In the rapidly evolving world of supply chain management, it's crucial to recognize the intricate connections between different elements. Today, we'll be shining a light on two of these key components, procurement and the supply chain, and examining their essential interplay.
Too often, the spotlight shines solely on supply chain solutions, with a particular focus on how enhanced logistics visibility and insights can foster more agile supply chains. However, that’s merely one side of the coin. Sourcing and procurement play pivotal roles in a supply chain's agility. Yet, the absence of a unified perspective encompassing both procurement and supply chain creates data, collaboration, and risk gaps across the entire supply chain network.
So why is it crucial to marry procurement and supply chain, giving birth to a true digital twin? It provides the full narrative. Many orders stumble at the starting line, often due to new or altered product introductions demanding rigorous approvals. Also, the Request for Quotation (RFQ) process can procrastinate supplier decisions, contributing to tardy product market entry.
The implications of these issues are manifold and consequential. They can lead to stockouts, unsatisfactory order fulfillment rates, and escalated expedited freight costs. The term 'supply chain' is almost a misnomer now. Managing a successful supply chain necessitates collaboration across multiple companies. Everyone needs to be on the same page. That’s why we’re gravitating towards the term supply web, a concept we'll explore in our forthcoming white paper.
The supply web has superseded the constraints of contemporary technology, prompting a revolutionary shift in companies' supply web management. The era where procurement and supply chain could exist as separate entities has come to a close. Procurement impacts timelines, stock levels, and other key metrics as intensely as the traditional supply chain, i.e., logistics.
You could spend hours assembling data from multiple systems and infinite spreadsheets, but by then, it’s too late to respond to market conditions. Or worse - the data is outdated and incorrect.
Without a fully integrated procurement and supply chain platform, you'll never truly realize how software can revolutionize your business. Without centralized data that's readily shareable with supply web partners, your agility significantly diminishes.
Here's a fact worth pondering: 26% of Full-Time Equivalents' (FTEs) time is spent on chasing data and information. A quarter of your team's time is devoted to merely navigating through different systems to extract the insights they need. And let's face it - how confident are we in our data?
Software has engulfed the world, augmenting complexity like never before. Companies have, on average, over 80 separate SaaS systems running their business. This has led to a maelstrom of disconnected systems. And who really wants to add another SaaS system to this mix?
Software should exist that consolidates information, providing actionable insights. And when enough data for each customer is aggregated, AI can truly come to the fore, offering recommendations based on your business's individual needs. Software should enable businesses, not ensnare them.
In conclusion, the intricacy and interdependence of procurement and the supply chain necessitate a unified perspective and management approach. The road towards a successful supply web involves integrated platforms, actionable insights, and AI-driven solutions.
Stay tuned for our upcoming white paper, where we'll delve deeper into the concept of supply webs and the essential technologies for their successful management. We'll also explore how software is revolutionizing businesses, and how to capitalize on these opportunities.