Collaborative procurement is a means to deliver greater efficiencies through combined purchasing power, and with public bodies under pressure to deliver more for less, collaborative procurement has become embedded in the procurement process.
Collaboration provides an integrated approach to delivering procurement solutions, and helps organisations to drive efficiencies, reduce risk and save money by buying together.
By working with other procurement organisations, collaborative procurement can result in fewer tendering exercises, which leads to lower administrative costs and allows public organisations to spend more time focusing on the specialised purchases that are unique to them.
What are the benefits of collaborative procurement?
The key benefit of collaborative procurement is that it helps organisations leverage their combined purchasing power to deliver savings that would not be possible if they were purchasing alone.
Traditionally, procurement has been done on a one-to-one basis, with a buyer dealing with a supplier individually and trying to get the most bang for their buck. However, collaborative procurement means that organisations can work with other bodies and expand their purchasing scale, which will bring down the average cost per unit.
For example, if an organisation needs to tender for an everyday item such as printer paper, then it makes sense to join with other organisations who are in a similar position and approach the market with their aggregated requirements, rather than have a separate deal for each organisation resulting in a higher cost per unit.
Collaborative procurement can also drive the standardisation of best practices in procurement, which can help your organisation become more efficient, improve process management and save money in the long run by sharing procurement knowledge, expertise and experiences.
Similarly, collaborative procurement means that organisations can work together with others in the same sector, forming groups and sharing information about markets and suppliers within that sector.
This is particularly helpful for smaller organisations who can use groups and networks to develop procurement-related expertise which would otherwise be difficult for them to develop by themselves.
Additionally, having a dialogue with organisations operating in the same sector and interested in procuring the same solutions is a good way to benchmark your own performance and find out how you shape up against your peers.
Being involved in these groups also gives your organisation the chance to form purchasing consortia to drive efficiencies. This is when organisations, such as local authorities or higher education institutions, come together to aggregate their procurement budgets with the goal of delivering major cost and quality benefits.
Efficiency East Midlands (EEM) is a perfect example of collaborative procurement in the housing sector, and consortia like EEM are a growing breed. Developed by Delta eSourcing, EEM allows its 97 member organisations to come together and buy in bulk the goods and services they jointly require, enabling them to make massive cost savings compared to individual orders. Their goal is to develop collaborative thinking and a working approach that delivers the fullest possible range of benefits – organisationally, financially and socially.
To find out how Delta can help your organisation with supply chain management and collaborative procurement, request a free demo today.