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How Experienced Procurement Officers Unlock Hidden Savings

Procurement officers play a central role in the success of a business. In service of mines, their decisions are vital. The contractors and products hired determine timelines & even whether production goals are met. How can they make sure optimum results are obtained?

One area that’s continually at the periphery of their decision making is cost saving. By making the correct decisions, large sums can be saved, which can be better used elsewhere. Through experience more ways of saving, while going through usual routines, are uncovered. Let’s look at a few ways and areas in which procurement officers can unlock hidden savings.

Knowing when to negotiate

The more effective resources are used, the better the results of general routines will be. Important assets that many procurement officers fail to tap into is their suppliers. Contractors such as SPH who have decades of experience, have acquired expert knowledge of the field they function in. This knowledge covers:

  • Costs of the industry
  • New products on the market
  • Resources
  • Service providers
  • New technology
  • Trustworthy role players

Procurement officers who give attention to all aspects of a mine, can’t necessarily be experts in all aspects of the industry. To stay informed, a procurement officer should sit down with contractors and service providers. Through discussions, more information about a specific aspect can be garnered.

This should be used to negotiate more beneficial, cost-saving contracts and service providing. Contractors can even become negotiators on behalf of a mine. They can obtain more beneficial services from other companies they already stand in relationship with. Building these relationships—which secures work for all involved—is beneficial to the contractors and the mine.

Define an accurate scope of work

A tender bid can become a daunting process that takes up a lot of time. Time is easily lost when trying to determine which contractor truly offers the best quotation. Comparing quotes aren’t easy when the scope of the work is set out in broad, vague terms.

Start off a tender process by stating exactly—in detail—what the scope of the work must be. Asking contractors to quote according to these specifications makes comparisons easier and less hidden costs.

This also serves as a dry-run to gauge a contractor’s quality of service. Experienced companies such as SPH have trained personnel and support teams who will clarify any point of a quote or contract. Their infrastructure is set up to deliver excellent work on site, as well as during the tender process.

Draw from the expertise in your company

The mine and its personnel play a vital role in obtaining cost-effective bids. A bidding process as an opportunity where all departments take up the challenge to find the best possible contractors.

To experience this unified approach during a bidding process, strong, trusting relationships are necessary between colleagues and department heads. This approach motivates departments—and even contractors—to work together for the greater good of the mine.

Procurement officers should invest time in building relationships with other departments. All parties learn from each other to improve their own functioning. Colleagues may know affordable service providers in the market that procurement officers are unaware of. When departments join forces to reach mutual goals, new dynamics in functioning break open.

Conclusion

Sometimes the smallest adjustment can result in a huge positive impact. Huge savings can be obtained during a bidding process by simply tapping into resources that are already within reach. This requires partnering with the right people to reach desired goals.

Authored By: 
Werner Cloete, Commercial Officer