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From Concept to Warehouse: The Real Procurement Process

Feb 8, 2022 | Procurement

We don’t like to brag, but….the team at GHL are experts in procurement. 

We know procurement processes, systems, and networks inside out. Which is why we work as an outsourced procurement partner for various global companies. 

We help take away the stress and administrative burden that comes with procurement management. We also utilise our extensive network of suppliers to ensure that our customers continue to receive the best prices on their sourced goods and services. 

There is a lot, and we mean a lot, to think about when it comes to managing the entire procurement process. This post looks at some of the areas you must consider and how the team at GHL Procurement can help you put a robust and strategic procurement strategy in place to help. 

  

What is procurement? 

Procurement and the procurement process is ultimately the series of steps you take to obtain the goods and services you require. 

It is cost-effectively sourcing goods and services from high-quality suppliers. 

Building an effective procurement process is the best way to increase efficiencies AND profits. 

  

Benefits of an effective procurement process 

  • Builds long-term relationships 
  • Helps to manage supply chains better 
  • Reduces risk (financial, operational, contractual, etc.) 
  • It helps to prevent supply chain disruptions 
  • Ensures a higher efficiency, shortening cycle times 

  

The procurement process and areas you must consider 

A full procurement service, “concept to warehouse,” includes: 

  

1.  Identifying the goods and services that are required 

You firstly need to outline and confirm the product or service that you want. 

You then need a detailed description of this good or service. For example:

Do you have a drawing, design, what colour do you need this in, have you thought about packaging and what this will look like, etc?  

What would be your delivery preferences? Do you have delivery routes available?   

Once these specifications have been identified, the research and evaluation process to find the right supplier for you can begin. 

  

2.  Finding the right manufacturers/suppliers 

Within this area of the process, you will need to: 

  • Carry out background checks and financial audits 
  • Check and carry out on-site factory audits   
  • Check ethical/Quality Assurance (QA) procedures 
  • Check customer reviews/reputation 
  • Check fulfilment capabilities 
  • Location 
  • Have you checked their environmental practices? 
  • Can they provide you with product samples, etc.? 

You will need all of this information, and often more, to help you make the most informed decision. 

  

3.  Negotiate contracts with chosen suppliers 

Once you have selected the supplier for you, you will then need to begin the process of negotiating contracts, including costs, terms and conditions, delivery times, pricing structures, and more. 

Contract management is very time-consuming and requires a great deal of communication, promptly dealing with all issues and information. 

This stage is critical as it focuses on risk management and reducing risk throughout specific areas and parts of the process. 

Parts such as: 

  • Sampling/product development 
  • Assembling technical product files for manufacturing 
  • Contract/Price/lead time Negotiation 
  • Purchasing/FX transfers 
  • Pre-production sampling 
  • Production Inspection 
  • Pre-shipment Inspection from approved sealed samples 

  

4.  Distribution and logistics 

This is the physical movement of the goods and services from the supplier to the end-user, and when working with international procurement can involve many organisations. 

When considering logistics, you will need to consider if this is via air, rail, or sea. In addition, you will need to consider: 

  • Customs clearance and inland delivery. 
  • Factory to port areas. 
  • Terminal handling. 
  • Vessel departure. 
  • Import terminal handling. 
  • Customer import warehouse. 
  • Local port distribution warehouse. 
  • Delivery to customer. 

  

5.  Audit your delivery 

Once invoices have been raised and payments put through for processing, it’s important that you quality assure and check performance. 

Ideally, we recommend that you regularly check and assess your procurement process. Identifying strengths and weaknesses and looking at areas where improvements can be made. 

  

Working with a professional procurement partner 

At GHL, we can help you with your entire procurement process. 

Regularly carrying out quality assurance checks, ensuring service levels remain high and that you receive the best possible cost price, we provide complete visibility throughout, streamlining your procurement process to enhance your business operations. 

We can provide guidance and information on manufacturing and buying from China and provide you with access to staff on the ground with expertise in your area of manufacturing.   

For a FREE ten-minute consultation with our team, call 02922 671 826 or click here to schedule a call today. 

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