Conduct a Procurement Health Check on your Business in 5 Simple Steps

Now, more than ever is the perfect time to conduct a procurement health check on your business to determine areas of opportunity to improve the buying process, save costs and ultimately make your business stronger. 

Using these five simple steps, this valuable health check offers actionable activities with your procurement processes to benefit your business.

How to Spend It

Conduct an audit of your outgoings, zero in on what you are spending and how you spend it.

Review your supply chain to ensure it's delivering optimal value at the right price. This may present an opportunity to innovate further and conduct a supplier review to inject new ideas to deliver more value, reduce cost and improve service from suppliers.

Chain Reaction

One of the many benefits of ensuring that your procurement and supply chain function operates in an efficient manner, in addition to maximising value for money, is mitigating supply chain risks. Take some time to focus on how clear your procurement strategies are to ensure you have strong policies and procedures in place to minimise the risk of fraud or inappropriate spending. 

Building a transparent supply chain will help with mitigating risks as well as ensuring that you are enjoying a competitive advantage through your supply chains.   Embedding transparency is a dynamic process but the first steps are undertaking an audit to ascertain your current practices, looking at the flow of suppliers and if there are any areas of concern.  Having mapped out your supply chain, you should look for opportunities for improvement on both your side and theirs. Fill any information gaps such as verifying a supplier’s code of conduct which could range from employee practices to their approach to environmental sustainability.

Taking Stock

As many businesses have faced changes in the trading environment and in some instances, at times unable to trade in a physical location, businesses may find themselves with an abundance of stock. 
Perishables are always particularly challenging to manage when you suddenly don't have the ability to use everything you have.

Firstly, you should create a plan of how to deal with a variety of scenarios for each type of product you may find yourself in excess of.  If you are suddenly put on the spot you may struggle and use up so much resource with trying to clear it.

Some potential solutions are:

If you are part of a group, create a rapid response "WhatsApp" type group that allows you to have regular contact with everyone in the business, informing each other of potential problems well before they become a problem. If you have the ability to exchange products between each other without the use of couriers you can use excess stock effectively and minimise costs.  

Whilst it feels like competition increases as trading becomes more difficult, in actual fact, you can benefit from working with your competitors. Discuss how to work together perhaps borrowing from each other when required instead of both stocking fully. There are horror stories from two competing dairy companies with millions of pounds of stock they both effectively had to give away during the first lockdown because they didn’t support one another. 

Try to recoup as much money as you can from the stock, by organising with other local businesses to sell at lower cost if they are in a position to do so, ensure that online sales are maximised through an optimised website, a sustained social media presence and perhaps developing competitions to win items where appropriate. 

If suitable, consider recycling or upcycling stock or making donations to charities and the local community.  Cultivating relationships with schools, care homes, hospitals, charities are important plus a spot of local PR always helps.

“In the Midst of every Crisis, lies Great Opportunity” - Albert Einstein

Look at how your business can adapt to capitalise on areas of opportunity that have presented themselves in an ever-changing environment. Explore what areas of your business you can move online, be delivered through a virtual offering, or how you can return to offering customer service in a contactless environment as customer mindsets move more to access brands online.  

As well as continuing to communicate with customers, ensure you continue to communicate and motivate your employees, especially if they’re working remotely for sustained periods of time. Fatigue can often set in with many people so even looking for external support to guide them on mental resilience and regaining motivation could be beneficial.

Stay Flexible

It’s essential to remain as flexible as possible and be agile to adapt quickly to changing demands and ways of doing business. Regularly review performance, customer and employee feedback to continually look to areas to improve. Pinpoint areas of your business that may need additional focus to meet performance targets. Regularly revisit goals and objectives to ensure relevancy and take the opportunity to reward your team (and yourself!) for every small win and success.