What is Strategic Procurement?

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Strategic procurement is the process of acquiring goods and services in a way that aligns with the overall goals and objectives of an organisation. It involves taking a long-term view of the organization’s needs and making informed decisions about what to purchase, from whom, and at what cost.

There are several critical elements of strategic procurement:

  1. Clearly defined goals and objectives. In order to make informed purchasing decisions, it is important to have a clear understanding of the organisation’s goals and objectives. This includes understanding the organisation’s overall strategy, as well as the specific needs of different departments or business units.
  2. A comprehensive understanding of the organisation’s needs. In order to effectively align procurement with the organisation’s goals, it is important to have a thorough understanding of the goods and services that are needed. This includes understanding the quantity, quality, and timing of the items that are required, as well as the budget available for procurement.
  3. Strong supplier relationships. Building strong relationships with suppliers is an important aspect of strategic procurement. This includes identifying and evaluating potential suppliers, negotiating favourable terms, and maintaining ongoing communication and collaboration.
  4. A focus on value. Strategic procurement is not just about getting the lowest price but finding the best value for the organisation. This includes considering factors such as the overall cost of ownership, the quality of the goods or services, and the level of service the supplier provides.
  5. Continuous improvement. Strategic procurement is an ongoing process that requires regular review and assessment. This includes evaluating the effectiveness of the procurement process, identifying areas for improvement, and making changes as needed to ensure that the organisation is getting the best value for its money.

Conclusion – strategic procurement is an essential component of any organisation’s success. By taking a long-term view of the organisation’s needs and building strong relationships with suppliers, organisations can make informed decisions about what to purchase and achieve their goals more effectively.

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Author: Barkers Procurement