Procurement Consulting Firms – Bridging the Gap between Cost and Value

Maintaining an attitude of ‘needing to know everything’ is required of procurement organisations that are shifting from cost to value. By working with reputable procurement consulting firms, chief procurement officers can obtain actionable intelligence on their supply chains, procurement categories, and suppliers. The intelligence can help you act and plan proactively as you base your decisions on comprehensive, actionable, and critical information at every stage of the procurement lifecycle. This way, hiring one of the best procurement consulting firms makes perfect sense if you want to ensure the quality of your sources for a more profitable procurement process.

Hiring a procurement consulting firm can be cost-effective to your business, too. By hiring them, you do not have to hire additional in-house staff. This saves you from additional overhead costs associated with having more employees in your company. Procurement consultants are more flexible in finding and using resources for best results, and as long as you work with seasoned experts, you can count on their industry expertise to help you generate ideas and apply the best practices, while providing support to top management.

The best procurement consulting firms maintain an in-house database of thousands of online information sources and a network of over a million suppliers around the world. This way, their procurement analysts can create actionable intelligence and insights for you and other stakeholders in your business. They offer procurement intelligence solutions that will enable you to benchmark and measure the performance of current suppliers, identify early warning signs pertaining to supply chain risks, track the changes of your procurement categories, and ensure a sustainable supply chain. They help you ensure compliance with supplier monitoring regulations and standards, while strengthening your relationships with every supplier. Procurement consultants can help you find niche and new suppliers, and find solutions that can help you negotiate well and save on costs.

3 Essentials of Procurement Based on Category Management

Supplier business models and procurement categories continue to evolve as fast as globalisation’s progress and advancements in technology. Hence, it makes good sense for category managers to establish a proactive approach to planning their categories by referring to actionable market intelligence. To achieve this, they need access to timely and comprehensive insights, which will enable them to develop and implement effective sourcing strategies. Likewise, they need to keep tabs on category developments to identify the early signs of risks and minimise disruptions to their supply chain. 

1. Hiring experts for help - Responsible procurement organisations understand the importance of intelligence mechanisms and category strategies that extend to indirect procurement categories such as HR, finance, IT, logistics, and their facilities. However, not all organisations may have enough manpower to deal with disruptions from those categories. In that case, hiring category intelligence specialists and consultants can help in monitoring those categories and enabling the company to understand each category and how it can affect the procurement process.

2. Category strategy development – Category managers should be able to understand the landscape of the supply market and create effective category plans. To achieve those objectives, they need access to secondary research sources and industry experts and seasoned analysts who can provide critical input on creating effective category strategies and applying the best practices specific to every category.

3. Category intelligence – After developing a category plan and defining a sourcing strategy, category managers must closely observe every variable that can affect the plan. They must observe variables such as the entry of new players, changes in pricing, macroeconomic changes, regulatory changes, technological developments, and consolidations occurring within the sector. It is recommended that category managers work with seasoned category management and intelligence specialists who can serve as an extension of their buying organisation. That way, they can free up resources and leave the monitoring and analysis to the experts. Seasoned category analysts can deliver actionable insights in the form of annual updates, periodic newsletters, and sector reports.