Purchasing is a detailed analytical group of tasks and many companies don’t like to spend their time shopping. Outsourcing procurement is more than just hiring a professional shopper.
Procurement outsourcing is one of the processes undertaken by global sourcing companies as part of supply chain management when representing other companies that need to outsource manufacturing or purchasing. Procurement sourcing enables the company that makes purchases worldwide to better use their time to focus on tasks that are more inline with their core capabilities and core business goals.
Basically, procurement outsourcing firms undertake to control scale economies and improve execution of poorly-managed or underachieving categories and likewise to further appreciate budget savings where supply and operation costs are concerned. This can offer more improvement on compliance, cycle times, and performance. Among the best things that a procurement outsourcing company can do, is to be a perfect solution for companies that do not possess internal sourcing and purchasing competencies, but do need to improve procuring of goods and services in order to profit more. Also, procurement sourcing can benefit companies that already do have sourcing and purchasing competencies, but fall short in particular areas such as dealing with services and indirect materials like IT, media buying, recruitment, utilities, etc.
Procurement Sourcing? Why?
A company might consider outsourcing manufacturing at various stages of its lifespan for different reasons, or adopt a permanent strategy of international sourcing a global manufacturer for all of their products from day one. Many small and medium size companies either have little procurement sourcing experience, lack knowledge of how to even begin worldwide sourcing to find overseas manufacturing, or simply do not have the time or inclination to do so. Obtaining the help of a procurement sourcing company is a solution for them to more efficiently define their needs, find their manufacturer overseas, source their supplier(s), and even manage their purchasing and supply chain.
Good Procurement Outsourcing
What makes for good procurement outsourcing:
- Specific tracking capabilities;
- Supplier supervision;
- Lessen overall production costs;
- Act in your best interest;
- Third Party Quality Control (3PQC)
Benefits of Procurement Outsourcing
Another company wades through the myriad of possibilities, legalities, logistics while your company focuses on core capabilities and business goals.
Procurement Sourcing Hazards
Some procurement sourcing providers’ advertising misleads companies that seek an overseas source in order to increase profitability. There are suppliers who tend to defraud companies and leave them in the dark, have poor standards, and do not adhere to a particular code of conduct. Some even set out to rob their customers of millions of dollars worth of products or funds. When there is no panel of superintendents that takes charge of looking after the interests of the customer while offshore deals happen. This is where the third party company’s 3PQC role is beneficial.
There had been times when buyers, after researching online, went to China to visit some factories and upon inspection, found out that what the websites, trade shows, and catalogs advertising over exaggerated their qualifications. Every word said about them was total exaggeration. These types of deceitful suppliers have flourished overseas for many years now. These crooks don’t come out and claim that they’re not a real procurement outsourcing firm, that they just play one on the ‘Net. They’re very persistent and coy. Posing as trustworthy providers of procurement outsourcing has become good business offshore, but is a business booby-trap for the buyers. Take the case of Alibaba, which really shocked a good lot of industrialists in February 2011. They have been a good vehicle and cohort for criminals who readily snatched money from foreign capitalists.
There is a multi-million dollar U.S. corporation in New Orleans that many industrial companies have come to trust for procurement services. Con-Tech International has offered their expertise in global sourcing and supply chain management to others since 1983. The process of taking a customer’s part and finding a suitable and economical supplier overseas, while managing the development and import process, is what constitutes the procurement services Con-Tech provides – with a personal touch.