How to Accelerate Savings in Procurement Without Cutting Corners
Strategies showing how to accelerate savings in procurement without compromising product quality, integrity, or effectiveness.
By Hugo Britt | August 10, 2023
Imagine you’re racing down a winding road behind the wheel of a high-performance sports car. Your objective? To reach your destination faster than ever before. You could attempt to take sharp corners at high speeds, but you know it will most likely lead to disaster. Instead, you need to find ways to increase your speed while remaining safe.
Procurement professionals often find themselves in a similar scenario, striving to expedite their processes to achieve cost savings and efficiency gains without increasing risk. This article delves into strategies for accelerating speed to savings in procurement without compromising on quality, integrity, and effectiveness.
The Need for Speed: Why Organizations Pursue Faster Procurement
Today’s organizations are under constant pressure to optimize their operations and deliver more with less. Speeding up the procurement process is one way to achieve these goals.
Faster procurement can lead to reduced cycle times, lower operational costs, faster project delivery, and better customer service. However, the path to speed must be navigated with caution to ensure that cutting corners doesn’t end up increasing the time and cost involved when things go wrong.
Faster procurement can result in reduced cycle times, lower operational costs, faster project delivery, and better customer service. Proceed with caution, however, to ensure that cutting corners doesn’t end up increasing the time and cost involved when things go wrong.
Mistakes to Avoid When Pursuing Speed in Procurement
Here are some key things to avoid as you attempt to accelerate savings in procurement:
Neglecting due diligence
Rushing through the supplier selection process without thoroughly vetting potential partners can lead to a host of problems down the road. These may include poor-quality products, unethical suppliers, or even legal and compliance issues. Invest time in researching and evaluating potential suppliers to ensure their reliability, capability, and alignment with the organization’s values.
Did you know? Leading GPOs use stringent methods to audit and investigate potential partners before signing any agreements. Una members can be sure that due diligence has been performed and all suppliers have been thoroughly vetted.
Moving quickly should never come at the expense of regulatory compliance. Skipping essential contract reviews, overlooking regulatory requirements, or sidestepping proper documentation can result in consequences including financial penalties, damaged reputation, and disrupted operations. Organizations should maintain a balance between speed and adherence to legal and compliance standards.
Did you know? GPOs insert non-compliance clauses as standard practice in every contract. This precaution reduces the risk of non-compliance and protects all parties should a compliance breach occur.
Overlooking supplier relationship building
To unlock value beyond the contract, procurement must foster valuable and sustainable relationships with suppliers. Organizations often make the mistake of treating suppliers as mere transactional partners, neglecting the potential for collaboration and long-term mutual growth. Building strong relationships can lead to more favorable terms, better communication, and improved responsiveness.
Did you know? Leading GPOs regularly review partnerships with suppliers to ensure members are getting the best-possible deal and identify any issues that could expose members to operational, reputational, or regulatory compliance risk.
Underestimating the power of data
In a rush to achieve quick savings, organizations might overlook the potential insights hidden within procurement data. Harnessing your data can optimize procurement processes, identify cost-saving opportunities, and enhance negotiation strategies. Ignoring the power of data can hinder the organization’s ability to achieve sustainable savings over time.
Did you know? Una can promptly and efficiently comb through your spend categories and identify which ones would benefit most from our collection of pre-negotiated contracts. The process of reviewing your current spend data and conducting a cost analysis is seamless which means our members are usually able to start saving within a couple of weeks.
Sacrificing quality for cost
One of the most common pitfalls of accelerated procurement is sacrificing quality for cost savings. Opting for the lowest-cost supplier without considering the quality of products or services can lead to subpar outcomes, customer dissatisfaction, and increased costs in the long run. Remember, having to go back and run the whole sourcing exercise again will end up slowing you down.
Did you know? Una’s network of leading suppliers is thoroughly vetted for quality and reliability, saving you time and lowering the risk of quality shortfalls.
Luckily, there are strategies proven to accelerate savings in procurement without sacrificing product or service quality or exposing your organization to unnecessary risk.
Strategies for Accelerating Procurement Without Compromising Integrity
The good news is there are ways to fast-track savings in procurement without risking it all. Implement these strategies to accelerate your process:
Efficiency doesn’t have to mean cutting corners. Organizations can streamline their procurement processes by eliminating unnecessary steps, automating routine tasks, and implementing advanced procurement technologies. By doing so, you can achieve speed while maintaining the integrity of your operations.
Resource to help: How to Improve the Procurement Process and Increase Cost Savings
Prioritize supplier collaboration
Rather than treating suppliers as transactional entities, organizations should prioritize collaboration and partnership. Engaging suppliers early in the process, involving them in value-adding discussions, and being open and transparent can lead to innovation, cost savings, and strengthened relationships.
Resource to help: Moving Supplier Relationships from Transactional to Strategic
Embrace technology and data analytics
There’s no denying that high-tech procurement functions can move faster than low-tech teams. Harnessing data and leveraging technology such as procurement platforms, AI-driven analytics, and predictive modeling can lead to faster decision-making, being able to spot savings opportunities, rapidly change and optimize procurement strategies, and speed up without compromising quality.
Resource to help: The Limitless Possibilities of ChatGPT in Procurement
Invest in skill development
An educated and knowledgeable procurement team can rapidly navigate the complexities of procurement efficiently while upholding compliance, ethics, and quality standards. Make sure the team is offered training in both hard and soft skills.
Resource to help: 7 Traits of Highly Effective Procurement Leaders
Implement agile procurement
Often associated with software development, Agile ways of working can be applied to procurement as well. This involves iterative planning, quick decision-making, rapid-fire feedback, and adaptability to changing circumstances.
Resource to help: How to Get Started with Agile Procurement
Accelerate Savings in Procurement with a Group Purchasing Organization
At Una, we pride ourselves on getting our members connected to savings quickly. As a true sourcing accelerator, our goal is to offer turn-key solutions that empower members to achieve category quick wins and then move on to the long-term strategies that make their business more profitable.
Una‘s pre-negotiated contracts are designed to save you more money, time and effort. Leveraging the incredible power of volume purchasing is the ultimate way to get on the fast-track to savings, granting instant access to deep discounts that would otherwise take years of business growth and negotiation to achieve.
Learn more about Una membership and the benefits of partnering with a group purchasing organization to accelerate savings in procurement: