What is procurement and what does it mean for cannabis?
Check out this valuable article contributed by @cannabizopps
Procure with power,
Sandra Thibodeau, CEO, Cannabis Business Opportunities
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As Sandra says in her excellent overview, procurement is the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods, with, two KPIs: cost and efficiency.
Here are a couple of best-practice rules of thumb for those two KPIs that have worked for me:
Cost: The best product/service for your specific need isn’t necessarily the one at least cost (it usually isn’t)
Efficiency: Selection is made from your due diligence based on word-of-mouth from your network and the potential company’s existing or past clients (the company should have no issue with giving you a list). After you have a signed agreement, have a backup company or two in mind in case there is a need to jump (such as a lack of stock/personnel, going out of business, or some other emergency). Re-evaluate your relationships frequently, and don’t go for a multi-year contract if it is a new relationship.
Does your procurement activity take place on site or is it outsourced? What are your experiences?
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