The procurement process involves different risks and challenges, but the most common are:

1. Unpredictable Demand Surges
Sudden changes in customer demand especially in retail, logistics, and manufacturing — require immediate responses. Without a workforce to ramp up production quickly, delays and missed deadlines become inevitable.

How to solve unpredictable demand surges in procurement?

A local service provider complete with tools and equipment offers on-call trained production labor to help procurement teams respond to demand spikes without sacrificing service quality.

2. Seasonal Staffing Shortages
Procurement planning often follows seasonal cycles. For example, in agribusiness, harvest seasons need extra workers to handle farm equipment. Meanwhile, holiday peaks can cause staffing challenges in manufacturing and production lines.

As a result, the processing of materials in procurement for production will slow down.

How to solve seasonal staffing shortages in procurement?

With seasonal manpower support, a third-party service provider allows you to scale your team up or down based on forecasted workload, helping you stay productive year-round.

3. Inconsistent Attendance and Turnover
High turnover and frequent absences are common problems when hiring labor workers. Even losing a few dependable staff can disrupt procurement activities.

How to solve inconsistent attendance and turnover in procurement?

Collaborating with a reliable service provider guarantees you a consistent and well-trained workforce that can help enhance your procurement process even during busy seasons.

4. Rising Cost of Raw Materials
Procurement professionals are struggling with the rising cost of raw materials. Disruptions in the supply chain, delivery delays, labor shortages, and weak economic policies have all driven prices up.

Two major factors behind this spike are:

COVID-19 Pandemic

Lockdowns during the pandemic slowed production, creating a supply shortage while demand stayed high—leading to higher prices.

Russia and Ukraine War

Russia and Ukraine are major energy exporters, but the conflict reduced supply. As a result, energy prices jumped by 20% in the first half of 2024, putting more pressure on procurement teams to secure key resources at higher costs.

How to solve the rising costs of raw materials in procurement?

To manage rising costs and supply chain challenges, consider partnering with a trusted service provider. By outsourcing key procurement functions, you can better control costs and maintain procurement process stability even during global crises.

5. Rushed Procurement Purchases Under Pressure
Taking cautionary steps in the procurement process is often overlooked, especially when rushed orders hit.

As a procurement manager, making emotional decisions and rushing to purchase materials without canvassing or looking for the best price with other suppliers can result in severe financial consequences in the long run.

How to solve rushed procurement purchases?

Establish a purchasing plan to prevent overspending. You can also automate your workflow process using advanced tools to help you easily track purchase orders.

6. Fraudulent Procurement Transactions
The prevalence and impact of different types of fraud are such costly concerns for many businesses in the Philippines. Fraud can happen internally with the participation of outsiders. For example, an employee might inflate prices or create fake invoices. Some even accept kickbacks from suppliers.

How to solve fraudulent procurement transactions?

One effective way to reduce fraud risk is to work with a reliable service provider. These partners have strict compliance systems, established vetting procedures, and financial controls that reduce opportunities for fraud.

By outsourcing procurement or staffing functions, you can gain added transparency, and tighter security making fraud much harder to commit or go unnoticed.

7. Supplier Inefficiency
A supplier who misses deadlines or delivers poor-quality materials can negatively impact your procurement process. Late material shipments can cause delays in production and frustrate customers. Purchasing low-quality materials lowers the value of products or services.

How to solve poor supplier performance?

Using a management system to track supplier performance like on-time delivery, product quality, and order accuracy can make your procurement process easier.

Conducting regular reviews will also help you identify supplier performance issues early. Remember, if a supplier underperforms, it may be time to find a more reliable partner.

8. Damaged Materials and Undelivered Packages
A 2019 report revealed that around 90,000 packages go undelivered every day. On top of that, about 11% of materials arrive with some damage.

These issues can delay procurement operations, and generally, when materials are lost or damaged, businesses suffer financially—especially if employees are expected to cover the cost.

While these issues can’t always be avoided, you can take a few actionable steps to avoid this risk.

How to solve getting damaged materials and undelivered packages?

Don’t accept damaged or incomplete materials without documentation. Taking this as a proactive step will help your company reduce financial losses, hold suppliers accountable, and maintain smooth supply chain operations—even in challenging conditions.

9. Inaccurate Procurement Documentation
Making procurement decisions based on inaccurate data can cause major problems like inventory shortages, overstocking, and other serious issues that can harm your entire procurement process.

How to solve inaccurate procurement documentation?

Investing in reliable procurement software that stores all your data in one place reduces the errors from manual entry or scattered spreadsheets. This also helps you streamline document processing and ensures your procurement records are stored accurately and securely.

10. Refusing to Adapt Technologies to Your Procurement Process
Managing procurement manually might seem easy at first, but as your operations grow, it can turn into a major obstacle that slows down your entire process.

How to adapt technologies to your procurement process?

To adapt technology to your procurement process, start by identifying manual tasks that slow you down. Then, choose a procurement tool that fits your needs, digitize your documents, and train your team to use the system effectively.

Over time, expand features and track performance to improve efficiency and procurement decision-making.

Learn more: https://toplissolutions.com/whatsnew/blogs/procurement-challenges-philippines/