Procurement is a vital function of various businesses. The procurement team needs to be flexible for better results. Procurement deals with various challenges, but can be overcome with certain tactics. You need to know the advantages and disadvantages of the procurement.

Keep on reading the article to know the advantages and disadvantages of procurement…

Advantages:

1.Negotiation will help to bring down the cost:

By giving the plan preference, the team can cut down the cost and save an ample amount of money. The pre-idea will help you to deal with and answer the vendor for an effective price. Buying bulk orders will come with a positive cost-cutting if the company has a powerful position during the negotiation. The company can do research and find someone who gives the supply at a low cost without compromising the quality.

 2.The resource availability increase:

The procurement team evaluates the supplier throughout the market, which increases the availability of resources, this states that the company has multiple options to choose whom to work with. The team knows how to interview the vendors, to pick the best out of them. This ensures that the quality is prioritized. 

 3.Control over the goods and services quality:

The procurement team needs to regulate the quality as is it the most important factor that will give the team success. Companies’ policies are flexible and transparent which tends them to have control over the quality of goods and services. Technology had made it easy to keep an eye on and control the working process.

Disadvantages:

1.Supplier Related problems:

Keeping track of the supplier is a long process and requires close monitoring, which often fails. The supplier which was providing the best quality might start to degrade it but the main issue is that the contract is still working.

The procurement process needs to do an extra investment: supplier relationship management. The table will turn around if you had locked the deal and the market value of the product started to decrease rapidly, the deal that was fixed will seem expensive even though it was not.

2.Working with the same vendor for a long period limit the option:

Working along with the same supplier for a long time will build a strong relationship but will come with a drawback as options will be closed. Staying loyal to the supplier is a must, which might make you lose profitable deals with other vendors.

3. Adoption of new technology fails many times:

Manual management of the procurement process is time-consuming and tiresome work. Adoption of new technology gives a helping hand; technology is just like a partner who helps to maintain the core value of the company. But if the team fails to adapt to the new technology, then it becomes a major problem. Doing everything manually is herculean.

Your procurement team needs to be calculative to gain the advantages of the procurement rather than facing the disadvantages and lacing behind.

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