The New Methods of Procurement – the Vital Components of Your Business’ Success


The New Methods of Procurement – the Vital Components of Your Business’ Success

Procurement is all about the systematic acquiring of things, tangible or intangible, for your company. The construction industry always requires procurement staffs who will procure the cement, metals, trusses, electrical wires, pipes, woods and finishing materials for constructing a building. To some extent, procurement guys do not only purchase stuffs. They also do the functions of outsourcing, negotiating, cross-referencing, material evaluation, product functionality checking and settling the payment and shipping with the suppliers. Without a dedicated procurement guy in a company, it would be like nearly disregarding the importance of cost, quality and cycle time – the three most important key performance indicators in the business world.

With all the many roles and functions of a procurement staff, there are equivalent methods, tools and techniques that are necessary in order to execute all of them. Given their best knowledge and skills, the effectiveness of a procurement process with respect to the profitability of any company can be measured with accuracy. Here are the newest methods in the procurement process that can be equated into the measurement of success in your business operation.

Active buyers of large companies are being sent with free catalogues and brochures by their key suppliers. These technical books are published in such a way that the buyer can easily find what he needs. There is some sort of indexing and specifications are printed as well in order to verify if it’s what really needed. However, these printed materials are already heavy, bulky and a waste of time to browse for the guys who will use it whether they belong to the design and development group or in the purchasing section of a certain company.

The websites in the internet are the new and modern means of outsourcing products and services. If you want to look for something that you haven’t seen before, you can start by typing them on Google or Bing search fields. As soon as you are directed to the right website, that is where the actual search will take place. If a certain item is already known to you, you can use the part number visible in the item body or on its packaging material if it’s still available.

The internet is the best venue to check the price, the specification and the potential suppliers of a commodity. Modern websites are e-commerce ready which means that you can request for a quotation or add the item to a virtual shopping cart right away. Alternatively, you can look for the contact details of the sales team where you can either send an email or make a phone call. Some even have Skype and Yahoo Messenger contacts posted. Whether you want to inquire about the pricing or the product information from three to five different suppliers, the benefit of getting the cheapest or the best quality offer will be awarded to you and to your company as a whole if you will use the websites.
Fast searching, competitive price comparison, easy specification review and easy ordering; these are all the measurable aspects in e-Outsourcing. Set the timeline and budget where your procurement group will operate and you can surely measure your success.

You can easily think of eBay and Amazon if it is about online buying and selling. There are many online buy and sell companies which are sometimes referred to as “e-Stores” or simply “online shops”. It may sounds difficult to many companies with legacy procurement systems to buy in these online shops with their worries that doing so may violate several company protocols on purchasing and procurement. Seller might have no business permit. Product posted may not be the actual product to be shipped prior considering functionality and physical appearance. Warranty issues may not be resolved properly and on the right time. These are some of the many worries most companies are avoiding from these online shops. Although eBay is now a multi-million dollar virtual company, large companies are still cautious about dealing with company to people or B2C buying transaction. They want proofs of purchase, business licenses and export compliance certificates.

The rules of eBay have been changed significantly in the past several years. With the ultimate goal of removing fear from buyers and also sellers, eBay implemented several methods on safety and security online. To simplify the explanation to these methods, think of depositing your money into an online bank and leave the authority to that bank of paying the seller once that the item is received in your end at its most perfect condition. If the item bought needs to be returned back for some reason, the bank will hold the money until the time that the issue is resolved between the buyer and the seller. The third-party is eBay and its goal is to protect consumers. Amazon sells its own products like the Kindle and products of other people which are usually the eBooks. Amazon handles the shipping, the settlement of disputes, the payment collection and many other aspects of business transactions which are supposedly roles of the buyers of companies. More and more online shops are offering these services, some of which are partnering with credit card companies, logistics companies and international trading groups just to ensure security and safety.

If you are a procurement guy who wants to speed up everything under a certain degree of safety, security and accuracy, create your company an eBay or Amazon account. This new procurement method will certainly reduce your time to gather several quotes and internally process the purchase order, the delays on payments, and worst of all, the effort wasted in exploring hundreds of websites just to find a small paper clip.

Business Process Outsourcing (BPO)
This is hiring someone who will do the job for you. You can hire a procurement guy and he, on a contract employment basis, will outsource, buy and enter records of transaction into your system. The truth is that you will pay him at the end of the day whether he was able to find a supplier or not. To some extent, a permanent labor force is beneficial into a company in many ways much more if it’s investing on a procurement guy who is smart, versatile and budget conscious. But financial analysts and market investors are the proponents of BPO and thereby thousands of BPO companies in different forms of business are now everywhere on this planet. As a company, you will pay another company or individual to do certain jobs for you or on your behalf. This method happens everyday and the terms project-based, freelancing, consulting and pay-per-action are now the word-of-mouth of most management people in many companies.

When it comes to procurement, the idea of hiring a commission-based agent is the newest method of saving money and acquiring the highest quality of products and services for your company. You can’t do the job and so you hire a consultant to do it for you under a win-win terms and conditions. The logic in this new method of procurement is simple – entrust the job to the experts. Companies operating under business processing outsourcing method are the masters of a craft; that from outsourcing to ordering, then to delivery and to payment settlement, everything is handled with accuracy. Here are the qualities that an expert BPO company can offer to your company’s procurement operation:

* Outsourcing products and services within the time limit, target price and specification requirements
* Processing of purchase order in compliance to your company’s supply chain protocols
* Handling of shipment and logistics in accordance with the international importation and exportation laws
* Settling of payments with the supplier electronically, on cash-basis, via check issuance or via credit card option
* Managing your inventory with respect to periodic forecast, periodic consumption, and project-triggered instances

Noriel Panganiban is the proprietor of Project Noriel Online Marketing Group. His more than 7 years combined work experience on freelance internet marketing and technical writing with online companies; and procurement engineering and inventory management in a multi-national semiconductor company; highly motivated him to become a Resource Speaker on topics related to these fields. Practicing the Project Management Consultant role, his expertise revolves around Enterprise Resource Planning implementation, Search Engine Optimization execution and Online/Internet Marketing planning. He managed to integrate all these business aspects on his website,

Noriel is a graduate of BSECE in Batangas State University. He is a diverse type of person – blogger, basketball player, singer, dog lover, web designer, article writer, supervisor on another company, a fellow Christian and a family man. He reads articles on HowStuffWorks, eHow and National Geographic. You will learn so much things from him. He strongly believes that Filipinos can still make Philippines a first-world country. Visit his website at

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