Etiket arşivi: supply chain

Agile Sourcing

Agile methodology is a project management technique born out of software development.

Agile procurement is an altenative tool in the procurement toolbox, to be utilised for the right projects at the right time.

Agile sourcing is using of agile principles to make sourcing processes faster and more effective.

Traditional procurement works on classical rules. Most of the time,decisions are not fast and is taking time.

Traditional procurement involves fixed deliverables, extensive documentation and a comprehensive project plan.

In an agile approach, you need to have frequent communication and collaboration during the supplier selection process.

Step 1 : Build a cross functional team involving all people that have impact in the vendor selection process, and those who will have to work day to day with the future team.

Step 2: Establish common goals and inform pre-selected vendors related to new selection process.Send out the presentation agenda and guidelines in advance.

Step 3: Run the selection workshop . All vendors came with the commercial and technical team that would actually work with you and required people that could build a proposal and decide on prices.

Step 4 : At the conclusion of the presentations and after your review, present the selected supplier. The decision was taken and announced to all vendors at the end of workshop. Contract is drafted, negotiated and signed.

Supply chain tokens

Supply chain projects like OriginTrail, Waltonchain and Wabi have rallied in excess of 250% as blockchain interoperability comes into focus.

Over the last few weeks, blockchain projects focused on supply chains and logistics have seen tremendous growth as the coronavirus-induced economic gridlock begins to loosen and future concerns related to the global pandemic subside.

TRAC

OriginTrail is a self-described “ecosystem dedicated to making global supply chains work together by enabling a universal, collaborative and trusted data exchange.”

The project was established in 2011 with the goal of providing enterprise users with the ability to streamline their supply chains with added data protection and item tracking features.

Currently, the project has partnerships with big-name companies like Microsoft, Walmart and Oracle.

WTC

Waltonchain is focused on creating an ecosystem that combines blockchain, RFID technology and the Internet of Things in order to enhance operational efficiency for supply chain use cases.

One recent major development that may have kicked off WTC’s current rally was the successful upgrade of the protocol’s cross-chain center, which enables interactions between data on different blockchains, including Ethereum and Fabric.

Waltonchain is another supply chain-focused protocol 

WABI

Wabi is a supply chain ecosystem that connects brands and consumers by enabling the seamless, fair, confidential exchange of information.

Currently, the protocol is preparing to launch a new business-to-business marketing solution with a focus on markets based in Asia. 

The reopening of supply chains after a year of disruptions brought on by the COVID-19 pandemic appears to be the most significant factor connected to the future success of Wabi and other supply chain and logistics-focused platforms.

On a sectorwide level, interoperability with other blockchain platforms has been one of the primary drivers of the rally among supply chain projects in 2021. As the global economy begins to open back up and supplychains are reestablished, platforms that facilitate smooth global trade could see further upside. 

source: https://cointelegraph.com/news/supply-chain-tokens-see-triple-digit-gains-as-the-global-economy-recovers

Foot Locker cites port congestion for nearly 24% drop in inventory

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  • Foot Locker is working to reroute its cargo in an attempt to avoid port congestion. Port delays reached two to three weeks in some cases and affected the company’s inventory levels in Q4, CEO Dick Johnson said on the company’s most recent earnings call.
  • Chief Financial Officer Lauren Peters said port congestion was one of the issues, along with store closures, that led to a 2.7% year-over-year drop in sales in the quarter.
  • “Once the product gets into our portion of the supply chain, you know I feel really confident that our team can move through the inventory and get it in the right place very quickly,” Dick Johnson said. “We think that [inventory] will start to normalize over the quarter.

Foot Locker’s inventory was down 23.6% at the end of Q4, as port delays have lengthened lead times for shippers and bottlenecked cargo.

“With respect to our inventory position, although we achieved our goal of being at a healthy composition by the end of the fiscal year, our levels are lower than we would like,” Peters said.

Dick Johnson said the company is working to improve its inventory as it expects to see strong demand in the quarter — especially given the stimulus bill that passed after the company’s earnings call.

“We’re working with our vendor partners to look for alternative routing,” Dick Johnson said in relation to port congestion and inventory levels.

Figuring out alternative ports of entry is a step multiple shippers are taking to avoid congestion at gateways, such as the ports of Los Angeles and Long Beach.

Source: https://www.supplychaindive.com/news/foot-locker-port-congestion-inventory-retail-ocean-shipping/596270/

Three Uses Of Automation Within Supply Chain 4.0

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The increased availability of advanced technologies has revolutionized the traditional supply chain model. Supply Chain 4.0 responds to modern customer expectations by relying heavily on the Internet of Things (IoT), advanced robotics, big data analytics, and blockchain. These tools enable automation and thus give organizations a chance to close information gaps and optimally match supply and demand.

Industry giants like Netflix, Tesla, UPS, Amazon, and Microsoft rely heavily on automation within their supply chain to lead their respective industries. Let us take a closer look at three powerful automation use cases.

1. Managing demand uncertainty

A painful aspect of supply chain ecosystems is the demand uncertainty and the inability to accurately forecast demand. Generally, this leads to a set of performance issues, from increased operational cost to excess inventory and suboptimal production capacity. Automation tools can forecast demand, remove uncertainty from the equation, and thus improve operational efficiency at each step along the supply chain.

Big data analytics is an established tool that helps organizations manage demand uncertainty. It consists of data collection & aggregation infrastructure combined with powerful ML algorithms, designed to forecast demand based on historical (or even real-time) data. Modern storage solutions (such as data lakes) make it possible to aggregate data from a variety of sources: market trends, competitor information, and consumer preferences. 

Machine learning(ML) algorithms continually analyze this rich data to find new patterns, improve the accuracy of demand forecasting, and enhance operational efficiency. This is the recipe that Amazon uses to predict demand for a product before it is purchased and stocked in their warehouse. By examining tweets and posts on websites and social media, they understand customer sentiments about products and have a data-based way to model demand uncertainty. 

The good news is that such powerful analytics tools are not restricted to industry giants anymore. Out-of-the-box solutions (such as Amazon Forecast) make such capabilities widely available to all organizations that wish to handle demand uncertainty. 

2. Managing process uncertainties

Organizations operating in today’s supply chain industry need to handle increasingly complex logistic processes. The competitive environment, together with ever-increasing customer expectations make it imperative to minimize uncertainties across all areas of supply chain management

3. Synchronization among supply chain partners and customers

Digital supply chains are characterized by synchronization among hundreds of departments, vendors, suppliers, and customers. In order to orchestrate activities all the way from planning to execution, supply chains require information to be collected, analyzed, and utilized in real-time. A sure way to achieve a fully synchronized supply chain is to leverage the power of automation. 

source:
https://www.unite.ai/three-uses-of-automation-within-supply-chain-4-0/


How Procurement Can Help Reduce Supply Chain Risk

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The modern supply chain is facing some unprecedented challenges right now, and procurement is in a prime position to be able to help solve some of these issues while also reducing overall supply chain risk for their organizations. In “Risk, resilience, and rebalancing in global value chains,” McKinsey Global Institute covers a lot of ground on the supply chain risk front, but also singles out a few key realities that companies are facing and the steps they can take to mitigate risk.

After analyzing 23 different industry value chains to assess their exposure to specific types of shocks, the research firm found that supply chain “shock” varies according to industry. Aerospace and semiconductors, for example, are susceptible to cyberattacks and trade disputes, because of their high level of digitization, R&D, capital intensity and exposure to digital data flows.

Some of the key procurement-related findings in McKinsey’s report include:

  • Shocks inevitably seem to exploit the weak spots within broader value chains and specific companies. “An organization’s supply chain operations can be a source of vulnerability or resilience,” it points out, “depending on its effectiveness in monitoring risk, implementing mitigation strategies, and establishing business continuity plans.”
  • Some of these vulnerabilities are inherent to a given industry; the perishability of food and agricultural products, for example, means that the associated value chains are highly vulnerable to delivery delays and spoilage.
  • Industries with unpredictable, seasonal and cyclical demand also face particular challenges. Makers of electronics must adapt to relatively short product lifecycles, and they cannot afford to miss spikes in consumer spending during limited holiday windows.
  • Other vulnerabilities are the consequence of intentional decisions, such as how much inventory a company chooses to carry, the complexity of its product portfolio, the number of unique SKUs in its supply chain, and the amount of debt or insurance it carries. Changing these decisions can reduce—or increase—vulnerability to shocks.
  • Companies’ supplier networks vary in ways that can shape their vulnerability. For example, spending concentrated among just a few suppliers may make it easier to manage them, but it also heightens vulnerability should anything happen to them.

Complexity isn’t a Weakness

Buyers should also understand that supply chain vulnerabilities often stem from the structure of supplier networks in a given value chain. “Complexity itself is not necessarily a weakness to the extent that it provides companies with redundancies and flexibility,” McKinsey points out, “But sometimes the balance can tip. Complex networks may become opaque, obscuring vulnerabilities and interdependencies.”

For example, a large, multinational company may procure goods from hundreds of different tier-one suppliers. Each of those tier-one suppliers in turn can rely on hundreds of tier-two suppliers. “The entire supplier ecosystem associated with a large company can encompass tens of thousands of companies around the world when the deepest tiers are included,” McKinsey points out.

Finally, the number of tiers of participating suppliers can hinder visibility and make it difficult to spot emergent risks. As a result, “suppliers that are dependent on a single customer can cause issues when demand shocks cascade through a value chain,” the firm notes.

Improving Resilience

On a positive note, McKinsey says that 93% of supply chain leaders are currently taking steps to make their supply chains more resilient. Some of the strategies they’re using include:

  • Building in redundancy across suppliers
  • Nearshoring their manufacturing operations
  • Reducing the number of unique parts that they use to build their products
  • Regionalizing their supply chains

“Most companies are still in the early stages of their efforts to connect the entire value chain with a seamless flow of data,” says McKinsey, which sees digital as a vehicle that can deliver “major benefits to efficiency and transparency that are yet to be fully realized.”

source: https://www.sourcetoday.com/

Global or Local Sourcing

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Strategic sourcing has become an extremely important element to the growth of any company. In order to stay competitive, companies need to constantly ensure the right level of coordination between innovation, organisational efficiency, price policy and procurement.

There appears to be a growing trend towards global sourcing; companies are constantly seeking to find the next low cost procurement option in order to gain an advantage over its competitors.

However there is a second narrative; local sourcing. Recently, more and more arguments are springing up about the immense benefits associated with sourcing locally. This narrative therefore begs the question; is local sourcing not the better option?

We will take a critical look at both sourcing techniques and see which option will better serve our organization’s procurement needs

Arguments against global sourcing

  1. Transport costs

With transport costs growing and with constantly changing demand patterns, organisations need to find smarter ways to become more responsive to customer needs and in a cost effective manner.

In recent times, oil prices have seen significant rises in price; reaching an all time high of approximately US$147 per in July 2008. While the prices have recently crashed to approximately US$60, the longer term price curve is likely to continue in the upward direction and it is worthy of note that for every one dollar rise in oil, there is a corresponding increase in the costs of transportation.  Therefore, unless there are new discoveries of ways to go around this, prices of things will continue to rise.

  1. Supply chain risk

There are also several risks that are inherent in extended supply chains that are detrimental to the growth of any business. Risks such as;

  • Extended lead times
  • Exchange rate risks which affects products pricing
  • Variable lead times in the supply chain, leading to a high level of uncertainty and inconsistency.
  • Loss of control
  • Reputational risk
  1. Loss of agility

Extended supply lines usually have adverse impacts on both time-to-market for new products and the responsiveness of suppliers to customer demand changes. Organisations are unable to quickly respond to significant changes in the market due to the extended lead times. Likewise these extended lead times tend to make organizations unjustifiably exploit larger economies of scale thereby leading to overstocking of supplies which also affects their response time to market innovations.

  1. Sustainability

Global sourcing’s increased need for transport has also impacted negatively on the world’s carbon footprint. Globalization only ends up exporting domestic carbon footprint to countries elsewhere and at an increased rate

In addition

There is an increased risk in the loss of intellectual property rights as there is often less legislative protection or enforcement in developing countries

The argument for Global Sourcing

The rising trend towards global sourcing is probably an inevitable on due mostly to man’s natural instinct to trade, seek options, explore alternatives and find new ways of doing things. Coupled with recent advances in communications and technology, it appears as if global sourcing practices have only just begun to shape the procurement world.

Some of the arguments for the huge importance of global sourcing practices include;

  1. We need Global sourcing to sustain our way of life

The constant rise in world population and the diminishing rate of resources to cater for this growing population has largely impacted the need for globalization in trade (procurement) and all other aspects of human endeavor. Nations who are in deficit will continue to look to other nations where items to be procured are in surplus and are readily available.

  1. The most sustainable option may not be the obvious one

Local sourcing may appear more sustainable but there are a number of documented cases where global sourcing has been found to have less impact on the environment. Conditions such as favorable weather conditions, vegetation, technology, availability of labor and work ethics might actually have significant positive impacts on manufacturing and production thereby leading to less carbon footprints than when sparsely produced

 

  1. Innovation can provide the solution to issues arising from global trading

It is highly possible to use innovative technology to combat the environmental challenges of global trade. Significant advancements in technology in most industrialized markets have aided the creation of breakthrough energy solutions which offers a new model for bringing lasting energy solutions that are reliable, affordable and doesn’t emit greenhouse gas. This trend has facilitated the growth of global industry.

Today there are thousands of individuals and companies across the globe working hard to harvest different kinds of clean energy in order to change the way we produce goods & services and in many cases, these experiments have been very successful.

  1. Global Sourcing Promotes Peace

There is also an interesting argument that global trade promotes peace among nations. Nations that trade together are unlikely to go to war with each other.

Conclusion

In arriving at a decision on what sourcing strategy to adopt, the points listed above need to be taken into consideration when comparing between global or local sourcing strategies. Whether local or global, neither of the two are inherently right or wrong, it is only a matter of carrying out careful analysis of both sourcing techniques with respect to your company’s procurement needs and selecting that which is more suitable to meet those needs. Wrong sourcing decisions can cost you valuable time and money

E-procurement Tips

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E-procurement Tips

E-procurement constantly requires extensive strategizing and figuring out new ways to do more with less amidst intense pressure to always deliver positive results. In light of this, competition is unbelievably fierce; teams are constantly changing, and there’s increasing pressure to constantly have the upper hand.

For your organization to be successful with her e-procurement strategies, it’s helpful to adopt practices that will ensure you are always ahead.

Below are 10 winning tips to consider in order to fundamentally affect in a positive way, the success of your organisation’s e-Procurement strategy:

  1. Team work

A successful e-procurement department must never work alone. Your organisation’s e-procurement department should consist of strong teams consisting employees with defined roles and responsibilities and who will work collaboratively as a unified group towards achieving the organisation’s common objective. Each member of the team should play their individual roles to ensure the success of the team. When and if this happens, success is sure to be achieved in the company’s e-procurement strategy.

  1. Analyze Data

You have to back your strategy with meaningful numbers and data. Procurement professionals must constantly analyze data when strategizing in order to guide the decision of what strategy to adopt. Likewise, the team can also use these numbers to track trends, recognise threats, spot opportunities, alter strategies and optimize opportunities for better performance.

  1. Know Your Competition

Research and Monitor your competition so that you always know who and what you’re up against and what they are always up to.   There are many ways to go about this; follow your competitors on social media, subscribe to their marketing newsletters, and regularly check their websites for company updates. You can also encourage your procurement teams to engage in conferences, webinars and seminars to help them stay ahead of the curve,

  1. 4. Manage Relationships

Good vendor relationship is an important ingredient for sustained success in any organisation’s procurement strategy. As you get to know your vendors, engage with them more and help them participate and deliver better through your procurement chain. Define what your expectations are and give the vendor a chance to explain how it will meet those expectations. Take the time to ask for several references and make sure you understand the amount of training and support that is needed throughout the entire process.

The more complex the product or service, the more important it is to identify the competence and capacity of the vendor. Smaller companies with less complex procurement needs should however not spend too much vetting every single vendor. Gathering useful information about your vendors will help you define your vendor preferences and in the long term, help you streamline your vendor list and simplify your procurement process.

  1. Maximize time and resources

Procurers and vendors alike are extremely busy people with each trying to meet the needs of many at the same time. In order to maximize everyone’s time and resources, preparation is key. Prepare in house before meetings, perform needs assessment analysis and constantly re-evaluate your relationship with your vendors.

Meet with your vendors periodically to review pricing and working conditions to make sure that they are still meeting up with required expectations.

Have someone designated to manage all your vendor issue and keep all vendor contracts, contact information, and related documentation in a single location so that whenever an issue arises, related information is easily accessed and they are resolved quickly.

  1. Save! Save! Save!

In E-procurement, all cost savings are important. Companies are quick to target big dollar spends for e-sourcing and ignore the lower cost items. Summarily, all these costs add up into something significant in the long term and if you must get the best value in your e-sourcing activities, every category of spend must be incorporated into your e-sourcing strategy.

  1. Embrace the change

A new way of doing things can sometimes be intimidating for management and staff of a company, especially when it has the potential to uncover additional savings. E-sourcing process creates a competitive dynamic that is way above the league of traditional sourcing methods and top executive in the organisation need celebrate and promote this new way of doing things. Keeping an open mind and applying e-sourcing techniques and tools in new and creative ways will ensure your program maintains momentum and remains profitable.

  1. Vendor selection should not be based solely on price.

This is very regular practise for most e-procurers and it’s easy to understand why. However, this approach to e-sourcing is surely a recipe for disaster. There are other factors that should be considered when selecting your vendors. Factors like; experience, capacity and track record of vendors providing such services. Identifying a great price should just be one step of the entire process.

   9.  Follow up on quality control.

Make sure your vendors are supplying to specifications. It’s not enough to select the least cost provider with a good reputation on paper and then go to sleep thinking that all is well. Continuous follow up on quality control with your suppliers is key to ensuring that you get what you paid for

   10. Be consistent with your results

Procurement professionals also face a constant need to be consistent. You need to find the right tools and solutions that will work for your organization. By clearly defining the organisation’s procurement objectives, delegating specific roles and responsibilities to members of the procurement teams and making the teams see how the procurement process aligns with those objectives, you’ll be able to deliver consistent results.

 

 

Are E-Auctions too Price focused?

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Unless you are one of those who when at the point of making a purchase, especially online would settle for the first and only option you are provided without seeking alternative brands and price offerings, then I don’t think this is a fair question to ask. Given the vast and endless opportunities provided by the internet, procurers will definitely seek out the best options available to them before settling to buy. Although there is more to online procurement than just pricing, negotiating so as to get the least price possible is definitely top priority for any smart procurer.

Online auctions take advantage of the internet to allow procurers arrive at the true market prices for goods and services being sought for. Most online auctions usually go the route of the “reverse auction” whereby  suppliers in a bid to win over customers tender bids that are lower than those of her competitors and this is the practice that seems to make e auctions appear too price focused. This Increased participation for a buyer’s business would naturally drive down the price. Nevertheless, this doesn’t imply that the lowest price will automatically win the bid; modern day auction technology allows the procurer and supplier to consider factors other than pricing. Factors such as quality, brand, reliability, guarantees,  experience, delivery speed, Warranty, volume discount, technical specifications, delivery dates, shipment methods, legal conditions, customer support, financing options e.t.c. All these are additional specifications that buyers can build into their RFQs and present electronically via the internet to an endless list of suppliers.

e- Auction tools are beneficial to both sellers and buyers. In the long term sellers will benefit by seriously pruning down their sales force since most of their sales will be performed online, saving huge staff costs and other incidental costs associated with maintaining a workforce. Likewise in the short term, buyers can immediately experience reasonable savings from online procurement options.

Other Benefits of e-Auctions

The advantages are extraordinary. In spite of the fact that e-auction tools are different based on individual suppliers, e-autions normally permit purchasers to consult with a good number of suppliers and vice versa all at the same time rather than in a sequential order as in physical procurement. This tends to save the procurer and supplier a lot of time and resources. Purchasers taking an interest in the site’s offering possess the capacity to reduce negotiation periods from about two months to as little as two weeks, empowering e-procurement administrators to focus more attention on other projects and tasks rather than a staggering amount of paperwork

Similarly, there is no need any longer for e-procurement managers to spend hours and hours in one-on-one meetings with potential suppliers sometimes even travelling and arguing over contract terms and details.  Instead, a buyer is simply expected to fill an RFQ (of which several e-negotiation platforms already have templates available) that he submits online. Likewise, suppliers are also capable of replying such requests electronically by submitting online proposals that provides detailed information such as price discounts, delivery dates and shipment methods. E-Auction platforms that has e-negotiation features essentially creates a level playing field for all suppliers who are provided the opportunity to compete, as most times e-auction processes are transparent and the results are clearly visible for all to see

It’s now obvious that there are other reasons that drive the demand for e- auctions  other than significant cost-savings, hence it would not be fair to say that e-auctions are too price focused. Unlike online auctions whereby it is the person with the lowest bid that wins, e-auction activities that feature e-negotiation tools is a huge leap towards a much broader seller – buyer online collaborations. In fact there currently appears to be a shift in focus from price based bargains to quality and performance based bargains amongst procurement professionals, so the argument that e-auctions are too price focused no longer hold water.

There’s even more, e-Auction solutions also provide a fair competing ground for all suppliers to compete for business. Buyer’s can deliver RFQs electronically and can even adopt readymade templates with only a few adjustments and likewise suppliers can deliver their proposals to the buyer via the same medium saving both parties a lot of time and resources. These proposals can also be evaluated electronically based on buyer’s specification thereby easily eliminating unqualified applicants saving also time and making sure that only the exact specifications are considered for purchase.

There is no denying of the numerous impacts that e-Auction technology has had, and will continue to have, in this industry. Buyers and sellers are no longer relying on e-marketplaces to just simply play matchmaker. But with huge opportunities at significant cost and time savings, better quality, stronger collaborations, self-empowerment, more functionality, and improved supply chains, e-auctions will continue to be the way to go in the procurement industry both now and in the near future.

Indirect Spend Categories to Make Cost Reduction

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Over the past five years, purchasing/supply groups in well-managed companies have made significant progress in reducing the price of inputs. Since specific direct materials are often associated with distinct Strategic Business Units (SBUs), managing this spend is usually accomplished through center-led commodity groups, with sourcing decisions and administration occurring at the SBU. Though most companies are generally satisfied with the efforts they have made in strategically sourcing their direct goods and services, most companies are still attempting to gain comparable control and results with their indirect spend.

Indirect spend is receiving increased attention from the senior management of large corporations. On average, indirect spend equals about 50 percent of a company’s purchases. Unfortunately, a significant amount of indirect spend is not purchased using the organization’s purchasing/supply function or purchasing processes. Senior management has realized that reducing or eliminating indirect spend offers an opportunity to favourably affect a company’s cost structure. Examples of indirect spend include: professional services, utilities, company travel, office products, and waste Management, facility management e.t.c However, spend that is indirect for one company may be direct for another. Furthermore, segmenting direct and indirect spend can be very difficult, particularly for service companies.

With increased outsourcing of non-core capabilities, the growth of the service sector, and increasing cost pressure, the importance of managing indirect spend is increasing.  A recent survey conducted by The Aberdeen Group recently reported that about 70 percent of procurement executives cite indirect spend as a top focus for controlling and reducing cost. Procurement executives know that indirect category management now presents a significant opportunity for cost management, gross profit and margin growth. More procurement groups now seek to drive a larger volume of contracts through their organizations. They want to manage and negotiate better rates and achieve tighter compliance with both financial and regulatory controls. And they believe that more attention to indirect spend and the multitude of suppliers in those categories can yield savings without distracting management attention from compliance or strategy.

Some of the top 5 Categories where companies can successfully achieve significant savings in indirect spend include:

Marketing Services

Marketing spend is defined as `external expenditures on services related to marketing’. Marketing spend categories usually include printing services compatible to goods,  agency/creative services, and other non-creative services,  Buying Marketing Services is often regarded as one of the highest budget areas within an organisation, hence the role for Procurement has increased considerably in recent years focusing on improving quality, delivery times and innovation.

 

Waste Management

Waste management is the “generation, prevention, characterization, monitoring, treatment, handling, reuse and residual disposition of solid wastes”. There are various types of solid waste including municipal (residential, institutional, commercial), agricultural, and special (health care, household hazardous wastes, sewage sludge). The term usually relates to materials produced by human activity, and the process is generally undertaken to reduce their effect on health, the environment or aesthetics.

 

Professional Services

Organisations often employ professional services for assistance with strategy, management, and other functional services such as legal, Human Resources etc.  Procurement can demonstrate value by providing insight to spend, supplier sourcing, realising savings and organising efficient, economical purchasing processes.

 

Office Supplies

Office Supplies can be defined as all items which have the objective of retaining or restoring a piece of equipment or system, to a state in which it can perform its required function. These are items which are used in production but do not become part of the end product and include hand tools, spare parts, lubricants and cleaning supplies e.t.c. They are goods acquired for the purpose of current operation; items that are consumable, sometimes perishable or short lived, and are subject to material change. They could also be items of a durable nature such as wastebaskets, small tools, bookends, file cabinets, chairs, calculators.

 

Facilities Management

Procurement is often involved with many of the services bought in, to support the building and people within an organisation – often referred as Facilities management (FM). FM is a significant area of spend for most organisations, traditionally defined as soft (people focused) and hard (engineering focused). Approaches for managing FM may be centralised or decentralised, either through several direct contractors or via an integrated FM supplier which provides all services.

What Procurement Professionals want in 2017

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The New Year is here already, after the holiday season filled with lots of giving and sharing with employees, colleagues, friends and loved ones, it’s now time to implement new spending strategies to help you make the most of your 2017 budget. If your company is planning to up the ante on event spending next year, they need to be aware what procurement professionals are looking out for and be better prepared on how make the most out of its 2017 procurement teams.

It’s no longer news that procurement teams fuel the profitability and growth of some the world’s most successful companies, from aligning procurement’s deliverables with top business goals to understanding exactly what needs to change in procurement to drive financial results, there are several habits that organisations can establish to encourage effective procurement practices that result in value generation for the company as a whole.

Some of the Industry trends that procurement professionals tend to be leaning toward in the New Year include:

  1. The power of relationships

The ability to build strong relationships with suppliers, clients and stakeholders can contribute to success within service delivery, recruitment and the list goes on.

Too often we see organisations fail to manage their contracts and suppliers. An effective supplier management framework that appropriately aligns risk, effort and reward is a key enabler of ongoing sustainable value creation. The framework needs to include segmentation (i.e., strategic, operational and tactical), performance management framework(s) and a clear articulation of organisational accountability and responsibility. Procurement professionals should be looking to do more in this regard in order to provide a more personal and tailored approach towards procurement in 2017

  1. Online Platforms

A growing amount of procurement professionals are tapping into online platforms to help build these global relationships. Procurement professionals can leverage what’s happening in retail-related user experience to build commercial business cases to invest internally in great systems.  Systems that will improve productivity and allow organisations to capture data and move from spend analysis to predictive procurement. Platforms that are cost effective and allows for easier data capture at point of purchase for procurement professionals. These niche platforms offer similar functions to a social network but also much more

So what are these online platforms? They aren’t just the usual culprits of Facebook, Twitter and LinkedIn. Now there’s a new wave of social media which is tailored to professionals in specific industries – the niche online business network. As for the procurement industry, some of these platforms include; Procurious, Salesforce, Amazon, SAP e.t.c. Procurement professionals should seek to delve deeper into these platforms to see how best they can further build upon existing successes recorded.

  1. Global networking

It’s no secret the logistics, procurement and supply chain profession is global in nature and these niche networks allow procurers, buyers and suppliers to network with people from all corners of the globe.  The online space is no doubt a key channel for establishing business relationships with professionals from some of the world’s largest economies. With functions such as networking capabilities, industry specific news and discussion forums, these platforms create focused global communities. They provide opportunities for members to converse, network and share knowledge with like-minded peers across the globe.

  1. Tailored learning

Niche online networks are also hubs of knowledge which can be useful when fostering relationships with several stakeholders. For example, if procurement professionals want to do business in new locations or with a new supplier, they’ll need to understand their background, the market they play in and local industry issues. Sites and platforms should foster discussions groups which can help one learn about another culture or industry’s way of doing business before entering the market.

 

The value that the an efficient and effective procurement department brings to an organisation are huge not just in cost savings but also in terms of long term profitability of the business and also in promoting  sustainability business practises and majority of businesses are beginning to establish and encourage habits that can drive these benefits. While the outcome of alignment and transformation projects are different for every organisation, the end result creates a clear path for procurement to drive financial results, earn more internal budget and resources, and demonstrate to key stakeholders the immense value and critical nature of their program. Procurement professionals are constantly challenged to provide the latest innovations that are truly integrated, mobile and social-enabled in order to deliver productivity gains and raise employee engagement and compliance while leading to better supplier management and auditing.