One of the most critical factors in cost savings and supply chain agility is procurement orchestration. Companies that adopt procurement orchestration can realize two to five times the amount of savings.
Procurement goals have evolved even further throughout 2021, and procurement teams have big goals for the future. Although still working through aspects of digital transformation and implementing platforms and tools, procurement is primed to bring greater strategic value to all organizations by achieving three goals.
Procurement operations teams face big challenges, even if they have access to data from procurement KPIs. First, getting their stakeholders to use contracts that are pre-approved by procurement and include specific and necessary terminology. Second, convincing stakeholders to adhere to common sense standards around issues like competitive pricing and best value award decision-making. Third, getting stakeholders to use processes that are compliant.
While we might think of procurement as a single discipline, it’s more complicated than that. There is direct procurement, which is what most people think of when they hear the term “procurement.” This is the sourcing of the raw materials needed for production. However, there is also indirect procurement, or the sourcing of products, services, and supplies that keep the business running. This is everything from repairing equipment to buying the toner and paper for the printers. It’s no less important, but indirect procurement is often harder to measure and source for.
Procurement teams don’t just ensure that the raw materials, components, and parts arrive on time, on budget, and on spec. In many organizations, the procurement team is also responsible for MRO sourcing. That’s maintenance, repair, and operations.
Raw materials procurement can get chaotic, so it’s vital for raw material procurement teams to find the best ways to procure raw materials while staying ahead of price increases.
When you talk to sourcing professionals, one of the procurement challenges that will repeatedly be raised is logistics. The transportation of materials and supplies to production locations, and the delivery of finished products to customers.
If you’ve been searching for a way to get ahead of price increases and shortages, predictive sourcing might just be the light at the end of the tunnel you have been searching for.
Most procurement teams focus on OpEx procurement rather than CapEx. OpEx, or Operational Expenditures, includes categories such as raw materials, packaging, and office supplies. The super category covers anything a sourcing team would source daily, and thus has repeatable, scalable, and efficient processes associated with it.
Procurement and sourcing professionals know that strong category knowledge is critical to a successful RFP. That’s why we want to shine a light on best practices for sourcing a category that often gets overlooked: packaging.