Procurement principles are guides that help procurement teams make the procurement process as effective as possible, even in Africa.
Although the principles are universal, there are nuances in the African context. This is because of the continent’s growing economy and business climate.
In this article, we take a deep dive into the procurement principles that work in Africa. And how it can benefit supply chains and businesses across the continent.
But first…..
What are Procurement Principles?
Procurement principles are foundational guidelines and practices that govern the procurement process in any organization or supply chain.
These procurement processes involve acquiring goods and services, including sourcing, vendor management, collaboration, and payments.
These principles ensure transparency, fairness, and efficiency in the procurement process.
Why are Procurement Principles Important?
The procurement principles guide the procurement process, helping the supply chain and organization achieve their goals.
Some of its importance are the following:
1. Best of the Bunch
When sourcing for suppliers, procurement principles ensure you get the best of the suppliers in the market.
This ensures your supply chain is aligned with stakeholders that will positively impact the supply chain operations.
2. Great Prices
Great prices don’t always mean the lowest price. In fact, it seldom does, but with procurement principles, you can get the best possible prices for the best value.
This is true whether you purchase goods or services for the supply chain.
3. Easy Facilitation & Collaboration
When procurement is done right, it facilitates the supply chain operation easily, including collaboration with suppliers.
It also makes all the tools and products required for a successful supply chain operation available.
4. Standard Operating Procedure (SOP)
The standard operating procedure are set of rules and regulations the procurement team should follow during the procurement process.
These rules and regulations are made possible and accessible through procurement principles.
5. Procurement Optimization
With procurement principles in place, it becomes easier to assess and optimize the procurement process.
Procurement principles simplify the process because they already act as a guide pointing to potential improvement areas.
Procurement Principles You Should Prioritize in Africa
Depending on who you ask, there are about 8 to 10 procurement principles. In this article, we look at the six that work best in Africa.
1. Best Value of Money
You want to get the best value for your money, but as I mentioned earlier, it is not about the lowest price.
It is about the price that allows you to get quality goods and services but also allows your supply chain to remain profitable.
Why get the lowest price if it will lead to supply chain disruption? And why pay so much if it will cripple your supply chain?
Although the African economy is still on the rise, financing, especially supply chain financing, can be difficult to come across. This makes financial prudency a must for most supply chains.
2. Market Research
Your procurement team should be able to conduct extensive market research about the supplier and product the team is sourcing for.
Extensive market research puts you in charge when negotiating. It also allows you to dictate your expectations from a place of knowledge and strength.
Conducting market research on your potential suppliers ensures you get the best of the bunch. It puts you in the know of your supplier’s capabilities and weaknesses.
Market research is one of the most powerful procurement principles in Africa.
3. Transparency, Fairness, and Impartiality
More often than not, you find situations in the different procurement departments where one or two of the officials have taken bribes in form or kind from suppliers.
This results in favouritism, which in turn promotes a les affaire attitude from suppliers, ultimately jeopradizing the entire supply chain operation.
As a supply chain manager, I have seen instances where the procurement team continuously favoured a supplier who did not bother meeting the agreed terms and conditions.
This led to a lot of breakdowns in the supply chain, but the procurement team’s hands were tied. Eventually, it led to such a massive setback that the company had to step in.
However, by then, it was already too late.
Lack of transparency and fairness in the process leads to supply chain disruptions that could jeopardize the business objectives.
4. Favourable Negotiations for all Parties
It is easy for businesses, especially mega businesses in Africa, to strong-arm their suppliers, but it is always counterproductive.
When you negotiate to suit only your businesses or supply chain, the suppliers really have no incentive to stay loyal to you.
When a better contract or business presents itself, they will always give preferential treatment to that business or client because they stand more to gain.
This eventually leads to unnecessary delays in the supply chain, which can result in downtimes.
Never go into the negotiating room trying to win for yourself. Go in trying to find a solution that works for all parties involved. That way, your suppliers value your business.
Even when a better offer comes, they will do you the courtesy of informing you of potential delays.
5. Consumer Focused
The consumer is as much a stakeholder in the supply chain as any other. Maybe more of a stakeholder than most.
Your consumers have to be the center of attention of your supply chain, from the beginning of the supply chain (AKA the procurement) to the end, which is delivery to the consumer.
When sourcing, negotiating, and managing vendors, always put your consumer first. Doing that will always get the best suppliers and deals that work for you and the consumer.
As far as procurement principles in Africa, this might be the most important.
6. Competition
A healthy competition is always a good idea, whether internally or externally. Have a healthy competitive mindset in your procurement process.
You could create competition among your suppliers, ensuring they always do their best to meet your expectations.
Your team can also implement a scorecard system that is accessible to them and penalize those who fail to meet up consistently.
They can penalize them by requesting fewer products from them. If they continue, consider dropping them entirely.
For this to work, you will need to engage multiple suppliers for each supply chain segment.
Externally, you can create competition with other procurement teams in your pursuit of suppliers.
This ensures you offer your best to suppliers while considering your consumers and business goals. Doing this gives you an edge in the market.
FAQs on Procurement Principles that work in Africa
Q1: What challenges do African supply chains face in implementing procurement principles?
Ans: Corruption, poor infrastructure, capacity issues, and the need for regulatory reforms are possible difficulties.
Q2: How might ethical procurement practices help Africa’s economy grow?
Ans: Procurement guidelines may draw investments, encourage economic stability, and fuel progress in African economies by ensuring fairness, transparency, and value for money.
Q3. How can African businesses enhance their purchasing procedures?
Ans: African organizations can enhance their procurement procedures by implementing best practices, investing in personnel development, and embracing contemporary procurement technologies.
Q4: How can suppliers in Africa guarantee procurement procedures are transparent?
Ans: Suppliers across Africa can encourage openness by requesting procurement data, engaging in open bidding procedures, and encouraging electronic procurement systems.
Conclusion
Procurement principles in Africa are a very important set of values that facilitate business operations between supply chains and its suppliers.
When done right, the procurement team can ensure the supply chain has the best product and supplier, thereby pushing them one step closer to achieving the organization’s goals.
Obinabo Tochukwu Tabansi is a supply chain digital writer (Content writer & Ghostwriter) helping professionals and business owners across Africa learn from real-world supply chain wins and setbacks and apply proven strategies to their own operations. He also crafts social content for logistics and supply chain companies, turning their solutions and insights into engaging posts that drive visibility and trust.
