Mitigating Challenges in the Procurement Landscape
Procurement leaders globally are recognizing the power of better data-driven insights for cost optimization and process efficiency improvement. Per a 2018 study from Deloitte, Procurement leaders have indicated the top three technologies currently being used to help achieve results are collaboration networks and B2B Markets, predictive/ advanced analytics, and visualization.
As Food & Beverage enterprises lean more on procurement leaders to deliver enterprise-wide value how should these leaders employ technology to address current industry challenges?
Today’s food and beverage enterprises are facing rising operational, labor, materials, and delivery costs. Management lacking visibility into real time consumer demand and subsequently, the inability to disseminate data insights back out to the supply chain are not properly equipped to counteract these market challenges. As a result, these businesses see costs rise even higher as inventory levels have to be increased to buffer supply chain variability throughout and freight is expedited to meet customer service levels.
Food and Beverage Procurement leaders who participate in collaborative networks, analytics and visualization technologies optimize and digitize their procure-to-pay and other supplier management processes reducing costs and administrative time. Automating business processes with trading partners connected to a collaborative network brings supply chain visibility for forward and backward lot traceability and compliance. With visibility, communication, and collaboration, businesses can better understand supplier and carrier performance, determine the actual Total Landed Cost of supply to inform and optimize sourcing decisions, reduce safety stock, improve product quality, gains insights into sustainability practices, and positively impact on time deliveries.
Managing supply chain risk is another challenge in the procurement process for food and beverage enterprises. Suppliers can fail financially, leaving your business without the materials it needs for production and manufacturing. Other risks include raw material quality for recipes and variations from a cold chain requirement on its delivery impacting ongoing compliance and spoilage concerns. With visibility from a connection to a collaborative network, supply chain trading partners on the network see what is happening across their supply chains up and downstream. For example, if you know that a supplier is struggling meeting your recipe specifications, you would be able to find another supplier by querying other suppliers on the network.
To make more informed decisions, food and beverage procurement operations need accurate and reliable demand data for existing and new product introductions. Making purchases based on inaccurate customer demand data can lead to inventory shortages, excess inventory or even the wrong inventory. All scenarios that negatively affect a business’s bottom line. Analytics is a key driver for change in procurement operations using data that is clean and usable for decision-making.
However, a challenge is sharing this data due to silo-mentality, many enterprises, suppliers, and other trading partners not wanting to share data. If you don’t have the data exchanged with your supply chain partners, you can’t analyze it, and you can’t improve your operation.
In the Deloitte study over half the Procurement respondents said their staff does not have the skills to deliver on the procurement strategies. However, Deloitte notes there is a direct correlation between stronger leadership capabilities, higher spend on training and enhanced performance. Chief Procurement Officers (CPOs) should consider talent an important success factor in the enterprise of today. Yet many organizations have insufficient budget to develop staff, making a gap in skills level significant.
Collaborative networks, analytic tools and visualization solutions help food and beverage organizations increase productivity and efficiencies of their current staff by using supply chain connectivity to free up employees from data entry and constant emails/phone calls to check if orders and shipments are on track. By automating manual processes, companies are reducing administrative tasks, freeing individuals to train for other positions that help improve supply chain performance.
Elemica Digital Supply Network connects and orchestrates even the most complex supply chains involving your customers, suppliers and logistics service provider. Our Digital Supply Network removes transactional barriers so information, multi-enterprise and collaborative processes can flow seamlessly between trading partners. Our Elemica Buy solutions will help ensure the inbound flow of materials and services arrive at the right time driving the ideal balance of inventory, working capital, and service levels. Using our supply chain network, analytics and visualization solutions, Elemica can help procurement leaders play a pivotal role in driving bottom-line business results for their organizations.