Procurement refers to the process of acquiring the goods and services you need to operate your business. Are you overhauling your approach to procurement or starting fresh? Following these simple best practices can drastically improve how smoothly your business is operated.
How to think about procurement for your business
First determine a schedule that works
Procurement has everything to do with people, so it pay to start with consistency. That means sticking to a schedule with product deliveries and reorders. That being said, you want to allow for flexibility if you are surprised by a big sales day.
Prepare your people by having a meeting on Mondays (or according to a more appropraite schedule) to react to changes you’re seeing. If you are a business that has inventory, you want to be sure to react to sales figures and resupply stores if necessary. The earlier in the week you meet, the better chance you have of changes taking place before the next weekend.
Perhaps you don’t hold inventory but you need to schedule sales people or consultations. The earlier in the week you can do this, the better.
Even if a retail store is low on product and they are begging for a shipment, they will be upset if 100 boxes arrive without warning.
Communicating with all members of your organization about timing of product shipments is critical to a smooth operation. Set up a system that allows warning for deliveries. UPS and FedEx have the ability to share this information – work with your sales rep to implement a process for this and your procurement will be easier, and your people – happier.
Build Those Relationships
Know your logistics company rep, your UPS rep, your software rep, and anyone else you rely on to get you your product on time. Meet in person, return their phone calls, put in the time to solidify a relationship. They will be more likely to help you out in times of crisis if they know you.
Once UPS accidentally shipped the product for a new store opening in California to Alabama. We had to overnight a truckload of opening store inventory. And did our UPS rep say “sorry, not my problem” when I called to complain? No, he showed up and helped our warehouse employees pack the truck until the last pallet was loaded. Then he made sure we weren’t billed the $20,000+ for it. I am almost certain he would not have done this if we didn’t have a positive business relationship.
Have a backup plan
As I just described above, things go wrong. This is life. We can’t control everything, though we may try. Think about ways to react to problems before they arise. If your warehouse is located in a possible flood zone, make sure you have a backup plan for storage. If you think there may be a delay in production, have another item selected as a second choice.
Life is all about expectation management. If you can manage your expectations as you plan your procurement strategy, you will be ahead before you even begin.