Why Take Procurement Outsourcing

Procurement outsourcing

     Procurement outsourcing means that the enterprise outsources all or part of its procurement business activities to professional procurement service providers while gathering its own core competitiveness. Professional procurement suppliers can assist themselves through their more professional analysis and market information capture capabilities. Enterprise managers perform overall cost control. Reduce the cost of procurement in the operation of the company.
     Procurement outsourcing helps companies focus more on their core business. Professional matters are handed over to professional people. Procurement outsourcing can reduce procurement costs, reduce personnel input, reduce fixed investment, reduce procurement risks, and improve procurement efficiency. For SMEs, procurement outsourcing is the best way to reduce costs.
    The characteristics of procurement outsourcing are: parallel operation distribution mode; in the organizational structure, enterprises that implement procurement outsourcing have greater flexibility due to the streamlining of procurement business; integration of external resources based on information technology; procurement outsourcing Can enable companies to focus on the development of core competitiveness.

Analysis of the advantages of procurement outsourcing
Procurement outsourcing can not only obtain specialized services with lower procurement cost and higher procurement efficiency, but also reduce the overall operation mode of procurement and improve the efficiency of procurement operations. It can also focus all its intelligence and resources on core procurement business. Improve the competitiveness of enterprises in a competitive environment. The advantages of implementing procurement outsourcing in enterprises are mainly reflected in:
1. Accelerate the reorganization of procurement business. Enterprise business process reengineering takes a lot of time, and it takes a long time to get benefits, and outsourcing is an important strategy for enterprise business process reengineering. It can help companies quickly solve refactoring problems in the procurement business.
2. Use the external resources of the enterprise. If the company does not have the resources needed to effectively complete the procurement business, the company can outsource the procurement business. When purchasing outsourcing, the procurement cost and profit analysis must be carried out to confirm whether such outsourcing is beneficial to the company in the long-term, and thus whether the procurement outsourcing strategy should be adopted. While concentrating resources on their own core procurement business, enterprises can make up their own deficiencies by utilizing the resources of other enterprises, thereby becoming more competitive and enhancing their core competitiveness.
3. Share the procurement risks. Companies can allocate risk from economic, market and financial factors through outbound resource allocation. The company's own procurement resources and capabilities are limited. By externally deploying resources and sharing risks with external outsourcing suppliers, enterprises can become more flexible and adapt to the changing external environment.
4. Reduce costs. According to relevant research. For companies that outsource specific procurement processes or procurement projects, their material acquisition costs have fallen by an average of 10% to 25%. Sometimes the procurement cost of a particular procurement project can be reduced by up to 30%.
   The reason why we can reduce the procurement cost so much is mainly because our agent company has rich product procurement experience and market expertise, mature procurement process and the amount of purchases gathered by many customers.
5. It can reduce corporate investment, reduce the proportion of fixed assets in the capital structure, and help optimize the capital structure of enterprises.