Continuously finding ways to improve and run a business more efficiently doesn’t apply only to those in manufacturing or logistics. Retail companies need to consistently look for more ways to innovate how they procure and work with suppliers, in addition to keeping stores full of the items customers want the most.
Optimizing expenditures, both direct and indirect, can help retailers reduce costs and improve services offered by suppliers.
The successful procurement team and their habits
- Support company strategy – The leadership team works to create a strategy that can be followed by everyone in the company, from the CEO to the newest employee. A great procurement team will use that strategy to drive decisions and support the organization. Pushing the strategy forward unifies the procurement team and the entire company.
- Implement continuous improvement strategies – No strategy is worth following if it doesn’t somehow emphasize continuous improvement. The procurement team should work toward improving the quality of products while reducing costs. It’s that simple.
- Ensure better service – Procurement teams can improve quality and cut costs, even if the products themselves continue to be more expensive, by negotiating for improvements in services offered by the supplier. As the cost of goods increases, prices for the consumer can be maintained if services such as shipment tracking work efficiently or if the goods consistently reach store shelves without damage. Often procurement teams can find room for improvement in last-mile deliveries. Suppliers help the retail company reduce costs and customers benefit from better prices.
- Test the market – As much as relationships matter, a great procurement won’t simply accept that their current supplier is the best for the business. Consistently researching vendors and making changes if necessary is crucial to an efficient procurement organization. A supplier that just didn’t fit a few years ago may be the best for the business today. Staying on top of development within the industry and supplier infrastructure enhancements can make a big difference. It’s up the procurement team to stay on top of changes with suppliers. We all know the business world moves fast and procurement teams need to be nimble and ready for change when an opportunity presents itself.
Keeping the customer first
Sitting in an office and constantly working to improve the bottom line can make it all too easy to forget what matters most to a retail business – the customer. Hopefully, the company strategy focuses everyone on the customer, but if not, it is essential for procurement teams to base decisions on how they will affect the end customer. If changing the way products are delivered to stores only helps the team working from the corporate office and not the folks working at the store, you could be damaging customer relationships or product availability.
A few pennies saved from the bottom line won’t matter if the change drives customers away. Great procurement teams can see the effect of changes all the way through the supply chain and into the store. The customer is still king – that much about business hasn’t changed.
Working with a 3PL Provider
Successful procurement teams work with logistics management providers who implement the latest technology and offer services that are a complete turnkey solution. The latest technology supplies your procurement department with the vital information needed when organizing build outs or remodels, whether for one store or hundreds.
STC Logistics will work directly with your procurement department or with your individual vendors. As a complete turnkey solution, in addition to our direct logistic management and supply chain management services, we also provide white glove service, sort & segregate fulfillment and installation services nationwide. To learn more about our 3PL retail logistics services and expedited shipping, click below!