Immediacy Factor On Procurement

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If you run a business or own an organization, many decisions made by different departments of organizations have some procurement implications. These implications have a major impact on the overall cost of carrying your that decision. These costs not only include the price that is paid, but they include the total cost of goods and services.

 

If you take a look at the private sector, procurement is seen as a strategic function that helps them to improve their business’sprofitability. It also helps in reducing the prices of raw materials, streamlining their business procedures, and recognising better sources of supply.

 

Why Procurement is Important?

Procurement in business is very important to maintain the following three functions:

1. Managing Organization’s Expenses

Good procurement is essential in developing and deploying effective annual buying plan, doing market analysis, leveraging robust forecasting, better purchasing process, and cost reduction methodologies.

2. Support operations

Procurement supports several operations of your business-like acquisition of high quality and low-cost inputs and converting raw materials into products or goods purchased by the internal customers of your business.The core purpose of an organization is to provide value to their customers and the procurement function helps in supporting value creating process.

3. Protection from Risks

Good procurement helps you to protect your organization from risks by developing different risk management methodologies, contract management, Shock mitigation, failure mood and effect mitigation, and avoiding many other major risks. In short, there are huge benefits for customers, stakeholders, and organization.

 

What is Meant by Immediacy in Procurement?

Immediacy in procurement is sometimes also referred to as emergency in procurement. Emergency usually refers to a sudden and unforeseen event. Immediacy is needed to be included in procurement strategy to meet the urgent and unexpected needs where health and public safety or conservation of public resources is at risk.

 

In Which Situations Immediacy Procurement Is Required?

Situations in which immediacy procurement is needed are as follows:

Natural or Manmade Disasters

Natural disasters such as earthquakes, cyclones, tsunami, flooding, fire contamination, etc. can result in the need for emergency of procurement.

Critical Health Emergencies

Take an example of current situation where the whole world is suffering from COVID-19 pandemic. Many companies have included immediacy factor in their procurement. Other critical situations and food safety events can result in the need for immediate procurement.

Unanticipated events that make it impossible for aCompany to Perform Its Necessary Operations

Any unanticipated events that can affect the cooperations of your company can result in the need for immediate procurement.Take an example of current situation where lockdown was implemented in many countries and a lot of businesses were forced to shut down their facilities.

 

One important thing that you must keep in mind is that any emergency situation that is caused by organization’s lack of planning and inappropriate policies are not counted as a procurement emergency. Businesses and organizations need to consider contingency planning where needed for the supply of goods and services if they face any emergency, supply shortage, or other foreseen events.

 

How Organizations Can Tackle Challenges Related toImmediate Procurement?

Flexibility to Respond

In some situations, businesses need to be flexible.Like if there is an emergency, how they will procure goods and services that are required to fulfil the demands of their customers in that situation.Sometimes they can forgo their routine procurement procedures. Take an example from COVID-19. With the outbreak of pandemic, the demand for healthcare products was increased dramatically all over the world. So, companies and businesses that were manufacturing and supplying these products had to reconsider their procurement policies to cope up with the customer demand. Some companies performed very well, while some struggled to fulfil the demands of their customers.

 The consequences were that public buyers thought that there are only limited pool of suppliers and they directly started to contact with them for their needs. These were the companies that had more flexible procurement procedures. They paid attention to what is justifiable and adjustable according to given circumstances and capitalized the market.

 

Finding A Reliable Supplier

In case of emergencies, finding a reliable supplier is very important to meet your procurement needs. It is because if there is any small delay, misinterpretation, or change then it can affect their main operations.It is very important especially if you are into industrial business. If you choose a supplier that have the capacity to fulfil your demand even in the case of emergency is very important and finding their inside connections can help you for fast and immediate transaction on procurement.

 

Try Something New

To clarify this point, let’s build a scenario. Suppose a research and development employee is looking for a new product to include in their new project. We all know that we are living in the age of internet. So, the first thing that he will do is, he will search the internet for that product. He will google to search his desired product and will find some companies. Then he will send an email to them. Now here is the main thing, most of them will take almost one week to respond to his email and there are chances that 50% of those companies won’t be manufacturing the product at that time.So, they need a new business model is needed that can help them to search for the companies not by just typing the name of the product but also keywords, demands, and technology specifications etc. to ensure that they meet the right supplier for their demand.

 

If you search the internet for sourcing agencies or companies then the results will be flooded with thousands of companies and websites. But we recommend you try our platform where we do things differently.We have developed a platform for industrial goods where you can find like-minded professionals from different industries and trade goods and services with each other. It is named as Connecter. To ensure great communication, and to help you find right suppliers for your business, we have developed a model in which both suppliers and customers can directly interact with each other without including a middleman. With additional filers, customers will be able to see the list of only those suppliers that fulfils their demand and criteria. So, now you do not have to wait for weeks or months to get your products and finding right suppliers. With the help of your platform you can give a great boost to your business and outsmart your competition especially when it comes to emergency procurement.

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