This blog comes to us from Megan Ray Nichols of Schooled by Science.
Because procurement begins the supply chain, delays in this sector are some of the hardest to mitigate — without raw materials, many departments must wait for restocking with no other options. Insufficient acquisition as the result of planning errors can lead to inventory stock-outs, delays and frustration. Business departments stall while waiting for parts of the organization to source materials or services, which slows their operations.
As a procurement specialist, it's good to have a plan for increased demand. Here are some ideas you can use to adjust your acquisition strategy when rising trade requires you to think differently.
Responding to Increased DemandIn general, identifying potential bottlenecks and optimizing your strategy can help you face increased demand. Even if you have a good and steady relationship with one supplier, market research should be a continuous process. You may find that during a spike in interest, current suppliers can't provide you with all the materials you need, forcing you to look elsewhere on a moment's notice.
Where possible, organize your procurement tactics around scalability and flexibility. Some systems and workflows that are functional when demand is lower won't necessarily be as useful when it grows. This factor may be especially true when there is more to keep track of — like orders, supplier evaluations and approvals. At high volumes, valuable information can get lost in the shuffle, making it harder for you to respond to issues and avoid delays.
Acquisition, like the rest of the supply chain, is becoming increasingly digitized — which means there are cutting-edge tools and platforms you can take advantage of. Different types of software can smooth out the process by centralizing data, like order tracking, and automating some procedures, like vendor evaluation.
However, you should also be aware of how disruptive adopting new technology can be. While software can optimize acquisition and reduce error risk, you should upgrade judiciously. You'll need to spend time learning the new tool to integrate it into your procurement process. During this learning period, your productivity could decrease.
You should also prioritize communication with the rest of the supply chain. Other areas, like warehousing, also need to adjust their strategies to meet higher customer demand. By keeping in touch, you can be aware of the issues others are facing and mitigate them before they cause delays. Coordinating delivery with the warehouse will work best if both you and warehouse management are on the same page about current storage capacity.
Planning for RiskGlobal supply chain risk increased by 36% in 2018 — meaning supply chains are becoming more volatile, making risk mitigation more valuable than ever. When planning for higher interest, you should also examine how your system might be vulnerable to hazards, which could hamper your ability to source materials.
Your procurement strategy should be continuous. Specialists should be continuously planning and remaining aware of shifts that could disrupt the process — like supplier issues, accidents and business reorganization — and how they can manage these problems. Avoiding risk can ensure your acquisition method's success, even when demands increase without warning.
Optimizing Your Procurement Strategy for Changing OperationsYour procurement team is one of the most essential links in your the supply chain. Without a successful acquisition, the supply chain can't begin — meaning all other departments rely on effective techniques from specialists in this sector.
There are a few ways to adjust your procedures to meet demand — for example, identifying and resolving potential bottlenecks and communicating with management and staff from other supply chain points.
When you use these techniques together, they ensure your approach to inventory acquisition will be flexible enough to meet customer wants and needs, even if they spike unexpectedly.