Before we begin with the article, it is important to understand that what exactly we mean by central procurement system. The centralized purchase system includes in bringing all the processes, personnel and items related to material procurement to a single platform. Such centralized system has a lot of advantages especially for larger platforms such as supermarkets that can be explained as follows.
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Minimization of the duplication:-
The supermarkets are heavily loaded with procurement transactions. Thus, if they do not implement the centralized system than the same can create a lot of duplication of the entries that in turn can result in waste time, cost and energy. Centralization can minimize the error and reduces the risk as well.
Increases the overall efficiency:-
If the supermarkets do not implement the centralized system, then different HODs have to handle their own department’s purchase. If they incorporate the central procurement, the respective employees can spend more time the other productive work. Thus, the overall accuracy, efficiency and productivity increase at the best.
Reduced costs:-
In the case of central procurement, all the transactions are carried out at a single place. This will reduce the money that the supermarket needs to spend for personnel and storage. This system will also ensure that different departments buying power come together and it increases the overall purchase ability for the store. Besides, the supermarkets will be able to reduce the regulatory expenses as all the procurement transaction will be carried out from single place, recorded and monitored from the single platform.
Improved Business Relationships:-
The centralized procurement will focus on improving the different supplier relationships. As the supermarket will continue to purchase material from regular suppliers then the chances of better relationship’s gets higher and higher. It leads to improved credit ratings and fast processing of the transaction. Apart, the purchase staff is instantly accessible in case of any query or complaint from the vendor.
Reduced Workload:-
As the central purchasing department comes into the picture, the employees can focus on the core function of the business. Hence, the strategic decision making can be powerful, strong and more effective for the organization. The network of the suppliers & vendors grow stronger and the company can implement the best practices in order to achieve more productivity from the business. The implementation of the technological advancement can be possible to fetch more revenue for the business and it takes the business to the next level all together. The optimum utilization of services and goods can be achieved. The overall waste of the material can be reduced to a greater extent.
Conclusion:-
The chain of supermarkets are going ahead with centralized procurement system in order tom improve the productivity, efficiency and revenue for the company. Especially in India, the supermarkets are focusing more and more on implementing the centralized procurement system. This has become a revolutionary trend for the Indian supermarkets as well as Indian consumers. So, join this revolution and fetch more profit for your supermarket!!!
