What is supply chain management?

The planning and administration of acquisitions, conversion, and logistics management operations are all part of supply chain management. It also handles with the coordination of all parties (from suppliers to customers). It deals with demand management inside a corporation in this manner.

What steps can we take to identify and reduce waste in our supply chain strategy?

The first step is to examine existing processes and determine where waste is still an issue. You may, for example, compare the things you buy to your outcome to prevent expenditures. Talking to relevant managers or operators or solicit further feedback from customers or service suppliers.

What is a global supply chain?

Global supply chains are networks that cross continents and nations to source and distribute goods and services. The mobility of information and resources is one of the most important foundations.

Where do risks exist in supply chain management?

Internal risks (those under your control) and external risks (those that are beyond your control) coexist. In this regard, the following sorts of dangers are identified: Financial hazards Poor planning Regulations Environmental Socio-political Human behaviour

What is procurement in the supply chain?

One of the various branches of the supply chain is procurement. It serves as a structure for a firm to efficiently carry out all of its daily activities, monitoring the outcomes and assessing how the items that will be provided to the clients are made.

What factors contribute to the success of a supply chain?

A good supply chain must have three components: flexibility, data, and long-term planning. In this regard, some of the aspects that impact its correct operation are as follows: Maintain your adaptability. Trust data and technology Plan for the future Remember who is your end customer

What are the benefits of supply chain management?

In a nutshell, it facilitates and improves the movement of products, information, and commerce. Companies benefit from an optimised and efficient business, building better ties with partners and customers.

Why is supply chain planning so important?

Planning in the supply chain helps to simplify operations, enhance productivity, eliminate wasteful spending, and build stronger client relationships. Planning, when done effectively, may assist decrease costs associated with purchasing, manufacturing, inventory management, and transportation.

How can we gain a better understanding of our supply chain costs?

Data analysis is an excellent tool for anticipating and determining where we need to improve. For example, it assists us in optimising warehousing and storage, which is essential in a bigger supply chain strategy. This allows us to optimise space, decrease damage, reduce packing, and do a variety of other things.

What obstacles do organisations experience when attempting to improve SCM?

The supply chain is a difficult process in and of itself, and adding innovations is a problem for businesses. It's critical to move fast and to balance rising customer demand with competitive pricing. In this regard, procurement may also assist to determine whether parts of the supply chain are not competitive or to set more ambitious goals.

Developing Effective Procurement Strategies for Companies

Know yourself. Your organisation. The market that surrounds you. The first step toward success is to develop a scheme, a road map that will lead you to success, and this is where the procurement consultant comes in as your guide.

Develop An Effective Industrial Procurement Strategy

Before you finish reading this article, you'll have all the information you need to begin developing your own effective procurement strategy, as well as the benefits of doing so. Not only will you be aware of cost-cutting opportunities, but you will also be able to develop a more efficient corporate behaviour.

Take a step towards success now

Procurement has evolved into one of a company's most important activities in terms of CSR, production, and innovation, far from being a measure to reduce costs. Indeed, according to a Deloitte survey, "reducing costs" wasn't the top priority for CPOs in 2021 for the first time in ten years.

Instead, 78 percent of respondents stated that "driving operational efficiency" was their primary concern.” 76.4 percent mentioned cost reduction as a close second priority. With efficiency and company goals in mind, procurement is changing the rules of the game.

So, what is it and why is it important?

According to Israr Raja, a university professor of Management, Marketing, and Supply Chain Management, procurement is the action of obtaining something with care and effort to meet a need. It's defined as a long-term strategy for acquiring large quantities of goods or services, to fulfil the requirements of a business.

A company's success in an increasingly competitive global marketplace is dependent on a variety of factors. A growing number of CPOs around the world see supply chain procurement as a critical deciding element in a company's success. To survive, businesses must adapt to the changing and globalised environment in which they operate. As a result, they will inevitably need to develop and implement a provisioning plan.

Driving operational efficiency
was the highest priority for CPOs in 2021

In this sense, the ingredients for an adequate procurement strategy need to consider:

The company's current state
Market conditions
Specific corporate objectives
Data analysis

If you suspect your company is losing money everywhere and you don't know what to do about it, it's probably time to hire a procurement specialist to help you. Our team has developed a series of basic steps to facilitate you in developing a strong procurement strategy.

Self-analysis
Market evaluation
Set (realistic) goals
Adapting the strategy to your needs
Let data be your best allies
Digital procurement strategy
Refine

1. Self-analysis
This is the logical first step in any strategy. What are your company's issues? What objectives are most compatible with your company? In this first analysis, we must identify the key business requirements as well as the risks (market risks, currency risk, equity, policies, and so on) to take them into account when implementing our strategy.

Experts advise asking the "what if"
question to determine the future of your company

In these cases, experts advise asking the "what if" question to determine where the company should go. Examine your company's weaknesses and areas for improvement... This will almost certainly lead you to where the money is spent.

By doing this exercise, it'll be easier for you to reorganise your resources in a more efficient way, strength your relationships, and eliminate wasteful spending.

2. Market evaluation
After we've finished our internal analysis, it's time to look at what's around us. What is the current state of the market? What are the supply markets like, and how are they performing?

One of the following standardised market analysis techniques is recommended for conducting a relevant study:

Porter's Five Forces Analysis identifies the industry's weaknesses and strengths. It's commonly used to assess the intensity of competition, the attractiveness of a product, and the profitability of a business.
PESTEL analysis allows you to investigate the external factors (political, economic, sociological, technological, legal, and environmental) that have an impact on an organisation.
SWOT analysis is a force for assessing your strengths, weaknesses, opportunities, and threats. It incorporates both an internal, and external analysis.

3. Set (realistic) goals
If you are unsure where to begin when developing your company's objectives, it’s recommended that you follow the principles of the SMART technique:

Specific: Define your goals very well. Questions like "What steps do I need to take to reach this goal?" They will help you clarify your doubts.
Measurable: Quantification will help you in determining whether you're meeting your objectives. You'll be able to track your progress and see if you're getting closer to your goals this way.
Assignable: Gain complete control over who is working on what. Assign tasks, divide the work, and make sure that each member of your team is accountable for a specific goal.
Realistic: Remember that your objectives must be attainable. Determine your needs first, and then develop the strategy that is best suited to your company. Simply ask yourself, "Is this a goal that my team can fairly achieve?"
Time-related: Set deadlines. Remember to include the end date as well as the start date. It's recommended that checkpoints be established to carry out proper control sessions.

Cost reduction, growing market share, increased sales, risk management improvement, strengthened customer service, and reduced environmental impact are all common business objectives.

4. Data-driven strategy
Here is the data. Making decisions based on data analysis will help you save money and cut costs by 60%. According to a previous Deloitte survey conducted in 2018, CPOs around the world are proactively leveraging intelligent and advanced analytics for cost optimisation (50%) and process efficiency improvement (48%) (although both these percentages are lower than 2017.)

With the ability to use big data and machine learning, you can make informed decisions. Using data is like finding out how the roads are: if traffic is heavy, we'll take public transportation. Once you start using data analytics, making smart decisions will be second nature to you.

5. Adapt the strategy to your needs
A strategy is successful when it's tailored to the company. It's critical to identify where it fails, how it can be improved, and what works. The key to developing a procurement strategy is to get it up and running as soon as possible and to start measuring how well it works for your business.

Keep your teams and stakeholders in constant communication to determine what needs to be improved and what is working.

6. Develop procurement guidelines
A standard operating procedure gives the company more cohesion and a more structured way of doing tasks. It's a guideline in which you will spell out the fair practises for all those involved in the process, as well as how to act in the event of any errors. It also serves as an "instruction manual" for your team, outlining which suppliers have priority and whether certain types of purchases would require prior approval. When making a purchase, for example, ensure that your company's values are not jeopardised. Suppliers must share your business' culture and principles.

7. Refine your strategy
Procurement experts recommend that the strategy be reviewed on a regular basis to ensure that everything is functioning properly. Track the activities using key performance indicators (KPIs) and make the necessary adjustments to ensure that everything is functioning properly.

Remember that monitoring these types of indicators is a piece of cake using the data analysis described in the previous step.

Start the transformation of your company

Procurement services companies such as Imre Drillings Solutions can assist you in navigating this journey. With over 15 years of experience, it supports the procurement supply chains of a wide range of industries, including oil production, drilling, petrochemical processing, mining, gas treatment, refining, energy, heavy engineering, chemicals, pharmaceuticals, and many more.

Imre Drillings Solutions drives visionary, strategic, and cost-effective solutions, utilising our professional expertise to provide the highest standards to our clients. Contact us today and we'll be happy to provide you with more information.