Developing trends in Procurement

Recently, a great deal of emphasis is being placed on procurement processes. The recent economic troubles, stiff competition and growing inflation are some factors which are thought to be responsible for this growing phenomenon. Unlike several years ago, when procurement was generally considered to be merely buying raw materials or machinery, the idea behind procurement has changed dramatically in recent times. Several new trends and developments have taken place in this regard.

Among the most important trends in this regard is the widespread use of online procurement.The web is playing an increasingly important role not only for direct procurement, but for indirect procurement as well. B2B activities are forming a major chunk of e-commerce activities, instead of B2C, as was previously believed. B2B procurement activities are on the rise on internet by the smaller as well as larger companies. The internet has brought about significant changes in the profit structure between the supply chains by reducing the number of intermediaries, which is an effective step in terms of lowering costs. Another major change that has been brought about is the level playing field for both large as well as small enterprises. With the amount of information available on the internet, even the smaller enterprises are able to procure at favourable rates, which also helps them to lower their cost of production. With access to a larger number of buyers as well as sellers, absolute advantage and monopoly is out of question. This generally means that the best rates are available when procuring.

Corporate procurement practices often rely on global sourcing these days. With the virtual world now emerging as the new workplace, it has become relatively easier to get in contact with suppliers all across the world and get the best rates. Although there might be several legal hurdles involved, global sourcing is nevertheless emerging as a clear favorite among a majority of the enterprises. Getting supplier information is incredibly easy, with details available in only a few clicks of the mouse. Just surf through the suppliers list, visit their websites, go through their product specialization lists and rates and get in contact with them.The costs can be reduced further by sharing supplier information. Enterprises can also opt for reverse auctions as well. This would help an enterprise in getting the best deals.

Procurement is an evolutionary process. What might appear to be the next big thing may be rendered absolutely obsolete the next day with the emergence of newer trends. Nevertheless, one cannot ignore the trends if one wants to survive in this scenario of cut throat competition.