How a Procurement Network Provides Opportunities for Your Business

Supply chains no longer have to worry about juggling supplier communications, third-party agreements and inventory oversight. Sourcing, tracking and receiving materials has never been easier if an organization deploys a procurement network system. These assets ease burdens from procurement and logistics departments by leveraging convenient technologies. How do they work, what do they offer and what does implementation look like?

What Is a Procurement Network?

A procurement network is a corporate service, usually in the form of a suite of digital products or a comprehensive program solution. Its aim is to streamline procurement administration and tasks. It does this by combining all supplier connections into a single environment, like a dashboard or hub. Common utilities includes:

• Compliance management
• Updating credentials
• Signing and authenticating contracts
• Inventory and catalog management
• Order tracking
• Supplier bid tracking

These assets are critical for reducing headaches by navigating numerous supplier networks and platforms that could be proprietary or temporary. Consolidating into a single procurement network can yield countless benefits for corporations or integrate correctly.

Why Do You Need One?

Investing in procurement management could be a hefty initial investment, but the returns are significant and diverse for the procurement team and greater supply chain. They range from quality of life improvements to revenue gains, so it is an option worth exploring.

Cost Efficiency

If you don’t have to navigate numerous complex systems, not only are you saving money from labor costs, you reduce the number of program investments you make. The increased visibility will also make ordering easier and more accurate. No more over- or underordering products because of misplaced receipts. You can also find the best deals in a lot of procurement networks, discovering bulk purchasing and negotiation options, to name a few.

Supplier Diversification

Procurement networks are like social media platforms for engaging with new suppliers. Diversification is critical, especially for industries engaging with corporate social responsibility and facing material shortages. Never send a distressing email about scheduling delays again because you’ll always have what you need on-hand with connections to countless new partners. This minimizes risk and encourages stronger inter-industry collaboration.

Improved Quality and Innovation

Supplier diversification leads to this as well. Gathering more insights from different business perspectives encourages more comprehensive and innovative thinking. The procurement team will also discover new products and services made of new materials, advertised in new ways, and promoted with novel features. If teams stick with the same shortlist of suppliers before a procurement network, then they wouldn’t have tried to improve quality with forward-thinking products.

Enhanced Visibility and Transparency

More people have access to information with a procurement network. All you need is credentials, and then everyone knows tracking status, budget updates and more. This prevents unnecessary back-and-forth communications and helps maintain B2B relationships. If everything is transparent at all times, it becomes easier to foster honest partnerships.

Agility and Responsiveness

Procurement networks enable dynamic workflows. With a few clicks, teams can adjust their delivery schedules, find a temporary supplier and notify clients of disruptions with grace. Business needs are always evolving and responding to influences outside of the company’s control. Respond and recover promptly because of the capabilities of a procurement network.

How Do You Implement a Procurement Network?

Now that you know all the benefits, how do you get this infrastructure in your workflow in five easy steps?

Step 1: Assess Current Procurement Processes

Teams can’t expect to adopt procurement networks without an adjustment period. Ideally, the current process will mesh at least in part with the network. Identify strengths and weaknesses that a network could empower and solve. This is also the perfect time to hear from stakeholders and their pain points, addressing those with the new technologies as well.

While some may resist change, incentivizing them to train with the new method with professional development and bonuses can reduce the sting of rewriting old habits.

Step 2: Define Procurement Network Objectives

The procurement network must support the corporation’s goals, like everything else in the tech stack. Should it save money or improve relationships? Hold onto these objectives, because they will be important later. Establishing key performance indicators are critical here, such as percentage increase in revenue or customer satisfaction. 

Getting all stakeholders to agree on the same objectives may prove challenging. Resist the urge to commit to too many. Hone in on what’s important. Tech adopters must communicate the importance of simplicity when goal-setting with tech integrations.

Step 3: Select Technology and Tools

Not every program will have the ideal interface or user experience. Research industry-leading options and trial a few of the top performers that offer features that align with the network’s objectives. Research may take time, but this won’t sting as much if the company anticipated integration to take a suitable amount of time. Separate testing away from operations so no disruptions occur.

Step 4: Build and Engage Supplier Relationships

The supply chain should only work with suppliers that are excited about the idea of a procurement network. This means they are tech-driven and dedicated to insights too. Cherish the relationships that align with this priority, because they could be some of the ones that persist. If tenured relationships resist the shift, encourage them to try it out.

Step 5: Monitor, Evaluate, and Optimize

Finally, no tech integration is successful without reflection. Teams must review the KPIs and how the network performed by comparing it to the organization’s goals. Did it actually earn more money? Are the employees happier? Have there been fewer disruptions and less downtime?

Schedule reviews on a realistic basis. Positive results may not always appear, but don’t become complacent. Alway strive for better. Competitors are doing the same thing with potentially better results, and this thought process should always motivate teams to find unique ways to make procurement networks and the rest of their tech stack work for them.

Connecting Suppliers in the Digital Age

Leveling up procurement only needs a network to tie in its intricacies. Employees will have an easier time getting products and keeping up with alerts from business partners. Plus, everyone has complete visibility over in-progress shipments and inventory updates so stakeholders are all on the same page. These are essential fixtures for modern industry, so there is no better time than now to transition.