Procurement departments have long fixed their attention firmly on direct spend: those items or services that are vital to the running of their organization and what it produces. Yet significant amounts are often spent across departments on indirect purchases — products needed for the smooth running of a business such as office supplies, IT equipment or even the unplanned replacement of essential parts or other necessities.
Such items may not contribute directly to an end product, but they are vital to running a successful, efficient and resilient enterprise. New or returning employees waiting on new laptops can experience a drop in productivity, while an office breakroom without a supply of utensils and coffee cups is likely to cause a significant drop in morale.
Businesses often need these supplies quickly, as a result of either failing to monitor stock levels or a sudden surge in demand. In the current climate, with supply chain disruption more likely than ever, it’s vital they have a way to source items quickly and easily without taking up significant internal resources. There will always be higher priorities for procurement teams than paperclips or hand towels, but such “long-tail spend” should not be ignored.
Small, in-the-moment purchases can add up to large sums of money when companies operate multiple facilities, meaning organizations are likely to be over-spending on items that could be procured for less if the process was managed properly. Organizations also run the risk of not knowing how much they are spending on such items, and of developing a culture where individual employees buy without sufficient authorization, bypassing approval process or company policy.
This is where smart business buying comes in. Procurement departments and business leaders must react quickly to the needs of strategic partners and employees, despite uncertain economic outlooks and frequent supply chain disruptions, all while ensuring appropriate controls and approval processes remain in place. At the same time, they must also deliver — and demonstrate — real cost savings amid tumultuous economic forecasts.
Importantly, smart business buying solutions offer organizations the chance to minimize supply chain disruptions by finding a wide range of necessary items from multiple, competing suppliers quickly and in one place, enabling faster reactions to urgent or changing requirements. They can also offer valuable insight into where money is being spent, and potentially reduce the number of purchases in the first place.
Faster sourcing means little without reliable shipping and delivery, however, so look for a partner that offers those as part of a tried and trusted delivery network. For example, with Amazon Business, customers can take advantage of a range of shipping options from free same-, one- and two-day shipping on eligible orders, or make use of Amazon Day, when all eligible orders can be delivered on the same day each week, reducing the number of journeys required.
If speed is particularly important, organizations can also choose to split bulk orders across different suppliers, perhaps choosing one with a quicker delivery date for part of the order before using a more cost-effective option for the remainder.
From a cost control perspective, access to a vast network of suppliers means buyers can compare business-only prices more widely. Furthermore, Amazon Business is committed to continuously managing and growing its supplier network to ease the pressure on already overworked procurement teams. Amazon Business can open the door to trading with a much larger network of suppliers, including thousands of small businesses. There’s even the ability to filter products by particular criteria to help make and demonstrate progress on environmental, social and governance goals.
Even the smallest organizations can benefit from Amazon Business, ensuring their spend is kept separate from any personal expenses. For enterprise organizations with their own procurement software or ERP system, however, Amazon Business’s ability to integrate at multiple points in the procurement process means users can make purchases from the organization’s system, either “punching out” to access the Amazon Business site, or “punching in,” where journeys start on Amazon Business and then end up back on the organization’s system at the transaction stage.
This means procurement teams benefit from getting more spend under management and greater visibility into spend data, while internal customers can use a buying tool they’ll be familiar with from their own purchases as consumers.
Over six million organizations already make use of Amazon Business to handle elements of their buying requirements, including 96 Fortune 100 companies such as Intel and Citi. Other prominent users include US government entities, Johns Hopkins University, Seattle Children’s Hospital, as well as smaller businesses such as the family-owned Red River Brewing Company in New Mexico.
This article was originally published on USA Today.
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