The Best Market Intelligence for Great Procurement – All you Need to Know
August 12, 2020
The truth is that procurement market intelligence is an essential and complicated step. When done poorly, it can have adverse effects that can last long. They can lead the business to drop profits and fall back in the competition. They may also miss out on good sourcing opportunities and even have their supply chain capacity downsized. Therefore it is vital to follow diligent steps towards a successful procurement market intelligence.
The companies with competitive and upgraded procurement intelligence support can rise to the challenge and expand their market share. They can also propel innovative ideas and designs. The businesses who understand the potential benefits of a systematic procurement set-up for their company, drive themselves to success.
What is Procurement Market Intelligence?
It is essential to understand what Procurement Market Intelligence means before we gauge the benefits. The procurement market intelligence is done through manual research, based on other third-part services whose job is to gather information from different sources. This data is then gained for analytical purposes and helps to benefit the business, company, or industry in many ways.
How to get the right market intelligence for procurement distinction?
A steady procurement intelligence system can maintain a healthy supply chain, distributing centers, and manage suppliers more efficiently.
It is common knowledge between the procurement officers that they need to create a thorough sourcing strategy. One that has a better vendor relation and poses lower risks. It is essential to know that following a low cost does not help in creating a long-lasting strategy. The main focus should be on optimal performance for the best results.
What should the intelligence procurement look after?
The procurement intelligence must cater for:
By this, we mean the top-line growth, bottom-line growth factors, the management of cost, and cash.
The quality considered should not only be of the vendor. It should also include contracts, SLA’s, regulations, expectations of business, etc. It is a measure of the KPI’s
Management of risk.
All the relations of lean, six sigma, kaizen, and JIT are a part of this. When we look beyond getting low cost and move into strategic sourcing and managing the risk is essential. Procurement intelligence is the aid that helps to detect, weigh-in, and avoid the potential risk factors.
The relationships with the vendors should be a top priority. The intelligence should be able to observe the value and relevance of the relationship. Since in the end, it will determine the success of the company itself.
How to choose the best procurement intelligence, partner?
Choosing a partner who is experienced and offers the best expertise is a sure way to get you at the top of the procurement strategy. Choose one with a global network. One who helps drive the direction of your market to the right place.
And knows global commodities, suppliers, and customers. While market research is essential, a task force that solely does it for your benefit and letting you concentrate your energies on some other vital task is very beneficial.
To make it more comprehensive, they should be able to:
- Analyze in detail the activities of the suppliers, needs of customers, and bring in innovative ideas
- Make a research on the commodity market
- Be aware of the company strategies and help in improving them
- Have a transparent region and market overview
How to improve Credibility for procurement success?
Studies show that around 30 to 49% of companies require department management approval for requests. This is seen across a wide range of industrial set-ups. Department managers have to analyze the claims closely. This helps to see if the cost is acceptable, vet the supplier, and have the intelligence to make the right decisions.
When the order has a backing of rock-solid intelligence information, its credibility increases automatically; it also allows the department’s managers to make a better and informed decision. In the end, these decisions will affect the success or downfall of the company.
Many industries are currently struggling with joint pain points. These struggles can only be downsized through the use of automated processes. It has been seen that accurate and timely intelligence helps companies make better decisions regarding new and current suppliers.
They have been able to cut costs, downsize potential risks, and also gained many benefits. Keeping this in perspective, the procurement specialists will need to analyze how to gather and analyze market information. After this, they will be able to explore how to identify possible areas that require improvements.