Cost saving, process efficiency and transparency are the synonyms of procurement

Authored by Usama Shahid

Business process is different today. Organizations claim less infrastructure, stock and assembling gear than any time in recent memory. They've outsourced everything from customer services to inventory network. Also, a developing segment of their workforce isn't even on their full-time finance. 

Business is no more about executing a procedure inside of an organization, however over a whole value chain. It's about the insight inside of an association, as well as the knowledge of whole groups. It's not about computerizing and doing things faster, but rather tapping aggregate bits of knowledge and best practices to improve-and in completely new ways, new period for acquirement is only more than doing transactions. 

Cost savings, Process proficiency and transparency are synonyms with procurement –and in light of current circumstances. The function has turned into a key empowering and strategic enabler of business value by routinely delivering them.

Organizations in the 21st century simply can't accomplish their cost, revenue and income objectives without being connected. Enabled by business networks, the Chief Procurement Officer can viably turn into the Chief Collaboration Officer, organizing real assets and optimizing collaboration within the enterprise and across the supply chain network to accomplish new levels of innovation, efficiency, and agility. 

There's probably no doubt that procurement today is totally different game. What's driving the transformation of organizations?

Organizational Change:

In the course of the most recent decade, there has been a principal movement in how organizations are organized. Traditional vertical integration where everything was managed internally, or structures where suppliers supplied parts and pieces and organizations did all the assembly work, has transitioned to a matrixed organization where distinctive suppliers are doing everything from initial product design, partial assembly and postponement to managing final assembly and delivery to the customer.

Globalization: 

Today's inventory network is no more directly down the road. It is extended all over the globe, and that not only increases opportunity for cost-savings, efficiency and scale, but the units that need to be reported on and opportunities for risk and delays. It also requires different cultural approaches, different mores with respect to labor practices, environmental conscientiousness, and the like that need to be managed.

Innovation: 

At the day's end, procurement wants to spend its time working with suppliers, , growing supply, catching innovation, and driving long-year road maps. Be all too often, the fundamental blocking and handling of negotiating agreements, managing suppliers and executing orders prevents them from doing so. Technology & Innovation has changed this. With regards to technology, there are two stages that organizations experience:

First, they automate core processes—sourcing, procurement and payables—to eliminate paper and hassles and gain transparency into order, invoice and shipping status.

Second, they begin looking for the next level of efficiency and reach beyond the four walls to discover, connect and collaborate with their trading partners in entirely new ways. This is where this concept of business networks comes in.

The Future of Procurement: 

Procurement is quickly becoming a platform for value and quality creation. What's more, supported by business networks, it will continue to transform and add strategic value beyond cost reductions and processes efficiencies. This value will come in four key areas:

1. Product and administration development

2. Expanding into new and developing markets

3. Compliance and cash flow optimization

4. Marketing and branding

It's already happening. As in past when Indian car maker Tata Motors set out to make the world's most affordable car for retail equivalent $2,500, it was procurement that sourced out and developed suppliers and created new materials and assembling parts unit to make the vision a reality.

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