Supply chain management has become one of the key areas that sit at the heart of all business transformation projects.
In a recent industry survey conducted on a community of supply chain management executives across different organisations, 82% executives posited that their organizations are in the process of undergoing transformation.
This comes to fore as a major update for the business community in general, considering that supply chain management and procurement is touted to be among those that are least capable of change. Apparently the evolving trend is considered to be reflected in all the other functions in an organisation as well.
Viewpoints from various professional fraternities have always pointed towards the fact that in almost every other industry, supply chain management and procurement is bound to change with developments in technology and why not, technology has been the catalyst that has kept the wheels turning when it comes to advancement of procurement operations in various companies. The rising levels of efficiency in business operations in various organisations have been indicative of that.
It has been noted that the digitalization-led transformation in supply chain and procurement has enabled enterprises put their supplier spend data to good use. They are able to analyze data that helps them to arrive at better, informed decisions and a deeper knowledge of supplier data is thus facilitating management information which is proving to be essential for an organization to grow.
Thus, data analytics has proven to be of great help in shaping strategic organisational direction and overarching policies and processes. Utilizing pre-existing information has proven to increase the efficacy of operational information such as purchase news, and demographic preferences.
For the beneficiaries within organisations, nearly a third of their revenue is likely to be outsourced. This has been good news and has boosted business for the supply chain organisations in the present.
However, much has been talked about the perils of outsourcing as a process that may heighten risk for some organisations. However, businesses that are aware of these challenges are smart enough to look at facilitating their own supply chain and procurement function and outsourcing the non-strategic categories, creating a fine balance between the two and making the most of it.
In many organisations, procurement may account for almost two-thirds of total costs. Leading businesses are employing their Procurement leadership and their teams to take up the responsibility for innovating business and controlling costs at the same time. Many renowned companies are not only employing additional skilled resources to keep a close eye on the market trends, incorporate innovations and contribute to the overall revenue stream of the business but also to control costs and improve efficiencies especially in procurement. The need to develop procurement functions, therefore, has hit every business worth its salt.
Today, the supply chain and procurement functions for any given corporation are no more a back-office function but are transitioning to be a critical component of business transformation and strategy.