In order to minimize costs and improve bottom lines, businesses adopt a clear procurement strategy. Following are the procurement risks that should be taken into consideration:
- Inaccurate internal needs analysis: This pertains to the underestimation or overestimation of the needs in the organization (requirements in the organization) that ultimately leads to inadequate budgets.
- Poor vendor selection: A poor vendor selection might not deliver the requirements on time and might also deliver low-quality products.
- Unorganized vendor management: Communications with the vendor should be clear in order to maintain long-term relationships. The order management process should also be seamless.
- Delays in procurement: Mistakes in the procurement process leading to delays in the same as the primary motive here is fixing problems rather than focusing on the procurement of goods.
- Talent shortages: Understaffing of professionals required in different stages of the procurement process can lead to increased mistakes.