February 18, 2021

Top 5 Cost Control techniques to help your procurement strategy

Whenever organisations are preparing to acquire any services or purchase any goods, cost is among one of the first factors that they consider. Cost saving and cost reduction are two prominent goals of any procurement strategy that are supposed to be woven into the strategy when it is being designed. Taking into account every individual component that makes up a procurement strategy, such as time, the tools, the human resource, and all the KPIs, cost reduction comes complementary to defining and framing these functions. So, it is no secret that all businesses are always on a lookout for new and improved techniques that can not only help them save costs, but also control them at a larger scape.

The current market climate is pretty complex and demands a higher level of strategizing and evaluation of processes that absorb the capital and deliver outcomes that do not meet the standard. And such market conditions make it necessary for organisations to redesign their entire procurement strategies in a way that enables them to achieve more suitable and acceptable results than their current ones.

So, let us look at some of the deeply-valued and target oriented cost control techniques that will help you with your procurement strategy.

  1. Re-evaluate your sourcing
    Often there are times when we are stuck in a cycle of undesirable outcomes that are then normalized by the suppliers, making it difficult to get out of the loop. This usually happens because we get used to a certain set of suppliers and lack faith in new ones. This results in heavy expenditure and low returns. So, procurement teams need to identify the gaps between what they get from their suppliers and their actual requirement, so that they can invest in better sources. Sourcing and outsourcing can majorly contribute to cost control once organisations get a better view of their payments and relationships with the suppliers.
  2. Bring in Intelligent Procurement
    Automation is a boon when used correctly! If you want to make your procurement strategy more driven towards time and cost control, intelligent solutions are the way to go. How? Well, intelligent procurement solutions or electronic solutions for procurement deploy your internal data and take into account real-time market information and scenarios to analyze your procurement processes and streamline them. You get a complete look in what’s happening when and how, so that you can keep a track of all the activities that drain money out of your pockets and eliminate them.
  3. Revamp your Training Processes
    Your employees are your assets that help you make or break your cost control techniques. So, once you decide on a specific way to achieve your procurement goals, including its digitization, revamp the way you train your human resource. Train them in a way that makes cost control and quality in tasks a key area of their focus. Teach your employees different ways in which they can deploy different resources and achieve better results in a lower amount of time. Make sure they know how to use the new tools, removing the chances of any errors.
  4. Ensure Quality Control
    Quality Control is an arena that is directly proportional to Cost Control. The more the number of defects and errors in carrying out a particular task, the more the cost incurred. When you consolidate quality control practices with your procurement strategies, you know how to achieve the highest level of quality in the lowest level of costs and steps. You can achieve the desired results while preventing redoing tasks because of issues with the quality.
  5. Leverage Smart Workflows
    Once you know the step by step procedure of achieving a goal, we tend to stick to it. But today the technology has become extremely smart, so much so that it can analyse the way you perform your tasks, evaluate different ways, and tell you the best workflow that can reduce the time spent on performing the task. Time reduction can directly help in controlling the costs and efficient execution of procurement processes.

It is a very crucial time for organisations to reinvent and reimagine the way they acquire services or goods and control the costs to the maximum of their capabilities. These techniques, paired with the right tools can prove to do wonder in bringing in uniformity and cost-benefit balance.