Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
Global Procurement Strategy and Process in 2025
What is global procurement?
- Global procurement is the strategic practice of acquiring goods, services, or materials from suppliers worldwide to secure the best combination of cost, quality, and reliability.
- Global procurement helps large businesses maintain a steady supply of high-quality and affordable goods.
- It is important to monitor logistics as global procurement can involve hidden expenses, political risks, and financial uncertainties.
What is Global Procurement?
Global procurement represents a strategic approach to sourcing goods, services, and materials from the global market. It enables companies to expand their sourcing beyond national borders by taking advantage of benefits such as reduced costs, improved quality, and access to innovative resources available in different parts of the world.
Global procurement opens up opportunities for collaboration with numerous suppliers, reducing dependency on a single local partner and increasing business flexibility.
The main advantage of global sourcing is the cost-effectiveness that comes from taking advantage of lower production costs abroad. In this way, companies can increase both their competitiveness and profitability. Furthermore, using a wider network of suppliers allows them to improve the quality of supply and adopt technologies used around the world.
A comprehensive global procurement strategy entails establishing robust communication and logistical links between the company and its international suppliers, along with continuously monitoring market trends and innovations.
How to Create Global Procurement in 7 Steps
Global procurement enables companies to expand internationally, improve efficiency, reduce costs, and become more competitive. In a dynamic business environment, adapting to the global supply chain is crucial.
This guide, outlining seven key steps—from analyzing the current state and developing a strategy, to identifying suppliers, negotiating, implementing technologies, managing risks, and continuous improvement—helps organizations establish an efficient and flexible global procurement system.
1. Analysis of the Current State and Goal Definition
Initially, it is necessary to analyze all aspects of the current procurement process within the organization. This involves mapping out existing processes, identifying weak points, and understanding current costs and performance. Based on the analysis, both short-term and long-term goals are defined, such as reducing costs, improving product or service quality, increasing process efficiency, and ensuring supply continuity.
2. Development of Procurement Strategy and Policy
A strategy is formulated to guide all activities related to global procurement. This includes selecting markets, defining supplier criteria, and aligning the procurement strategy with overall business goals. Detailed policies, standards, and procedures are developed to regulate the entire procurement process, ensuring consistency and transparency in all business transactions.
3. Identification and Evaluation of Suppliers
Conduct extensive research to identify global suppliers who meet the established criteria. Various tools and methodologies (e.g., scoring systems) are used to assess supplier quality, financial stability, reliability, and alignment with your standards and ethical norms.
4. Negotiation and Contracting
Define negotiation goals, limits, and key conditions, as well as success criteria. Actively negotiate on prices, delivery deadlines, quality, warranties, and other conditions. After successful negotiations, contracts are drafted that clearly outline the obligations and rights of both parties, including mechanisms for dispute resolution.
5. Implementation of Systems and Technologies
Implement IT solutions and software tools (e.g., ERP systems, procurement management platforms) that enable automation and process tracking. Ensure that the new systems are integrated with existing business processes, and provide adequate training for employees on how to use them.
6. Risk Management and Performance Monitoring
Proactively identify potential risks in the procurement process—from supply chain disruptions to market condition changes. Establish KPIs (key performance indicators) and monitoring systems that allow for timely identification of issues and the implementation of corrective measures.
7. Continuous Improvement and Process Optimization
Regularly gather feedback from all process participants (both internal and from suppliers) and conduct periodic reviews. Based on the collected data, continuously adapt and improve the processes to achieve greater efficiency, reduce costs, and enhance service quality.
The 8 Steps of Global Process
In today’s competitive global market, companies must continuously evolve their procurement strategies. This eight-step guide offers a concise framework to optimize global procurement—from assessing current processes to implementing technology and managing risks—by incorporating key elements like preliminary research, detailed supplier evaluation, and performance monitoring.
1. Analysis of the Current State and Goal Definition
This step involves a detailed evaluation of the company’s existing procurement processes. It begins with preliminary research, where the company identifies the optimal locations for production, assesses market trends, analyzes customer requirements, and examines competitor activities. Based on this comprehensive analysis, clear and measurable short-term and long-term goals (such as reducing costs, improving quality, increasing efficiency, and refining brand positioning) are defined.
Real-life Example: Analysis of the Current State and Goal Definition
2. Development of Procurement Strategy and Policy
Based on the analysis, a strategy is created that aligns procurement activities with the company’s overall business goals. In this step, detailed policies and procedures are formulated to set the rules, standards, and expectations for the entire procurement process, ensuring consistency and transparency.
Real-life Example: Development of Procurement Strategy and Policy
3. Market Research and Supplier Identification
In this step, the company conducts in-depth market research to gather information about the global market. It identifies potential suppliers by establishing selection benchmarks derived from the preliminary research. This process enables the company to explore various options and trends before forming a partnership.
Real-life Example: Market Research and Supplier Identification
4. Supplier Evaluation and Selection
After identifying potential suppliers, a detailed evaluation is conducted. This stage serves as the sourcing event, where the company applies pre-defined benchmarks and scorecard systems to assess supplier quality, reliability, financial stability, and compliance with internal standards, ensuring that only the best partners are selected.
Real-life Example: Supplier Evaluation and Selection
5. Negotiation and Contract Finalization
In this step, key negotiation objectives are defined and the company negotiates terms of cooperation, including prices, deadlines, and warranties. Following successful negotiations, contracts are formalized, clearly outlining the rights and obligations of both parties to ensure legal protection and clarity.
Real-life Example: Negotiation and Contract Finalization
6. Implementation of Technology and Systems
Appropriate IT solutions—such as ERP systems and procurement management platforms—are selected and implemented to automate processes, improve process visibility, track transactions, and integrate with existing systems. This phase also involves creating a detailed performance analysis schedule and defining team responsibilities to ensure effective implementation.
Real-life Example: Implementation of Technology and Systems
7. Risk Management and Performance Monitoring
In this stage, the company identifies potential risks that may affect the procurement chain, such as market changes or supply disruptions. Key performance indicators (KPIs) and comprehensive monitoring systems are established to facilitate the timely detection of issues and the implementation of corrective measures, ensuring smooth ongoing operations.