Procurement is an ever-evolving industry. As a result, leaders need to constantly be on their toes to drive results for their organizations. Read on to learn how you can help steer the procurement process for your organization in the right direction this year.
Supplier enabled innovation will be more vital than ever before
Supplier-enabled innovation (SEI) is one of the new buzzwords floating around the procurement industry. Today's procurement leaders need to push for innovation in conjunction with their suppliers to succeed. SEI offers a few benefits:
- Expands your organization's capabilities - Your suppliers will often have industry or product-specific knowledge that you lack. If you foster good relationships with your suppliers and use their skills and innovations to your advantage, you can expand the knowledge and capabilities of your research and development (R&D) team exponentially.
- Allows organic, cross-organizational collaboration - If everyone in your organization is determined to foster SEI, your teams will naturally align their core goals and begin working more smoothly with one another.
- Lets you stay ahead of the competition - It only makes sense that organizations focused on SEI would be on the cutting edge and succeed more than their competitors. Research indicates that organizations focused on SEI and innovation have a 40 percent faster route to commercialization than their competitors.
The most challenging part of SEI is choosing suppliers that will encourage innovation within your organization. Looking at patent filings and executive structures within suppliers can be helpful.
Suppliers that are on board with SEI will often have a team of executives dedicated to fostering SEI with companies, and suppliers that are consistently filing patents for new and innovative products are potentially better targets for SEI than their less cutting-edge competitors.
Understand and take control of product data
The supply industry is more crowded than ever before, and not necessarily with quality suppliers, either. Unfortunately for procurement teams, buying the wrong product can have disastrous consequences.
Suppliers with poor quality control can cost organizations thousands by delivering products that aren't correctly sized or occasionally come with missing parts. To avoid having to deal with supply-chain stoppages, CPOs should have access to a comprehensive product database that contains details of what they're supposed to receive from suppliers.
Having data analysts that can govern and decipher this data is equally important. Establishing a comprehensive product data analysis process will be useful in identifying which suppliers are reliable and which ones are not meeting expectations.
Automation and AI poised to take over procurement
Here are two interesting statistics:
- 83 percent of procurement leaders think that digital transformation in the forms of automation and AI will be impactful to supply chains.
- Only 5 percent have followed through and created highly automated procurement processes.
Differentiate yourself from competitors by using automation and AI to rewire your procurement processes and dramatically reduce the amount of time your company spends doing unnecessary busy work during the procurement process. Now is the time to jump in and start looking for ways you can use these technologies in your organization's procurement process.
Of course, if you're lacking bandwidth for these initiatives, Negotiatus can provide all of these benefits for vendors you currently work with and any others you are considering out of the box. Click here to learn more.