3 procurement mistakes to avoid

Statistics show that the UK had over 65 000 procurement officers from 2011 to 2020, which is expected to increase in the coming years. The UK spends over £284 billion every year on purchasing goods from foreigners.

These figures illustrate the importance of procurement and how detrimental mistakes could be. So, as a procurement officer, how can you ensure you do not make such mistakes? You can avoid it by relying on procurement technology like these tools and by being aware of these common mistakes

1. Making snap decisions

Rushing into making decisions can be problematic. This is especially so in a procurement business, where you need to make well-informed decisions. Although time is of the essence, it is crucial to avoid making hasty decisions. You can do this by consulting your team members on various decisions to look at it with fresh eyes and offer new solutions, and highlight issues you would have otherwise missed. 

You can also consult significant players in your line of business when the decision you are about to make will affect many industries in the business. You can bring them on board and periodically update them on the deal’s progress before making the final decision. It is also vital to keep paperwork of various meetings and agreements to stay on track to avoid making snap decisions. Bringing everyone on board before significant decisions are made will improve your performance as a team at work.

2. Ignoring your suppliers

Suppliers serve as reliable sources to learn about the available goods, new prices, and best deals on the market. Your procurement business will be a lot more successful if you could establish mutually beneficial relationships with suppliers that offer quality services. It is prudent that the suppliers you affiliate with must meet your specific needs. First, you must ensure that your supplier is certified by the International Organization for Standardization. After which, you must draw up a service level agreement (SLA). The SLA will spell out the individual responsibility both the supplier and your business play in the deal. Sometimes, your specific need can be transportation. You may have to deal with a supplier that can work with full truck load companies to deliver on your request. 

3. Overspending

Money plays a significant role in the procurement industry. However, overspending can be detrimental to the business. You can avoid this by creating a budget for total expenditure on a quarterly or yearly basis. Where possible, purchase goods made locally to avoid spending a ton on taxes and duties on foreign goods. You may also plan your procurement to minimize the cost of shipping. For example, your company will need to import electrical appliances like a kettle, iron, and extension boards. Instead of buying all the required items from different countries, you can choose all your goods from one country. You can also decide to import all your goods at a go rather than sending them separately. Businesses have avoided the incidence of overspending on procurement by initiating such a principle called bulk purchases.

The procurement industry is an essential part of every government’s machinery. However, there are many avoidable mistakes, both the procurement officer and the firm run at a loss. These tips will cushion you against avoidable mistakes in procurement.