Whenever one speaks about optimization of supply chain operations, it solely directs to the processes that include minimization of cost, driving up the utilization of assets, decreasing the inventories, and implementation of appropriate resiliency required to handle any sort disruption.
When COVID-19 hit the world in 2019, the very first thing product sourcing leaders were focused on is weathering the storm by auditing the supply chain system. Least did the organizations know that the supply chains from every corner of the globe would come to a halt. Procurement leaders slowly started giving value to the procurement solutions, so do they thought of improving their relationship with the existing and target suppliers. According to a study it was found that almost seventy-five percent of the organizations from among the world witnessed a strongly negative impact of the pandemic on the on their businesses. This was the most distressing news for supply chain organizations from across the world, who at once, had supply chain and procurement operation maintenance on top of their minds. The executive teams had no other option than to manage the cost structure by increasing visibility of spend.
However, there were organizations who had procurement procedures in the right place and who had integrated the disruption control strategies with supply chain technologies to mitigate the dangers of any turmoil, if ever came into their way. Such organizations had the greatest survival possibility as they stayed agile and provided their employees with the necessary supply chain data to make instant business decisions.
Although procurement is considered as the best cost management strategy that adds tremendous value to the organizations in various aspects. From conducting operational performance to making the market faster, and ensuring product quality, procurement also provides alignment with supplier and cost management. Despite of all the activities performed by procurement, a majority of procurement teams are unaware of the priorities of their business partners. This is the main reason why procurement solutions are unable to make real-time decisions, especially when economic situations fluctuate. Therefore, there is a dire need of understanding the part procurement plays in organizations.
Know more on how to implement strategic procurement in organizations in a way that brings out the best in them and helps them thrive in conditions of uncertainty and economic instability.
This section of the context will point out the incredible tactics chief procurement officers can apply to survive through a pandemic that massively disrupted the supply chain.
Map Business Priorities With Procurement Project’s Value
The product sourcing organizations have witnessed a basic fact- whenever the world underwent an economic dis-balance, every team leader looked upon procurement as the savior. This is primarily because procurement has the power to influence and directly impact the business decisions. However, once organizations got a hold of the economic conditions, started normalizing the current situation and supply chains became working normally as before, they lost the sight of true value of procurement.
For instance, when there was a massive decline in the 2009, the chief procurement officers mentioned about the increase in their influence over the market in a way more prominent to the world. This increment was never seen prior to the crisis that occurred back then.
This is why procurement operations are recommended to stay onboard irrespective of any economic condition, be it disrupting or a swiftly moving situation. Procurement projects should always align with the business priorities, in cases of pandemic and in beyond. This is the only way businesses from across the world can remain stable in days of fragility as well as when conditions become stable.
Make Use Of Proper Procurement Intelligence Tools
A level study conducted in the year 2018 showed that most business had to face difficulties while searching for quality suppliers. Business owners have to strategically select the appropriate suppliers to ensure that they are do not get financially drained. In this study, almost thirty percent of the respondents showed poor and inconsistent supplier performance due to the wrong supplier’s choice. The procurement intelligence tools can be utilized as an effective way of determining the right suppliers who can perform in a cost effectively.
In this way, organizations can also build and maintain a good relationship with their suppliers. Supplier relationship management plays a vital part during periods of economic instability. They are the ones who are trusted with the products delivered by an organization. It completely depends on them if a product will be good and accepted by the customers worldwide. This, in turn, will decide if the organization can maintain its brand reputation and remain trustworthy for the customers.
Staff Should Sell Value Of Procurement During Recovery Period
The metrics of supply chain are primarily reported on the cost saving procedures, only twenty percent of the measure is taken into account, and they are mainly reported to drive contributions for revenue streams. If an organization focus on reporting supply chain metrics that align with the business priorities and report the business-facing dashboards on time, this can be of great help for them.
Staff Should Know How To Monitor The Changing Priorities In Business
One thing about business organization that remains common with every situation is that it keeps changing with time and value in the market. Therefore, every organization needs to keep their employee informed about this fact and teach them the tactics that help them analyze the changing organizational behavior with the ever-changing needs of the market. This will help employees gain insight into the latest directives as it is vital to be vigilant, particularly, at times of economic unrest.
Leaders can help their employees stay up-to-date on the foregoing business operations. Sourcing managers can also keep their partners updated with the procurement analytics about the challenges, expectations, goals, and other expectations to help the business meet with daily deadlines.
Moreover, organizations can conduct an effective annual business alignment that help them analyze perceptions of procurement across various units of a business.
It is possible to tackle situation when leaders know how to make use of flexible and agile procurement processes and maintaining a good relationship with their employees and suppliers. The product sourcing procedures become easier and companies can make more informed decisions and weather the disruption through efficient management of operations.