Procurement is a real strategic game that requires highly detailed research and reasonable steps. If you want to avoid losing this battle to your competitors, you need to keep an eye on the data and avoid chaos. After all, moderate actions based on previous data allow you to control the situation. So, you need to follow a few rules to optimize procurement and make your life easier.

What is procurement?

Retail Procurement is the process of providing retail businesses with goods for sale to end consumers. The main goal of Retail Procurement is to ensure that goods are available at the right time, in the right place, at the right price to meet customer demand.

The main aspects of procurement for retail business:

• Demand analysis - studying sales, seasonality, and trends to accurately forecast needs.

• Supplier selection - evaluation of prices, reliability, product quality, and terms of cooperation.

• Pricing - controlling the cost of purchases, discounts, and margins to increase profitability.

• Optimal supply - planning the frequency and volume of deliveries to avoid shortages or overstocks.

• Inventory control - manages inventory balances to minimize losses and efficiently use resources.

Step-by-step guide to optimize procurement system

Procurement optimization may seem like a complicated task, but in fact, this process can be greatly facilitated if you approach it systematically, step by step, without skipping any stage and having the necessary data at hand for analysis.

1. Demand analysis and forecasting. This is what will help us identify the needs of our customers, track the dynamics of purchases of goods of different brands, sizes, and tastes. Based on historical data, the manager can easily make assumptions about the next purchases. If you see that ice cream sales increased by 30% in June, you should increase your purchases in advance. But you should also take into account the difference in dynamics during seasonality, promotions, and marketing campaigns. Therefore, having all analytical data in one place is a vital option.

2. Analysis of suppliers and your experience with them. Price is usually the decisive factor in selecting distributors, but you should also consider their reputation, efficiency, product quality, speed and reliability of delivery. When choosing suppliers, always consider not only price but also their values. The social and ethical reputation of your brand directly depends on who you cooperate with. In addition, it is worth having friendly relations with contractors, because when you have positive relationships with suppliers, they are more willing to meet your needs, offer better terms of cooperation, and ensure timely delivery of goods. And on-time delivery of goods is a direct way to successful sales and satisfaction of your customers.

3. Supply management and inventory optimization. Losing a customer just because the products were not delivered in time sounds like a nightmare. It is inventory control that helps to maintain the optimal level of goods, avoiding stock-outs and shortages. It is important to take into account the balances of the items you plan to purchase. That's why analyzing stocks + analyzing the dynamics of product (brand) purchases + calculating the time for delivery to a specific store = the perfect formula for timely replenishment of stocks.

Optimal stock = average daily sales * shelf life.

This formula will help you avoid stock-outs and write-offs.

Analytics is the main weapon of any procurement manager, as it enables them to make informed decisions based on data, not intuition or guesswork.

Datawiz BIis an analytical service that allows you to collect and analyze data in one place. This is your chance to easily compare numbers with dashboards, or share some of the information with suppliers for their convenience.

What opportunities does the analytical service provide?

• Assess the sales dynamics of a particular product/brand;

• analyze typical combinations of products in consumer baskets;

• assess the main inventory;

• track down products that have not been sold recently;

• Receive notifications about product shortages in the warehouse;

• assess the reliability of suppliers.

Along with this service, the purchasing manager no longer needs to communicate with each department separately, because they provide all the necessary information directly to the service. Reports are generated in just a few seconds from the latest updated data.

Datawiz BI is a chance to avoid the chaos in the plates and see the real picture in each store.