How Can OEMs Benefit from e-Procurement in UAE
e-procurement in UAE is not an isolated scenario; today’s world is running on digital wheels. Every industry is employing its digital skills to reap improved performance. The opportunities are immense.
However, despite continuous evolution, OEMs are slow to adapt to digital tools and techniques. It is because of the over-reliance on traditional skills and methods. As a result, the cycle from indirect procurement to the final delivery to customers, consumes 80% of the time of sourcing teams.
Cutting corners has become the pandemic-enforced trend to maximize profits in a business. At this time, digitalization in the supply chain can be a worthy step. It offers multiple advantages and underlines significant growth in the figures. To best understand its influence, let us unearth some key benefits.
Solving the Challenges in Supply Chain
The world is still recovering from the impacts of the COVID-19 pandemic. If we talk about the manufacturing sector, the virus has piled up on the challenges it was already facing. The COVID-19 induced lockdown dealt a heavy blow to the UAE economy, with businesses, and their supply chain all bearing the brunt. The International Monetary Fund (IMF) projected a 6.6% contraction in the GDP last year. It was mainly due to the impact of COVID-19 on key performance sectors and the fall in oil prices.
Sourcing the raw materials took the backseat, which resulted in a dip in manufactured products. Subsequently, the supplies to the end-users also got hampered. The dampening of business activities posed several challenges for the businesses to overcome.
To resolve the challenges, making a move in the right direction is imminent. With digitalization, businesses can adhere to the COVID-19 guidelines while conducting their business activities. Digital supply chain solutions are the most basic and foremost available methods to revive the lull operational activity.
Aligning with the Economic Growth
The UAE government announced a financial stimulus package to the tune of AED 100 Billion, among other measures to dilute the impact of the lockdown. However, the revival is not as instantaneous as the losses.
The IMF painted a brighter picture of the UAE’s economic recovery with a 3.1% growth, better than its 1.3% projection in October 2020. The positive outlook is a result of the combined efforts of the country and its citizens. OEMs can expedite their transition from traditional competencies to modern ones like adoption of a P2P software solution and supply chain digitization initiatives. Procurement automation, also known as P2P automation is integral to OEMs in UAE to stay on the course to recovery.
Taking a Step Towards Procurement 4.0
Since we live in Industry 4.0 era, we can find the production chain going ostensibly digital in its entirety. The ability to get a bird’s-eye view of your complete production link hands a better chance to minimize losses and maximize productivity. Businesses can acquire the necessary information on their logistics, such as the position of trucks, containers, and even pallets. All this at the click of a button.
To promote digital supply chain transformation, the UAE government is already taking steps under its Smart Government initiative to become a paperless government by 2021. The government is inviting the bid for tenders via electronic mode to facilitate a seamless procure-to-pay solution. Through this, suppliers can monitor their purchase orders and also submit digital invoices. This e-Procurement solution aims at digitizing and automating the complete process.
As digitalization is inevitable, OEMs must deploy it in their operational activities to make progress. e-procurement will enable easy management of complex supply chain processes. It will also allow businesses to use their people’s talent in other critical areas that require human involvement.
Experiencing Improved Decision-Making
Data is the key to gaining visibility into the supply chain. It is enabling digital supply chain solutions to divulge critical information to improve your decision-making capabilities and optimize business growth. With procurement automation in place, businesses can effectively monitor key performance indicators. On its basis, they can identify the improvement areas.
Cost-optimization is a must during this period of economic rebound. P2P automation offers this across the whole supply chain management processes. Digitalization’s other advantages are transparency, more visibility, a safe and neat collection of data, and cost-efficiency. All in all, businesses can streamline their processes and manage them effectively.
The Now and the Next for CPOs of OEMs in UAE
Digital supply chain transformation in the UAE is imminent, as the economy branches out to new-age non-oil verticals. However, it should not be in parts. For OEMs in the UAE to benefit from the adoption of e-procurement, CPOs have to take a unified view of the different but interlinked silos of the supply chain. Therefore, CPOs in UAE need to replace multiple solutions for different procurement functions with an integrated procurement automation system and consolidate supplier base management functions into one centralized control tower.