Why You Should Partner with a Small Procurement Outsourcing Company (in Two Examples)

Procurement outsourcing has become an essential strategy for companies to remain competitive, as it increases efficiency and reduces costs.

If the time has come for your company to outsource its Procurement process, how do you go about choosing a good outsourcing partner? You should look for a company that offers a broad range of quality materials and products, timely deliveries and quick lead times, and that can help you reduce costs. You will also want an experienced and competent company that you will be able to trust to provide you with what you need, when you need it.

Now, do you do big or go small? While large companies may appear as a safe choice, it in fact makes more sense to hire a small outsourcing partner.

Example One – Small Companies Are More Agile

Large companies usually don’t have the ability to be as agile as small companies when it comes to getting whatever you need quickly.

Here is an example. On behalf of one of our clients, we asked a large aerospace distributor for a quote on a chemical we had purchased from them previously. The only difference was that previously we had purchased a 5-gallon pail, and this time our customer was asking for a 55-gallon pail. Amazingly, the aerospace distributor was unable to quote a 55-gallon pail as it was not listed as a catalog item, and they were not allowed to quote items that didn’t already exist in their catalog. It was evident that the sales rep with whom we were communicating was frustrated that she could not give us a quote due to her company’s limitation. Of course, we were able to get the product quoted by another company.

It is an example of the limitations of large businesses. It is not uncommon that companies will not go out of their way to find sources for products they do not already carry, even if only the order size is different. This is because many of these companies are too big and their internal organization is too complex and dense for there to be much room for agility and flexibility. Unfortunately, many large companies also believe that they don’t have to go out of their way to please a customer. “Either we have it, or we don’t, and if we don’t you can find someone else, we have enough customers as it is” – this principle is pretty discouraging.

These types of limitations usually don’t exist in small companies. First, small companies can be more flexible; you don’t have to jump through so many hoops to get something done and requests don’t have to be processed, approved and signed off by innumerable departments to get executed. Secondly, small companies are usually more customer-friendly. It is in their interest to truly deliver and even outperform their clients’ expectations in order to prove themselves.

Example Two – Small Companies Are More Efficient

Here is another example of the inefficiency of rigid systems some large companies have. We asked a large distribution company for a quote on an electronics material. We had to go through this company since the manufacturer of the material insists that all quotes are requested from existing distribution partners. We called the manufacturer to get the correct part number, and they said that this item was just added to their line the day before, and that, because it was new, the item information had not yet disseminated to their distributors. When we called the distributor, who didn’t have access to the part number yet, they said that we would have to wait 4-5 days for a quote, as they had to wait for the product information to be disseminated through their system. They said it had to go through many channels within their company, from Technical Support to Product Manager to Purchasing and back through to Sales and Marketing. This is a very large and well-run company that we had done business with for many years, but their efficiency was stifled by the rigidity and complexity of their system.

In this case, we were able to provide our client with details on a new product that the authorized distributor was yet unaware of. We often end up knowing more about the product than the distributors who are authorized to carry it, due to our knowledge base and because we do research on products prior to sourcing. In many cases, what would take large companies many days to process due to the size of their system, we could get done in a mere matter of minutes, and we often do, as many manufacturers have no problem with us buying directly from them.

What Is the Bottom Line?

The bottom line is, small Procurement companies are more agile, flexible and efficient than Procurement giants. While big companies can be thrown by requests that don’t fit their mold or their exact processes, and can therefore take a long time to handle an order, thus stalling your business, small companies can be more nimble and effective.

Finally, while customer service is, for many large companies, just a buzz word, small businesses are usually more dedicated to their clients and can act as true partners to your business, and you need a partner who is fully invested in the success of your company.

At CTA, we give our clients the customer service usually provided by small, family businesses, while procuring materials of the highest quality from top suppliers globally, and providing the experience and expertise of a Procurement partner of 20 years to Fortune 500 companies.

CTA’s Procurement service offers a highly skilled and dedicated team to perform Procurement functions quickly and inexpensively, and with the flexibility needed to meet the changing needs of any Procurement department.

Find out how CTA can help you optimize your Procurement process by contacting us or by submitting your RFQ.