Procurement is a strategic function critical to an organization’s business objectives, with the right processes in place they can make sure operations continue as smoothly as possible all year round. Strong procurement processes can not only help you through challenging times, but also create a competitive advantage for your organization by allowing them to reduce costs and produce more for less.
With the unprecedented supply chain disruption caused by COVID-19, procurement have moved to remote working which has unfortunately led to less efficiency according to a report by McKinsey and Company. The report found that half of procurement leaders (49%) surveyed admitted productivity levels had fallen due to remote working setups, while 43% had seen a drop in team morale. The decline was due to poor efficiency and team coordination.
When an organization has an effective and streamlined procurement process, procurement can eliminate redundancies in the operation, promote collaboration and efficiency within supplier relationships. This allows your procurement team to easily determine your suppliers’ capabilities, competitiveness, and financial strength. This will give your procurement team the ability to optimize your supplier base, weeding out under-performers and working with suppliers that have ability to enhance your organization’s competitive advantage.
Within thousands of purchasing departments across the world, there are still manual processes that can be made more efficient with technology that automates the process, but many have been slow to approach. A Hackett Group research report, titled “The CPO Agenda: Keeping Pace with and Enabling Enterprise-Level Digital Transformation,” found that a mere 32 percent of procurement organizations have implemented a digital strategy – and only 25 percent have the requisite skills and resources to do so.
At its core, digital procurement automates repetitive tasks, boosts efficiency, and lowers costs. In addition to that, it produces a wealth of useful data especially if managing rebates. With real-time insights, decision-making will become more informed thanks to accurate and informative data.
Download our checklist to see how you can increase efficiency in your procurement department today.