Procurement departments are still being asked about the best way to focus their efforts. Following on from the list of nine best practices for procurement officers to outperform themselves in 2020, questions are now focusing on the priorities that need to be set as the year begins.
Companies have many high expectations. Procurement departments have a lot to gain from creating their own roadmap, in order to combine their efforts and focus solely on the essentials. This line of thought is clearly reflected in the seven priorities listed by procurement officers.
The seven suggested priorities can be categorised into three areas:
- Collective intelligence and efficiency
- Optimisation of procurement processes
- Processing of purchasing data
Focus more on the business
Company growth and innovation are increasingly based on the ability of key players to take responsibility for their share of the strategic planning, coordination and execution. To better support the business, procurement departments must focus on their relationships with suppliers, by looking for continuity, creativity and agility, rather than the lowest prices.
Get more involved in the value chain
The perception of procurement departments working away in a corner is clearly outdated. Modern procurement departments need to be part of a network of committed stakeholders, where intelligent collaboration is of the utmost importance. Personal relationships and a concerted effort to better understand the challenges faced by those in other departments boost collective intelligence and efficiency.
Contribute to the company's reputation
The traceability of each stage of production responds to societal demands for transparency and the integrity of an organisation's value chain. However, at times, a significant proportion of production is carried out by the company's suppliers and sub-contractors.
In terms of sustainable procurement, procurement departments are responsible for guaranteeing the sustainability of processes and origins for each step of the supply chain that takes place outside of the company. Incidentally, blockchain technology may be a useful resource for this type of task.
Automate time-consuming tasks
The automation of business processes (Robotic Process Automation) is becoming a key resource in procurement digitalisation projects. RPA will allow teams to phase out all manual, repetitive and low value-added tasks, such as invoice reconciliation, for example.
RPA benefits procurement departments by giving teams more time to reflect and advise. This will enable procurement departments to work better with other departments.
Make headway with risk management
Data linking, which is all too often managed via disjointed processes, improves supplier risk management. 360° risk management combines purchasing data, market data and the financial analysis of supplier behaviours.
A complete and objective knowledge improves a department's ability to:
- Foresee major and minor failures.
- Anticipate any impacts on business activity.
- Define corrective procedures in advance.
Provide high-quality data
Vast quantities of data are extremely valuable in terms of the success of an organisation. However, data made available by one department must be processed so that it can be used immediately by another.
For their part, procurement departments are encouraged to examine their data-processing abilities:
- How should supplier data be collected and standardised?
- How can errors be found and corrected?
- What is the best format to send data to the finance department in order to optimise the order management cycle?
Track future innovation
Industry 4.0 is based on the automated collection of added-value data at each step of the supply chain. This information can be used to anticipate machine maintenance, take an agile approach to stock management or even to understand customer expectations more easily.
In the same way, certain ideas and trends that are currently tucked away in supplier catalogues could be better captured. Procurement departments must give themselves the resources they need to systematically identify sources of innovation and therefore save the company precious time.
In conclusion, procurement departments are expected to contribute to all of the organisation's strategic imperatives. The perception of an isolated procurement department, whose only concern is to "cut costs", is now woefully out of date.
Today, procurement is on the same level as other departments in terms of increasing the capacity for innovation and accelerating the company's decision-making process. Thanks to technology, procurement teams no longer have to complete time-consuming tasks and now have additional intelligence at their disposal.
The future of the procurement department is therefore inseparable from that of the company. To go deeper into this subject, Manutan organised its fourth Customer Event on the topic: "What does the future look like for procurement?"