A procurement strategy outlines the objectives, policies, and procedures for procuring goods and services while ensuring value for money, quality, and timely delivery. By developing a procurement strategy, businesses can identify opportunities for cost savings, improve supplier relationships, mitigate risks, and increase efficiency.

Developing a good procurement strategy is crucial for businesses to ensure that they acquire the goods and services they need at the best possible price, quality, and quantity. Here are some steps businesses can take to develop a good procurement strategy:

1. Analyse business needs:

The first step is to analyse the business's needs and determine what goods and services are required. This includes assessing the current inventory levels, identifying potential suppliers, and determining the expected demand.

2. Develop a procurement plan:

Based on the analysis of business needs, develop a procurement plan that outlines the procurement objectives, timelines, and budget. The plan should also include details on how procurement activities will be managed and the roles and responsibilities of those involved in the procurement process.

3. Identify potential suppliers:

Research potential suppliers and evaluate their capabilities, reputation, and track record. Develop a list of preferred suppliers and establish a process for selecting and managing suppliers.

4. Negotiate contracts:

Negotiate contracts with preferred suppliers that clearly outline the terms and conditions of the agreement, including pricing, delivery schedules, quality standards, and payment terms. Ensure that contracts are reviewed and updated regularly.

5. Monitor and evaluate performance:

Regularly monitor supplier performance and evaluate the procurement strategy to ensure that it is meeting business needs and objectives. This includes tracking key performance indicators, identifying areas for improvement, and implementing corrective actions when necessary.

6. Continuous improvement:

Continuously review and refine the procurement strategy to ensure that it remains effective and relevant. This includes incorporating feedback from suppliers and stakeholders, keeping up to date with industry trends and best practices, and exploring new procurement technologies and approaches.

Visit our Procurement Hub for more information on the procurement process