For many SMEs, especially those backed by investors, there is much consternation about rising costs; even reducing costs not reducing enough. Debates about cost:income ratios prevail yet the list of cost savings opportunities isn’t what you’d call overwhelming; worse still, your company urgently needs to free up money to invest in the systems and infrastructure that will underpin your company’s growth. Frustrating isn’t it?
From the perspective of a procurement professional, believe me, the savings are there. What you need, in order to identify them, is the looking glass of a Chief Procurement Officer amidst your Executive. Now let me be clear: you need to look at your organization through a procurement lens. You do not necessarily need to hire a CPO or hire a procurement department. Doing this need not cost you expensive personnel which will push your fixed cost base higher still.
It does require focus and effort. These are our steps towards this procurement perspective.
Step 1: Make someone accountable for it.
The right candidate isn’t always the obvious one and they must possess three key attributes: authority, comfort with data and a naturally questioning mind.
Step 2: Re-cut your budget and spend data so that it is cut by categories of spend as opposed to by team/site/division.
Armed with this information you can start to interrogate the data using questions from the Buyer BeSure Procurement Levers toolkit which you can download from the link below. The Procurement Levers are all the levers that you can manipulate to influence the price that you pay for your goods and services; the toolkit provides questions to ask to understand if your organization is fully utilizing all of these levers.
Step 3: Incept small and simple projects to implement savings that you identify.
In an organization new to this start with projects that will be easy to implement and which will succeed quickly: they are confidence building and can be used to build re-usable templates for future projects. By incepting a team you are also formally securing the resources to fuel the project. A mix of finance, analytical and creating thinking is required so pull on resources from across the organization. This will also upskill more people in the art of procurement as well as spreading the work load.
If you do only one thing this week then I invite you to access the Procurement Levers toolkit from the link below and start to think about how well your organization is using these levers.
My personal values are: Freedom, Growth and Service.
My goal through Buyer BeSure is to ensure that these values flow down to my clients through the services that I deliver.
I want my clients to be free from unproductive supplier relationships without being shackled with increased headcount or large consultancy costs.
I want to leave your organisation and its personnel equipped with the tools and the skills to deliver improved supplier relationships and better supplier performance.
Improved supplier performance makes for more efficiently delivered products/services which improves your bottom line and your customer experience.
For free access to the tools and templates mentioned in this article please complete the form below.
For a free no obligation consultation with me to talk through your procurement and spend challenges; and help guide you towards your next steps book here.