In the recent times, we have witnessed players in the food and beverage industry investing heavily in the latest technological advancements to improve their processes. This trend is contradictory to the cost-cutting mode that was prevalent in the sector a few years back. Companies have started to realize that modernizing their activities is a one-time investment that could reap significant benefits in the long run. One of the functions which require businesses in the food and beverage industry to be on their toes is procurement. This is the stage that often proves to be tricky, but if efficiently managed can result in substantial cost reductions and considerable savings.
What are the procurement challenges in the food and beverage industry?
There are several factors that players in the food and beverage industry need to consider during procurement. One of the main issues worrying the companies in this sector is to find the right strategies to combat the hindrances that they are likely to face during decision-making. So what are the challenges that businesses in the food and beverage space have to consider while making procurement decisions?
- Developing fast and high-performing supply chains to enable greater responsiveness to insights gained from big data analytics and other market reports.
- Ensuring strict regulatory compliance, supply-chain transparency, and traceability.
- Minimizing supply chain complexities, especially for perishable and seasonal products.
- Avoiding under-stocking and over-stocking situations
- Keeping track of the changing food trends and procuring the right products to suit the demand
- Finding the right supplier offering the products at reasonable prices.
- Cost control and increase the profit margins
How can F&B companies overcome procurement challenges?
To gain a competitive advantage in the market, it is imperative for companies in the food and beverage industry to control and rigorously manage their expanding and increasingly complex global supply chains. How can businesses achieve this?
An effective spend analysis strategy can help players in the food and beverage industry to protect profit margins and formulate category sourcing, procurement, and supplier negotiation strategies in a much easier manner.Businesses can also gain easy identification of savings opportunities to accelerate decision making.
By defining sourcing strategies, F&B companies can efficiently determine requirements, discover, evaluate and compare suppliers worldwide. With the help of sourcing strategies, companies can take decisions that are fact and market-driven.
Players in the food and beverage industry can use contract management to rapidly build, negotiate and execute contracts that contain all the necessary terms related to safety regulation, policy compliance, and risk avoidance. It can also help them to enhance stewardship, security, and continuity of important contract documents.
A supplier management strategy can help enterprises to successfully onboard new suppliers, manage compliance with regulations, inspection, and control requirements through multiple supply-chain tiers. Additionally, businesses can also continuously track, benchmark and improve supplier performance to yield fast flexible, responsive and globally competitive supply chain.