In the procurement world, there are three main procurement strategies that companies can use to optimize their procurement processes and gain competitive advantages.
These strategies are essential for controlling costs, minimizing risks and developing long-term relationships with suppliers. These three strategies are: strategic sourcing, tactical sourcing and operational sourcing.
Each of these strategies requires the necessary knowledge and skills to be implemented effectively. Below we discuss what each strategy entails and how each can contribute to an organization’s success.
Strategic purchasing: the long-term view
Strategic purchasing is focused on the long term and on developing lasting relationships with suppliers. This strategy is less about getting the lowest price and more about creating value by partnering with a number of suppliers that are strategically important.
This may include consideration of innovativeness, quality of goods or services provided and reliability of suppliers, as well as what alternative suppliers exist.
The strategic procurement process also includes a thorough analysis of the market, identifying supplier dependencies and evaluating their capabilities and reliability. This requires specialized knowledge.
The goal of strategic sourcing is to select suppliers that not only meet current needs, but also can accommodate future growth and any changes within the company.
Strategic procurement offers several benefits, including:
- long-term cost savings: by establishing long-term relationships with suppliers, companies can benefit from stable prices and terms;
- improved quality: by working closely with suppliers, the quality of delivered products and services can be improved in concert;
- innovation: suppliers are encouraged to provide innovative solutions that can help increase the company’s competitiveness;
- risk management: strategic sourcing helps identify and mitigate risks in the supply chain.
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Tactical procurement: focus on efficiency and optimization
Tactical purchasing is medium-term oriented and focuses on optimizing the procurement process and achieving immediate savings. Here the emphasis is on negotiating favorable contracts and optimizing inventory management.
Tactical procurement requires detailed knowledge of the market, price trends and supplier performance. It involves making smart choices that increase the efficiency and effectiveness of the procurement function within an organization.
Tactical procurement deals in particular with:
- contract management: negotiating contracts that are mutually beneficial and monitoring compliance;
- inventory management: optimizing inventory levels to reduce costs and eliminate waste;
- cost efficiency: achieving savings through smart purchasing decisions and optimizing the procurement process.
Operational purchasing: the day-to-day purchasing activities.
Operational purchasing refers to the day-to-day purchasing activities within an organization. This includes placing orders, tracking all deliveries and managing the administrative processes involved in purchasing.
As a result, the right goods are always available at the right time to ensure the continuity of the production process. All this requires precise planning and coordination to ensure that everything runs smoothly, without interruptions.
Operational procurement is particularly important for:
- securing delivery: it ensures that all necessary materials and services are available on time so that production can continue uninterrupted;
- Cost management: with efficient ordering and delivery, costs can decrease;
- quality control and management: the products delivered must meet the required specifications and quality standards;
- smooth administrative processes: invoices must be properly processed and procurement documentation must be properly maintained for the entire procurement function to run smoothly.
Why a good procurement strategy is essential
Having a good procurement strategy is essential for any company looking to increase its competitiveness. By combining a strategic, tactical and operational approach to procurement, companies can cut costs and improve the quality of their products and services.
Moreover, a well-executed procurement strategy helps reduce risk and encourage innovation within the organization.
Check out our procurement vacancies
Developing and implementing the strategic, tactical and operational procurement strategies is essential for any company seeking to strengthen its competitive position and create long-term value.
Good and lasting relationships with suppliers are of inestimable strategic importance here. That is why at xentys we are constantly looking for talented professionals in the field of procurement and supply chain management who are eager to make a difference.
Take the next step in your career
Are you ready for the next step in your career and a new challenging position in procurement or supply chain management? Then check out our procurement vacancies and take a new career step through Xentys.
We have specialized in recruitment for procurement and supply chain positions in the industrial, offshore and construction industries since 2010. We have in-depth knowledge and experience in these disciplines and work for major clients. With us you will find interesting vacancies with salaries starting from EUR 60,000 and other attractive benefits. We sometimes add 5-10 new positions per month. We offer permanent and interim positions and for some positions we mediate on an exclusive basis, meaning that these positions cannot be found on any job board.
If you got curious after reading this article, check out our job page or contact us. We would love to hear from you!
Find a buyer through xentys
At xentys, your experienced procurement recruitment agency, we are happy to help you find the right professional for your procurement team. Send a message today and strengthen your purchasing department.
