THE EFFECT OF PROCUREMENT PROCESS OPTIMISATION ON COMPANY PERFORMANCE

Due to constantly increasing market competition, companies need to optimise their business operations in order to be able to thrive or maintain their market position. There is a wide range of possibilities for companies to boost their competitiveness and business efficiency, i.e. to generate revenue. Modern-day business operation is significantly different from traditional business operation. All organisations consist of business processes, regardless of their different views thereon. Business processes are important because they affect the visible factors such as sales, revenue, and profit. Furthermore, they also affect productivity, error rates, process cycle, reliability level, process costs, customer satisfaction, as well as supplier relationship. The world’s largest companies owe their success to the use of the process approach and optimised procurement activities. Combining the two can help create a system in which every employee participates in creating and sharing added value for the users of the process, and facilitates dealing with customer requirements. The long-term success of a company depends largely on the quality of business process management in all segments of its operations. Business process management, in particular the management of the procurement process, enhances the competitiveness and innovation capabilities of a company and allows it to respond to changing market conditions in a faster and more flexible way.