Procurement in 2021: Leveraging Technology-led Procurement
Every manufacturing company navigates make vs. buy decisions. Cost-efficient procurement at each level in the supply chain is essential to generate a desirable bottom-line impact for large OEMs and end consumers. Cost-efficient procurement is the key to stimulating the demand for goods made in India. One of the easiest ways to achieve this is via technology-enabled procurement. While cost efficiency has always been a critical theme for procurement leaders and managers, 2021 will see enterprises broadening the horizons of procurement costs. They will move from the earlier view of savings on product costs to savings on the total cost of ownership (TCO) of procurement. What will drive this transition towards digital procurement in 2021?
2021 will see procurement leaders search for new avenues of agile cost reduction in the supply chain upstream to achieve the desired balance sheet impact. Robotic process automation will enable enterprises to reduce procurement costs by up to 65%; that too within a few financial quarters. As such robotic process automation will be one of the significant technologies to impact digital procurement in 2021.
Enterprises that were still in the pilot purgatory stages will commit more resources and outlay to their digital procurement initiatives in 2021. Enterprises have learned about the value of uninterrupted supplies and will lean towards risk-averse procurement practices in 2021. Having learned that digitization is the need of the hour, they will step into 2021, choosing from the digital technologies that can make their supply chains more robust and transparent.
Risk-averse procurement behavior in 2021 will see enterprises investing in technology that will digitally connect business processes to physical assets. It will also ensure all-weather procurement continuity.
Enterprises will step into 2021 with a cognizance of the need to respond to incremental information on evolving situations with agility and adapt their supply chains accordingly.
Leaning on digital procurement will allow enterprises to achieve this agility by enabling a single view of the supply chain among their suppliers, factories, warehouses, and logistics services providers. The digital connect will happen across three levels of the B2B order fulfillment cycle: procurement to engineering, engineering to manufacturing and manufacturing to order fulfillment
Amandeep Bhan is Senior Vice President at Moglix.
To learn more about manufacturing and supply chain trends in 2021, download our ebook titled Road to Self-Reliant Manufacturing: Procurement and Supply Chain Insights for 2021 here.