7 WAYS TO PROTECT YOUR PROCUREMENT STRATEGY
In today’s world, global events are unpredictable and put pressure on businesses. Companies are faced with increased production costs and disruptions along their supply chain, while customer preferences and sustainability regulations intensify the need for continuous innovation. In fact, 55% of companies are increasing their investment in technology due to the constant pressures on the supply chain.
(Source: 2024 MHI Annual Report).
Where is your procurement strategy today? Here are some things to consider:
• How resilient is your existing supply network?
• How quickly can you identify new suppliers in case of a disruption?
• Do you have a digitized process to identify strategic suppliers?
• Are you getting competitive pricing from your suppliers?
• What are you doing to achieve your sustainability goals?
• What are you doing to support your business’s innovation goals?
• Can your existing suppliers deliver at the production levels you need?
• In today’s dynamic environment where we constantly have to do more with less, what technology are you using to help your employees improve productivity?
• Do you have more than one supplier for critical goods? Do you have a way to find new suppliers in a monopoly situation?
The solution is to be better prepared and to control what you can control
Having easy access to multiple strategic suppliers with a holistic view of the market to meet your criteria is no longer a luxury but a necessity. Here are 7 things to consider for your procurement strategy:
01
Increase efficiency in your source-tocontract journey
Procurement teams can gain significant efficiency through the ability to preselect suitable suppliers prior to embarking on the entire source-to-contract journey. For example, by employing this strategy, teams can avoid the frustrating scenario of reaching the contract negotiation stage only to discover that the chosen suppliers are incapable of meeting their requirements.
02
Ensure resilience
In today’s ever-changing business landscape, disruptions have become the norm rather than the exception. Therefore, having a robust action plan in place to ensure supply chain resilience and continuity is paramount. Use technology as a tool to empower procurement teams to proactively identify alternative suppliers before a disruption occurs.
03 Mitigate risk
However, unexpected events do happen so being prepared also means being able to react quickly when they do. Develop the ability to identify alternative suppliers to mitigate the immediate risk of a supply chain disruption and significantly shorten time to recovery.
04
Drive innovation
Product innovations often require new suppliers. If your company is branching out into new application areas and products, your existing suppliers might not be able to deliver on your demands. Consider using an AI-driven tool to gain a broader perspective of supply options all over the world, perhaps even in markets you hadn’t previously explored.
05
Reduce costs
By gaining a comprehensive understanding of the supplier market, you equip yourself with invaluable leverage during negotiations. Introducing competition among your suppliers not only shifts the balance of power from sellers to buyers but also unveils myriad cost-efficient sourcing options. Tapping into this knowledge of the supplier landscape empowers you to secure more favorable terms, pricing, and conditions, ultimately optimizing your procurement outcomes and driving greater value for your organization.
Ensure sustainability
06
07
Customers are putting increasing pressure on businesses to be more sustainable and there are a growing number of regulations that companies have to adhere to. This requires companies to identify new suppliers or potentially replace existing ones. Leverage the power of an AI-driven tool to help with your discovery process. Ensure that you have a more accurate view of all the suppliers that fit your criteria and can help you achieve your sustainability targets and strengthen your brand.
Digitize procurement processes
Traditional methods, including countless hours on search engines, combing through supplier directories and Excel sheets, as well as activating personal networks, all too often lead to unsatisfying results; relevant suppliers remain hidden, while the retrieved supplier data tends to be incomplete and inaccurate.
Through automation, streamline your supplier search process, freeing up valuable time for procurement teams to focus on high-impact, strategic initiatives. In fact, the time it takes to find a new supplier could be reduced from 50 hours to just 1 hour. By digitizing your processes, you can eliminate manual and repetitive tasks that drain your resources.
