How Procurement Teams Can Minimize Supply Chain Disruptions
In these difficult times during the Covid-19 pandemic, businesses are trying their best to carry on, often with a remote workforce. In doing so, many companies not only face lower revenue but also supply chain disruptions that can affect their ability to operate successfully and adapt to changing conditions.
These disruptions can include preferred suppliers running out of stock, delayed deliveries, rising prices on in-demand goods and services, and losing transparency within different parts of their supply chains.
To help overcome these issues, companies may need to adapt their procurement processes to emphasize flexibility, redundancy and transparency. Procurement teams may also need to implement or more frequently leverage technology such as e-procurement and spend management platforms that can streamline buying processes and improve oversight, both during this pandemic and beyond.
In particular, procurement teams can minimize supply chain disruptions by focusing on areas such as:
- Gaining Visibility Into Supplier Pools: Procurement teams that have visibility into their available pool of suppliers, as well as potential pools of suppliers that they could onboard if needed, can more easily adapt to issues such as suppliers running out of stock. Having this visibility can also make it easier to find best-in-class pricing.
Gaining visibility in this area might require routing purchases through an e-procurement platform in order to maintain a digital catalog of suppliers. Companies may also need better communication among procurement teams and other staff to ensure that employees aren’t making maverick purchases from unapproved suppliers that procurement teams do not have visibility into.
- Predictive Purchasing: Some e-procurement platforms offer predictive purchasing capabilities, where purchasers can automatically see suggestions for items based on variables such as price, location and availability.
This capability may seem like a luxury, but in these trying times, it can help procurement teams minimize supply chain disruptions. For example, prices may start to rise from certain vendors due to limited supply and increased demand, so instead of wasting time searching for more affordable options, predictive purchasing capabilities may be able to automatically suggest products or services that fit your budget. Similarly, companies may need to quickly source products from local vendors to account for delayed delivery times, so having predictive purchasing capabilities that can account for these factors can help procurement teams stay on schedule.
- Order Tracking: If procurement teams do not already have a reliable, ideally automated system in place to track orders, then it can take longer to identify issues such as unfulfilled purchases due to cancellations or delays.
In contrast, procurement teams that can track all orders through a centralized system, such as an e-procurement platform, may be able to more quickly find new suppliers if certain orders can’t be fulfilled on time or make other operational adjustments if items they need will take longer than expected. The more that companies can route orders through a centralized system or automatically feed procurement data into a tracking system, the easier it generally is to adapt to disruptions.
- Bid Tracking: Similar to having a system in place for order tracking, procurement teams need a centralized way to track supplier bids. In times like these where companies may need to quickly source new vendors due to issues such as suppliers running out of stock or rising prices, then it’s critical to stay on top of outstanding bids.
Here too, an e-procurement or spend management platform could help automatically track the status of various bids and even automate the RFQ process so companies can quickly find new vendors if needed.
- Building Supplier Relationships: In addition to having visibility into supplier pools, procurement teams may also need to invest time into building stronger relationships with suppliers or using services such as GoProcure’s Buyer’s Desk that have existing relationships with suppliers. Doing so can help companies minimize disruptions in a variety of ways.
For example, if a supplier can’t meet your requirements due to the current environment and you need to find a quick replacement, another vendor that you have a relationship with may be willing to point you in the direction of another supplier that can help. This can be particularly useful for hard-to-source products and services.
Building supplier relationships can also help you minimize issues like delivery delays. For example, a vendor that you have no relationship with may not be as transparent as to why your order is late, such as if they’re waiting to batch orders together until shipments from different warehouses they operate come together. Yet a vendor you work closely with may be able to advise you on what they have in stock within warehouses close to where you need deliveries, so you can purchase what you need from there. Even if that means you then purchase certain items from another vendor, your supplier can avoid the risk of you canceling or not placing the entire order due to extended delivery times.
- Automating Approval Workflows: Lastly, procurement teams that can streamline and automate approval workflows can minimize disruptions. For example, when using an e-procurement platform, you can establish automated workflows so that employees can only order from pre-approved suppliers, rather than taking a chance on the fulfillment capabilities of an unapproved supplier.
Moreover, when approval requests automatically get routed to the appropriate employees within your companies, it can be easier to maintain transparency into your purchases.
Prepare Now for Future Disruptions
Many procurement teams find themselves in a difficult situation right now, but it’s possible to overcome some supply chain disruptions by leveraging technology and improving relationships with vendors.
Even for companies that have yet to face supply chain disruptions, focusing on these areas now can pay significant dividends in the event that more manufacturers, logistics companies and other parts of the supply chain have to reduce or adapt their services. Plus, companies that build resiliency now can be prepared for future events ranging from extreme weather to trade disputes that could also disrupt supply chains.
Want to learn more about how e-procurement/spend management technology can help your company minimize supply chain disruptions? Request a complimentary consultation with our product experts today.
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