Top 3 Questions Every CPO Should Ask to Transform Procurement Today
In India and worldwide, the current economic world order has been marked by volatility, inflation and various supply chain disruptions in recent years. Global inflation is expected to rise to 8.8% this year. Knowing this, CPOs must consider how these factors will impact enterprise procurement.
Inflation directly impacts costs across the supply chain, leading to higher outlays in the procurement cycle. Unorganized areas like MRO in procurement may be particularly adversely affected by this. Volatility further adds to the problem by making it harder to predict costs and prepare a procurement budget.
Given this landscape, procurement leaders must head the change and address today’s critical challenges in business procurement. And you can do this by asking the right questions and taking the proper steps.
Top 3 Questions Every CPO Should Ask to Strengthen the Supply Chain
The current market may have challenges, but it also offers unique opportunities for procurement leaders to set new and more ambitious goals for their organizations. Here are three key questions that CPOs must ask and answer to stay ahead of the curve.
1.Have you quantified the effect of disruptions on your supply chain?
The first step towards mitigating the effect of disruptions on your supply chain is to quantify the impact. To begin with, assess the additional outlays and the reduction in margins resulting from inflation or volatility.
2.How well do you understand the industry dynamics of your suppliers and vendors?
Another vital aspect of reimagining procurement for the present day is understanding the industry dynamics of your suppliers and vendors. These insights will help you protect your margins.
3.How are you incorporating today’s lessons into tomorrow’s procurement strategy?
Above all, you must include the procurement lessons you learn from today’s disruptions in tomorrow’s procurement strategy. This is a highly effective way to future-proof your supply chain.
The Road Ahead: How You Can Mitigate Future Procurement Risks with the Right Tools
You can use commercial, technical and cross-functional levers to protect your enterprise procurement from additional risks and catastrophes.
Commercial levers include regional diversification in sourcing supplies, offshoring and nearshoring to partner with new vendors and secure the supply chains. These techniques can bring in more opportunities for cost savings.
Businesses can also look beyond commercial levers and adopt technical levers to manage disruptions. For example, redefining material selection, insourcing and upgradation of procurement technology are effective strategies in this category. Another measure your business can take in this segment is comprehensive supply chain digitization to make procurement less expensive and more efficient.
There are times when the key to future-proof your business is a combination of various strategies across different functions. By combining measures that promote a better understanding of the vendor ecosystem, rapid innovation and flexibility in sourcing, CPOs today can strengthen enterprise procurement quickly.
Moglix e-catalog solution enabled India’s second largest tractor manufacturer to save up to 85% of staff hours on procurement. They achieved this by digitizing their procurement process, which previously relied on legacy ERP solutions that resulted in poor visibility and low-quality data. This holistic approach to digitization led to significantly better supply chain visibility and ultimately delivered cost and time savings.
Want to keep pace with the new normal? Upgrade your procurement plan today!
Transform your organizational supply chain with contemporary solutions from Moglix, such as digital procurement, optimization of MRO categories in your purchases and simplified packaging. If you’re keen on transforming your procurement, send us your business query at firstname.lastname@example.org.
Are you looking to streamline your procurement process and gain 100% visibility over indirect spending?
Then look no further!Download the case study now