What is Collaborative Procurement?

Collaborative Procurement is a procurement arrangement in which more than one organization join together to purchase common materials or services from the suppliers. This practice helps companies increase efficiencies, reduce cost and risk by buying together.

Advantages and disadvantages of Collaborative Procurement

Collaborative Procurement can have many positive effects on involved organizations. Here are some major benefits of this practice.

Cost Savings

One of the key benefits of Collaborative Procurement is that it helps organizations reduce costs by leveraging their combined purchasing power. Companies can increase their purchasing scale, which leads to a decrease in the average unit cost. Organizations will also benefit from bigger volume discounts.

Sharing Expertise

When working with procurement partners, your company has the opportunity to learn and share experiences, knowledge and expertise to improve your procurement process and gain better insights of the industry. This is particularly helpful for small and young companies who need to expand their networks and enhance procurement-related expertise.

However, there are also some disadvantages that collaborative procurement brings about. One of which is Management issues. As it involves a group of enterprises working together, things can get complex and troublesome. There will be a lot of meetings to discuss and evaluate the deal and the amount of paperwork is huge, at some point, conflicts are unavoidable.

Visit JKA Solutions’s website now to learn more about Collaborative Procurement: https://jkaservices.com/services__trashed/procurement-and-supply-chain-service/