Looking at new ways of Procurement Agility

Any type of business should set up procurement productivity and flexibility as top significance for enabling its industrial goal in the field of trade they operate in. Understanding that industries in construction and engineering, production, and manufacturing, including supply chain management and corporate have a bigger role to play towards business sustainability and profit gains to keep the business afloat, while the business performs to the best of its ability through competitiveness.

Driven business solution with thriving goals and success is based on solid business development with the aim to achieve the best results and great profit margins.

Looking at how business thrives against all odds, the business entity needs proper and viable business solutions which will enhance productivity and create more business opportunities for the enterprise to be sustainable throughout its success.

In this sense, procurement transformation and agility should be essential to any business strategy to deliver cost savings, use transparency, and optimized working capital as there is a massive opportunity to attract new clients in corporate, industrial, manufacturing, government, mining, retail, SMEs and construction sectors as these businesses are always evolving.

 At most, organisations recognize the need to improve procurement agility and flexibility in their processes, it is quite essential to start by breaking walls of rigidity and offering great service with the end customer in mind through flexible means to deliver the best compared to your competitors. In terms of becoming agile, it is worth noting that this is more about flexibility, despite changing all processes and procedures which had been in place prior. 

Through your business work ethic and professionalism, it is essential to provide a viable agile procurement for various top and small clients which have an appetite to partner work with you in the business model you are engaged in.

Your business model needs to present customers and potential customers in an effort to find the weak and strong areas of your products and services.

Ways to break rigid processes and improve procurement agility:

1.      To adapt to business needs through courage and long-term goals, sometimes a rigorous process can be a holdup towards delivering business requirements in an effective and efficient manner, hence moving beyond prediction by getting to understand agile procurement by means of time-saving and applying cost-saving measures for the benefit of the business.

2.      It is quite crucial to have a swift reaction towardsresponding to important changes with supplier relationships to keep a competitive advantage over rival companies, as that is the way to go to be ahead of others. 

3.      Adopt the Kaizen approach of continuous process improvement – as globalization has influenced organisations to respond differently from the traditional ways of doing business and the initiation of technology solutions also forces businesses to catch up with the latest trends for sustainable business growth. Procurement can be a support function that moves with the business requirements by encouraging digitization and computerization to become a vehicle to drive continuous improvement faster towards bringing positive and desirable results at great times to beat deadlines and avoiding failures of producing the best outcomes for the business. 

4.      It is vital to Introduce process enablers, with the aim of having sustainable human capital and tools of the trade, while understanding that procurement leaders are the custodians of developing policies, procedures, and processes, and in that sense, the acquired solid team of human capital and tools of trade will enhance the production and bring sustainable results towards your business. The intention is to ensure corporate governance is necessary for a healthy business however where there is a need to adapt urgent process requirements, there should be a room to craft meaningful processes for enablers to support immediate product deliveries requested by businesses to respond to markets demands, fast approvals sequences and vendor onboarding processes as a niche to always stay competitive.

5.      For procurement agility, you need to have flexible procurement leaders to look into bringing value in your procurement through data analytic systems, digital transformation, value-driven ideas, and skilled procurement personnel including proper service delivery to the satisfaction of the client. Flexible procurement leaders’ role becomes important towards the capacity building from the early stages of demand and supply engagements to ascertain cost measures, mitigate supply risks and not be afraid to find sources of supply through collaborating with suppliers that might be difficult to respond to business needs, however, it is wise to look at alternative service providers to avoid the disappointment of losing clients based on lack of urgency and applied strategies which needed to be put in place to safeguard your business operations and success.

According to the research conducted by the Hackett Group, which is a leading international strategic consultancy firm, digital transformation has enabled world-class procurement organizations to achieve greater efficiency, effectiveness, and a higher return on investment.

 In terms of making a procurement organization be world-class and effective, theHackett Group research states that there are five strategies that are viable to envisage the success and progress of your business.

1.      Re-allocating resources from transactional focus to value-adding activities:

GlobalProcurement organizations falter when they devote much of their attention to transactional work and pay little attention to strategic activities. Value-adding activities include analytics, performance management, and devising purchasing strategies.

2.     Digital transformation:

World-class global procurement organizations spend more per full-time equivalent (FTE) due to greater investments in process automation. The three critical steps in enabling digital transformation are creating a procurement technology strategy, partnering with the information (IT) group, and creating a technology road map that defines the desired strategic outcomes, key performance indicators, and needed behaviors.

3.      Analytics-based decision-making:

By spending23% more on technology per FTE, world-class procurement organizations invest a higher proportion of systems and tools to enable analytics capability. Data should be used beyond reporting to solve more complex business needs.

4.     Customer-centric service delivery:

Customers must be the focal point of all activities within procurement. World-class global procurement organizations design services and processes, keeping the customer perspective in mind.

This includes service-level agreements with internal customers, the use of non-traditional project teams and skillsets in communication and digital media, and the “voice of customer” recommendations.

5.     Re-skilling the procurement function:

 World-class global procurement organizations employ a more significant percentage of the overall staff for planning, and strategic roles. However, less performing organizations have a greater focus on operations and compliance management.

By focusing on building procurement skills, these organizations invest in talent development, increasing the business acumen of procurement staff; and developing analytics skills.

 It is worth noting that new ways of technology such as data and automation assist a lot through the use of Business Intelligence Dashboards instead of old-fashioned traditional methods used as analytic tools to analyze data for quicker response in terms of getting accurate information that you need based on agile procurement. Investing in more resourceful and innovative ways to adopt data-driven technologies to improve performance and reliable information is the best way to elevate your procurement business strategies to greater heights.

In conclusion, you need to make an impact towards agile procurement through a clear understanding of processes in place and new innovations on how you can utilize the fourth industrial revolution methods to push to the new frontiers. It all takes knowledge and education to get to understand how procurement works. Once you get all the methods and strategies right, you will be on the right path to excellence.