Procurement managers need to optimize their procurement spend by choosing the best suppliers who can fulfill their requirements. Procurement costs make up a significant part of the overall spend. Therefore procurement managers concentrate on reducing the supply chain cost related to both direct procurement (products and materials) and indirect procurement (facilities and services).
However, they may need external guidance in this regard as there are certain limitations with internal expertise in terms of market exposure and business intelligence. This is where procurement consulting comes into the picture. With subject matter experts and knowledge in different aspects of procurement, it provides the direction for managers to make their key procurement-related decisions.
Procurement consultants offer expert advice on suppliers and the market scenario based on industry and material requirements. Based on the size and scale of business, these consultants offer guidance on the various procurements tools that procurement managers could use to improve their efficiency and visibility in the organization. They may also review the internal processes and identify areas for improvement.
Procurement consultancy services are usually sought for a limited time frame to facilitate key strategic decisions regarding the suppliers and contracts. The advantage of availing a consultancy service is that they offer no-holds-barred report on internal functions and corrective actions in the best interest of the company.
Given their wide exposure and experience in working with various companies, their wealth of knowledge comes in handy for making procurement decisions. They can also guide in terms of negotiation with suppliers.
Procurement consulting services include a wide gamut of services such as:
- Procurement spend analysis
- Supply market analysis
- Risk analysis
- Process and performance evaluation
Procurement consultants can advise on the cost of the commodities that influence the prices of the respective supplies. This can help in negotiating with suppliers for a competitive price and arrive at favorable contract terms. Consultancies also offer automated web-based services that benefit decision makers in terms of convenience, time-saving and managing their supply chain. With procurement functions gaining more prominence among companies, procurement consultancies are expected to witness rapid growth in the coming years.
Procurement managers should consider factors such as background, project plan, consultant profiles and client history while choosing a procurement consultancy firm. They must ensure the project in-charge is well experienced to handle critical assignments. Some of the major companies in the procurement consultancy space are BrainNet, Efficio, Proxima and State of Flux.