Let’s be honest, the main reason an investment is taken onboard is to make money. We certainly don’t go head-on into a project knowing that for all our effort we are about to put in there will be zero return at the end. Therefore, it would be fair to say that the stability and health of your investment is key to maximising a remunerative return for your project.
One very important way to maximize your return is to implement a solid procurement strategy. This needs to be secured from an early onset to allow the full benefit of the process.
Procurement has numerous benefits for your project which include the ability to establish budgets, provide clear standards, ensure products are available when needed, and create supplier relations that not only streamline processes but make sure the project is at the forefront of technology and trends.
How can we help you capitalise on these benefits?
Establish Budgets. It is paramount for any project to set budgets as costs can quickly get out of hand. By setting up early procurement agreements with suppliers it creates a set and known value for the products or services that are required. The procurement management we offer explores and sources competitive products that delivers on the overall value.
What makes a product bring value? Nominating products simply because they are cheap is a poor way to determine ‘value’ as cheap fixtures can regularly suggest an inferior product. This is because costs have been cut too low and the materials are more susceptible to wear and tear, compromising longevity and safety. ‘Cheap’ may save you money in the short term but in the long term it can be a heavily expensive exercise.
Sourcing products, as well as services, requires a holistic approach. Yes, we need to determine price but we also need to determine if the product is durable, research if the product meets Australian Building and Fire Safety Standards, and decipher if the product is current, that is does the product offer the most current version or is it a product that is due to be obsolete in the near future. Installing products that are relevant and improved make for ease in the installation stage and also later in the maintenance stage as items can be readily sourced. Staying ahead of competitors with current product placement can also lead to a better brand reputation and in turn a more successful profit return.
Establishing procurement budgets offer fair and transparent contract negotiations and agreements which can deliver substantial cost savings as funds can be released with known terms. These terms provide forecasting for products and services so that delays, that are proven to be costly, are kept to an absolute minimum. Agreements set also keep fluctuations in market pricing to a low as pricing has already been set weeks and months in advance.
Overall effective budgeting and research is a team effort that involves detailed collaboration and planning. Each Procurement Agreement needs to be goal-oriented to ensure budgets are in-line with the individual project to achieve optimal return on your investment.
"A procurement strategy should be stress-free"
Availability is essential for the smooth flow of the project. When it comes time to call up or order a product, we need to know that the product is ready for disbursement. Having certain products already arranged means that we know that the supplier has already ordered and set aside the needed goods, making it easier for the project’s team to manage efficiency of work and most importantly time. A Procurement Strategy should be stress-free. By providing solid procurement management it ensures this smooth flow of products and services from production to delivery is met.
The building world is susceptible to many set-backs. These set-backs can include natural disasters such as floods or cyclones, generalised labour shortages, and material shortages brought on by localised occurrences or global events. By providing a strong procurement strategy we can minimise these potential delays and disruptions in the projects operations by ensuring that inventory is readily available and set aside so we can rest easy in knowing that the product will still be obtainable when the time comes.
Streamline Processes are achieved with strong supplier relations and these solid relations are achieved with clear and frequent communication. As part of Procurement Management, it is key that in the ever-changing world of both products and services that frequent supplier updates are maintained. We need to ensure that suppliers are continuing their loyalty and reliability when it comes to timely delivery of products, communicating any changes, providing fair value, upholding set agreements, and continuing to provide a reputable product.
Providing measurements and the desire for continuous improvement is crucial to streamline the procurement process. To achieve a successful streamlining process, we need to implement key performance indicators (KPIs) and frequently measure both our performance and the supplier’s performance against them. In this instance KPIs look at metrics such as how we can regulate spending, supplier lead time, and quality of goods or services. KPIs can also look at Purchase Order cycle time, meaning the time a Purchase Order is submitted to the supplier, to the dispatchment of products, to the invoicing. All these processes that are measured have the ability to identify areas for improvement and refinement in the procurement processes. This continued refinement leads to greater efficiency and subsequently back to cost savings for the overall project and ultimately you.
End Goals of a project are primarily to provide an exceptional service and product, maintain a positive reputation, deliver on stakeholder satisfaction, and to provide an end product that stays true to budget.
Procurement and the management thereof meets the projects needs through a strategic and efficient approach. It goes beyond the simple process of ordering a service or product, and digs deeper into the process of exploring different options and identifying practical solutions.
All in all, a solid procurement strategy saves time and keeps projects on track for completion. Procurement provides an expected quantity in the fact that we know exactly what product is coming and the price it’s aligned to, it reduces any supply chain disruptions as we can be at the forefront of these occurrences, and gives us a known quality finish which is best suited for your project.
Procurement is essential for any project and is very much the key to success. Feel free to talk to us about how we can help you use a personalised procurement strategy to maximise your next project.
