Top Benefits of Outsourcing Procurement

November 4, 2016 The TNS Group

Leveraging a Managed Service Provider to procure IT related equipment and manage warranty and support renewals is often overlooked by small to medium-sized (SMB) businesses as a value add.

  • At TNS we leverage the various IT relationships with the country’s largest IT distributors. These distributors carry thousands of products and have the logistics setup to deliver the needed equipment or manufacturer support warranties to maintain the client’s investment in technology.
  • SMB clients can save on the cost of hiring internal purchasing resources to take advantage of external structures and expertise.
  • Equipment will be delivered on time and will align with the client’s budget.
  • The advantages associated with using a single source supply chain partner can result in a cost savings strategy.

Some of the benefits that can be gained are:

  1. Cost reduction from head count, training, office space and computerization.
  2. Market leverage allowing for better discounts.
  3. Transaction cost per purchase are lowered by economies of scale.
  4. Marketing knowledge of which suppliers are best for each product to be purchased.
  5. Staff that specialize in purchasing.
  6. Improved communication between purchasing experts and the company staff.
  7. Better management information and purchasing analysis is available for people who understand the purchasing environment.
  8. Negotiation by an expert in the field is often more effective and profitable.

The objectives of the TNS procurement team are evolving beyond the traditional belief that procurement’s primary role is to obtain goods and services in response to internal or client related needs. To understand how this role is changing, we must understand how The TNS group defines purchasing, starting with the primary objectives of a world-class purchasing organization.

OBJECTIVE 1: Support Operational Requirements

  • Understand business requirements
  • Buy products and services
  • At the right price
  • From the right source
  • At the right specification that meets users’ needs
  • In the right quantity
  • For delivery at the right time (transportation method)
  • To the right client
  • Research and development

OBJECTIVE 2: Manage the Procurement Process and the Supply Base Efficiently and Effectively

Identify opportunities where the procurement team adds true value:

  • Evaluation and selection of suppliers
  • All purchases go through approved procurement processes
  • Engineering is part of the process
  • Sales personnel should not be allowed to enter contractual agreements without procurement’s involvement
  • Review of specifications or statement of work
  • Review the requirements for the material or service being provided
  • Ability to suggest alternative standardized materials that can save the organization money
  • Periodic review of purchase orders can allow greater leveraging of requirements
  • Acting as the primary contact with supplier
  • Developing and maintenance of policies and processes
  • Defining procurement strategy and structure
  • Teamwork

OBJECTIVE 3: Develop Strong Relationships with Other Company Departments

  • Operational teams , Client Services and Project Management
  • Finance
  • Business Development and Account Management

Contact The TNS Group today to learn more about procurement and how it can streamline your business operations and increase profitability.

By:  Jeffrey Egol, Director of Finance, The TNS Group

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