What is Strategic Procurement?

In such challenging times, public procurement has never had a higher profile.

As the COVID-19 pandemic continues to cause concern for buyers, suppliers and other stakeholders, it is important to recognise that procurement has never played a more important role in bringing businesses and communities together

In recent years procurement professionals have spoken a lot about the importance of strategic procurement and have adopted more effective methods of procurement to drive value and increase transparency throughout the procurement process.

We explore “strategic procurement” below and help your organisation to understand the benefits of below.

 

What is strategic procurement?

The Chartered Institute of Procurement and Supply (CIPS) has given a definition of strategic procurement on its website, noting that:

“Strategic procurement incorporates actions aimed at reducing the supplier base, negotiations, communication and maintaining long-term relationships with suppliers.”

Often referred to as ‘strategic sourcing’, many public sector organisations use strategic procurement to ensure that they have access to an efficient supply of the goods and services that are critical to the day to day to running of their organisation.

 

What are the five pillars of procurement?

Effective procurement strategies can help solve the complex public sector service challenges of today. A good procurement strategy will incorporate the five pillars of procurement that are mentioned below:

  1. Compliance. eProcurement has many benefits over traditional methods, including reduced costs and complete auditability. The requirement for all communication around public sector procurement to be electronic as of October 2018 means that eProcurement software and tender management systems are increasingly important to commercial eProcurement solutions.
  2. Better business partnering. Cost will always be important when it comes to procurement, but it is important to think long term. When deciding on a supplier, think lifecycle costing (i.e. costs relating to acquisition, costs of use such as consumption of energy and other resources, maintenance costs, end of life costs) and look for a partner that wants to collaborate with you throughout the contract, not just one that wants to sell their services and leave.
  3. Invest in your team. Make sure all your staff are fully aware of the latest legislation, guidance, processes, and practices affecting public sector procurement. There are many training options out there; however, we recommend PASS Procurement to help you get started.
  4. Drive disruptive innovation. Be a leader when it comes to change by encouraging innovation partnerships and inviting new suppliers to work with your business.
  5. Be an attractive customer. Make it easier for suppliers to work with your organisation. Engage with them and learn about the goods, services, or utilities they offer – they are the product expert and will be able to help you shape better tenders for your requirements.

 

What is the purpose of a procurement strategy?

The realisation of the savings that can be achieved from well-run procurement exercises has challenged many buyers to improve the efficiency of their procurement strategy in recent years.

CIPS has said that strategic procurement:

“Is particularly relevant in light of globalisation (on the sales side it increases pressures on the company’s own prices and on the purchase side it opens up new potential), the development of cost-saving communications and widely available IT, improved logistics and procedures, dynamic competition, high consumer demands, increasing environmental awareness and requirements for transparency.

All these developments make operative procurement tasks obsolete and calls for a more strategic approach aligned with the wider organisational strategy.”

Buyers have a duty to find the best products and services for the best price, as well as the most favourable terms and conditions. Without an effective procurement strategy, buyers will tend to make the following mistakes:

  • purchasing without defined tasks
  • failing to find the balance between central and local purchasing
  • failing to achieve efficiency despite suitable purchasing tools
  • sole concentration on design and development

The right training and technology can help your organisation to avoid making these mistakes. With so many options available, it is important that you do your research on the different procurement strategies that are available to you.

 

What are the different procurement strategies?

Different organisations require different strategies, and different tools to support them. Nowadays it is most common for buyers to use an electronic method as it removes unnecessary manual processes and supports organisations to speed up response times and set clearer lines of communication with their suppliers.

Delta provides several solutions that can help buyers improve the efficiency of their procurement strategy. All solutions come with training from our helpdesk team and our team of procurement experts are always on hand to offer you support with your procurement strategy.

Tender Manager: Make sure that the procurement process is effective and efficient using the Tender Manager tool to source products or services. This module can transform a potential resource-draining issue into a huge advantage for your organisation.

Supplier Manager: This tool can support public sector buyers to identify, invite and manage suppliers more efficiently. At a time when transparency in public spending is so important within procurement, this module offers buying organisations an all-in-one method in which it can manage and engage with local suppliers and the wider community.

Contract Manager: Contract management software will support buyers through every aspect of contract management post-award. Easily monitor a large volume of contracts in one place with Delta’s Contract Manager module.

Workspace Manager: This eProcurement module plays an important role at the very early stages of the commissioning process. Manage and commission tenders using unique project folders while promoting collaboration throughout the procurement process using Workspace Manager.

Quick Call: Secure quote and manage framework agreements faster than ever before with Delta’s Quick Call module.

eAuctions: Your organisation can secure transparent and compliant negotiations that will drive the best value using our auctions too.

Dynamic Purchasing System: Run your call-off competitions using an electronic system of pre-qualified suppliers and manage a range of competitive exercises.

Branded Portal: If your organisation requires a bespoke platform to highlight and increase the visibility of tender opportunities that are available to suppliers this module can support this.

 

Build a winning procurement strategy

Revaluating your procurement strategy?

Delta has worked with buyers for more than 36 years. We off procurement professionals a central, secure, online solution that simplifies and automates many of the time-consuming processes involved in creating and issuing calls for competition and managing tender responses.

Delta’s rich functionality covers all aspects of the tendering process from commissioning, notice creation, pre-qualification and issuing of invitations to tenders to evaluation of responses and award of contract and even contract management.

Having this comprehensive solution allows you to significantly reduce both the processing cost of procurement and the timescales for tenders above the OJEU procurement thresholds.

Delta eSourcing offers a range of procurement software and is committed to helping public sector organisations make efficiency savings to improve their procurement processes. Discover how we can help your organisation by booking a free live demo with a member of our expert procurement team.

To find out how Delta can streamline your procurement process, contact us, or request a free demo today.