Don’t expect supply chains to get back to pre-COVID-19 levels anytime soon. While analysts expect some easing heading into 2023, inflation, global unrest, and talk of recession aren’t helping. About 97% of procurement executives in a May 2022 survey said that they’re still experiencing significant disruption.
Against this backdrop, public leaders need to mitigate today’s supply chain issues and build stronger procurement processes for the future. Since public procurement accounts for 12% of GDP, estimated at $9.5 trillion annually, even managing small process improvements can yield big results.
Effective procurement management produces:
- Efficiencies and faster fulfillment
- Reduced costs
- Compliance
- Fewer errors
- Fewer fulfillment delays
Six ways to streamline public procurement management
To improve your public procurement management strategy, you need to take a step back to look at your processes and workflow. Check out these six specific ways that you can streamline your processes to improve efficiency.
1. Centralize procurement management
Wherever possible, centralize your procurement management. Create a greater scale to make purchases in bulk and consolidate work in one place rather than having individual departments or agencies handle buying, leading to cost efficiency and reduced workload.
2. Remove administrative burdens and bottlenecks
Map the procurement process from start to finish, and look for any places where slowdowns occur. Find unnecessary steps or areas where the system gets bogged down.
Despite structured processes, many public agencies have an informal policy about managing approvals. By moving to an automated system for approval chains, for example, you can significantly speed up the approval process.
Utilize another way to accelerate the procurement process by incentivizing vendors to participate. When you can promise accelerated reviews and outcomes, you may get faster responses and more competition.
3. Increase competition
With supply chain concerns, public procurement pros need to look beyond their traditional suppliers for potential new sources. By increasing competition, you can cast a wider net in procurement and potentially reduce costs. However, you might also slow down the process.
Minimize slowdowns by doing a systematic review of vendors before reviewing RFPs, to ensure that they have the capabilities and experience to compete.
4. Segment and prioritize
It’s vital to segment and prioritize expenditures not only by critical need but also in light of today’s supply chain challenges. For example, due to the global shortage of computer chips, suppliers are lengthening lead times considerably for electronic components, resulting in vehicle shortages and huge delays for heavy equipment.
Knowing this, public purchasers can move such items forward in the list to reduce delays in fulfillment.
5. Improve accountability
You can increase accountability by mapping the process and responsibilities of everything and everyone during procurement. Focus on cost, compliance, and process efficiency.
Holding tight to deadlines for each step of the procurement process can help keep systems running smoothly. With supply chain delays, you need to move quickly to get to the front of the line for manufacturers and providers.
6. Use cooperative contracts
You can save time by piggybacking on existing contracts. The American Bar Association’s Model Procurement Code for State and Local Governments offers cooperative contracts as a way to accelerate the purchasing process while maintaining compliance with competition regulations.
Cooperative purchasing saves time and money by purchasing from ready-to-use contracts. Trust that these have been competitively solicited and are available for immediate use. Since the contracts span multiple government and education organizations, you can also leverage economies of scale to reduce costs further.
The keys to success
As you review your process and systems, you must collaborate with key stakeholders during procurement. Everyone must be on the same page to implement change. Don't forget to include your frontline procurement team and key decision-makers. Their perspective is important, but securing their buy-in to any changes that you want to make is essential. By pulling everyone together and mapping the entire process, you can reveal where potential bottlenecks occur and enable brainstorming on solutions.
Simultaneously, you will want to enact a strategy to manage change. Not everyone embraces changes within an organization, even if they can improve things. Develop a change management plan to ease concerns and enact transitions.
Some changes are simple. For example, if you want to use cooperative contracts, you just need to ensure that everyone in the decision-making process is aware and on board. Prepare for resistance to major changes, such as a different approval process or a move to centralize purchasing.
Leverage cooperative contracts
To learn more about leveraging cooperative contracts to help mitigate the impact of supply chain slowdown, contact the experts at Sourcewell. With free registration, you can search for contracted products, get quotes, and purchase 100% online from various suppliers. You get local dealer access with national buying power.
Here at Sourcewell, we help public agency buyers procure fleet vehicles faster by fulfilling the time-consuming bid process for them. Through cooperative contracts, we expedite the fleet vehicle procurement process so you can better serve your teams.
Want a faster procurement process? Contact one of our specialists today to buy the fleet solutions you need!
