Procurement teams in companies have received huge impetus in recent times with respect to visibility and overall growth of the organization. In many organizations today, procurement has now become a recognized and primary enabler of business strategy to achieve sustainable cost reduction. With this change in perspective, it is extremely important for Procurement Teams to sit up and take charge.

With evolving technologies like Blockchain, Artificial Intelligence and Machine Learning, it has become imperative for Industry leaders to facilitate new and innovative ways to improve and increase the efficiency of their procurement strategies to be realigned to meet the demands of the changing market. It goes without saying that the CPOs and Procurement Leaders have to improvise these up and coming trends to keep up with the ongoing needs in order to sustain exponential growth and effective roadmap for future prospects. Let us have a look at the major areas which impact a truly successful procurement strategy ready for the future.

Procurement Spendmap:

It is important to know what exactly the Spendmap of your organization and where exactly you stand. A detailed approach will effectively streamline your overheads leading to effective cost management. In a nutshell, its far reaching impacts include:

• Basis for identifying risks
• Paving the path for effective cost reduction initiatives
• Value addition from Suppliers as an end game

Contract and Supplier Relationship Framework

An effective supplier management framework makes sure it strikes a perfect balance between its key stakeholders keeping in mind every risk and successfully aligning effort and reward alongside to make the best out of the situation. It is important for Vendors to be accessed rightfully based on the following factors before proceeding with orders:

• Financial stability
• Ethical performance
• Quality control
• Technical skill

Optimized Inventory

Most organizations deal with challenges pertaining to Inventory issues resulting from poor planning and forecasting. Procurement leaders around the world are embracing the power of better data-driven insights. Nearly 50% of respondents in 2018 Global CPO survey confided that they are embracing intelligent and advanced insights for cost and inventory optimization and leaving no stone unturned to automate their processes to achieve their ambitious numbers.

The main areas of focus to streamline inventory include:

• The Precise ratio of operating inventory pertaining to Safety, Replenishment, and excess Stock to arrive at an optimal quantitative analysis
• Over- or Under-purchase of Products/Services
• Frequency of Purchases

Once these areas of concern are addressed, it becomes a cakewalk to employ the right checks and processes in pace to ensure steady and significant results.

Procurement Capability and Operating Model

One of the biggest challenges faced by procurement teams today is the absence of a procurement capability and operating model. The following key factors needs to be considered before arriving at the ideal model for effective sustenance:

• Strategy defining the Vision, Objectives, and Performance Scorecard for the team.
• Defining Governance and Control to clearly state how procurement interacts with the wider business.
• Organization and Skills denoting specific Reporting Relationships, Goals, and Objectives in order to better determine the right mix between commercial and technical skillsets and identifying gaps if any
• Defining a well mapped Procurement Value Chain

Automated Procurement

Technology is no longer just an enabler for procurement but a key driver of exponential outcomes. Unified technology platforms and tools which augment visibility across the source-to-pay spectrum of operations are responsible for widespread impact on key decisions and strategy planning for future endeavors. In order to better improve the efficiency of your Procurement team, feel free to employ our revolutionary application which will transform the way you Think, Operate, and Succeed. Click below for a Free Demo Trial: