While they serve many roles, procurement managers are still primarily focused on cost reduction.
Their role is complex for the many business areas that have to be cost-effective.
To do this effectively, they’d have to prioritise. As a procurement manager, your time is of the essence. You can’t waste time pursuing minor cost reductions. While you may be able to save some money, the time spent tends to outweigh the benefits and may cause you to miss out on more substantial savings.
Let’s take suppliers as an example. Your supply chain consists of various suppliers. When you work on reducing costs, you need to be careful about which suppliers to target.
For example, you wouldn’t want to pursue cost reduction from a low-end supplier. You might find a perfect opportunity to do this and save your company some money. But how much exactly would you save? Since the order size isn’t that big, your savings would be minimal. This would have very little effect as a whole.
And yet, you’d have devoted a lot of time and energy into negotiating lower prices. This can cause you to miss better opportunities at cost savings. In the long run, this can only hurt the business.
The point is this. Just because you have a chance to reduce costs, it doesn’t mean you should immediately take it. Before you decide which areas to focus on, consider the time it will take for you to secure lower costs. Are there any higher priority areas that you should look into first?
Unless you’re certain that the negotiation will be worth your time, you might want to hold off. See if you should perhaps go in a different direction.
This goes for all other business areas in your purview. To learn more about mastering time management, reach out to the team of professionals at Promotional Centre.