Supply chains of modern organizations are complex and increasingly dynamic. It is influenced by constant changes to suppliers and industries, raw materials and commodities, and within the markets themselves. Though the ERP systems used by most companies are great management tools, they are mostly blind to this external data. Their “inside-out” approach can leave companies flat-footed when planning and executing competitive supply chain strategies. Moreover, with purchasing professionals asked to deliver more within a limited span of time, procurement market intelligence is gradually taking increased strategic importance in most companies. An efficient procurement market intelligence strategy can help companies to effectively overcome sourcing challenges and successfully mitigate procurement risk. That’s not all; here are five ways in which procurement market intelligence will help companies step up their performance:
Undeniable Benefits of Procurement Market Intelligence
Effective operations
Even though a company’s procurement, supply chain, and inventory facilities are at the peak of its efficiency, they can get caught off guard by a sudden change in a supplier’s business, management, or operations. With the help of procurement market intelligence, alerts can be set up to notify about changes in various suppliers’ businesses in near real-time, giving an early warning to disruptions that might require a fast reaction or an alternative solution. Companies can also use this information to arrange for ‘back-up’ suppliers, depending on the requirement. The ability to react quickly aids companies in maintaining consistency in the supply chain and increases reliability across operations.
Competitive advantage
Competitive advantage is gained by being nimbler, more agile, and react faster than other players in the market. In fact, leading companies now use their quick reaction to unforeseen disruptions as a competitive advantage. For instance, if a key component may be difficult to procure, companies can lock up supply before their competition with the help of procurement market intelligence that provides information in real-time.
Superior supply chain strategies
Progressive companies are advancing supply chain planning by looking carefully at the impact of potential events on their operations. For example, if demand increases in a particular region, companies have to identify if they have the right suppliers and strategy to exploit it. Alternatively, in case of any supplier facing a catastrophic event, companies have to figure out the impact on their business. Procurement market intelligence can provide early warnings and unique insights into events that are likely to occur, and also provide information for assessing alternative suppliers and approaches. This equips companies with more information to help better prepare for any scenario.
Better customer satisfaction
Customer delight is a critical factor of success for modern businesses. Using procurement market intelligence, companies can build a reliable, low cost, agile supply chain that enables them to reliably deliver a better product in a timely manner at a lower cost. It also enables companies to work closely with customers and react to market disruptions and opportunities, further building trust with the customers.
Improved supplier management
Building and maintaining close relationships with suppliers—particularly the strategic suppliers—is critical to business operations. Procurement market intelligence helps companies to manage changes, acquisitions, divestitures, customer wins and losses, operational changes, and other factors that have a substantial impact on a supplier’s ability to deliver. Furthermore, when companies are in need of a new supplier, procurement market intelligence gives the insights to better understand a potential supplier’s business, their customers, their management, and their motivations. With this information, firms not only are well-informed as they engage a new supplier, they also can be armed with more leverage for negotiations.
Market Intelligence Goals and Processes
Market intelligence goals involve gathering and analyzing relevant data to gain insights into market trends, customer behavior, competitor strategies, and other factors that impact business decisions. The process typically includes data collection, market research, competitor analysis, trend monitoring, and data interpretation. The goals of market intelligence are to identify opportunities, mitigate risks, make informed business decisions, and stay ahead of the competition. This process helps businesses understand their target market, customer preferences, and industry dynamics, enabling them to develop effective strategies and achieve their objectives.
