As a result of rising global inflation, many UK businesses—including the hospitality sector—are facing increased costs. We are feeling the effects of a fuel crisis, which has driven up utility costs and led to weekly notifications from suppliers about price increases. Also, Ukraine's conflict with Russia is restricting grain exports by that country—a significant supplier of sunflower oil (also used in biodiesel). As economic conditions continue to change, businesses must focus on cost controls and sound purchasing practices.
The current economic climate means that businesses are having to take more care with how they spend their money, which in turn impacts the growth of their business. To remain competitive and profitable, you need to make sure your procurement strategy is well thought out and effective at bringing savings to the business whilst maintaining quality products and services. This article will help you understand how an effective procurement strategy can make your business thrive during this time of economic uncertainty.
Understanding the problem
Procurement is one of the most important aspects of any business, but it can also be one of the most time-consuming and difficult tasks. With so many vendors out there, it is easy to feel overwhelmed by choice or stuck with a vendor who does not provide quality service. The key is understanding what you need from a vendor and then finding someone who can deliver.
What is under the bonnet?
This is the heart of the company, where things happen and activities are carried out.
A company's under-bonnet encompasses everything from administration, finance and marketing to manufacturing, engineering, purchasing and planning.
For a company's under-bonnet to run smoothly, strong leadership is required. The person with the most responsibility for this is usually the CEO or managing director who sets goals and objectives through appropriate planning.
What is good procurement?
An effective purchasing process is critical for any company, regardless of size. Procurement can be a complicated process, but this does not mean that you should avoid it. In fact, it means the opposite. You need to understand where you stand on several key procurement metrics and take steps towards improvement as needed. Examples of metrics include inventory turns and accounts payable days. Understanding and optimising these metrics will save you time and money eventually.
The Answer lies within your supply chain
Many businesses are feeling the pinch of global economic conditions. One way to mitigate these problems is by implementing an effective supply chain management strategy that can help reduce costs and minimise risks. The problem, though, is that many businesses do not know where to start or which parts of their supply chain need improvement. By taking a good look at your supplier networks and identifying the high-risk areas, you can start working on solutions right away.
How can you put it into practice with procurement management software?
As a business owner, you have more than just running your company in mind. You are responsible for making decisions that will affect not only the success of your company but also the lives of employees and customers. Therefore, it is crucial that you focus on what is happening around you. With our software StockTake Online, you will be able to easily manage all your orders in one place and stay updated with all pertinent market data at the same time.
