Is Centralized Procurement for you?
Centralized procurement is a process simple in theory but complex to achieve. For tech companies finding a good supplier that can ensure a constant supply, fair pricing, a good deployment team, and a solid global logistics system can seem like finding a needle in a haystack. Is it possible to build a perfect reseller partner that whom you can have a long-lasting business partnership? Can they simplify your procurement and administrative process?
Centralized Procurement: The Concept
As the name suggests, the concept is to bring all the processes and procurement to a central point. One department is responsible for purchasing and sourcing all equipment needed. The department manages the demands and sourcing for all company locations. All internal orders from procurement are fulfilled using the external vendors most available to each branch office.
Similarly, this concept can also be implemented by using the centralized supply chain method of procuring all your supplies from one or more trusted vendors. The process remains the same with all internal orders being collected by the procurement team and sent out to the trusted vendors for fulfillment. If the branches are spread across international borders your vendors must be able to ship them from one central point or have a source in the same country.
Advantages of Centralized Procurement
Centralized procurement can have multiple benefits for the end-users, specifically in the tech industry. Sometimes interacting with multiple vendors can be challenging and administratively tasking. Cost and time savings are just some of the benefits of centralized procurement.
Duplication
Duplication of work, tasks, and processes, kills total quality management. International companies with branches across the globe often deal with such issues. The same equipment is being sourced again and again when the same inventory may be stockpiled in an outpost branch somewhere not needed, costing both money and time. The administrative work required can be very disruptive. This process itself can lead to problems such as constant price increases and warehouse maintenance costs of excess goods.
A centralized procurement is more refined and reduces doubling and administrative tasks. Having a small group of suppliers or vendors enables orders to come in easier and more manageable. Other benefits can include bulk discount pricing and more consistent quality control. With duplicates being eliminated, inventory control is more manageable and profitable.
Risk Management
Keeping track of suppliers can be challenging. Risk management is very difficult when working on a decentralized system. Using centralized procurement keeps things straight and simple. With a controlled group of suppliers keeping track of shipments is very efficient and reliable.
One Supplier One Price
A downfall of decentralized procurement is the inability to form a mutually beneficial local relationship. Unless the company is big enough to attract discounts and benefits, the likelihood of local vendors offering incentives is minimized.
Having one point of contact at a major supplier does have its perks. Purchasing in huge volumes and consistent buying patterns can help keep prices competitive and can attract big discounts, ensuring quality and avoiding shortages.
Who should Deploy Centralized Procurement?
Any global company, especially tech companies can largely benefit from centralized procurement. Both resellers and end-buyers can benefit from centralized procurement. Centralized procurement can help reduce administrative costs and streamline the procurement process for companies small and large.
How AGOL Worldwide can Assist you in this?
Do you have a solid partner managing inventory and being able to handle all international product movements? If not, that partner is AGOL Worldwide where everything exists under one roof. AGOL Worldwide specializes in handling logistics across international borders. Offering Importer of Record (IOR) and acquiring licenses in more than 120 countries, AGOL Worldwide is the one-stop shop for logistics. AGOL can manage all hardware storage and shipping needs effectively, enabling a 100% hand-free process. AGOL Worldwide manages every step of the shipping process, as a “Door-to-Door” service from a supplier to the end-user from anywhere to anywhere. AGOL also has warehouse space all over the globe to enable prepositioning of goods for your consistent customer demands. Migrating to a centralized procurement process through AGOL Worldwide can make your import process 100% hassle-free. To learn more about how AGOL Worldwide can enhance your import-export process, contact us now!
