7 Strategic Steps for Category Strategy

Here are the 7 steps of strategic procurement with examples:

Define the Procurement Strategy

The first step is to define the procurement strategy which involves setting the procurement objectives, selecting the right procurement method, and identifying the procurement team. For example, the procurement objective may be to reduce costs by 20% and the procurement method may be competitive bidding.

Conduct a Spend Analysis

The second step is to conduct a spend analysis which involves reviewing all the spending data to identify opportunities for cost reduction. For example, the spend analysis may identify that the company is spending too much on office supplies and there is an opportunity to negotiate a better price.

Conduct a Market Analysis

The third step is to conduct a market analysis which involves researching suppliers and identifying potential new suppliers. For example, the market analysis may identify a new supplier who can provide the required products at a lower cost.

Develop a Procurement Plan

The fourth step is to develop a procurement plan which involves developing a procurement schedule, identifying procurement risks, and developing contingency plans. For example, the procurement plan may include a schedule for the competitive bidding process and a contingency plan in case the preferred supplier is unable to deliver the required products.

Implement the Procurement Plan

The fifth step is to implement the procurement plan which involves communicating with suppliers, issuing purchase orders, and managing supplier relationships. For example, the procurement team may communicate with suppliers to ensure they understand the company’s requirements and issue purchase orders to the preferred supplier.

Monitor Performance

The sixth step is to monitor supplier performance which involves tracking supplier delivery times, quality of goods and services, and compliance with contractual terms. For example, the procurement team may track supplier delivery times to ensure they are meeting the agreed-upon schedule.

Review and Evaluate

The final step is to review and evaluate the procurement process to identify areas for improvement. For example, the procurement team may review the competitive bidding process to identify areas where the process could be streamlined to save time and reduce costs.

Overall, these 7 steps form the foundation of a strategic procurement process that can help companies reduce costs, improve supplier relationships, and achieve their procurement objectives.