Figure 62: WHICH OF THE FOLLOWING DO YOU BELIEVE ARE ESSENTIAL TO MANAGE OR OVERCOME THE ECONOMIC CRISIS?
Better control and analysis of spend A programme of cost-savings initiatives More robust and efficient procurement processes
63.6%
44.3%
44.3%
Training in procurement and supply chain
38.6%
Better management of risks
37.5%
Downsizing the procurement function Adoption of technology
35.2%
4.5%
0
10%
20%
30%
40%
50%
60%
70%
The findings from this final question in the survey have been thought provoking and difficult to explain. We interpret these to mean that about six out of 10 organisations do not believe that cost-saving initiatives, more robust procurement processes, training, risk management and adoption of technology can help them in the management of the economic crisis. We wonder if the results imply that procurement professionals have lost their faith in any management practices that would help them in overcoming the crisis. Either that or they have not been convinced about the value and benefits of applying these practices in the first place. Hard times call for hard measures. We believe that procurement is on the spot in these stringent economic times and its potential value can be significant, if properly leveraged. Start by asking some of the following questions. Do you have visibility of third-party spend? Do you have a programme of cost-saving initiatives? Do you have contracts in place that you actively use during their lifetime? Are you aware of the risks in the supply chain? Do you know which suppliers are critical to your business? Do you efficiently manage your suppliers? Is your team equipped with the required skills and technology? Do you have a clear procurement strategy? If the answer to any of these questions is ‘no’, then there are definitely opportunities to grasp. The ultimate prize for procurement and supply chain is being positioned as a strategic function in the organisation – one that cannot be ignored. While the economic crisis cannot be avoided, procurement can do a lot to minimise its impact.
Are you on board for leveraging your supply chain?
· Have full visibility and tight management of third-party spend. · Design a programme of cost-saving initiatives. · Work closely with suppliers to unlock greater value and manage risk. · Design contingency and risk mitigation plans. · Ensure early engagement of the procurement function in the buying process. · Drive for cash by employing techniques such as outsourcing, strategic sourcing, eAuctions and a consolidated supply base. · Prioritise procurement involvement in purchasing initiatives. · Research the market for opportunities and threats. · Undertake audits to identify overpayments or areas of savings. · Monitor potential disruptions in the supply chain. · Explore supplier finance.
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