How Procurement Teams Can Prepare for Business Re-Openings
Across many parts of the U.S. and other areas of the world, government officials are cautiously beginning to lift stay-at-home orders. For a wide range of businesses, that means their stores, offices and factories are starting to or preparing to re-open, and some of their suppliers might resume operations too.
Still, this new environment will likely look quite different than it did in the past, at least for most of 2020. While companies might want to ramp up to where they were pre-pandemic, many questions remain around customer demand, operating restrictions, the potential for reinstituting stay-at-home orders, etc.
Amidst this backdrop, procurement teams may understandably be hesitant to resume normal purchasing activities. At the same time, they don’t want to be overly prudent to the point where it hampers growth.
As such, procurement teams need to find ways to be flexible in their purchasing and make data-driven rather than fear-based decisions.
Aim for Real-Time Spend Oversight
As businesses re-open, companies will likely need to keep a close eye on purchasing costs while being able to quickly respond to new needs. Having real-time spend data makes it easier to keep track of what products and services you have in the pipeline vs. what you need to order, all while staying within budget.
For example, companies may need to increase the purchasing of protective equipment for employees and hire new vendors for cleaning services. Without real-time spend data, procurement teams, especially at large companies with multiple locations, may not know if they need to order more supplies and services or if someone has already placed that order.
In the time it takes to get to the bottom of this situation, companies could run into issues such as falling behind on purchasing needs or having duplicate orders in place that causes companies to go over budget.
By using a system such as an e-procurement platform to not only track real-time spend data but also approve purchases, procurement teams can also gain the flexibility to quickly respond to new conditions.
For example, employees might put in purchase requests, not realizing that changing customer trends in one segment of the business affect the overall company’s purchasing capabilities. But a procurement team that has real-time oversight of spending can more easily approve, adjust or reject these purchase requests so that they fit the company’s up-to-date procurement needs and budget.
Communicate With Suppliers
In addition to gaining real-time insights and control into spending, procurement teams should also aim to keep open lines of communication with suppliers and build relationships that can withstand this period of economic uncertainty.
For one, some suppliers might not be able to ramp up production to meet your needs, such as if they’re located in a city or state with stricter physical distancing requirements. Communicating with these suppliers might mean that they can either work out an alternate arrangement with you, such as batching orders together and expediting shipping once they’re able to, or they might recommend a partner that can help fulfill areas they can not currently meet.
By gaining a better understanding of your suppliers’ current capabilities, you can also identify areas where you need to build resilience. Among U.S. CFOs, 56% plan to de-risk supply chains by developing alternate sourcing options, and 54% are trying to understand the financial and operational health of vendors, according to a PwC survey in April 2020. Procurement teams can help CFOs in this regard by handling more of the communication with suppliers.
Moreover, having strong relationships with suppliers can provide you with flexibility, such as if you need to put an order on hold due to customer demand changes or if you need to re-close some locations. Some suppliers might be willing to work out terms where they’ll delay charging for the order and can adjust the deliverables once you need them again.
Gain Insights and Flexibility With GoProcure
Leveraging a partner like GoProcure can make it easy to gain deeper, real-time insights into your spend and supplier relationships so that you can remain nimble in this challenging environment.
Our e-procurement platform’s vast network of suppliers can help you easily find additional partners when needed, and our network of procurement specialists can help you develop a procurement strategy that fits these new circumstances.
Request a free consultation with our product experts today to learn more about how GoProcure can help you as businesses start to re-open.