Have you ever taken a step back and evaluated your purchasing structure and strategy to ensure they are aligned? While you may have a structure in place, there are still ways to optimize your strategy and get the most out of your procurement process.
Savings and optimization start in the purchasing department. Even if you have multiple people designated to making purchasing decisions for different areas of your organization, having everyone on the same page is key to successful sourcing.
Follow along as we discuss different types of purchasing structures and highlight how to optimize your spend.
Decentralized purchasing allows multiple departments, branches, or employees to procure the items they need. This can be beneficial to end users because the purchaser may understand their needs more closely than a dedicated procurement team. Plus, since they are purchasing for their direct end users, there are fewer wasted resources. On the flip side, this structure lacks consistency and can cause severely undermanaged spend that can lead to greater risk management issues.
Centralized purchasing means there is a dedicated procurement department at your school or agency that handles all purchase orders. This option is standardized and regulated so that you are postured to meet compliance standards. Since all purchasing decisions occur within one team, you are able to track and manage spend much easier as well. Conversely, a centralized purchasing structure can lead to a backup of purchase orders due to having a lean procurement team and, at times, a surplus of goods that may go to waste.
Overall, the most effective structure tends to be a coordinated one that is neither centralized nor decentralized. A coordinated procurement structure is more effective at leveraging best practices and suppliers across your school or agency. It takes the pros of decentralized and centralized purchasing structures while avoiding the cons found in each model. By utilizing a hybrid of centralized and decentralized, your organization can craft a purchasing structure that helps you succeed.
Cooperative Purchasing Strategy
As you assess what structure you utilize, or wish to utilize, we invite you to explore how a cooperative purchasing organization can be woven into any structure to bring extra value to your school or agency. Beyond time and cost savings, cooperatives can assist you in making strong, smart buying decisions that will centralize your overall spend patterns.
As inflation continues to soar, organizations risk having a higher amount of undermanaged spend. Monitoring the market is a full-time job within itself—allowing a cooperative to take that piece away from you gives you more time to focus on other aspects of your school or agency. Your cooperative is constantly monitoring the market as well as the offered agreements to ensure you are getting the best price and service levels possible.
Acting as an extension of your team, a cooperative is there to help you tackle the roadblocks that procuring resources brings. Choose a cooperative that can help you futureproof your organization, mitigate your risks, and manage your spend.
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