Procurement: Both Art & Science

Poor procurement practices can cost your organization millions in lost revenue and added expenditures because of over inventory issues. Procurement is a science that requires talent in project management and serious multi-tasking. Procurement requires a knowledge and talent for managing, controlling, directing purchases, and coordinating movement of the materials that arrive to the warehouse.

Of utmost importance is researching and developing resources for supplies and parts. Managing supply sources requires oversight of the quality of material received, quantity, dependability, and involving closely following trends in the market for those resources needed. Another important talent is contract management. Negotiating long or short-term contracts is a critical aspect of meeting budget restrictions. Remember to ask about an opt-out option if the supplier does not meet your specific standards of delivery.

It is easy to see how poor procurement practices affect your bottom line. No, wrong parts, or under stock of inventory affects manufacturing leading to no or delayed production and very angry customers. An overstock in supplies is a huge waste of money.

It is essential to the success of your third party logistics company or warehouse distribution center to work closely with both your suppliers and customers, so you can closely coordinate activity within the plant. If you need to hire an employee to fill this position, consider someone with a minimum of a bachelor’s degree and five plus years prior experience preferably within the same industry. Important to the overall efficiently in production is a strong individual and best practice.