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\n\t\tOpinions expressed by Entrepreneur contributors are their own.\t<\/p>\n
Key\u00a0Takeaways<\/strong>\u00a0<\/p>\n Every business owner knows the feeling of being buried in work that keeps the business running but doesn\u2019t necessarily move it forward.\u00a0\u00a0<\/p>\n Procurement rarely gets a\u00a0strategic discussion. It doesn\u2019t get a line item in the annual plan or a slide in the all-hands deck. Most\u00a0business leaders\u00a0simply\u00a0handle it.\u00a0Time\u00a0spent comparing prices, placing orders, tracking shipments, reconciling invoices and managing\u00a0multiple supplier accounts may seem like small tasks on their own, but\u00a0the\u00a0time\u00a0adds\u00a0up quickly\u00a0and often at the expense of more valuable work.\u00a0\u00a0<\/p>\n A recent\u00a0Walmart Business survey<\/a>\u00a0of more than 500 decision-makers at businesses with 10 to 500 employees found that 37% spend four to seven hours a week on routine ordering tasks alone.\u00a0That\u2019s nearly a full workday spent on tasks that don\u2019t grow the business.\u00a0That\u2019s not allocating a little spare time to ordering. That\u2019s a part-time job.\u00a0<\/p>\n For busy leaders, reclaiming that time should be a strategic priority.\u00a0<\/p>\n Most business leaders don\u2019t realize how\u00a0much\u00a0procurement\u00a0complexity\u00a0has accumulated until they step back and take inventory. Office supplies come from one vendor. Cleaning\u00a0and janitorial\u00a0products from another. Breakroom essentials\u00a0and groceries\u00a0from a third. Technology\u00a0accessories\u00a0and electronics\u00a0from a fourth. Before long, routine purchasing requires managing a patchwork of suppliers, ordering processes, invoices and shipments.\u00a0<\/p>\n The\u00a0survey\u00a0also\u00a0found that 87% of businesses work with two to five suppliers for routine\u00a0purchasing.\u00a0Nearly 40%\u00a0identified\u00a0managing orders, accounts, and invoices across multiple relationships\u00a0as their biggest purchasing challenge.\u00a0<\/p>\n The result is a level of complexity businesses never intended to create.\u00a0\u00a0<\/p>\n The time\u00a0spent on procurement\u00a0must\u00a0come from somewhere. In many cases,\u00a0it\u00a0comes\u00a0at the expense of higher-value work.\u00a0<\/p>\n Typically, the person managing procurement also makes hiring decisions<\/a>,\u00a0develops\u00a0customer relationships and\u00a0leads business growth<\/a>. Survey respondents said time spent on routine ordering pulls them away from those\u00a0important priorities.\u00a0\u00a0<\/p>\n Think of it as an operational tax.\u00a0\u00a0<\/p>\n Every\u00a0hour spent reconciling invoices is an hour not spent on\u00a0interviewing a prospective employee. Every shipment issue requiring follow-up is time not spent serving customers.\u00a0Every tedious purchase task competing for attention makes it harder to focus on work that creates value.\u00a0\u00a0<\/p>\n These hidden costs might not appear on a balance sheet, but they affect performance all the same.\u00a0\u00a0<\/p>\n Reducing complexity starts with rethinking what businesses should expect from their suppliers.\u00a0\u00a0<\/p>\n In\u00a0the\u00a0survey,\u00a085%\u00a0of respondents agreed with this statement: \u201cBusinesses don\u2019t need a supplier; they need a\u00a0partner.\u201d\u00a0\u00a0That distinction is important.\u00a0<\/p>\n A\u00a0supplier\u00a0fills an order. A\u00a0true\u00a0partner helps\u00a0make purchasing easier, more efficient and more predictable.\u00a0They provide dependable pricing,\u00a0reliable\u00a0fulfillment and reduce the administrative and cognitive burden that comes with managing multiple relationships.\u00a0\u00a0<\/p>\n Consolidation doesn\u2019t\u00a0necessarily mean\u00a0relying on a\u00a0single supplier.\u00a0Going\u00a0from five vendors to two\u00a0can create meaningful efficiencies. What matters\u00a0is\u00a0shifting to\u00a0fewer, better-managed relationships, where the\u00a0supplier\u00a0delivers consistently low prices and\u00a0key services, such as same-day delivery.\u00a0\u00a0<\/p>\n That shift in thinking starts with conducting a simple audit.\u00a0<\/p>\n To eliminate the operational tax and streamline the back office,\u00a0business leaders can deploy a simple, practical three-step framework:\u00a0<\/p>\n Supplier relationships are\u00a0part of\u00a0a business\u2019s\u00a0operational infrastructure, whether\u00a0leaders\u00a0treat\u00a0them that way or not.\u00a0\u00a0<\/p>\n Many organizations\u00a0build that infrastructure reactively, adding a vendor whenever a need arises and rarely subtracting one once the need has passed. The result is a system nobody designed, consuming time nobody budgeted for.\u00a0<\/p>\n The businesses that\u00a0operate most efficiently take a different approach.\u00a0They treat\u00a0procurement as a strategic function, regularly evaluating supplier relationships,\u00a0eliminating unnecessary complexity\u00a0and expecting more from the partners they choose to keep.\u00a0\u00a0<\/p>\n\n
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The slow build of supplier sprawl<\/strong>\u00a0<\/h2>\n
The cost you\u2019re not seeing<\/strong>\u00a0<\/h2>\n
Businesses\u00a0want partners, not another\u00a0supplier\u00a0to manage<\/strong>\u00a0<\/h2>\n
Map, measure, ask<\/strong>\u00a0<\/h2>\n
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Treat\u00a0procurement\u00a0like\u00a0a strategic function<\/strong>\u00a0<\/h2>\n