The term “supply chain” is becoming less and less accurate. Modern technology provides you with a veritable cornucopia of vendor options for any particular item or material, turning the chain into a supply web. In theory, expanding your options like this improves the procurement process, but in practice, it also makes it much more complicated to keep track of.
Of course, this advancement of technology is nothing to be scared of. It just means that you need to advance with it. Your ordinary supply chain management software won’t be enough to keep track of your procurement needs anymore. Instead, you need to implement a strategic sourcing software platform, that can leverage your purchasing power in this supply web and help you find the best value for each product and material you need to procure.
Not convinced? Here are three reasons why your company desperately needs strategic sourcing software:
1. Streamlining Procurement
A strategic sourcing software platform is essential for more efficient procurement management. It creates a centralized data source for all of your supply chain information: what items or materials you need, what you’ve just bought, when you’re due to buy more of this or that, where you bought it from last, how much you paid for it, and much more. This way, your entire company has the same, up-to-date set of data at their fingertips whenever they need it.
In addition, many aspects of procurement can be automated, to eliminate bottlenecks in the process that keep you from getting what you need when you need it. It eliminates a lot of extra hassles and streamlines the process so that you never again have to worry about not having the materials or equipment that you need.
2. Cutting Supply Chain Costs
How many separate items do you need to procure, say, in an average month? Between materials for manufacturing, tools and equipment, and even office supplies, there’s a lot to keep track of. And prices fluctuate. Supply and demand can change on a dime and with all the different purchases you have to keep track of a change in one item can go right over your head. But strategic sourcing software can track these changes and find the best value at any given time—whether that means buying more of something this month, less of it next month, or switching to a different vendor to save money, good sourcing software is programmed to save you money in ways you would never have seen on your own.
Aside from hard product costs, using centralized software can also minimize your acquisition costs by grouping orders together. Lowering expenses such as the cost of placing an order and delivery may not seem like a lot of money, but in the long run, it can really add up.
3. Improving Decision-Making
By streamlining your the supply chain and cutting costs, your software can improve the overall decision-making process in procurement management. But a simple “set it and forget it” automated process wouldn’t really be useful in handling real world procurement decisions. You still need human input—often from a variety of different departments in your company, or from other stops in your supply web. Using a software keeps you connected with all of those different departments and supply chain stops so that their input can be included in the decision-making process. Between automated tracking of the best procurement values and human input on what will best meet your company’s needs, you have all the information you need to make informed procurement decisions.
A strategic sourcing software is more than just a helpful tool. In today’s fast-paced world, it’s an essential part of your procurement process. Of course, it’s possible to manage your supply chain without one. But it becomes a much messier, more complicated business—not to mention a more expensive one. If you haven’t implemented a software to help you with your procurement management, then it’s high time you looked into it, for your own sake.