The global market is becoming increasingly unstable day by day and that is why it is important for companies to have procurement strategies that do not cause excess expenditure for business so that the day today procurement operations in the market become profitable and not a liability for the company. There are a lot of factors which can affect the supply chain market on a day-to-day basis and therefore imperative for a company to make sure that their procurement strategies are in place so that the financial bleeding in case of any uncertain or untold situations can be kept to a minimum.
- Centralize Procurement Activities
A lot of benefit comes with centralising procurement activities within a company because it helps to keep the program and Strategies and track and make sure that the strategies that are used on a day-to-day basis are optimised and streamlined so that the company that is looking forward to expand their share in the market does not suffer loss even if there is some kind of untold scenario prevailing at any given moment. There are a number of cloud-based tools like Coupa which can greatly improve streamlined performance. Thus, with the right strategies in place and the right technology companies can make sure that the strategies they execute in the market will only give growth and profitability in the long run.
- Implement Strategic Sourcing
Strategic sourcing is something extremely important for a company because it is something the whole supply chain market depends on because it often forms the very base of the supply chain management. Therefore, it is important for companies to maintain a good hold on the market through high performance strategic sourcing along with maintaining good supplier relationships for achieving higher consumer satisfaction and sustainable growth. The companies are looking forward to long term growth creation because of the unpredictable time that the world is witnessing at the moment. It is here tools like JAGGAER helps to optimise and pick out the most appropriate suppliers for greater sourcing efficiency.
- Automate Purchase Requisitions
Automating purchase requisitions help the company grow by making sure that the mistakes that occur in manual purchase requisitions. Automation of purchase requisition makes less errors and makes sure that procurement is carried out on time and with perfection. Automatic things like this improve the clarity in related operations and help to comply with the prevalent laws and rules without creating any barriers or hassle. Automation makes sure that the procurement and the sourcing operations of a company are in line with demand and necessity is in the market so that there are no shortage or excess of products when it comes to procurement within done will have a direct impact on consumer satisfaction.
- Use Dynamic Supplier Scorecards
The use of dynamic suppliers scores cards when it comes to supply chain management will have a direct and positive impact on the growth and profitability of company because dynamic suppliers score cards helps to identify suppliers who are high performing and these suppliers score cards also compliance, quality and delivery time of the suppliers to ensure that the business targets are made on time and without any fault. The suppliers score cards help to maintain clarity which in turn increases mutual relationship and respect and provides table growth to the company. Tools like GEP SMART analyses all the key performance indicators to point out the high performing suppliers and also those who are not performing well because of such tools it has become easier to filter out the necessary things in order to achieve stable profits.
- Adopt Contract Lifecycle Management
Adopting contract lifecycle management is essential for business because it helps to make sure that there are minimal to no mistakes and thus efficiently reduces risk factors, helps to comply with the rules and regulations along with imparting value and actively contributing to value creation of various contracts that a company enters for establishing a strong position in the market. The contract life cycle management also ensures that the terms and conditions of a contract are duly followed and the time of delivery does not falter. Through this system the companies maintain a strong bond with the collaborators and various suppliers by making sure that their relationship remains transparent and based on mutual respect. There are also a lot of artificial intelligence tools that help companies achieve lifecycle management without any hindrance. ICERTIS is one such tool that not only keeps a track record of contracts but also performance of the suppliers.
- Leverage e-Procurement Portals
Using e-procurement portals can be extremely useful in making business operations related to supply chain management more effective by making it transparent, cost efficient and almost foolproof. It basically reduces the amount of paper work related tasks which can cause errors in the procurement related matters and therefore makes compliance even stronger. It also uses data analytics to make sure that the right suppliers are picked up for the appropriate jobs and that makes the company profit by collaborating with efficient suppliers that lead to greater consumer satisfaction. SAP Ariba like systems also helps the company to be more transparent and optimise tasks so that they do not bleed financially and optimise sourcing practices for long term profits.
- Monitor and Reduce Tail Spend
Tail spends monitoring should always be done because there are times in the company when low value and high-volume purchases are not focused on but these are purchases which are extremely crucial for the company. This system helps to make sure that there are no hidden costs affecting the supply chain marketing related decisions and if such costs exist, then they should be rectified immediately so that the company does not end up with a long list of expenditures which were initially not required. Analysing spending of a company also helps to make better decisions regarding budgets and expenditure so that the operations in the market have a positive effect on the profit and long-term growth. Fairmarkit is one of the many artificial intelligence powered tools which help to keep a track of the spend analysis of a company and point out the nature and volume of purchases to make sure that the company stays on the right track along with providing cost effective solutions and fast procurement.
- Improve Demand Forecasting
Demand forecasting is extremely useful when it comes to supply chain management because this system helps the companies to give consumers what they prefer and makes sure that the company achieves a good level of consumer satisfaction. Demand forecasting also helps to predict the kind of goods and services that are required in the market along with optimising inventory and making sure that the company does not have access stock of one type of material and less stock of another, therefore making sure that the company has abundant stocks of all the required materials that are in trend in the market. Anaplan is one such artificial intelligence tool that helps the companies with stock planning and prediction making companies more flexible under pressure and well equipped to take accurate decisions.
Final Thoughts
To control it is imperative to know that the above-mentioned strategies are immensely useful and effective when it comes to procurement and sourcing and also navigating the whole complex supply chain scenario. From supplier scorecards two procurement portals and other artificial intelligence powered systems like Anaplan and Fairmarkit help mitigate risk and unnecessary expenditure by optimizing various procedures related to supply chain management. Using all of these together will help the company by making sure that they maintain transparency and also get to collaborate with the best suppliers so that their performance meets their expectations and leads to growth and stability.
In the next post, we’ll cover points 9 and 10 — focusing on real-time spend analytics and standardizing supplier onboarding.
Author’s Bio:
Pankaj Tuteja
Head of Operations – India
https://www.dragonsourcing.com