Supply market intelligence helps in putting together the pieces of a jigsaw puzzle called the supply chain in order to identify the team – suppliers, vendors and distributors – that will help find solutions to mitigate potential risks. Supply market intelligence complements and supports strategic sourcing decisions in an organizations supply chain by providing actionable market insights that are essential for optimizing procurement results. Today, organizations have realized the need to improve their supply chain strategies under the pressure of burgeoning economic uncertainty. They are increasingly turning to strategic sourcing and procuring market intelligence in order to capture cost reduction opportunities.
Strategic sourcing can be defined as a continuous process based on a data-driven approach in order to improve an organization’s supplier base and thereby enhance the overall value proposition of the business unit. This helps the business entity to devise an effective supplier management strategy driven by facts and supply market intelligence. It basically assists the procurement professionals to get the best product or service at the best possible price. When an organization leverages strategic sourcing practices, it should understand that it is much more than just supplier price negotiations. It entails the total acquisition cost including the demand drivers, internal procurement practices, inventory practices and specifications of the product. However, organizations often stumble while integrating their supply chain with market insights as they are unable to gather accurate and real-time market data along with supplier and industry information.
Why does strategic sourcing need supply market intelligence?
Organizations need to modify their supply chain practices by understanding the core components of strategic sourcing in order to imbibe informed decision making in their corporate culture and support third party supplier relationships effectively. Procurement professionals cannot effectively manage the supply chain and take strategic procurement decisions without a clear picture of the competitive landscape, industry knowledge and market developments. It is necessary that the organization gain awareness about the external environment through supply market intelligence and collate data regarding the capabilities of the supply market, competition, thereby identifying the key trends that are responsible for disrupting the market.
Gaining supply market intelligence will help the procurement professionals and the category managers to fine tune their internal product designs and plans, identify growth opportunities and develop effective sourcing strategies that are in line with the business goals and objectives. This will also enable the organization to leverage buying power and thereby create a sustainable competitive advantage in the global market. The organization will require market insights under the following scenarios:
- When a business entity seeks a new supplier source, supply market intelligence is essential in order to procure a new product or service for a particular category.
- In order to analyze spend data and consumer spending trends, determine production levels, pricing strategies and counter competitive actions.
- Undertake supplier analysis and specific risk monitoring assessments to mitigate potential financial risks by appraising key suppliers and their related information.
We can say that strategic sourcing and supply market intelligence are the new best friends that are set to change the procurement landscape. It’s a new school of thought that will definitely pay big benefits and help gain a competitive advantage. At SpendEdge, we help you gain actionable supply market intelligence based on trusted data sources and thereby drive the organizations to take well informed strategic sourcing and procurement decisions.
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