It sure would be nice having an ace up your sleeve as part of your “go to market” strategy. Look no farther than you own procurement team. Procurement has been working to establish itself as a worthy member of the executive team in every industry for years. Procurement has long lived in the shadows behind sales, operations, finance and IT. Sales teams tend to get a lot of recognition for bringing in the business and it is well deserved. Operations, finance and IT all seem to have their moments to shine too. But procurement in general seems to get lost in the shuffle behind those other disciplines.
However, that in no way diminishes their ability to add value to the organization. Maybe they just need a new marketing campaign. Years ago procurement was viewed only as a necessary support function to fulfill internal requirements. It’s continuing to evolve as more companies are seeing greater value being added than just filling a material requirement at the lowest cost.
Procurement’s strategic effect touches just about all areas of the organization. Here are 4 key areas that procurement can effectively provide a competitive advantage for your organization:
- Product design
Developing products is a creative process that can consume lots of time and resources in order to maintain relevance in the marketplace. Sales and operations typically drive the process, but don’t forget that procurement has direct communications to the supplier network. That is an incredible resource that is easily tapped into for support to the latest technology and market solutions that extend well beyond your internal capabilities. Go ahead and invite your suppliers to be part of the process, you might be surprised what they bring to the table.
- Inventory strategies that increase cash flow
Investing into inventory is one of the biggest expenses for just about any company. Unless you can turn around and sell the material without further touches, expenses quickly add up like space requirements, tracking inventory, audits, compliance, theft, packaging and support management. Then there’s the risk of the inventory moving slowly or not at all. Why not work with the suppliers to find solutions that minimize that risk and inventory investment? Increasing cash flow, reducing lead time and logistics costs, what’s not to love about those benefits!
- Corporate social responsibility
Unfortunately as global commerce continues to expand into developing countries, corruption still exists but the good news is that information has never been more accessible. There is so much injustice across the world, but organizations have never had as much information as they do today to make informed decisions on where they award their business. There are major concerns when working internationally such as human rights, environmental issues or intellectual properties. How about turning those concerns around and sourcing responsible suppliers as an example of the right way to do business? Now that’s an advantage that benefits everyone.
We all want to standout in the marketplace and having exclusivity in your supply chain is a very real possibility that allows you to be distinctive. Procurement can drive this exclusivity advantage through strong relationships in the supply chain. Keeping competitors out of your supply chain is a huge advantage that is best established right from the procurement team.
If you are tired of just being another supplier in the market place and distinction is what you want, look to your procurement solutions as a real advantage. Advantages like this can be achieved through internal teams or through procurement outsourcing providers. They have the experts on demand with proven concepts, experience and partnerships available to make ideas like this part of your competitive advantage.
If you know of any companies that are looking for a distinct competitive advantage through their procurement solutions, please email email@example.com for more information.
Question: What creative procurement solutions have you used to develop a distinct competitive advantage in your marketplace?