A recent Forrester survey found that procurement leaders are divided between prioritizing cost reduction and investment in digital technology to support recovery after the COVID-19 crisis.
According to experts from Forrester and Ivalua, businesses need to have strong visibility and relationships with their upstream partners because there will be greater competition among surviving firms for the expected reduced demand after the crisis. Forrester suggests that companies should invest in software solutions that will allow information-sharing and collaboration with procurement teams and supply chain partners.
Forrester’s vice president and principal analyst Duncan Jones said that respondents considered geographic and time zone gaps as the biggest obstacle in effective collaboration. This is followed by the lack of mechanisms for collaboration, particularly virtually. Having collaborative tools is very important in ensuring supplier development and in maintaining product quality and inventory levels that are critical in supply chain resilience.
Ivalua’s chief marketing officer Alex Saric highlighted the disconnect between cost-oriented behaviors and supply chain resilience and agility goals. He added that it is important for leadership to understand the cost-benefit balance between having a strong supplier relationship and maintaining profitability.