How to Optimise a Small Procurement Department

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There are several different reasons why you might wish to optimise your procurement department. Your business or organisation could be entering a new growth phase or a growth strategy phase. You might be developing a new product or breaking into a new market. Then there are more straightforward business reasons such as the need to control costs and increase profitability. Businesses that have no procurement department or only a small procurement department tend to want to optimise their procurement for one or more of the reasons stated above.

How should businesses optimise, however, when they have only a small procurement department or no department? This is where we can come in with our procurement service for small and medium enterprises (SMEs). Below we take you through how you can optimise your procurement with this service. 

How does procurement add value to an organisation?

Procurement is a critical aspect of an organisation, enhancing cost efficiency, supply chain resilience, innovation, and sustainability. It involves sourcing goods and services at competitive prices, negotiating favourable terms, and leveraging economies of scale. Effective procurement also fosters innovation and quality improvement, driving product differentiation and market positioning. It also contributes to sustainability efforts by selecting suppliers with environmentally responsible practices.

Optimising your procurement department

When it comes to optimising a procurement department of any size, the strategic alignment of the procurement with the strategic goals of the business is essential. This is a fundamental part of our approach to optimising procurement within any business. Procurement can drive innovation, build resilience in the supply chain and reduce risk, and it must align with the strategic goals of the business. You can achieve this with our winning approach to procurement.

Opportunities assessment

Like many other functions in a business, you can’t optimise a procurement department without first understanding your current situation. This is your starting point. 

We’ll begin by conducting an opportunities assessment, which involves speaking to your procurement department and the wider business to get a picture of your procurement structure.  

We’ll learn about your suppliers, what type of relationship you have with them and how you manage your suppliers. We’ll analyse your spending. We’ll review your categories and contracts. Basically, we’ll try to learn everything there is to know about your business to help us identify opportunities to optimise your procurement.

Observations and recommendations 

After conducting our opportunities assessment, we’ll make a series of observations that focus on core areas of improvement in your procurement function. We’ll highlight key aspects you can enhance and suggest possible measures to implement within our extensive recommendations.  

We’ll also make a forecast regarding the savings you could make, and we’ll draw to your attention any additional benefits you can reap from the improvements, besides cost reduction. There’s more to procurement than just keeping spending under control. 

Strategic alignment 

As part of our opportunities assessment, we look to see if your procurement strategy and processes are aligning with the overarching strategy of the business. Are you missing out on opportunities to align your procurement with the organisation’s business strategy? Are you overlooking opportunities for procurement to benefit other departments? We’ll look at core areas of your procurement to establish whether this is the case. 

Another question we’ll ask is whether you have the resources to meet your requirements and help the business to achieve its goals? Do you have a procurement department? If so, is it large enough to handle its current responsibilities? Are extra tasks weighing down employees and distracting them from their main responsibilities? 

Tender exercise 

A tender exercise, which we’ll conduct, will help you to reduce your costs. We’ll also use this exercise to produce a report in which we make further recommendations you could implement. We’ll look at issues such as tail spend management and whether you’re overlooking the lower value transactions in the business; whether your supply chain can cope with the changing needs of the business; digital procurement opportunities and how digital procurement could benefit your business; and opportunities to reduce costs by reviewing current contracts. 

Implementation

We don’t just analyse your procurement, suggest ways to improve it and then leave you to struggle to implement the recommendations provided. We understand just how complex procurement is and want to be sure you gain maximum return on your investment. Whereas many consultancies leave it to the clients to implement measures, we put them in place for you, going that extra step to set you up for success and enable you to navigate procurement confidently. 

Adding value to your procurement

At Barkers, we think long-term when it comes to your procurement. Whatever your reason for hiring us is, we seek to add value to your business by aligning the procurement with your business strategy. We follow up on our recommendations by leaving measures in place for you to take the reins back and manage your procurement more effectively. If you’re a small or medium enterprise and want to adopt a more strategic approach to your procurement, find out more about our service on our SME Procurement as a Service page or contact us directly for further information. If you’re looking to cut costs and wish to do so in the shorter term, we also offer a separate procurement savings service for SMEs that focuses on helping you manage your costs easier.

Are you looking for specialist SME services? Take a look at our SME service lines

Author: Barkers Procurement
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