Given the evolving role and expectations from the procurement function, it is necessary to adopt new strategies and processes to achieve its objectives and that of the organization as a whole. Omer Abdullah, co-founder and managing director of The Smart Cube, offers some tips on procurement management and strategies for 2020.
1. Manage market volatility. The procurement function needs to focus on managing volatility given the current economic and political uncertainty. Procurement managers should track their key suppliers and keep a list of alternative suppliers and supply markets. It is also important to invest in the right tools and processes to monitor commodity prices and mitigate risk before it becomes a real threat.
2. Digital transformation. Procurement leaders should take digital transformation seriously. This can help the organization get better insights into risk management, contract management, supplier relationship management and spend analytics. They need to identify the processes that need to be automated first, ensure they have quality data and make sure that their employees can handle analytics.
3. Build strategic supplier relationships. Building deeper relationships with suppliers can have a significant impact on the supply chain. Procurement leaders should identify suppliers that are integral to their supply chain and can help drive business value. They should then flag those who are likely to cause problems in the future.
4. Delivery more value for the procurement function. Procurement managers should strive to contribute to the wider objectives of the organization. They should look for ways to increase speed to market and play an active role in achieving sustainability goals. It is also important to improve revenue through new product ingredients, alternative delivery models and innovative packaging techniques.