analysis

Spending money is easy - know where your business expenses are and get the right price

Split Sourcing

Don't become dependent on just one supplier - source goods and services more strategically and drive down costs.

Standards and Policies in Procurement

Having clear policies for your business's purchasing will ensure anyone responsible for buying anything on behalf of the company does so properly and will save money in the long run

Strategic Business Units (SBUs)

If your business has different product or service lines you could make more money by treating them as separate business units which need their own strategic direction

Strategic Procurement

Make sure you are buying the things that fit with your strategy and not just buying as you need. This approach can save your business huge unnecessary costs

Supplier Evaluation

Make sure you know how your suppliers are performing - it is critical to your business and will help show cost saving opportunities

Supplier Incentivisation

If your suppliers are aligned with your business's aims they are going to work as hard as you to deliver. Working together with them will bring business results

Supplier Performance Management (SPM)

Are your suppliers helping or hindering your business? Making critical decisions can hinge on knowing which supplier to go to when you need something urgently

Supplier Relationship Management (SRM)

Having good relationships with your suppliers is key - it can get you that contract that needs a quick turnaround if your suppliers like working with you

Supplier Segmentation

If you group your suppliers properly you will understand where the majority of your costs are going. Then you can work on reducing them and increase profit margin immediately.

Supplier Selection

Choosing the right supplier could be the difference between success and failure of your business as outside purchases are typically 40%-60% of the final cost. Firms like MacLaren look for their suppliers to contribute up to 80% of the end value

Supply Base Management (SBM)

How many suppliers does your business have? Could you strike better deals by having less? Understand this technique and you could be making cost savings immediately

Supply Chain Complexity

Reducing complexity will often unleash high performance. If your supply chain is becoming a barrier to performance, understand what you need to do to make it simpler to manage

Supply Chain Finance (SCF)

Unlock the power of your invoices and release cash to help you grow

Supply Chain Integration (SCI)

Speaking to all of your suppliers regularly may open up collaboration opportunities which can save you money and maybe even open up new money making ventures

Supply Chain Management (SCM)

It is business critical to manage your supply chain well. Cutting costs raises profit immediately

Supply Chain Operations Reference Model (SCOR)

How does your business measure up against some of the larger firms out there in terms of managing suppliers?

Supply Chain Risk Management (SCRM)

Is you business reliant on 1 or 2 suppliers? Do you have a back up plan in case any of them don't deliver their end of the bargain?

Supply Chain Security Management

DO you know all of your suppliers, and how secure are your processes? This is your business's money being spent after all

Supply Chain Visibility (SCV)

Don't just think you know where money is being spent, KNOW you know

Sustainable Procurement

As your business grows, understand how to make your buying practices sustainable

Sustainable Supply Chain

Tactical vs. Strategic Purchasing

Do you have a clear plan for what your business is buying and why? If you do this right you could save 20% or more on spend

Theory of Constraints

Uncover the weakest links in your production processes - make more profit by being more efficient

Third-Party Marketplaces

There might be a cheaper way to find your components or mass-sell your products via market places. Understand how they work

Time to Market

If you are too slow to market you could lose 33% profitability. Understand the steps involved and get it right to maximise profit

Total Quality Management (TQM)

Deliver the best quality you can and your business can succeed

Traditional / Open Loop / Forward Supply Chain

Have a solid understanding of the steps involved in the supply chain and work out which is best for your business

Triple Bottom Line (TBL)

As your business grows, understand the measures that large organisations are judged on

Understanding Supply Markets and Competition

Understanding where price changes to your raw materials might come from will help you to stay ahead of the competition

Value Chain Management (VCM)

Being able to manage the value chain well will help deliver bottom line performance

Value-Added Network (VAN)

You could save valuable time and money by using a VAN for much of your supplier related documentation

Vendor / Supplier Rating

Even with relatively few suppliers it is important to know how they rank so you can look at getting discounts for the ones you use the most

Vendor Managed Inventory

A possible way to free up your time from stock management to be able to focus on growing your business

Warehouse Management Systems (WMS)

Getting the right system for your business could save substantial costs and improve your bottom line.

Warehousing and Inventory Management

Make sure you are carrying only the right amount of stock and free up working capital.