The role of procurement has evolved—it is no longer just about buying goods and services but ensuring smooth operations throughout the year. This includes creating specifications, conducting market research, evaluating suppliers, negotiating contracts, and managing risks. Here are five ways procurement leaders can create value for their organization:
1. Reduce Costs
Every business aims to lower expenses without affecting profitability. By selecting the right suppliers, procurement professionals can help reduce external spending and operational risks. However, obtaining reliable information and insights on potential suppliers often requires significant time and investment.
2. Drive Innovation
Procurement specialists hold a strategic position in business. They select suppliers that often shape the organization’s overall supply chain. By choosing value-added suppliers, procurement teams can position their organization for competitive advantage.
3. Leverage High-Quality Data
There is a difference between collecting as much data as possible and making decisions based on high-quality supply chain data. Complex supply chains involve product development, engineering, packaging, delivery, sales, forecasting, and more. Using data effectively generates insights that boost revenue and operational efficiency.
4. Drive Growth in New Markets
The best opportunities to create value often come from new markets and external supply chains. Previously untapped markets are frequently full of companies eager to innovate and develop quickly. Entering unknown territory requires thorough research, knowledge, and confidence.
5. Ensure Compliance with CSR Requirements
Corporate Social Responsibility (CSR) is increasingly important for businesses. Reputation damage can arise from failing to meet CSR requirements, such as the United Nations’ Sustainable Development Goals, which are often difficult to control within the supply chain. Therefore, detailed prequalification processes are critical for procurement professionals.
Source: Supply Chain Digital
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