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How to Keep Up with the Evolution of Procurement
Procurement is a dynamic industry, strongly impacted by consumer demand. As people’s wants and needs change, so should your procurement process.
For example, if consumers demand more environmentally-friendly ingredients, components, and products, the procurement team will have to adapt in kind. The same goes for new technologies, trends, and beyond.
So how should your business go about transforming your procurement process? Here are just a few tips from our experts.
Focus on the Big Picture
Before you make any major changes, your first reaction may be to isolate and focus on one singular issue in your process. Though this approach seems sound, there are major pitfalls which can come with highly-targeted solutions.
One such pitfall is that this can be a very reactive approach. It rarely leads to creation of preventative measures and results in continued “firefighting” as problems arise. Equally, the wider business is not usually consulted, nor are stakeholders in tangential roles. There is also a tendency to lean on technology as a solution, while other options go unexplored.
To avoid this “quick fix,” hyper-focused mentality, instead go the holistic route. Analyzing your process as a whole and finding the root causes of your challenges is much more productive. Be sure to include those human elements in your evaluation, such as customer preferences and talent skillsets. They often prove to be major contributing factors.
Back to Basics
While you are evaluating the big picture, you’ll have to ask yourself some basic questions: “What is being procured?” and “For whom?” The answers to these questions may change over time, so it’s very important to reassess every so often, especially if you’ve noticed a dip in productivity or profitability.
To fully understand the situation and ascertain the right answers, managers will need to do a few things. First, they will need to segment and group both customers and product categories. Different kinds of people need different things from an organization and grouping those with similar demands will help to streamline solution development. The same goes for products – they each fit a different need.
Organizations should also be transparent about processes and spend. This information should be shared across teams so it can be cross-referenced and easily analyzed. This will lead to easier, better informed decision-making going forward.
Build an Adaptable Model
The needs of the industry will undoubtedly continue to change overtime. So, while you are overhauling your strategies, be sure to include room for adaptation and evolution. Create dynamic strategies which can be updated and evaluated regularly. Analytics and data collection are easier than ever before, so implement the tools at your disposal.
Develop clear lines of communication and accountability. Everyone in your organization should have overall knowledge of the business, as well as niche expertise. Creating responsibility for each branch, category, and customer segment will help your business to keep their finger on the pulse and know when further change is necessary.
Finally, as new processes and technologies are implemented, keep your workforce in the know. Regular training and updates should take place. Also, inform your teams of your vision and allow them to contribute and ask questions. Once they are on board, transformation will be much easier.
If you would like to find the right talent to help you perfect your procurement strategy, please reach out to our team of expert recruitment consultants. You can also submit a job description or browse more of our management advice.