Procurement consulting has become a routine exercise for companies looking to source from low-cost countries. This consulting is now offered by specialist and general consulting firms around the world. However, many companies that would benefit from asking for this consultation have no idea of its existence or purpose.
A procurement consulting firm explores the options and factors for obtaining goods and procurement requirements. Not only companies, universities and governments have also started switching to consulting services to reduce costs.
What is procurement consulting?
Recruitment consultancy is mainly of two types:
- Direct recruitment advice for raw materials and production goods;
- Indirect recruitment consultancy for operational supplies, outsourcing, maintenance, etc.
In direct purchasing consulting, consultants and managers focus on the collection of raw materials, prices and the outcome of the purchased goods/services.
Indirect purchasing consultancy aims to optimize existing operations, such as making the acquisition of raw materials cheaper.
Acquisition usually follows the following steps with additional sub-steps depending on customers:
Detect needs → Market analysis → Identify suppliers and vendors → Negotiation → Purchases → Streamline procurement → Record keeping → Final evaluation of all steps and relationships with parties.
Any business inquiry can help companies optimize their processes and profits. Procurement consulting works like any other consulting, but the differentiating factor is that it helps companies analyze and develop strategic sourcing in addition to price negotiation.
As the name suggests, strategic sourcing means figuring out all aspects of your sourcing needs and mapping out a long-term roadmap. For example, identifying suppliers and market audiences, analyzing the pros and cons of a specific investment, managing the supply chain and managing contracts.
Advantages of hiring a procurement consulting firm
This is the biggest goal that purchasing inquiry helps businesses achieve. By facilitating informed discussions combined with the expertise and connections that many companies lack, procurement consulting helps to:
1. Reduce costs
Consider this, if you are trying wheat from somewhere in the US for $6 a kg, the inquiry can help you get it down to $4 by negotiating a contract for you or reducing other costs to get that supply to you.
2. Facilitate efficiency
This can help speed up the process by having on-the-spot solutions to your problems rather than wasting time repeatedly reviewing purchasing strategies for your business. for example, outsourcing manufacturing to cheaper organizations in other parts of the world.
3. Improve all aspects of your supply
Supply is more than just deciding what goods you need, raw material or otherwise. The consultation can help you develop better import or export methods, better supply chain management, easy ways to reduce taxes or duties imposed on your products, and help you better manage your balance sheet of supply route.
4. Access to better resources and connections
Consulting companies also offer concrete solutions. Thus, they bring several contacts that you would not have thought of or that you do not have and open access to resources without having to go through a lot of trouble.
This does not mean that buying and supplying are the same. On the contrary, the former leads to the latter and is a means of achieving a sourcing strategy. The difference lies in the ideation and execution.
Procurement consulting helps develop an execution plan and long-term vision or procurement strategy.
Finding the right recruitment consulting firm can be tricky, so you should shop around and see the different perspectives that each firm has. If you have a budget and a goal in mind, any consultancy’s job will be easier, and they will be able to help you better.
Ultimately, you should choose the one that best suits your vision. It’s easy to compromise on the quality of consulting if you don’t have the knowledge and don’t do your research.
Ask for testimonials and approaches taken by these companies on similar issues. Keep an open mind and go with your gut. It is the key to running a successful business.
Indeed, reviewing multiple recruitment consultants can be expensive, but it is well worth the investment. Especially if you are an entrepreneur with no experience in the sector but with a solid entrepreneurial vision.