The procurement industry is full of its share of headaches. Individuals working in supply chain management are faced with challenges everyday. You’ll find the biggest obstacles discussed below, along with tips to overcome them.
#1: Lack of Internal Communication
Supply chain management is often one of the most overlooked departments in a corporation when it is a priority. Without direct communication between every department, purchasers are often not aware of key issues that will affect their buying decisions.
The solution – Develop a solid procurement strategy that integrates with the corporate strategy. Work with upper-level management to open the lines of communication throughout the company and meet regularly with other decision makers to keep everyone on the same page.
#2: External Communication Blocks
When internal communication is below standards, it’s easy to fall into a similar trap with your vendors and suppliers. A supply chain can only be as effective as the people involved in the procurement process. This includes everyone from purchasers to logistics experts to sellers to end users.
The solution – In addition to getting feedback from department heads and customer liaisons, procurement professionals must work hard to develop a strong, trustworthy bond with their suppliers. Meet regularly with your vendors and address problems or concerns quickly and professionally. Choose sellers who actively work with you to improve your relationship.
#3: Cost Control
Depending on the industry, the costs of products, materials, and transportation are constantly fluctuating. On the other side, demand and value are also changing. Keeping all of this under control to meet the desired profit is a big challenge in most procurement processes.
The solution – Again, internal and external communication is essential throughout the procurement process. Concentrate on building relationships with the suppliers who have the biggest impact on profits. The best procurement professionals actively eliminate unneeded spending and impart more value to the company as well as its consumers.
#4: Improper Focus
Too many procurement professionals remain isolated from corporate operations and often fail to see a product for its greatest end value. In doing so, many important details get overlooked, leading to missed opportunities, increased costs, and other side effects.
The solution – Like most challenges in the procurement industry, the foundation to overcoming this obstacle is communication at all levels. A successful supply chain manager is aware of the end user’s needs, the budget, the marketing strategy, and other steps in the product’s timeline to develop a comprehensive strategy that generates optimum profits.
#5: Failure to Streamline the Process
The most effective procurement strategies integrate seamlessly into the corporate strategy, essentially becoming a key player in demand management and not mere supply chain management. Of course, a process that works this effectively requires overcoming all the obstacles already mentioned.
The solution – Streamlining starts with a quality software solution. Procurement software systems that are too complex cost more time and money in the long run. These resources are better spent on improving internal and external communication and, ultimately, becoming a leader in product innovation and demand progression.
Tackling all the challenges that come with supply chain management isn’t easy. Remember that communication at every level is the key to procurement success.