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Procurement Strategy for your Small Business: A How-to Guide

What is a Procurement Strategy?

A procurement strategy outlines how an organization will procure the goods and services it needs to operate efficiently and achieve its goals.

Why do you need a Procurement Strategy?

Procurement is a powerful lever to grow revenue & profitability.

A solid Procurement strategy will :

  • Align Procurement activities with organization goals

  • Mitigate supply chain and business risks

  • Optimize Procurement processes

  • Build long-term supplier relationships

  • Foster innovation

6-Steps to your Procurement Strategy

  1. Define Procurement goals

  2. Define Procurement & Supplier performance metrics

  3. Develop procurement processes

  4. Formalize supplier selection criteria

  5. Implement Procurement risk management processes

  6. Foster supplier relationship management

Define Procurement Goals

Know what you want from your Procurement.

Prioritize the deliverables.

Define Procurement & Supplier performance metrics

Measure what matters

Formalize an objective (and/or subjective) scorecard for Procurement & for your Suppliers.

Develop Procurement Processes

Develop processes for each step in your Purchase to Pay flow.

Formalize supplier selection criteria

In line with your business priority and Procurement goals, formalize how you will select supplier partners.

Implement risk management processes

Identify and mitigate risks associated with procurement activities.

Assess supplier risk, identify mitigation plans, and implement an ongoing risk monitoring process.

Foster Supplier Relationship Management

Build structured processes around key aspects of supplier relationship management.

Reach out if you need help formulating a Procurement strategy.

Check out the Source Refresh Podcast to listen to small business experts.

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