Purchasing and supplier management: 6 tips to apply right now!

The industrial market has been demanding a change in mindset from its leaders. We have moved from a reactive and hierarchical scenario to a new one where proactivity and strategic decision-making are a constant in employees' daily routines. In this context, purchasing and supplier management stands out even more.

A good purchasing team is autonomous, engaged, and capable of structuring a purchasing and supplier management strategy based on the actual needs of the business. And the results of this are clearly perceived. In the state government of Goiás, for example, purchasing management was responsible for saving R$60 million in 2019.

If you want to know how purchasing and supplier management works and what the main tactics are to optimize the process, keep reading our article!

What is purchasing and supplier management?

Management is responsible for ensuring the efficiency of a process. Therefore, when we talk about purchasing and supplier management, we are talking about strategies that enhance a company's material acquisition processes and supplier chain organization.

Purchasing and supplier management is responsible for carrying out, from the very beginning, the control and study of the partners who will provide inputs and services, as well as certifying their quality and availability.

If well managed, the process ensures business sustainability, keeping the supply chain running uninterrupted. If managed irresponsibly, however, it can lead to untold losses or even the interruption of the production line, in addition to delays in product delivery deadlines to customers.

How to do good purchasing and supplier management?

Not having good purchasing and supplier management can be a true nightmare. But don't worry! Below, we present 6 tips to ensure that management happens in the best possible way. Check them out:

1. Work with a diagnosis and an action plan

Every good management process begins with an accurate diagnosis of the company's situation. Once made, this diagnosis should be periodically updated with information on usual costs, frequent suppliers, average production and delivery deadlines, and savings margins obtained with each purchase.

The diagnosis is the basis for building an action plan, which should bring a general objective and short, medium, and long-term goals to achieve it.

Let's think, for example, of a company whose general objective is a 30% reduction in spending on suppliers by the end of a year. To make this possible, it will be necessary to replace those with higher prices, seek better offers, or think of new ways to obtain usual services.

2. Critically analyze and evaluate suppliers

Supplier analysis must go hand in hand with the action plan. Even though there is a tradition of consuming certain types of products from the same companies, it is essential to carefully evaluate whether these companies are truly the best to offer what is being sought. The market is evolving by leaps and bounds, and in a short period, a service or input can lose value to a new one.

The migration to the Free Energy Market (Mercado Livre de Energia) is an example. There are still companies that can migrate and postpone the decision. They prefer to stay in the Captive Market rather than migrate to the Free one and, thus, fail to optimize their energy costs and have freedom of choice.

A company that clings to old suppliers misses the opportunity to innovate and step ahead of competitors.

3. Take management to inventories

Managing purchasing and suppliers is not a job restricted only to contact and product acquisition. It is essential that purchasing and supplier management works in partnership with inventory management.

That is, instead of having a crowded and stagnant inventory, without generating revenue, it is more interesting to think about tools that create predictability and warn you and your team about the best time to buy raw material or the crude product. Thus, it is possible to provision purchases more assertively, avoiding waste.

4. Use tools to facilitate management

Doing purchasing and supplier management is a complex task, since it is composed of countless processes. Fortunately, technology already offers a series of solutions to automate this work.

Complementing the previous item, online management systems are examples of tools that enable integration between the areas of a business. With them, it is possible to track, for example, data from sectors such as purchasing, inventory, and reception. This helps not only in making decisions, but also in tracking the numbers related to the process.

5. Negotiate better prices and conditions

The great secret for a company seeking effective purchasing and supplier management is having negotiating power.

By relying on more suppliers for the same product or service, the team works with a more comfortable negotiating margin and can compare values and seek the best purchase conditions.

Having a good relationship with suppliers is another factor that can positively impact negotiation results. Therefore, invest in a qualified team capable of building a professional dialogue with partner companies.

6. Seek new ways to save

Every good purchasing and supplier management process must be related to the pursuit of innovation and new opportunities to save.

Finding a simpler method to obtain results with the same quality is one of the savings strategies that the purchasing sector should pursue. Replacing ways of consuming resources with more economical ones is too.

Costs related to electric energy consumption, for example, are largely responsible for compromising profits in industries. Therefore, companies decide to study how to migrate to the free energy market as a possibility to spend less on obtaining energy resources, in the medium and long term.

Why do purchasing and supplier management?

Strategically utilizing purchasing and supplier management in your company is essential to achieve results such as increased profits and reduced costs.

Furthermore, as the purchasing sector integrates with other sectors and creates a routine of evaluating and diagnosing the company's needs, the work tends to gain momentum in efficiency.

This also happens when the relationship between supplier and company is consolidated: with knowledge about the organization's needs, service provision becomes more efficient and adequate.

With a purchasing and supplier management team focused on the best solutions for the lowest prices, it is possible to leverage the company's results, positioning it for new opportunities and taking a step ahead of the competition.