Every day, the procurement area gains prominence in companies, thanks to its strategic importance in business growth. However, some errors in procurement management can hinder the speed of its evolution.
There are some myths that still haunt procurement professionals and can impair the department’s results, such as believing that the digitization of processes can replace the role of buyers in businesses.
In this post of ME’s blog, we have selected the key errors in procurement management that prevent teams from becoming strategic players in business processes.
Enjoy the reading!
Lack of procurement planning aligned to your company’s goals
Planning is one of the most important steps for a successful business, particularly in uncertain scenarios. In an increasingly competitive market, a company that doesn’t plan can be subject to major negative and even catastrophic consequences.
In the procurement area, planning is key to increase the chances of winning the best acquisitions, with competitive prices and the best business partners.
But one of the mistakes in procurement management is focusing only on savings, without any efforts towards other important aspects that can promote the company’s growth – such as new technologies and ESG issues.
The definition of goals aligned with business objectives is vital for the procurement area, so it can increase its efficiency in the mid and long term.
Daily operational processes aren’t optimized in procurement
In a recent past, the procurement area was known only as an internal customer support. With the crises we have already experienced and the technological transformations, this scenario has changed: today, boosting business between companies is important for companies to grow in a sustainable and scalable way.
And to follow market’s evolution, operational procurement processes can no longer be the focus of buyers. Professionals must be released to conduct strategic activities that are relevant to the business.
The automation of procurement, through digital solutions, not only frees buyers’ time for strategic activities, but also provides important data for planning in that area, decreases the lead time, and increases transparency in transactions, among other achievements.
Negotiation isn’t considered as one of the most important stages
One of the key mistakes in procurement management is not paying due attention to the negotiation stage. This usually happens when there is poor planning and last minute purchases, thus impairing the bargain power of buyers.
To generate savings, a good negotiation is crucial to achieve good results. In addition to the search for savings, other topics are also relevant in negotiations, such as planning, communication and collaboration.
Having an empathetic look during negotiations, and considering benefits for both buyers and suppliers, are among the ways to invest in the relationship with your business partners and then leverage innovations.
KPIs aren’t tracked in procurement
In procurement, R$1 saved means R$1 more in profit for businesses. Therefore, making decisions based on assumptions is one of the mistakes in procurement management, and the consequences of wrong choices can be irreversible.
In order to identify possible problems and know if the area is moving towards the proposed objectives, it’s vital to work with KPIs (key performance indicators) in your procurement strategy.
By monitoring such indicators, procurement professionals can make more agile and smart decisions, based on data and information analysis.
The most common KPIs are: saving (savings generated with procurement); delivery level, price evolution, productivity, customer satisfaction and cost of supplies.
No investment in the development of behavioral skills
In the procurement area, technical skills and knowledge of technologies to manage daily activities aren’t enough for its success. For this reason, the development of behavioral skills has been more and more relevant.
‘People’ are essential for the good operation of processes and technology. Unlike past scenarios, procurement professionals must be aware of those skills that contribute to their best performance in negotiations, as well as in the relationship with other areas and with partners.
Knowing how to relate smoothly with suppliers, seeking partnerships with other areas, cooperating with teammates, exposing ideas in a clear and objective way, being analytical and using good communication are some of the essential skills for a successful career in procurement.
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