The fifth step in building of an effective procurement strategy focuses on exploring the use of connective technologies to construct collaborative relationships between buyers and suppliers.
The closer the connectivity with suppliers the better buyers will be able to execute value-added functions and ensure the smooth flow of purchased goods and services into the organization.
The objective of this step is to determine the capability of the procurement staff to use advanced technology networking tools to establish closer collaborative relationships with suppliers. An important part of this objective is to identify gaps in available procurement-driven technologies that will need to be addressed.
Determine Level of current technologies
This activity is concerned with assessing the level of competency possessed by the procurement department to use current integrative technologies with suppliers. The goal is to identify existing strengths and serve as a platform for increased training and education. A critical part of this activity is identifying any gaps in technology tools that are missing that could significantly enhance the execution of procurement functions, such as supplier search, order management, and leveraging the Internet to explore alternative avenues to facilitate procurement processes.
Explore technologies to link product development and supplier capabilities
This activity centers on broadening buyer and supplier collaboration.
Critical criteria include:
- Development of supplier contracts focused on long-term quality and mutual benefits.
- Collaborative sharing of information.
- Real-time communication of designs and specifications
- Close computerized networking for design and replenishment planning.
- Mutual responsibility for total quality management.
Deploy technologies to enhance RFQ, order entry, service management, and planning functions
This activity identifies technologies that can facilitate and reduce the costs of procurement functions. Technology applications include automation tools that simplify and standardize procurement, use of internet-based portals to extract and aggregate data from suppliers, exchanges, auctions, and private consortium exchanges that permit access to private exchanges for the purchase of inventories.
Establish real-time analytics and scoreboards
This activity seeks to use procurement databases to establish the key performance indicators (KPIs) that reside at the foundation of an effective supplier strategy. These technology-based applications support the monitoring tools providing for the detailed measurement and enforcement of agreements, performance targets, the extent of the integration of procurement and supply chain processes, depth of process control enforcing standardization and enforcing common processes across the supply chain, and the establishment of a single source of procurement-related data and intelligence.