Procurement Outsourcing
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Procurement Outsourcing
Overview
Procurement outsourcing is rapidly advancing in tandem with other outsourcing services, offering significant benefits to organizations worldwide.
Keywords: KPO, knowledge process outsourcing, outsourcing, India KPO, BPO, India BPO services
Introduction
The outsourcing industry is experiencing rapid growth as companies recognize its advantages. Initially, outsourcing was confined to non-core business areas such as data management, surveys, and customer service. Today, many companies are extending outsourcing to procurement, focusing primarily on non-core items like common raw materials and office supplies.
A recent survey of 150 US-based outsourcing firms found that nearly half are either currently outsourcing procurement tasks or planning to do so. Experts predict that procurement outsourcing will continue to grow by 15% annually.
What is Procurement Outsourcing?
Procurement outsourcing involves delegating procurement activities to third parties under mutually agreed terms, ensuring a seamless supply of direct or indirect materials. Companies that invest significant time and resources in maintaining an uninterrupted supply chain can benefit from procurement outsourcing services. These services often negotiate bulk contracts, enabling them to offer competitive pricing to clients.
Initially centered around non-core materials, procurement outsourcing is now expanding to include direct materials. This shift is driven by manufacturers' desire for a smooth material supply and to minimize production downtime.
Levels of Procurement Outsourcing
Procurement outsourcing can be categorized into three levels:
1. Basic Level: Involves outsourcing people, infrastructure, technology, and general supply management.
2. Intermediate Level: Covers requisitioning and procure-to-pay processes.
3. Advanced Level: Includes strategic outsourcing where providers identify supply sources, select suitable suppliers, and establish long-term business partnerships.
Benefits
Reports indicate that companies outsourcing procurement operations gain extensive benefits, such as improved price control, reduced labor costs, access to top suppliers, strengthened strategic relationships, and overall increased efficiency.
For more information on outsourcing, visit [kpoasia.com](http://www.kpoasia.com).
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