How is procurement advisory changing company responsiveness across industries?

Summary 

With the uncertainty of supply chains, the need for a long-term strategy that helps businesses navigate these risks, minimise response times, and execute alternative plans is essential.

Procurement advisory gives you the direction you need to put adequate plans in place to improve the responsiveness of companies to the world around them.

If businesses compete with suppliers and not competitors, then they are overlooking a massive opportunity to create long-lasting, mutually beneficial networks, get the most out of their resources, and gain a competitive advantage over their competitors.

By broadening the scope of procurement businesses can move past traditional procurement functions and create agile teams capable of overcoming unforeseen events.

This ultimately leads to simplifying processes and removing complex systems that are widening the gap between organisational goals and procurement goals.

It also sustains the implementation of a procurement strategy that addresses the changing environment and can withstand the changes that may lie ahead without risking short-term value.

With a string of black swan economic events gripping the world, procurement has proven to be a resilient and necessary strategic function that has helped companies in a number of industries improve their responsiveness to unpredictable changes in the business landscape.

As procurement teams operate directly with other key functions in an organisation—all while playing an instrumental role in the quality and flow of production—they possess the knowledge and expertise needed to deal with multiple internal and external stakeholders to ensure that a business is able to remain resilient under the most challenging conditions.

Despite the unique position of the procurement function, adapting to the risks and emerging competition in the market can be a tedious task, especially considering the need to maintain the quality, delivery, and cost of production.

This is where the value of procurement advisory services becomes clear. Businesses are able to cautiously navigate these risks and emerging competition to analyse, predict, and carry out procurement management procedures to minimise response times and execute alternative plans.

Compete with competitors—not suppliers

In procurement, the most valued relationship is between the supplier and the buyer. With the current economic crisis, procurement teams may often feel inclined to take up more hardened negotiation strategies in order to put pressure on suppliers and maintain the same profit margins as pre-crisis markets. 

When considering the retail industry, transport industry, and many other similar industries where multiple competitors use the same supplier it becomes crucial for organisations to get the most out of their resources. This means cutting out wastage and more efficient allocation. 

Getting the right procurement consulting services can help organisations maximise the use of resources, navigate potential scarcities in the industry, and get more value out of their critical resources than their competitors. 

To do this, however, there must be a fundamental change in the approach to procurement, a change that the right advisory support can spearhead.

Broadening the scope of procurement

Organisational agility and the agility of procurement teams are interconnected. 

In order for organisations to meet the demands of the future, procurement teams must be able to not just accept innovation but create it in pragmatic ways. 

Stepping away from narrowly defined roles and approaching supply chain management for the value addition it is capable of introducing to any company, could be the way forward to broadening the scope of procurement teams.

Some organisations are also moving towards an integrated business model where procurement becomes embedded into existing business processes rather than operating as a separate function altogether.
Regardless of which methodology a company chooses to embrace, these transitions are far from easy and often require a cultural overhaul that cannot always be powered by internal teams. Procurement advisory services can offer the right guidance and perspective to ensure that purchasing teams are equipped to take the right steps to elevate organisational responsiveness.

Simplifying processes through procurement advisory

The complexity of procurement functions has become one of the leading reasons why businesses often fail to benefit from the immense value the function can bring when it is approached with continuous improvement. 

With the rise of digitalisation and Procurement 4.0, today there are many solutions that are able to mitigate these inefficiencies and simplify procurement so that stakeholders are able to comply with and elevate these processes rather than overlook their potential.

The ability to ensure that effective and positive change management is promoted rather than using technology to support stagnant frameworks can improve the way organisations respond to volatile landscapes and pave the way for a more antifragile function.

Fortunately, advisory services can help navigate this terrain and the pitfalls it may bring through their experience in the field and knowledge of best practices and tools to augment outcomes.

Procurement strategy

With rapid changes taking over every corner of the market it is not always feasible for procurement teams to step back and take note of the intricacies of the landscape at large. 

Without the right strategy in place, however, procurement teams risk creating inaccurate budgets and falling out of sync with wider business objectives.

This combined with the pressure placed on procurement teams to act quickly on projects does not leave the necessary resources to maintain thoughtful responsiveness to the market. Procurement advisors can help by supporting procurement teams with strategising a procurement strategy that not only facilitates responsiveness but alignment with short and long-term business goals.

Procurement advisors are capable of taking an objective view and helping organisations swiftly align their procurement functions with their business objectives without losing sight of survival needs.

Boost company responsiveness in the face of a volatile business landscape

Procurement advisory has proven to be a game-changer for many organisations that are looking to make necessary changes in their business models. 

Changing strategies, supply chains, and supplier-buyer relationships—the procurement process has evolved and now plays a core role in the strategic outlook of a company as its impact on change management and responsiveness to volatile situations have become evident.

Procurement advisors can help organisations understand the power of transformation and unlock the full potential of procurement teams.

Getting the right guidance can generate new opportunities for higher value addition and—more importantly—help organisations prepare for disruptions that can possibly have a negative impact on business operations. 

Establishing a strategy that is able to improve a company’s responsiveness to future market events can foster a better prepared business capable of swift risk management and antifragile features.