7 Common Procurement Problems and Simple Hacks to Solve Them

Procurement can be a labyrinth of inefficiencies, miscommunications, and delays, but it doesn’t have to be. If you’re facing common procurement challenges, don’t worry—there are straightforward solutions you can implement today to streamline the process and boost your results.

Here's a step-by-step breakdown.

01

Slow, Manual Processes

The Problem:

Relying on paper-based approvals or manually tracking requests can slow down your procurement, creating bottlenecks that waste time and resources.

The Hack:

• Create Standardized Templates: Develop templates for purchase orders, requests for proposals (RFPs), and approval forms to avoid reinventing the wheel each time.
• Set Deadlines for Approvals: Assign clear deadlines to each approval stage to prevent bottlenecks. For example, set a 48-hour turnaround time for managers to approve or reject requests.
• Delegate Approvals by Tier: For smaller purchases, empower junior staff to approve requests under a specific amount, reducing delays from unnecessary upper-level involvement.

Actionable Tip: Implement a “one-touch” policy where any document that crosses your desk must be processed or forwarded immediately to the next person.

02

Poor Vendor Management

The Problem:

Without a structured approach to managing vendors, communication breakdowns, missed opportunities, or even compliance risks can arise. You might also struggle to build strong, mutually beneficial relationships.

The Hack:

• Schedule Regular Check-Ins: Set up quarterly or biannual meetings with key vendors to discuss performance, upcoming needs, and any issues. A proactive approach keeps relationships strong.
• Develop Clear Vendor Guidelines: Create a simple, one-page document outlining expectations, such as delivery times, quality standards, and compliance with your processes.
• Rotate Vendor Contracts: Avoid sticking with the same vendors for too long. Introduce a contract review process every couple of years to ensure you're still getting the best value.

Actionable Tip: Keep track of vendor performance with a basic spreadsheet where you note metrics like delivery time, quality, and any disputes that have occurred.

03

Lack of Transparency and Spend Visibility

The Problem:

If you can’t see exactly where your procurement dollars are going, you risk overspending, inefficient purchasing, or even fraud. Lack of transparency also makes it hard to track how much is spent on certain categories or vendors.

The Hack:

• Implement a Simple Tracking System: Use a shared document or spreadsheet to log all purchases, who approved them, and their costs. Make this visible to all stakeholders to ensure accountability.
• Review Spending Quarterly: Take time to review procurement spend every three months. Categorize the spend by department, vendor, or type of purchase to identify trends.
• Set Spending Thresholds: Establish clear spending limits for departments or individuals to reduce unnecessary expenditures and improve visibility.

Actionable Tip: Hold monthly meetings with key stakeholders to discuss procurement expenses and flag any anomalies or unexpected spikes.

04

Compliance and Regulatory Challenges

The Problem:

Keeping up with industry regulations, internal policies, or government compliance can feel overwhelming. Failing to meet these requirements can result in fines or lost business.

The Hack:

• Create a Compliance Checklist: Develop a checklist of all regulatory and compliance requirements for your procurement activities. Review this checklist during each purchasing decision.
• Train Your Team: Hold regular workshops or training sessions to ensure everyone involved in procurement is aware of compliance obligations.
• Audit Vendor Compliance Annually: Set a schedule to audit your vendors once a year, ensuring they are adhering to regulatory and legal standards.

Actionable Tip: Incorporate compliance checks into your RFP process, ensuring that all bids meet regulatory requirements before considering them.

05

Delayed Approval Processes

The Problem:

Waiting for multiple approvals can cause serious delays, holding up procurement processes and potentially costing you opportunities.

The Hack:

• Set Approval Authority Limits: For smaller purchases (e.g., under $500), allow managers or team leads to approve purchases without needing senior-level involvement.
• Batch Approvals: Schedule dedicated approval times (e.g., twice a day) where all requests are reviewed, instead of handling them one at a time.
• Simplify Approval Criteria: Create a short list of criteria for what requires approval and what can be automatically processed to reduce unnecessary steps.

Actionable Tip: Assign a designated “backup approver” to step in when the main decision-maker is unavailable to prevent delays.

06

Lack of Supplier Diversity

The Problem:

Working with a limited group of vendors can expose your organization to risk and stifle innovation. A diverse supplier base ensures competitiveness and offers a wider range of solutions.

The Hack:

• Reach Out to New Vendors: Dedicate time each quarter to researching and reaching out to new vendors, especially minority-owned and small businesses, to expand your pool.
• Host Supplier Workshops: Offer educational workshops or training programs for new suppliers on your procurement requirements. This can make it easier for smaller or less experienced vendors to bid.
• Create a Supplier Diversity Policy: Set a goal for increasing supplier diversity and track your progress.

Actionable Tip: Build relationships with local business associations or networks that represent minority-owned and small businesses to connect with potential vendors.

07

Ineffective Bid Management

The Problem:

Managing bids can be chaotic without a structured process. Missing deadlines, unclear evaluation criteria, and poor communication with vendors can lead to lost opportunities or subpar project outcomes.

The Hack:

• Set Clear Bid Deadlines: Create a bid calendar with clear deadlines for each stage (submissions, evaluations, decisions) and share it with all stakeholders to avoid confusion.
• Establish Evaluation Criteria: Develop a transparent, easy-to-understand set of criteria for evaluating bids. Share this with vendors upfront to set expectations.
• Debrief Vendors: After bid decisions, offer debrief sessions for vendors to understand why they won or lost. This fosters trust and helps vendors improve their future bids.

Actionable Tip: Make sure each RFP includes clear instructions for submission format and timelines to streamline the bid process.

Conclusion

While procurement problems are common, they don’t have to be overwhelming. Simple, actionable steps like setting clear deadlines, conducting regular vendor reviews, and creating standardized templates can make a huge difference. By addressing these common pain points, you’ll have a smoother, more efficient procurement process—and better results for your organization.