Procurement Best Practices 2: Top Management Support Key to Success
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It is a fact that the key reason for the success or failure of a procurement strategy is the top management of the company. If you are going to implement a plan to improve the way your company buys supplies and manages them, this cannot be something that is approached in a half-baked manner. If top managers do not care about weeding out old worn out operating procedures, redundant ordering processes and wasteful spending, eventually the plan will peter out for lack of support. A well-oiled procurement management plan definition means that everyone in the company organization – from top to bottom – is on the same page when it comes to streamlining and improving purchase supply chain goals.
A key tenant of procurement management best practices is that upper management shows its full support of any changes taking place in the supply chain. Why does this matter? Well, the simple reason is that all companies tend to get bogged down in red tape of some sort or another. For instance, the procurement team has identified a huge cost savings that can be had by switching to another vendor. Unfortunately, they cannot implement this change because they have to wait for approval from someone from upper management. This particular manager doesn’t like the idea of changing vendors because the company has been using said vendor for many years. Therefore, the request goes nowhere. This particular manager values vendor loyalty over making a change that would save the company money. This manager simply doesn’t get it.
Therefore, it is important to the success of the plan that all top managers are informed and brought into the procurement cost management process from the very beginning. Some companies even create a procurement council that oversees the entire procurement strategy. This way, there are no misunderstandings about why changes need to be made or how they happen. The best way to utilize your procurement manager and/or team is to let them know that they have full company support from all segments of management. Make a commitment to create a well thought out plan that includes clear goals and action steps that can be approved fairly quickly. When top management is actively involved, that is when the most benefits and cost savings can be achieved.
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Related Posts:
Procurement Best Practices 3: Understanding Procurement Cost Analysis
Procurement Best Practices 4: Strategic Partnerships With Suppliers
Procurement Best Practices 5: Nurture a Culture of Improvement
