It goes without saying that these are testing times for the UK’s Movers and Makers. One of the key lessons has been the importance of having a robust procurement strategy. Only then do you have the agility for effective supply chain management. By embracing a comprehensive enterprise resource planning (ERP) system, manufacturers and distributors can adapt and pivot as procurement professionals have business-critical data available at the touch of a button. Visibility of operation, stock levels, and supply chains allow them to confront challenges and exploit opportunities across the global marketplace.
Through sourcing diversification, effective supply chain management, cash flow and cost control, procurement strategies can offer a competitive advantage in any trading climate. We’ve seen procurement managers across the nation take the helm by navigating global supply chain disruption and pivoting to exploit new avenues of production, from ventilators to PPE.
Be it Covid-19, Brexit, or global trade wars, uncertainty is the new normal, and business must respond with a digital toolkit. Quickly adopting new procurement practices and strategies become almost impossible if your processes are paper-driven and disparate software systems are incompatible.
Competitive advantage
By automating procurement processes within a centralized system, information can flow between a business, its customers and suppliers, providing end-to-end visibility, boosting productivity, and improving customer service. That digital agility provides a competitive edge to exploit new markets and opportunities, change suppliers, introducing new product lines and pivot in response to shifting demands.
Digital insights
It is critical that the procurement team has a real-time view of stock availability and material requirements. Only then can they accurately forecast demand, identify stock availability, establish supplier lead times, cost, and material requirements.
By automating inventory management, businesses can avoid interruptions through materials shortages, they will be alerted when items need reordering and can ensure they you only hold the material you require.
Sourcing new suppliers
Yet effective digital procurement must reach beyond your own factory walls and connect the entire supply chain. Agile procurement in a fast-changing global market demands forming relationships with a bigger pool of suppliers to better manage risk and ensure businesses can respond to new opportunities.
An ERP procurement portal allows users to take charge of requisitions approval, collaborate on a delivery schedule and manage workflows. Visibility of granular data helps monitor supplier performance and ensure decisions are quicker and better informed.
5 practical tips for smart procurement
- Get the right people on the right commission structures as buyers and invest in their training to prioritize long-term rather than short-term cost savings.
- Work in partnership with suppliers to drive efficiencies, not against them. Support them in reducing their unit costs.
- Use digitized procurement to give buyers access to information across the business and don’t allow people to work in silos.
- Prioritize business continuity and ease of access to data by using cloud-based ERP available anywhere, anytime, and from any device.
- Use “what if” scenarios and make your supplier base more resilient as a way of continually mitigating risk in the procurement process.
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