What is Collaborative Procurement and How It Can Benefit Your Business
- Collaborative procurement brings together procurement teams and suppliers in a collaborative setting.
- The objective of this close collaboration between procurement and suppliers is to create more value for the business.
- Building trust and establishing a collaborative culture are key to implementing collaborative procurement.
November 28, 2022 | Procurement Strategy
Amid growing uncertainty, businesses must adopt a proactive approach and stay prepared for unforeseen events.
The first and foremost task for them is to streamline their supply chain operations. And procurement teams have a vital role in this process. They must work in close collaboration with suppliers. Read on to learn more about collaborative procurement and how it can benefit your business.
What Is Collaborative Procurement?
Collaborative procurement is an organizational strategy that focuses on achieving greater value by working together with suppliers to jointly plan, source, and buy products. The focus is on collaboration and value rather than on cost savings.
While traditional supplier management focuses on cost reduction, collaborative procurement also optimizes volume, demand forecasting, contracting, and other practices that cut costs while still meeting the purchase requirements of individual company buyers. It also brings visibility to suppliers and helps drive efficiency.
Why Should You Care About Collaborative Procurement?
Collaborative procurement is a strategic approach to buying that brings together purchasing teams and suppliers in a collaborative setting to improve the efficiency of purchasing, reduce the cost of goods and services, and provide value to the organization. It is important for companies to implement collaborative procurement because it brings visibility to suppliers and helps drive efficiency within the organization. Collaborative procurement also optimizes spend and drives down suppliers’ costs through shared volume and demand forecasting, collaborative contracting, and other practices.
Benefits of Collaborative Procurement
There are many benefits of collaborative procurement. Some of these include visibility, greater efficiency, optimized spend, and reduced costs. With visibility, suppliers are easily accessible to the organization, and their data is readily available for all stakeholders.
Collaborative procurement also improves relationships with suppliers, which drives efficiency within the organization by reducing the number of suppliers to which the organization must turn.
How to Implement Collaborative Procurement
Before you can implement collaborative procurement, you must establish a collaborative culture, which includes building trust, engaging suppliers and stakeholders, creating a common language, and leveraging technology. Establishing a collaborative culture within the organization will enable you to implement collaborative procurement successfully.
You must create a detailed plan, which includes defining roles and responsibilities, assigning accountabilities, and setting goals and timelines. You must also communicate the plan to suppliers and stakeholders within the organization. This includes communicating the value of participating in collaborative procurement and why it’s important.
Final Words
Streamlining procurement and supply chain operations is a top priority for businesses today. This requires a close collaboration between procurement and suppliers. To successfully implement collaborative procurement, you must establish a collaborative culture, create a detailed plan, and communicate the plan to internal stakeholders and suppliers.
