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Future Proof your Supply Chain

Future Proof your Supply Chain

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Future Proof Your Supply Chain

Over the past two months, every government and healthcare facility around the world has worked tirelessly to learn more about COVID-19, to treat afflicted patients and most of all, to stop the spread. At the same time, global importers and exporters have also struggled with the pandemic’s unprecedented impact on their supply chains.

Even with the lessons we have learned from the SARS outbreak, or the Swine Flu outbreak, or the 2011 Fukushima tsunami, the logistics concerns and risk management strategies have been put to the test by COVID-19.

Given the scale of the pandemic, it is difficult to rush into the creation of a methodical supply chain. Nonetheless, staying ahead means taking the lessons learned and planning for a future with the possibility of similar incidents.

Invariably, toilet paper has been the one commercial product which everyone can tie to the global panic surrounding the coronavirus. You would think people would be buying pallets of hand wash, but it was oddly toilet paper. We’ve never seen so many news headlines about toilet paper in modern history.

Despite the illogical rush, many manufacturers did not halt their production and distribution of toilet paper. Yet, there are many other products with halted production due to supply chain disruptions. Now, toilet paper is widely available once again.

Still, with a deeply linked global supply chain, operating in tight margins, this is prime time for a significant reordering. The tissue hoarding is just one example.

As a result, it is never too soon to start planning for the next potential crisis. Not to mention, global economies will be in recovery mode for the foreseeable future. Even as nations open back up, things won’t bounce back to pre-pandemic levels just yet. If the recovery period is protracted, then it will require increased levels of coordination and orchestration.

The uncertainty is still here. But, with planning, you can help facilitate a more significant bounce back. In addition, the actions you take now will set the stage for sustained performance and growth once the pandemic is fully mitigated.

Implement risk management systems

Regardless of how great the current implications are, risk management is still a priority. The tools which should be in place include credit risk and supply risk. Think of the lessons you learned from the Great Recession in 2008 to get a sense of how to address client and supply-side credit risks. Keep things in balance without any overlap.

Increase visibility

One of the keys to supply chain recovery is by increasing visibility so that you can make data-driven decisions on a timely basis using real-time data. To achieve this, look at deploying control towers to send alerts, insights, and data. If you can put these types of control towers together quickly, even better. Utilize control towers powered by artificial intelligence and machine learning which provide advanced analytics.

Next, you want to look at your direct and indirect supplier base and identify areas with increased levels of supply chain risk. Review your KPIs throughout your extended supply network, contracts, bottlenecks, stock-outs, and overall performance with the objective of working towards better synchronization.

Then, improve real-time visibility around order fulfillment while looking for areas prime for improvement such as better delivery estimates or improving expectations around product availability to even accessing inventory outside of primary fulfillment centers.

It’s also extremely important to have better visibility around the logistics infrastructure, backlogs, delays, capacity constraints, inventory levels, and the material flows. Figure out where you can improve customer service through these processes.

Further, take a look at your factories and expectations around any supplier constraints of inbound materials along with the quality of materials. How are asset utilization and labor scheduling affected by COVID-19? What is production like across various facilities? Are their quality control issues? Can you make use of advanced algorithms to address inbound quality issues, as well as finished goods quality issues moving forward?

Analyze your supply chain infrastructure and design

Before the pandemic, most organizations worked with the assumption that raw materials were always readily available and accessible for global production. It seemed a one-size-fits-all supply chain perspective. Although, COVID-19 has thrown a wrench in this philosophy.

So then, instead of continuing to use static operational systems, look at dynamic distribution capacity. Find local supply sources in all of your major markets. Stop relying on single sourcing. Even if single sourcing has kept costs low, we are living and will live in a different world after the pandemic.

Research suppliers in local markets in the event you need to have a secondary source. As a result, you can diversify your supply chain and rely on more dynamic distribution.

As you can see, the only thing you can rely on is change.

Break up your supply chain. If your supply chain is too long, you can expect larger issues. Take the toilet paper example again. Production has continued, but store shelves remained empty because brand owners were not getting replenishment alerts fast enough even though they normally sit on at least two weeks of inventory. If there are a larger number of nodes affected, then the bullwhip effect comes into play with distorted signals and an increase in demand error.

Separate fact from fiction

Right now, your supply chain may be experiencing the bullwhip effect of unpredictable buyer behavior, such as the run on toilet paper and related products such as flushable wipes. Or, the panic-buying of staple items such as rice and beans, disinfectants, and medicines. There is a known-unknown matrix in the pandemic scenario. But, it’s still vital to separate fact from fiction, don’t make assumptions.

Increase agility around evolving customer demands

Manufacturers could not immediately respond to the toilet tissue shortages because they do not rely on shelf signals. At the same time, demand for luxury items tumbled. The COVID-19 pandemic has made the estimation of final customer demand more challenging but also more significant.

Figure out if the demand signals you get are coming from your direct customers, and if they reflect the pandemic uncertainties. Create a demand-planning team, using analytical tools, to ensure you have a dependable demand signal to ensure you are providing adequate supply.

In addition, use marketing insights, databases, and customer communication platforms to better understand the demand straight from your client’s customers. If data sources are limited, then use direct communication channels to plug the discrepancies. Furthermore, use stringent processes that can quickly adapt to evolving scenarios. Remember to do the following:

  • Create an accurate demand-forecast strategy
  • Incorporate market intelligence
  • Use analytical forecasting tools
  • Create a dynamic monitoring system that facilitates quick mitigation of forecasting errors

Many customers were buying based on shortage predictions. If needed, decrease the size of the orders, but make them more frequent to ensure a higher level of agility when needed and the ability to manage the highs and lows of varying demand.

Optimize both production and distribution

It’s crucial to employ scenario analysis to detect various production scenarios for understanding their operational and financial implications. And then, production should begin by making sure your employees are safe, offering the option for remote work if possible, and listening to your employees’ concerns.

Plus, scenario planning is crucial to determine the implications of a long-term shutdown. How will this affect available capacity and current inventory levels? Figure out which products are the highest in demand – strategically – taking into consideration that health and human safety are at the forefront of customers’ minds.

Further, how will these current implications impact future recovery? Draw a more comprehensive analysis with input from strategy staff, marketing, sales, and operations to contribute to macroeconomic forecasts. By taking these types of actions, you can better align production and supply chain with the expected demand – depending on the circumstances.

Improve deployment of dynamic inventory

For the most part, companies often have a primary distribution center to serve its customers. Then, historical demand data is used to optimize the network. So then, customers get the products they want, when they want them. But, the pandemic environment is anything but normal with much higher supply-side volatility and surging demand for certain types of products.

As the economy rebounds, there will be inventory imbalances present throughout the network. As a result, consider alternative routes to secure your logistics capacity. Regions will emerge from quarantine piecemeal, which means that there will be an irregular supply chain for an extended period of time. Think of how you can diversify your distribution networks and how to address regional availability. Create alternative distribution centers now.

In conclusion

Take notes from corporate investors who have been working on reducing their stock portfolio volatility and re-evaluate cumbersome overseas supply chains. Whether we are facing a pandemic, or a trade war, organizations in every sector must work at improving supply chain risk.

The only way to mitigate the impact of unpredictable pandemics is with thorough preparation. Even before the next crisis occurs, your contingencies should already be in place. The recovery may be V-shaped, or it could take longer and resemble a L-or-U shape. Still, recovery is coming. In the meantime, this is the word of the day: Diversification.

Virtual workforce

How To Thrive While Transitioning To A Virtual Workforce

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How To Thrive While Transitioning To A Virtual Workforce

Summary: Many people are working from home during the coronavirus pandemic. New remote workers and businesses can help foster success by generating routine, utilizing calendar sharing, having video meetings, setting clear expectations, developing time management skills, and continuing to learn. 

 

As of 2017, 43% of employees worked remotely with some frequency. In 2020, with the COVID-19 pandemic shuttering many brick-and-mortar office places, agile companies are quickly pivoting employees to remote work. Telecommuting is a great benefit in the age of social distances, but it comes with its own challenges. Especially companies and their employees who are new to telework will likely experience growing pains, but there are steps you can take to ease the transition and ensure your virtual workforce is able to thrive. 

New Normal, New Habits 

Working from home is a major transition for employees who have spent their entire working lives in an office space. While offices offer a sort of comforting familiarity, a steady set of expectations, and a familiar environment while home may be full of energetic children, stir-crazy pets, and plenty of chores and hobbies alike to do. 

The best thing for companies who are new to this form of work is to understand that is a transition and that it can take an adjustment period for workers to find their focus, their flow, and their new normal. During this period, be lenient, expect some technical complications, and have patience while new systems for collaborating and working are developed and tested among workers who are unfamiliar. 

You can ease the transition by creating a form of routine, just as employees had at the office. This could be a recurring meeting, a consistent sign-on, sign-off, or lunch time, or anything else that offers stability in this time of stark change. 

Similarly, equip teams with a calendar sharing application such as Google Calendar. When teams can collaborate and understand where time is used and how their efforts fit into a bigger picture that they all are working toward, the stress and isolation of working from home can transform into great freedom for productivity and collaboration. 

Set Expectations

When life is in a deep state of flux, employees can feel overwhelmed with a bombardment of decisions and uncertainty. Guide employees through work changes by offering clear expectations. This may mean specific output quotas, work hours, required meetings, or anything else that is a high priority for your business. 

Don’t set expectations too high or add requirements for their own sake. While structure is important, offering employees some freedom to feel into their new roles and schedules can help ease stress too, boost loyalty, and benefit your company’s culture on a broader scale. 

Communicate Differently

When workers can’t meet face to face, utilize technology to boost presence, connection, and accountability. Instant messenger and chat applications, such as Slack, help employees have real time conversations throughout the day. You can even set up a “watercooler” chat segment where employees can talk about anything to keep connection and camaraderie high. 

For meetings, use a video software such as Zoom in order to help replicate the rapport that comes with in-office meetings. Even a once-a-month meeting on a video can go a long way for morale and accountability. 

It’s important to find new, effective methods of communication with clients and buyers as well. For example, we at Premikati use remote demos to help engage potential clients. Because we are doing this from afar, we pay special attention to asking meaningful questions and really engage with our clients on a deeper level. 

Use Your Time Wisely 

Many new remote works feel like they simultaneously have more and less time than they once did. There’s no more commute time, tedious morning primping, prepping meals ahead, or other tasks that come with office work, but they may feel like work starts expanding into their personal life or struggle with focus during the day due to distractions. 

Time management is a make-or-break factor for virtual workforces. Set expectations surrounding schedules to help prevent worker burnout and the “always-on” mentality. Have focus sprints. Have patience with coworkers who may not always be available. 

Similarly, many job functions can’t be fully performed from home. If you or any of your employees are “benched” during the pandemic, look for other ways to contribute. Could they update documentation? Spend time brainstorming resolutions to industry problems? Furthermore, could they continue their education in order to make deeper contributions after the crisis? Do what you can do, and encourage your employees to do the same, but be mindful as well to not get caught up in busywork. 

Never Stop Learning

Continued education is always important to pursue, but now is a prime opportunity for many employees to pursue an expansion of their skills. Many courses are free during the coronavirus crisis, so time availability, a desire to learn, and an idea about what’s important to know are all you need to bolster yourself and your employees for the future. 

As the new normal for work continues to  change, keep learning what systems work for you and your employees, and don’t be afraid to try new things to make life, and work, a little bit easier and more connective. 

What has your business done to adjust and thrive during the transition to virtual work?  Reach out to us and let us know!

 

Streamline procurement

How to Streamline your Procurement Processes During a Pandemic

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Procurement Processes and a Pandemic

 

Within our modern era of globalization, and inter-woven supply chains, the coronavirus pandemic is presenting an unforeseen set of challenges to address. The state of multi-factory and multi-country manufacturing is now teetering on shaky ground. If COVID-19, and the economic downturn, isn’t effectively mitigated soon, the supply of various items from cars to clothing to electronics and even oranges will falter.

With the breaking down of the global supply chains, many are calling for returning critical production of medical and tech supplies to the United States. Perhaps, another option is to increase the redundancy of supply chains by further diversifying suppliers and inventory moving forward. As a result, any future obstacles can be more easily managed.

With increased demand for specific items such as soap, hand sanitizer, face masks, ventilators, cleaning products, and more – retailers have done their best to serve their communities while drastically transforming how they run their stores and protect the health of their employees and customers alike. In many communities, the pandemic has already negatively impacted the economy and sources of income.

In these times, businesses are going above and beyond to manage their supply chains effectively and ensuring consumers have access to the goods they need. Yet, we have all seen the deluge of images conveying barren store shelves and out-of-stock items. Right now, it’s time to address the short-term fallout from the current health crisis. In this article, we will focus on steps you can take towards minimizing the challenges associated with COVID-19.

How COVID-19 May Affect your Supply Chain

Since this is a novel pandemic, there isn’t an exact method for determining how the coronavirus may impact supply chains but you could experience instances of the following?

  • Materials: Shortages of supplies or materials from deeply-impacted locations.
  • Workforce may face fluctuations due to illness, fear and/or quarantine.
  • Travel, and shipping, may be limited due to newly-placed restrictions and decrease in demand for flights.
  • Established logistics, and networks, may be upended due to capacity shortages and even labor shortages.
  • Consumers are transitioning to online shopping en masse, for a larger percentage of their purchases, and this may be the existing reality moving into the future.

Now is the Time to Secure Demand

As network-wide stockouts increase for certain types of non discretionary goods, it’s critical to strengthen your relationships with co-manufacturers, consumer-packaged-goods (CPG) makers, and distributors. For the most in-demand products, you should hold daily conferences with suppliers to ensure comprehensive supply.

One way you can secure your supply is by limiting variety, for now, then increasing the quantities. In addition, it can help to be more flexible with your delivery windows and even your payment terms. Then redirect your employees and capital to the essential categories during this pandemic. Right now, it is very important to foster an environment of open communication with your partners.

If you are dealing with decreased demand and excess inventory of non discretionary goods, then perhaps you can sell to your distribution partners and also start working with suppliers who have adequate cash reserves.

Living in an unprecedented scenario requires long-term planning, as well. If you supply non discretionary goods then perhaps it might be time to shift focus and resources to 2021. Review your buys for next year, and revise the variety based on expectations of demand even after the pandemic is mitigated. Many of the changes the world has recently made will be long lasting.

Plan Quickly

Now that we are going through this crisis, it’s important to focus on how you can improve your supply chain to become more agile and responsive in the next crisis. Conduct a simulation test and develop a strategic response with action plans. There is no time like the present to create a network of alternative sources.

Being better prepared than the competition might even open new opportunities when the next disruption comes around. When the next disruption arrives, you want to be better prepared than your competitors. Figure out how to diversify concentrated supply chains with high value, and find alternate routes and sources.

Prioritize Flexibility

If you want to limit any future disruptions, then your procurement processes must be more agile than ever. Surges in demand are cobbling excess capacity of specific non discretionary product demands. In fact, freight costs and trucking demand have skyrocketed. Not to mention, shipping rates have gone up. Now that you have experience with this level of disruption, what can you learn from it and how would you prefer to handle a similar disruption in the future?

It will take creativity to ensure you have the capacity to consistently stock your store shelves with the essentials. And, it will take a larger portion of your financial resources. One way to limit expenditures is by having suppliers ship directly to stores, as opposed to distribution centers. Next, you could decrease packaging and assortment complexity so that suppliers send same-SKU shipments to dedicated hub stores.

Product variety is less of a concern, consumers just want to ensure they have supplies of important products. So then, packaging and assortment simplification can help to improve shipping speeds.

Fix the Gaps

When extraordinary measures are needed, then more resources are concentrated on expediting shipments. But, if your company is prepared for a major disruption, will you have to pay premiums to secure adequate supplies or raw materials?

From a future-proofing perspective, what gaps are slowing you down and how can you fix them with the right people, processes, tools, and data? How can you align your procurement and business objectives to protect your organization from crisis events in the future? Think of how customer spending, and demand, will be affected in various crisis scenarios. Make time to prioritize research to get a comprehensive picture.

What are the Financial Implications?

You want to ensure your inventory is located logistically, strategically, and within easy reach. Moreover, it should not be located in areas that are heavily impacted. Then, work with your HR and legal team to determine any financial impacts for not providing reliable supplies to customers and how to guide your team members correctly.

In Conclusion

Once we get to the other side of the COVID-19 pandemic, businesses will quickly fall into two categories: Those who have learned from the crisis and used those lessons to improve their procurement processes and those who like to gamble with their survival by not doing anything and hoping something like this will never come around again. Reviewing your supply networks, and making the right investments now, can ensure you don’t have to feel blindsided by the next crisis.

 

 

BPO for SMB

Procurement BPO for SMBs

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SMBs Can Leverage BPO to Improve Procurement

As important as the procurement function is for companies to purchase the products and services they need in a compliant, cost-effective way, many businesses face the challenge of dedicating enough resources to procurement.

Fortunately, procurement doesn’t always have to be managed in-house. Just like other functions ranging from accounting to marketing to technical support can be outsourced to third-party partners, many companies — especially small and mid-sized businesses (SMBs) — benefit from leveraging business process outsourcing (BPO) for procurement.

Save Time and Money

Outsourcing procurement to a trusted partner can free SMBs up from challenges such as:

  • Finding qualified procurement staff
  • Implementing and managing procurement technology
  • Sourcing vendors
  • Analyzing spend
  • Assessing procurement risk

SMBs may also be able to customize their BPO relationships, so if they do want to be in control of analyzing areas such as spend through their in-house finance team, they can still benefit from letting their BPO partner focus on areas such as vendor risk management.

By not having to dedicate the resources to all of these areas, companies can save approximately 30% of their time and money, as employees can instead focus on core business functions such as sales.

Gain a Competitive Advantage

In addition to saving time and money through BPO, companies that outsource procurement can often gain competitive advantages by leveraging the expertise of their BPO provider.

Across outsourcing as a whole, beyond just procurement, a Deloitte survey finds that cost optimization is no longer part of the top-five criteria for outsourcing. Instead, companies are more often turning to outsourcing to gain a competitive advantage. In 2018, 49% of organizations moved more services to outsourced providers that innovate, compared with 20% in 2016, so this is becoming increasingly important.

With procurement BPO, service providers can help your organization innovate in many ways, such as helping you gain the products and services you need to target new market segments. A procurement BPO provider can also help you gain spend insights that can inform overall budgets and help you find innovative ways to reduce costs, such as by procuring technology tools that have a lower total cost of ownership over their lifetimes.

Elevate Your Procurement With Premikati’s BPO Services

Premikati is one of only six SAP® Ariba®BPO partners, and we have the experience and technology to handle your procurement needs. Leveraging SAP® Ariba®as the underlying procurement platform, combined with our in-house expertise, we can quickly help SMBs gain the services of a full procurement department in a cost and time-effective manner.

As you focus on your organization’s growth, we can provide the procurement support you need to scale up while staying on budget. And over time, if you decide to bring some procurement functionality in-house, we can adjust our service offering to meet your needs so that procurement can always be a source of strength for your organization, not a burden.

To learn more about how Premikati can lift your procurement capabilities through BPO, please get in touch with our team.

spend sieves

Eliminate Spend Sieves

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Eliminate Spend Sieves with a Three-Way Match

 

Your business is dynamic and fast paced, and you want to be on the move, getting the real work done. In this type of environment it is easy to think you can manage your organization’s purchasing decisions on the fly. After all, you know your business and your suppliers; transacting with them doesn’t have to be a big deal, right?

Well, maybe. As your business grows and adapts to an ever-changing marketplace your purchases of goods and services are changing too. They are becoming more complex, or higher in volume; maybe you need to expand your supply sources to keep up with customer demands. This is when you benefit from having a consistent, optimized purchasing process.

Costly mistakes can happen, and even seemingly small financial variances can leak through holes in weak process adding up to big bucks over time. How can you prevent wasted funds and risky deals? Document your purchases, for goods and services. Use a detailed purchase order (PO), perform a receipt, and ensure the supplier invoice matches the goods/services ordered and received before issuing payment. This process is called a three-way match, and it ensures you get exactly what you want from your suppliers at the price you agreed upon. Here’s how to implement this in practice.

Write a Detailed PO

For Goods:

Even if you know exactly which items will make up your total purchase, avoid entering one grand total on your PO. Create lines for each item. Include the quantity and purchase price per unit. Don’t forget to enter a line item for negotiated shipping or delivery costs.

For Services:

Just say “no” to one-line, lump sum service purchase orders. It may seem like the quickest way to get things moving, but if a deadline or deliverable is missed or delayed you won’t have an easy way to hold your supplier accountable.

Instead try breaking the service into milestones, for example: Kick-off, Release 1, Release 2, and Go-live. Include a deliverable date and milestone payment value for each. If your service is not project based, you can capture an hourly rate and a set number of hours allocated to the work each week or month. Even if you have a recurring monthly fee for a year of service, break that out into 12 line items so your supplier can invoice against each easily. This will avoid confusion on invoice reconciliation especially at month or year end. Don’t forget to include a line item for T&E if any work will be performed off-site or remotely.

Lastly, ensure expenses are approved at the appropriate authority in your organization before the PO is issued. If these costs need to be allocated to a specific cost center identify and record that detail now. Getting this approval up front helps projects run smoothly, ensures budgets stay on track, and saves time and confusion at the end of the project when the supplier is waiting for money for services rendered.

Confirm Receipt

Ideally the same individual who is ordering and approving payment for goods should complete this important second step. This is especially relevant for orders with long lead times or those delivered in multiple shipments.  The receiving process is your chance to call out any discrepancies before the invoice comes in making it much easier to adjust and avoid overpayment.

If you’ve built a milestone-based purchase order you can use this opportunity to check in and ensure the project is progressing as intended before issuing a payment.

Reconcile the Invoice and Approve for Payment

Ensure the supplier is invoicing for the same amount of money as indicated on the purchase order and as the goods/services received by you. If the expenditure is approved up front in the purchase order process and all relevant parties have confirmed the quality of the goods/services through the receipt, this should flow seamlessly and quickly allowing you and your supplier to get back to doing what you do best supporting and growing your business.

Executing a proper three-way match will ensure your strong relationships with your suppliers stay that way. You have more valuable work to perform than haggling over a missed deadline or chasing down details to approve an outdated invoice. You can consistently follow this simple process that will not only help you prevent lost dollars but will give you confidence that your operations are running smoothly, and save time spent on purchasing activities.

To make a three-way match flow even more seamlessly contact Premikati to learn more about how you can simplify your procurement processes.

 

 

procurement automation for smbs

Procurement Automation: Best Bet for Growth for SMBs

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Procurement Automation: Your Best Bet for Growth

Is there a way to optimize your procurement processes without having to make a massive investment in IT? Can you eliminate manual processes and their associated errors? Is there a way to eliminate expensive invoice processing?

It goes without saying that procurement processes can involve a wide variety of third-party vendors such as business partners and consultants, along with legal, supply chain management, and various department needs. Yet, data can be difficult to locate and the success of a procurement process may simply revolve around the fact that no one complained – yet.

Unfortunately, many SMBs spend a large portion of their sales revenue on procurement. Nonetheless, simple enhancements – such as automation – to the procurement process can perform the double duty of reducing costs and boosting productivity.

For SMBs, with their limited resources, the focus is often on overarching operations as opposed to specific procurement business functions. But, when you can empower your procurement team with an automated tool, then you can improve supplier relationships and make the right purchases for your business – on a more consistent basis. Further, all parties are satisfied.

When you utilize automated procurement, you can prevent your teams from engaging in trivial tasks so that they have more time to focus on their core functions and responsibilities. Also, you decrease human error.

Certainly, these are all specific reasons why many SMBs are opting for automating procurement, but there are many other advantages as well. Keep reading to learn more. 

Get Out of the Time Rut

Within the procurement cycle, or purchasing cycle, there are several stages such as research, bidding, vendor selection, negotiations, and approval. Depending on the current processes you already have in place, this can take much more time than necessary.

Why not speed up your processes with procurement automation? You could reduce the cycle by days, or even weeks. If you’re interested in adopting lean principles, automation would be the route to take. 

Plus, there are huge amounts of paperwork that needs management. In contrast, procurement automation can save time by transitioning documents from paper to digital. Not only do you save on paper and physical storage costs, but you inherently speed up all your cycles and processes.

Get Your Supplier Relationships on the Same Page

For the health of your SMB, it is vital to have strong supplier relationships. Although, this can be difficult in a highly competitive environment. To get there, you need true transparency. The good news is automation enables real-time interaction and order tracking. In addition, an automated system lets your suppliers respond more quickly and your company can select a supplier more quickly. Moreover, the process is transparent for all parties involved which means a much faster resolution process in the event of a complaint or misunderstanding. It is a win-win situation for all.

Monitor Every Interaction

When your company opens up a bidding war, this means you increase your chances of finding a vendor who can meet your budget. At the same time, it can get quite complicated to manage every interaction with all of your potential vendors. Further, no one likes filtering through hundreds of email messages trying to find the most recent interaction. Unquestionably, this is a scenario where mistakes can happen and messages will get missed.

With an automated procurement tool, you can quickly access all associated documents and RFP responses. In fact, you can even monitor every single interaction in real time.

Enjoy More Control

SMBs often face the daunting challenge of limited visibility during one-or-many stages of the procurement process. Invariably, low visibility can become even more prevalent during indirect procurement. One of the quickest ways to overcome this hurdle is with an automated procurement tool.

It’s imperative to have a visual representation of how much you’re spending on every purchase. Many SMBs have finite resources which means it would be quite beneficial to determine where you could cut back on expenditures. As a result, you feel more control over your budget and can improve your revenue outlook.

How Can You Tell if Your Procurement Processes are Ready for Automation?

Part of the decision-making process around an automated procurement tool is knowing which of your tasks are ready to be automated. So then, it is critical to execute a thorough assessment – and analysis – of your current processes and which are redundant/repeatable where automation can take over to save both time and money.

For instance, if your company requires a lot of legal input during the buying process, then you could automate this portion by utilizing pre-approved negotiations so that your legal team can focus on higher-level tasks.

There isn’t any reason why the SMB procurement process should not replicate the enterprise in terms of purchasing, employee training, and automation. SMBs want to grow, and automated buying practices help to provide transparency, facilitate tracking, offer convenient reporting, and most importantly, assist in managing costs to set the stage for expansion.

Final Thought

Searching for a comprehensive automated procurement tool to effectively manage your processes? When SMBs streamline how they purchase goods and services, they create more value and become an organization that vendors – and customers – enjoy.

Learn how an automated system can streamline your procurement process – contact Premikati today for a free consultation!

 

procurement continuing education

Continuing Education Resources for Procurement Professionals

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5 Continuing Education Resources for Procurement Professionals

For procurement professionals to get ahead in their careers and help their companies succeed, continuing education can play a key role. From formal educational events specifically geared toward teaching professionals about certain procurement and supply chain topics, to news sites that help procurement professionals stay up-to-date on trending topics, to discussion boards where peers can share insights, procurement employees have a variety of options to help expand their professional knowledge.

Some of the key resources we recommend to continue procurement education include:

  1. SAP Business Exchange: In addition to being an SAP Ariba™ partner, we also participate in the SAP Business Exchange. In this online community, users can learn about and discuss expense management software SAP Concur, along with other procurement-related topics that may be broader than just Concur issues. The SAP Business Exchange also directs participants to upcoming events such as SAP webinars that can help procurement professionals learn new tips to help their companies operate better.
  2. Procurious: This social network is geared specifically toward procurement and supply chain professionals, thereby helping these employees quickly find relevant information. Among its numerous resources include online classes, community discussions and links to relevant events. Procurious also has helpful blog articles and shares top industry news, making it easier to stay up-to-date with relevant topics.

  3. Trade Associations: In addition to groups like SAP Business Exchange and Procurious that specifically provide educational resources for procurement and supply chain professionals, some trade associations also have procurement-related events and other resources that can help these professionals improve. For example, Premikati is a certified Women’s Business Enterprise National Council (WBENC) company, and we’ve found that organizations like this provide helpful events and programs, such as to learn how to boost supplier diversity programs. They can also be a great resource to learn where to find specific types of suppliers.

  4. LinkedIn Groups: LinkedIn has numerous resources for essentially any professional to learn and grow their careers, and procurement professionals havethe luxury to choose from a number of large, active LinkedIn Groups geared toward this occupation. The “Procurement Professionals – Best in class” group, for example, has nearly 400,000 members, and the “Strategic Sourcing & Procurement” group has over 100,000 professionals. Within these groups you can keep up with news shared by peers and discuss procurement-related issues to help you learn how to tackle occupational challenges.
  5. Premikati Webinars: We offer our own series of webinars in order to help procurement professionals learn about SAP Ariba™ as well as how to improve strategically overall. For example, upcoming topics include helping professionals ensure an invoice is ready to pay as well as how to identify vendor efficiency opportunities.

By leveraging these types of resources, procurement professionals and others in related roles can continue to gain knowledge beyond what they learn directly from their day-to-day work. Learning from peers and industry experts can help you gain new perspectives and learn new strategies that ultimately help you and your company perform better.

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ESG and Your Supply Chain

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Why You Should Incorporate ESG Into Your Supply Chain

 

Companies that incorporate environmental, social and governance (ESG) factors into business practices can not only create more ethical companies that align with core values, but they can also enjoy a potential increase to the corporate bottom line. That’s because customers, employees, investors and other stakeholders increasingly want to associate with companies that consider ESG.

Taking these factors into account can unlock new opportunities in areas such as hiring by expanding talent pools to include diverse candidates; marketing by showcasing environmentally-friendly products to customers; and finance by making it easier to attract equity investments or take out loans by demonstrating sound governance. Becoming more ESG-focused can also extend beyond internal operations to include your supply chain.

As the United Nations Global Compact notes on its site, “A company’s entire supply chain can make a significant impact in promoting human rights, fair labour practices, environmental progress and anti-corruption policies.”

Aligning Values With Finances

While many companies may be open to incorporating ESG factors, they may think that doing so requires sacrificing profit. However, the tide is increasingly turning towards consumers seeking out ESG products and services, and many are willing to pay a premium.

For example, between 2013-2018, “products marketed as sustainable grew 5.6x faster than conventionally-marketed products,” according to an NYU Stern School of Business Center for Sustainable Business and IRI®study.

Moreover, 44% of Millennials believe that companies they do business with should always be environmentally-friendly, even if that causes a small price increase, according to a survey by Markstein, conducted by Certus Insights.

One way companies can improve their standing in this regard is to seek out vendors that align with ESG factors. Doing so can even be helpful for companies that sell services rather than physical products. For example, an accounting firm that uses environmentally friendly suppliers for office supplies, lighting, trash disposal, etc., may be able to more easily market itself as a green company and appeal to younger customers who want to work with a firm that goes beyond just focusing on finances.

Similarly, working with diverse suppliers such as women-owned, veteran-owned or minority-owned businesses can improve the social responsibility of a company by demonstrating inclusion and equality. Doing so is important considering that 70% of consumers “want to know what the brands they support are doing to address social and environmental issues,” according to the Markstein and Certus Insights study. And most of these survey respondents agree that social responsibility expectations apply equally to small and large companies.

Expand Your Supplier Network

Incorporating ESG factors into your supply chain not only helps attract stakeholders to your business, but looking at suppliers with this new lens can also expose your business to vendors that you may not have otherwise considered.

For example, looking at governance factors like the composition of a company’s board of directors or looking at how a supplier treats its own employees may cause you to spot risk factors with the vendors you currently work with. From there, you may decide to seek out new suppliers that stand out for incorporating ESG into their businesses, and these companies may be able to work with you on related initiatives like improving the sustainability of the shipments you receive from them.

One way to source ESG-focused suppliers can be through the consulting services or procurement platform of Premikati, an SAP Ariba™ partner and a certified Women’s Business Enterprise National Council (WBENC) company.

To learn more about how Premikati can help your organization incorporate ESG into your supply chain and improve your overall procurement, please get in touch with our team.

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Product Shipping and Procurement

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The New Era of Product Shipping

With the rise of e-commerce has come increased expectations around delivery service, including in both the consumer and B2B worlds. When a consumer buys a product online, even two-day shipping, popularized by companies like Amazon, is often too long now, which is why Amazon and others are turning to one-day or even same-day shipping in some cases. For businesses, similar expectations apply, as employees want their products like office supplies to arrive as fast as they do when making personal purchases.

As a Deloitte study finds, the future of shipping is evolving to one that attempts to meet higher demand and increase speed by taking advantage of technology. These tech advances range from data analysis for optimizing delivery routes to the use of smart storage lockers to improve the efficiency of the so-called last mile of delivery where packages reach their end recipients. Even drones are starting to be deployed, and an expanded presence could help improve speed.

While these advances offer significant potential for consumers and businesses to receive the products they need almost as fast as buying from a retail store, at the same time gaining the efficiency of online purchasing, the transition won’t always be easy for suppliers and logistics companies. Businesses will also have to adapt to obtain the efficiency their employees crave.

Navigating New Expectations

One example of the challenge of meeting new shipping expectations can be seen in the performance of FedEx. As Reuters reports, FedEx recently cut its 2020 profit forecast, due to factors such as investing in the rollout of Sunday delivery, and the company has not always been able to keep up with expected delivery times in major cities.

These types of struggles can challenge suppliers, as even if they’re able to absorb the cost of expedited shipping, their delivery partners may not always meet expectations. Overcoming these obstacles may require suppliers to work more closely with partners like logistics companies, such as through increased data sharing, to figure out how they can expedite shipping. As the Deloitte study notes, carriers partnering with their “most forward-thinking customers to build mutual capabilities could well serve both parties.”

For procurement teams, this new era may also benefit those who can form strong partnerships with suppliers to figure out the best ways to optimize delivery speeds. For example, limiting the number of vendors you work with and spending more with certain suppliers could give you more leverage to work out an expedited shipping schedule. Your suppliers may also inform you of how you can help them help you, such as by trying to place orders for different types of products into one batch.

Moreover, data-driven procurement teams can gain insights into delivery speeds and accuracy in order to help their suppliers understand what needs to be optimized. Procurement teams can also eliminate underperforming vendors and then limit their relationships to those who can meet delivery expectations.

Improving Procurement With Premikati

Understanding your procurement activities, including delivery performance and supplier relationships, can help your organization receive optimal service quality in this new era of product shipping. Leveraging procurement services and/or purchasing platforms through Premikati, an SAP Ariba™ partner, can help you gain the data you need to make better decisions related to shipping. Our consulting services can also help you work with suppliers to optimize delivery according to your needs.

To learn more about how Premikati can help your organization thrive in this new era of shipping, please get in touch with our team

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Cut Procurement Costs – Not Quality

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A New Year’s Resolution to Cut Procurement Costs, Not Quality

 

Many people take on personal new year’s resolutions such as to lose weight, but what’s often more important than the number on the scale is someone’s overall health quality. Similarly, many businesses want to cut costs, but focusing just on reducing expenses may not be the most sustainable way to grow overall.

For example, switching to a vendor that supplies lower-quality products, such as for IT devices, may reduce costs in the short-term, but if those devices break down faster, it can cost more overall to repair or replace them.

Thus, companies looking to save money in 2020 should make a new year’s resolution to cut procurement costs without cutting quality. To accomplish this task, businesses can leverage:

    • Purchasing Power: Either by consolidating spend with fewer vendors or by leveraging group purchasing organizations, companies can often obtain a discounted rate for purchasing the same products and services. For example, making tail spend purchases through a B2B marketplace can enable businesses to obtain better rates from suppliers based on the combined spend of the marketplace’s multiple clients. If a small or medium-sized business tried to negotiate rates based on just their own spend, they would have less leverage than a marketplace has when setting rates with suppliers.
    • Spend Insights: As companies improve their ability to track spending, they can more easily identify pure cost-saving opportunities that have no bearing on product or service quality. For example, using spend insights to identify erroneous purchases, such as incorrect pricing or accidental orders, allows companies to reduce costs without affecting any other areas of their business. Similarly, spend data may show that companies are going over budget with purchases that do not add much value. From there, businesses can implement stronger cost controls so that unnecessarily expensive purchases do not go through.
    • Productivity Gains: In addition to the direct cost savings that can come from negotiating better rates and cutting waste, businesses can also save on expenses and potentially increase revenue through productivity gains. For example, if a business can process orders and invoices more efficiently through a procurement marketplace, they may be able to reduce the costs of using a third-party accounts payable provider. Moreover, freeing up employees’ time to focus on more revenue-generating tasks can help companies grow, without adding expenses.

Start Saving With Premikati Marketplace 

To simplify tail spend purchasing and cut procurement costs without hurting quality, businesses can turn to Premikati Marketplace, which runs on SAP Ariba™ Buying and Invoicing. The platform provides an easy way to access great pricing on quality products and services, while also allowing businesses to implement cost controls, gain rebates and streamline the overall buying process. Altogether, businesses can reduce tail spend costs by around 30% through this marketplace.

To learn more about how Premikati Marketplace can help you achieve a new year’s resolution of cutting procurement costs without cutting quality, please get in touch with our team.

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