In today’s competitive markets, the efficiency and sustainability of a company’s supply chain can not only impact profit margins but can also have a profound effect on how the brand is perceived. Supply chain capabilities are developing rapidly and the majority of recent fundamental developments in this field have been technological. In order to survive – and thrive - keeping abreast of these improvements to transparency and efficiency is crucial. Now is the time for businesses to make sure their procurement processes are up to date and optimised, so that they can be prepared for any and all eventualities.
What is supply chain streamlining?
Supply chain streamlining improves an organisation’s capabilities by eliminating unnecessary procedures. Consider that UK businesses estimate that they spend 10% of their working day chasing invoices – that’s around 160 hours each year that could be spent more productively. Therefore, analysing and streamlining your supply chain is the only way to respond more quickly to market changes, while at the same time boosting your operational efficiency.
Advantages of streamlining your supply chain through digital procurement
McKinsey reports AI-powered solutions as a “tremendous boosting tool” for increasing operational sustainability, implementing demand, detecting short-term changes or disruptions, integrating supply chain and manufacturing, and, as a result, making businesses more resilient. Streamlining supply chains through digital procurement helps businesses look beyond strategic order fulfilment and routine tasks and gain a fuller understanding of the overall supplier landscape and future customer needs. Within the next 18 months, only 3% of procurement departments will have no procurement process automation and, looking at a brief overview of the advantages, it’s easy to see why:
- Disruption to business processes is minimised, whilst keeping costs down and improving brand perception.
- Administrative headaches can be prevented.
- Reduce delivery numbers, minimise risk, and free up logistics managers’ time.
- Streamlining supply chains also helps logistics managers reconnect with their environmental agenda – the lower the number of separate orders and deliveries, the greater the benefits to the planet.
- Coordinate and organise all business procedures (from procurement to returns).
Furthermore, companies which innovate harder (e.g., investing 30% more in AI and self-learning software), expect 53% more ROI compared to those who invest fewer resources.
4 ways to streamline your supply chain through digital procurement
- Digitise production management
Management software that can talk to itself makes it much easier to streamline your supply chain processes. You can automate inventory requests, examine your supply chain, and keep track of compliance requirements. As a practical example, you could set up a system that lets your employees on the floor monitor how many products are sold online. When stocks run low, you can set up a task in your system that either alerts you or automatically sends out a new order request, optimising ordering and reducing costs and waste.
- Automate and streamline supplier payments
Unlike customers who have to accept your prices, suppliers have to negotiate every deal, putting them in a risky position. Don’t aggravate the situation by being late with payments or getting payments wrong through administrative errors or, worse, making the supplier chase you for payments. Being punctual when it comes to payments doesn’t have to be complicated - in fact, you can decrease your supplier payment workload by 80% just by using the right automation solution.
- Audit your suppliers regularly (especially in turbulent times)
By auditing your suppliers and knowing who is involved at every step along the way, you can constantly monitor your product for quality and cost. You need to know which supplier you’re dealing with at all times, or your business could accidentally become embroiled in a scandal - poor quality raw materials, illegal working conditions, environmental hazards – that you had no idea about. Digitising your procurement methods makes transparency along the entire chain much easier.
- Stay up to date with new technologies and materials
Don’t limit yourself to just one product or supplier. Keep your options open so that you can take advantage of better materials, production methods, or lower costs. Always be aware of what choices are out there so that you can improve your business and streamline your supply chain.
Considerations when choosing your digital procurement solutionWhen contemplating a digital procurement solution, involve all departments in the decision. The impact will be felt across the business and it’s essential to ensure your digital procurement solution fits with your overall business strategy. Weigh up the cost of implementing digital procurement against the projected savings from, for example, new sourcing opportunities or identifying past and future trends.
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