All companies require many non-core supplies (i.e. not production material) to perform their work. This can be anything from stationery, to sanitation supplies, kitchen supplies, various office equipment like printers, cash machines, photocopiers, etc. The same applies to services, like cleaning, sanitation, security, courier services, or even building maintenance. Employing specialised personnel that can effectively manage the company’s procurement can be very costly for a company, as it introduces a very high logistics and administration cost. If – on the other hand - procurement and administration work is not performed by specialised staff, it usually leads to inefficiencies that increase the cost for the company, or reduce the quality of service received. Agreements and contracts are rarely properly monitored and there is no realisation for poor quality of service or costs that remain high in comparison to changes in the market. Expenses are not tracked and the utilisation of material is not monitored, and while such expenses are usually dismissed or ignored, they could be a significant portion of the company’s operational expenses.
All these issues can be addressed by a company by having a dedicated Procurement and Administration Department. Such a department can:
- Manage orders and deliveries to ensure all required supplies are made available when and where required.
- Monitor the market to ensure all goods & services are obtained at the best possible prices.
- Negotiate, draft and manage vendor agreements.
- Identify suppliers for new services and equipment that the company might require.
- Facilitate an independent Tenders process, away from the business, to ensure that there is no foul play in reaching an agreement with a vendor.
- Perform vendor assessments and - where necessary - replace a vendor.
- Verify invoices and confirm payments in line with vendor or pricing agreements.
Moreover, a dedicated department can build on its experiences and on such introduce additional controls to reduce the company’s risks or introduce procedures to improve efficiency in the procurement cycle.
Of course, having a dedicated department is not a cost effective solution for small & medium size companies. Even for some large companies it is not easy to establish a department with the necessary expertise for the whole scope of the procurement activities of the company. What Saseco can offer though is the ability for a company to have a full, expert, dedicated procurement and administration department as an outsourced function, avoiding the high costs from having such a dedicated unit in-house, while also having an additional level of independence and eliminating the operational risk of internal fraud.
Saseco can offer a company:
- Reduction in the cost of procurement.
- Higher quality of services received from vendors.
- Convenience and simplicity in the procurement and administration activities.
- Improved controls and management knowledge.