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A Look into the Future of the Food and Beverage Industry Post the COVID 19 Pandemic- SpendEdge’s Vivek Sikaria Offers His Perspective on the Future Course of This Industry

There is no doubting the fact that enterprises in the food and beverage industry are riding the highest tides of demand as the COVID 19 pandemic is firming its grip around the globe. Indefinite lockdowns and restricted mobility of goods are painting a sordid picture for consumers who are resorting to panic buying of consumables.

However, amidst this buying frenzy, fractured supply chains and inadequate infrastructure are heralding immense challenges for the enterprises in the food and beverage industry. A majority of such enterprises are issuing SOS because of completely depleted inventories. It will not be a long shot to say that the current COVID 19 pandemic has induced enterprises in the food and beverage to re-strategize their supply chain management objectives. It is expected that the current crisis will change the way the future of the food and beverage industry will look.

On this note, SpendEdge’s Vivek Sikaria has shed light on the degree of preparedness of the current food and beverage industry and has assessed the possible trends that will characterize the future of the food and beverage industry.

Time is money in business and it is ticking. Access to SpendEdge’s procurement platform is free and instant. Now, get daily insights into the best strategies and negotiation strategies with the best suppliers in the food and beverage industry with the help of our platform.

How do you think will the food and beverage industry pan out during the COVID 19 pandemic?

Vivek- Apprehensions of an empty refrigerator will continue to work in the favour of enterprises in the food and beverage industry. However, the question is about their readiness to cater to such a demand surge. Most of them have contingency plans that can help them to weather through emergencies, but they are no match with the current pandemic. Inventory shortage, inadequate storage infrastructure will continue being the antagonizing forces in this industry. Meanwhile, a majority of consumers are shying away ordering from takeaway restaurants because of the latter’s lack of integrity on sanitary measures. This is a major blow to the growing sentiments of the food and beverage industry. I would further like to add to these observations about a certain extent of a curb in consumer’s choices of eateries. The decrease in customer footfall and supply chain disruptions have forced scores of small-time cafes and restaurants to post bankruptcies. Some of them have opted to merge with bigger brands. This consolidation in the food and beverage industry effectively reduces the choices and can be bad news for consumers in terms of their pocket-pinch while dining out.

According to you, what are the sectors in the food and beverage industry that will benefit the most out of consumer’s purchasing behaviour in light of the current COVID 19 pandemic?

Vivek- Rightly said about the impact of consumer’s purchasing behaviour. I have observed major demand shifts across sectors in this industry as consumers are being driven by frenzied buying. It is interesting to note that food is serving as a comfort factor for a number of people during the period of lockdown. Snacks and non-alcoholic beverages are becoming regular staples for students trapped in their solitary confinements. They find more comfort and convenience in such consumables than raw ingredients that have to go through an elaborate process of cooking to be consumed. Meanwhile, because of the inconsistent supply of raw ingredients, millennials are preferring to consume ready-to-eat frozen products.

What do you foresee in the future of the food and beverage industry post recovery from the COVID 19 pandemic?

Vivek- To start with, I see a major change in the perspective that evaluates growth in the food and beverage industry. I believe that stakeholders in this industry have learnt a crucial lesson from the current COVID 19 pandemic albeit in the most difficult way that prospects of high demand do not necessarily translate into success. You ought to have a responsive infrastructure in place to cater to demand that will see its highs and lows from time to time. I can foresee a large-scale proliferation of automation across certain sectors in the food and beverage industry. This, I believe will be in line with the contact-less service concept which will prevail for quite a long time. This will also make for the lack of human labour which was the reason of agony for numerous sectors in the food and beverage industry during the COVID 19 pandemic-induced lockdown.

Click here to know about the negotiation strategies with food and beverage companies and procurement best practices in this industry.

From a sourcing and procurement perspective, what are the strategies that you think will secure the future of the food and beverage industry?

Vivek- It is no more a surprise that a poorly maintained supply chain has wreaked havoc for most of the industries. Lack of ownership across the entire supply chain will continue to trouble enterprises in the food and beverage industry. It is extremely important for such enterprises to ensure that their vendors practice complete adherence to GS1 traceability standards. This is particularly relevant for procurers for raw ingredients such as poultry meat. The GS1 standard requires suppliers to provide traceability in elements like cattle information such as age and source and livestock mob movement declaration in case of livestock. Other elements such as global trade item number of the carcass, carcass grade, and government or authority issued registration number of slaughterhouses, and meat transfer certificates are also supposed to be maintained by suppliers.

The assessment of the storage capacities of suppliers holds extreme importance in the food and beverage industry. Procurers must analyze the available storage capacity across a supplier’s facilities within a specific region and in proximity to the demand markets. The more the area allocated to storage reduces supply shortage risks in the event of supply fluctuations due to natural calamities (crop infections and unfavorable weather conditions) and economic downturns.

Anticipations of future supply shocks make it essential for procurers to engage with suppliers who have implemented effective forward contracts to ensure reserves of products and consistent supply during shortages and price fluctuations. In addition, the implementation of forward contracts by suppliers can protect buyers against factors such as exchange rate fluctuations and variation in the physical properties of products.

Procuring in the current food and beverage industry can be tricky. Request a free proposal from SpendEdge’s experts to know about sourcing and procurement strategies to devise sustainable and futuristic purchasing strategies befitting the food and beverage industry dynamics.

Supply Chain Planning

Vendor Evaluation: 5 Tips and Tricks to Streamline Procurement Operations for B2B Companies

With digitization being the driving force behind the mode of operation in the global marketplace, strategies to conduct procurement operations for B2B companies have evolved with days. In modern times, procurement operations are conducted with the aim of getting the desired results within a limited time. Gone are the days, when procurement teams in B2B companies had to undergo the cumbersome tasks of vendor evaluation by requesting quotations and going back and forth with companies for negotiation.

In today’s digital world, the task of vendor evaluation is sized down to searching desired products from catalogs and set prices with vendors all on a single digital platform. However, such innovation surely ensures convenience and lesser time in the procurement operations, but does it guarantee an adequate vendor evaluation for B2B companies? The answer is mostly no.

To develop an effective vendor evaluation process B2B companies require to analyze new and existing vendors. Request a free demo to know how our experts can help you with real-time insights pertaining to vendors in different industries.

To cater to consumer’s evolving needs that range between high-quality services and personalization, a majority of B2B companies are prioritizing proper scrutiny of vendors in their procurement operations. In the long run, such careful vendor evaluation will not only facilitate them with a satisfied customer base but will also usher a streamlined procurement operation.

Top 5 Tricks for Effective Vendor Evaluation to Streamline Procurement Operations for B2B Companies

Engage with vendors who offer a high level of technological expertise- Rapid advances in technologies such as VR, AI, and AR offer immense opportunities for the creation of unique campaigns to engage with prospective customers. This makes it an essential vendor evaluation criterion for B2B companies to evaluate vendors’ technological capabilities and the cost of implementing technologies before engagement.

Setting clear performance benchmarks– It is essential to set a baseline against which the performance of vendors can be benchmarked along with setting measurable/quantifiable KPIs. The ideal way to start the process is to ask vendors to assess the area to which they are supposed to cater to. They should also present a report regarding the services that will be provided and the improvements that can be expected. This can be the baseline for effective vendor evaluation. Defining KPIs in SLAs provides vendors with clarity on the scope. Besides setting standards for operations, pricing, and performance, KPIs must provide tangible goals in terms of the quality of service. The adoption of such practices can enable buyers to accurately gauge service quality, carry out measures, and suggest measures to improve the quality of services

Engage with vendors who prepare comprehensive purchase orders- Purchase orders should include delivery schedules, quantities, the total price of products ordered, and minimum purchase requirements (if any). It should also include indirect costs such as packaging and labeling costs. These details provide buyers clarity on all the relevant costs, facilitating price negotiation with vendors.

Wondering how an effective vendor evaluation can impact the cost and quality of operations? Request a free proposal and access our complete portfolio of vendor management solutions.

Promote competitive bidding scenarios- One of the most effective strategies for vendor evaluation is to engage in competitive bidding. This involves the invitation of bids from multiple vendors. They can be evaluated based on parameters such as flexibility in pricing terms, value additions, financial strength, reputation, and geographic presence. This will enable buyers to assess the overall capability of the available supply pool and choose a supplier that is best suited to meet their requirements

Engage in consortium purchasing practices– A purchasing consortium comprises two or more buyers, usually belonging to the same geographic location. They collaborate to consolidate their procurement requirements. Such a consortium enables buyers to consolidate their procurement volume, which offers them higher bargaining power over their vendors during procurement negotiations. Buyers can also reduce their transportation, logistics, and warehousing costs by procuring products as a consortium.

Want to proactively define criteria for vendor evaluation?  Request a FREE demo and know how our experts can help you enhance the process of selecting the most relevant vendors.

5 Key Coronavirus Risk Assessment Strategies to Overcome Healthcare Supply Chain Challenges

If you think that the emerging healthcare industry supply chain challenges are just the implications of the global economy that is currently held hostage by the coronavirus pandemic, you may want to give it a second thought. While healthcare enterprises are exploring the feasibility of coronavirus risk assessment strategies to glue together the loose ends of their disrupted supply chains, it can be safely concluded that the pandemic has amplified supply chain challenges that were long eroding the growth prospects of several enterprises in the healthcare industry.

Shortage of PPE, masks, sanitizers, essential medical devices is crippling the endeavors of healthcare taskforces who are at a war footing to contain the pandemic. These emerging challenges serve as an eerie reminder of the immense healthcare industry supply chain challenges and procurement catastrophes faced in the US that were triggered by Hurricane Maria in 2017. This natural disaster laid waste on the island of Puerto Rico, which was also one of the main IV suppliers for the US.

This time this pandemic has issued the message bold and clear that careful implementation of coronavirus risk assessment strategies is the need of the hour to not only redeem the supply chains but to build the resilience of the same in the healthcare industry that can weather any future pandemic shocks.

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Request free access to our platform to access the complete list of the key coronavirus risk assessment strategies leveraged by the leading players to address the imposing healthcare industry supply chain challenges.

A Quick Look into the Top 5 Coronavirus Risk Assessment Strategies to Mitigate Healthcare Industry Supply Chain Challenges

Adopt multiple sourcing options: Most of the leading healthcare sectors across regions are highly reliant on the supply of essential medical and pharmaceutical commodities. The pandemic-induced lockdown has choked most of the supply sources which reinstates the importance to source from multiple suppliers and ideally have a supply back-up. Adopting multiple sourcing options can serve as one of the straight-forward and simplest coronavirus risk assessment strategies that will help to mitigate an imposing healthcare industry supply chain challenge.

Adopt big data analytics in the sourcing process- Trusted as one of the effective coronavirus risk assessment strategies to address healthcare industry supply chain challenges, the adoption of big data analytics will help enterprises conduct an effective demand projection. This is particularly relevant in the current state of the healthcare industry. It will aid in inventory management through analysis of required inventories, holding time, and time to purchase. Big data analytics will offer real-time visibility of data to either party by ensuring transparency in the supply chain which is deemed as a crucial coronavirus risk assessment strategy.

We understand the fact that the nature of your business challenge tends to change within every hour in this pandemic. Request a free proposal from our experts to know how the top coronavirus risk assessment strategies can be customized to address your unique business challenges.

Adopt collaborative supply chain planning- Stock shortage is emerging as an imminent healthcare industry supply chain challenge that is also the result of the lack of involvement of both buyers and suppliers in the procurement process. Adoption of a collaborative procurement process is deemed as an essential coronavirus risk assessment strategy that considers factors, such as transparency in sourcing, inventory status, demand projection, and R&D processes, as well as solutions to mitigate the challenges faced by parties in the value chain.

Assess the implementation of VMI programs by suppliers- Not only is VMI seen as one of the best ways to reduce inventory cost but it is also an essential part of the widely accepted coronavirus risk assessment strategies to ensure a continuous supply to enterprises in the healthcare industry. Buyers should engage with suppliers who provide efficient inventory management solutions, such as JIT, that help to reduce inventory maintenance and storage costs.

Engage with suppliers who can meet demand variations- Medical facilities can face unprecedented demand for ad hoc procurement of components, particularly during episodes of epidemics. In light of the recent pandemic situation, one of the key coronavirus risk assessment strategies stresses engagement with suppliers who exhibit sufficient spare production capacity to meet any ad hoc variations in product demand. This will, in turn, enable buyers to reduce procurement time in such cases, that would otherwise be required for selecting a new supplier and check adherence of its products to quality and regulatory norms.

Not facing supply chain risks yet? That’s great! Let us help you to devise a future-ready supply chain to stay immune during any hours of emergency in the future. Request a free demo of our digital procurement platform and get immediate access to the coronavirus risk assessment strategies to boost your supply chain resilience.

Successful M&A Strategies for Companies in the Aerospace and Defense Industry

As pressures and shifting demands in the aerospace and defense industry continue to mount, companies find it difficult to survive. Cost pressures, regulatory controls, and engineering changes further add to the woes. Companies looking to curb their mounting debt are getting out of the commercial aviation business and planning to sell their remaining stake in the coming time.

On the other hand, larger companies aiming to gain additional revenues, access new technologies and seize opportunities for growth and scale may target smaller companies that are unable to keep pace with increasing financial pressures. However, M&A activities come with their own set of challenges. Companies are compelled to incorporate organizations that come with their systems, processes, and cultures. Here are the key points to remember for your M&A activity.

Companies must perform the aerospace and defense industry analysis to address financial pressures during a merger. Request a free proposal to financial services industry analysis and gain customized market intelligence solutions. 

Strategies to Adopt During M&A Activity in the Aerospace and Defense Industry 

Integrate the data 

Companies in the aerospace and defense industry adopt M&A strategy to drive growth, expand the company and take advantage of additional development opportunities. However, to leverage such opportunities and see the payoff, companies must integrate the data acquired for the new company at the earliest. They must use a supply chain planning platform to pull data from numerous sources, including ERP systems. The platform must be able to model the planning behavior of the disparate systems for the success of M&A activity.is one of the most important metrics for companies to evaluate due to the

Wondering how companies can gain actionable insights to develop effective strategies to address aerospace and defense industry challenges? Get in touch with our experts for more insights on our solutions.

Streamline and standardize processes

Many companies have siloed functions and a host of Excel spreadsheets for data analysis. IT functions strive to integrate between modules and the company’s separate ERP systems. There is always a challenge of merging demand, supply, and inventory for reporting and scenario management.

Companies need to model all planning behavior and streamline and standardize processes to make vital information available to supply chain planning teams. Streamlining processes not just minimizes the time to plan but facilitates an easier transition for parties involved in the M&A activity.

Incapability to standardize processes can increase complexities for different functions and impact aerospace and defense industry market share. Stay a step ahead by requesting free platform access from our procurement experts to gain detailed market insights.   

Drive adoption of new and expanded processes

Businesses need to have a comprehensive understanding of risks, integration issues, tax implications, new assets and inventories pre- and post- M&A. They require a high level of trust to ease cultural differences, expand processes and embrace change. Quickly integrating data and streamlining processes on a single platform facilitates companies to document and access workflows easily. It simplifies sharing and learning new processes. Also, it helps companies to establish a level of trust among existing and new stakeholders as everyone is looking at the same plan.

To gain detailed insights into the aerospace and defense industry trends, request more information from our analysts.

Best Ways to Evaluate Suppliers in the Global Active Pharmaceutical Ingredients Market amid COVID-19 Outbreak

The growth of the active pharmaceuticals market is mainly driven by the expansion of the oncology pharmaceutical sector and continuous investment in technologies and the manufacturing capacity. There are significant developments in both developed and developing economies, where the pharmaceuticals infrastructure is improving all the time.

But the outbreak of COVID-19 is expected to impact the active pharmaceutical ingredients market. A large number of manufacturers of active pharmaceutical ingredients are located within Chinese provinces that were epicenters for the virus outbreak. They are responsible for the production of some vital drugs, apart from other active pharmaceuticals ingredients.

Moreover, the landscape is highly fragmented due to the involvement of a wide range of industry players. The different approaches used by different companies to develop active pharmaceutical ingredients make it difficult for companies to evaluate their sourcing process and suppliers.

Want to tackle challenges posed by the Pandemic? Request a free proposal and our experts we will get back to you in 48 hours with customized solutions.

Ways to Evaluate Suppliers in a Dynamic Active Pharmaceuticals Ingredients Market 

In-house vs outsourcing 

It is one of the most important metrics for companies to evaluate due to the ongoing global crisis. Outsourcing manufacturing can significantly reduce the cost for pharmaceutical companies but can dramatically increase lead times for production. However, in-house involves major resource investment, risks, and increases product complexities. Large contract manufacturing organizations (CMOs) can operate at metric ton scale capacity and offer the highest production volumes but can lack diversity. There are higher chances that smaller CMOs will scale up their production. While selecting a CMO, companies must ensure that the providers can deliver specific pharmaceutical ingredients at the correct scale.

Are you looking for suppliers in established manufacturing hubs such as the US and Germany? Contact us to identify the CMOs with a proven track record of successful commercial production in the active pharmaceutical ingredients market.

Identify innovators

Seeing the current market situation, pharmaceutical companies should extensively focus on CMOs that are actively developing innovative active pharmaceutical ingredients and improving production methods and technologies within their domain. The right CMOs will focus on controls to prevent cross-contamination and protect workers, invest in improving active pharmaceutical ingredients composition, prioritize high-quality processing, and select manufacturing methods that reduce lead time and bring down costs.

We understand that finding such CMOs is an arduous task and requires accurate market intelligence. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights to identify providers with the strongest innovation record.

Lowering production scales 

Producing active pharmaceutical ingredients at a kilo scale can make more sense in today’s time for CMOs and outsourcing pharmaceutical companies alike. Focusing on small-scale production can help CMOs to prevent contamination as small batches are less likely to be contaminated. Creating high potency active pharmaceutical ingredients can be a solution for companies as they are significantly stronger and produced in smaller quantities. MT-scale production is a high investment risk and can put millions of dollars at risk if the batch fails. Smaller-scale CMOs can prove to be effective for pharmaceutical companies in such a crisis to reduce lead times and minimize costs.

To partner with CMOs that specialize in the global active pharmaceutical ingredients market, request more information from our analysts.

Reducing the Risk of Supply Chain Disruptions in the Wake of COVID-19 Outbreak

The COVID-19 outbreak is having a distressful impact on the global economy and there are several procurement and supply chain challenges that businesses need to overcome quickly. Our procurement intelligence team is currently working with leading global procurement organizations across industries to support them in dealing with its consequences on the supply chain such as travel restrictions in certain geographies, logistics constraints, labor shortages, supply shortages, etc. We are offering customized solutions to help enterprises address supply chain risks and protect their supply chains from serious and costly disruptions. Our experts have also listed some key areas for managing supply chain disruptions.  

Want to better manage supply chain disruptions? Request a free proposal and our experts we will get back to you in 48 hours with customized solutions.

Key Areas for Managing Supply Chain Disruptions

Develop strategies to address global supply chain disruptions

In order to manage global supply chain disruptions, organizations must develop a comprehensive risk management strategy. Factors impacting the dynamics of international supply chains leading to increased uncertainty in logistics operations at the tactical, operational, and strategic levels must be analyzed to implement risk mitigation tactics. Risks associated with supply chains at a country level should be identified to understand the impact of COVID-19 on supply chains.

Ensure compliance with local laws

Companies having global supply chains need to deal with the uncertainty in local laws and cultural norms that may impact a business. The physical transport of materials and finished goods has come at a risk, increasing complexities and uncertainties. Understanding the current scenario and norms that impact supply chain operations, uncertainty in supplier reliability and lead times can help companies prepare effective action plans to mitigate supply chain disruption occurring due to pandemic.

Wondering how companies in different regions minimizing the impact of COVID-19 outbreak? Contact us, to gain comprehensive insights. 

Categorize supply chain disruption strategies

Disruption of complex materials or components widely impacts supply chain operations. A comprehensive analysis of the supply chain is a must for assessing risks associated with holistic sources. Qualitative and quantitative analysis of supply chain risk is also critical for companies to maintain their speed to market. 

Understanding different types of supply chain disruptions is crucial for companies to devise effective strategies. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights into risks.

How can SpendEdge Help you Manage Supply Chain Disruptions?

We can assist you with customized procurement intelligence solutions to help you gain deep-dive insights on topics such as:

Ongoing Credible Updates on the current situation and developments – COVID-19
Mitigation measures for overall country-specific supply chain operations
Travel restrictions at a country level – Identification of Ports of Entry/Exit that are affected/vulnerable
Government policies (import/export bans) and implications at a country level
Second/dual/alternate sourcing options to mitigate supply chain risks
Quick audit of second source supply chain
Predictive models to assess country/region wide scale of impact
Long-term assurance of supply consulting for direct materials
Tracking commodity price movements and shortages
Enterprise-level Business Continuity Roadmap Consulting

To know more about recent supply chain disruptions and the steps to mitigate them, request more information from our analysts.

Has the CoronaVirus Pandemic Called for a Re-course of Your Business Perspective? –Quick Insights into Risk Mitigation Measures Imperative at This Moment

An easy answer to the downward sliding business performance is the coronavirus pandemic that is resulting in the shutdown of some of the major economies. While a cure for this declining business health is underway, the need of the hour is a major evolution of our business perspective. It will not be entirely wrong to say that more than focusing on reviving the profit margin, it is crucial to implement risk mitigation measures. Such risk mitigation measures will be instrumental to help stakeholders brace for any sudden economic shock or to seal any open wounds in their business.

Imminent Risks That will Inhibit Enterprises to Design Business Contingency Plans

Supply Chain Inconsistency- Buyers from industries such as automobile, pharmaceutical, chemical sectors are heavily reliant on the consistent supply of products and service delivery. However, with some of the major regions under lockdown, the distribution capacities of suppliers are getting severely hampered. This is creating a serious supply deficit for buyers in these industrial sectors who are left without any back-up to maintain their production schedule. This imminent challenge is making it imperative for these sectors to explore risk mitigation measures to stay immune from such sudden supply shocks.

Subscribe to our procurement platform and be the first to get updates on the risk mitigation measures buyers from these industries are adopting to sustain in this troubling time.

Breach of supply contract- Absence of definitive clauses in contracts will allow a section of suppliers to take the liberty to resort to actions that are clear breaches of contracts. For instance, the absence of a risk mitigation clause such as a price lockdown in a supply contract will enable suppliers to set prices of their products on their own terms. They will tend to state the current situation as an excuse for a sudden price hike. Considering this possibility, the inclusion of binding clauses that will ensure that suppliers stay compliant to the contract is one of the most imminent risk mitigation measures in this troubling time.

Get instant insights into the risk mitigation measures most of the industries are following to stay immune to risks in terms of supply contract breach. Get your free sample of SpendEdge’s procurement intelligence report on the contract compliance services market.

Uncertainty in the recovery of market demand– Quite in contrary to the recession in 2008 that was triggered by economic policy failures, this perceived economic recession owing to a viral outbreak makes it difficult to anticipate the recovery of the market demand. What is more dangerous is the lack of foresight of enterprises that are also troubled with liquidity shortages. Desperate to stay relevant in the current market, such enterprises fail to assess from a long-term perspective and attempt to either liquefy their assets or pump in more investments without gauging the possibility of ROIs. This reinstates the importance of risk mitigation measures required to survive in this economy.

Why take business risks in these troubled times? Download the free sample of SpendEdge’s procurement intelligence report on corporate strategy consulting services and get insights into expert-recommended risk mitigation measures to re-evaluate your business perspective.

Risk Mitigation Measures that are the Needs of This Hour

Collaboration with risk-mitigation advisors- Apart from the economic impact of the recent pandemic, buyers from the BFSI sector, in particular, are often challenged with the absence of effective data management, inefficient organization-wide risk modeling framework. These factors make it crucial for them to leverage credit risk mitigation measures to address the potential risks faced in this sector. As a matter of fact, the adoption of risk mitigation services in MEA is anticipated to grow due to the collaboration among governments and big corporates to reduce the economic impact caused due to the outbreak of diseases, especially caused by viruses such as MERS-CoV and Ebola in Africa and the Middle East.

Download the free sample of SpendEdge’s procurement intelligence report on the risk management services market to know about the leading risk mitigation service providers and how can they add value to your business.

Engage with risk mitigation service providers who provide risk-scoring of suppliers- Risk scoring is an algorithm used to evaluate a vendor and rank them on a scale of 1 to 1,000 where a higher number denotes higher risk. It is advised that buyers partner with risk mitigation service providers who use risk scoring methodology as they can easily quantify threats and deficiencies associated with suppliers.

Resort to stress-testing measures- Engagement with risk mitigation service providers who offer regular stress testing will help buyers to ensure the appropriate use of capital assessment. Moreover, extreme stress testing such as reverse stress testing will aid buyers to resolve emerging threats to future business plans and strategies.

No matter what, time is money in business and it is ticking. Access to SpendEdge’s procurement platform is free and instant. Now, get daily insights into the best risk mitigation and negotiation strategies with the best suppliers for a wide range of business sectors.

Analyzing the Role of Strategic Sourcing in the Financial Services Industry

Financial Services Industry Overview 

Businesses across the financial services industry are seeking ways to manage costs in the way that they do not creep back into the system. External spend is one such category of spend that constitutes approximately 30 percent of its cost base. To this end, companies are improving the strategic sourcing approach – an approach successfully used in different sectors.   

Strategic sourcing envisions innovative ways to optimize the long-term value contribution from suppliers and procurement functions while inculcating traditional techniques. When implemented effectively, strategic sourcing can deliver sustained incremental savings of total external spend, with better saving opportunities in individual spend categories.

Companies in the financial services industry can achieve sustained cost savings through strategic sourcing. Request a free proposal to financial services industry analysis and gain customized market intelligence solutions. 

Role of Strategic Sourcing in the Financial Services Industry 

Better cost savings 

The financial services industry has witnessed a strong and benign credit environment growth over the last few years. However, economic pressure is forcing businesses to take cost management initiatives. The reason being – companies do not address the underlying cost drivers. The “shell game” that firms play ostensibly cut spending ends up being detrimental in the medium- to long-term, as these costs inevitably reappear over time. Although short-term reduction of external costs is demanded each year and should be delivered but companies must take proactive approach in identifying how they can cut costs in a more sustained way. Having a top-down approach can help organizations reap the benefits of sourcing functions within the firm.

Wondering how companies operating in the financial services industry can devise cost management strategies? Get in touch with our experts for more insights on our solutions.

Seizing opportunities 

Our experience with the clients indicates that organizations can achieve substantial savings even across expense categories that are already considered “managed”. There exist significant reductions in opportunities in the areas that traditionally do not fall under the procurement management umbrella. It includes spend categories such as legal expenses and temporary staffing, as well as sourcing of functions such as payments, mortgage servicing, and loan processing. However, capturing such savings is an arduous task. It requires a radical remake of the procurement function, developing a comprehensive, center-led set of competencies and capabilities.

The incapability to capture savings for the future can impact the market position of companies. Stay a step ahead by requesting free platform access from our procurement experts to gain detailed market insights.   

Maximizing strategic sourcing potential

Taking a series of pragmatic steps can help companies to realize the benefits of strategic sourcing. A comprehensive overview of the external spend categories and spend drivers rather than simply analyzing traditional procurement categories and relating them to an appropriate level of procurement sophistication can help companies unlock significant cost savings. Also, mapping out a comprehensive strategy to gain more value from suppliers and effectively managing spend drivers can help achieve a sustained lower spend base.  

To gain detailed insights into the factors impacting the financial services industry growth rate and the role of strategic sourcing, request more information from our analysts.

Strategies to Minimize the Impact of Coronavirus on Supply Chains

Manufacturers across the globe are struggling to address supply chain disruptions caused due to COVID-19 outbreak. Commonly called as coronavirus, is impacting supply chains in terms of parts, labor, and government restrictions. Quarantined workers and shortages of components have crimped the availability of goods from different manufacturing locations, primarily China. The severity of disruptions is expected to increase after the first quarter of this year. Lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move products for the majority of US businesses due to coronavirus impact on supply chains. The experts at SpendEdge have put forth some key points after evaluating the coronavirus impact on supply chains. Here they are:

1. Companies in the manufacturing sector could expect a delay of approximately three weeks for the supply of raw materials and products.

2. There could be disruptions in the supply chain of hardware required to run the business or third-party systems.

3. As the situation is expected to remain fluid due to lockdown in several regions, shipping and delivery could become a new choke point for some industries.

4. Not just Facebook and Apple products, the shutting down of global supply chains could lead to scarcity of other day-to-day essentials as suppliers face their own challenges in improving supply chain management operations.  

 

Want to understand coronavirus impact on supply chains? Request a free proposal and our experts we will get back to you in 48 hours with customized solutions.

How Can Companies Prepare for the Future? 

Advanced manufacturing units 

Companies of today must focus on advanced manufacturing and things such as 3D printing and artificial intelligence rather than setting massive factories that build things at large scale and at low labor costs. Instead of making one city a manufacturing hub, the focus should be on smaller manufacturing hubs in different cities. Shortened supply chains will reduce coronavirus impact on supply chains and improve capability and innovation.

Wondering how companies in different categories are improving supply chain management and reducing coronavirus impact on supply chains? Contact us, to gain comprehensive insights.  

Localized supply chains

If companies want to prepare themselves for the future, they need to create small and agile supply chains. They cannot afford to have a 30-day shipping time from China to the United States. Supply chains need to be nimble, not just to address unprecedented risks or pandemics but for innovation. It is really difficult for companies to be innovative onshore when they have advanced manufacturing engineering offshore.

Creating localized supply chains is crucial for companies to address unprecedented risks. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights into coronavirus impact on supply chains and devise effective strategies.  

In-house logistics 

Companies should consider investing in a self-operated, proprietary supply chain and logistics network and create an internal task force to manage the crisis response. Deploying human and autonomous capacity to facilitate the delivery of crucial supplies and waiving fees for some suppliers could help companies resume their operations quickly. In devastating epidemic situations like this, improving in-house logistics networks could lead to greater profitability for companies.

To know more about coronavirus impact on supply chains and ways to improve logistics and supply chain management strategies, request more information from our analysts.

3 Key Procurement KPI Metrics that Companies Must Be Aware Of

While cost savings remain the end objective of procurement functions, companies are not just restricted to that. They track the right procurement KPI metrics to measure the performance of their procurement process. Evaluating the right procurement KPI metrics enables companies to optimize and regulate spend, quality, time, and cost. But how do companies know that the procurement KPIs that they are tracking matter the most? By gaining a comprehensive understanding of the procurement KPIs used by leading companies. Here’s the key procurement KPI metrics that companies must be aware of. 

Want to know how top companies are measuring the efficiency of the procurement process? Request a free proposal and our experts we will get back to you in 48 hours with customized solutions. 

Key Procurement KPI Metrics 

Procurement KPI metrics #1: Quality

Quality is one of the key procurement KPI metrics that companies should take into consideration for sustainability. The key factors to include are: 

Supplier quality: Gaining actionable insights into the suppliers’ performance is critical for companies. Measuring supplier defect rates can help companies evaluate a supplier’s individual quality and examine its trustworthiness.

Purchase order accuracy: Inaccuracies in purchase orders can augment operating costs for businesses. Such procurement KPI metrics would help businesses ensure if the supplies ordered were according to demand and delivered at the right time.

Compliance issues: Compliance with regulator norms in the respective supply markets is imperative to ensure legal security. Dip in compliance rate can spike up maverick spend and increase the chances of getting penalized.

Wondering how our expertise can help you create the procurement KPI template by providing necessary insights? Contact us now! 

Procurement KPI metrics #2: Delivery 

Unplanned orders: Any unplanned order acquired to prevent the shortage of products or services is termed as an emergency purchase. The lower number of emergency purchases reflects the efficiency of the procurement function.

Supplier efficiency: The efficiency of suppliers can be better measured in terms of lead time. Supplier lead times is one of the important procurement KPI metrics that businesses must calculate without fail. It starts with availability confirmation and ordering and ends with the delivery of goods.

PO cycle time: The purchase order cycle covers the end-to-end ordering process. It is crucial for companies to count the cycle times from the time purchase requisition is submitted.

Improving delivery time is crucial for companies to boost brand value. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights into procurement KPIs evaluated by leading organizations. 

Procurement KPI metrics #3: Cost savings 

Invoice cost: Cost per invoice varies greatly from organization to organization. Having an automated process can significantly reduce the processing cost when compared to manual approaches.

ROI: It is an important key metrics for companies to determine profitability. It helps analyze the cost-effectiveness of their procurement investment.

Spend management: For companies to optimize cost and forecast expenses, it is critical to improving spend under management. It is the percentage of procurement spend that is controlled by the management.

To know more about procurement KPI scorecard and metrics, request more information from our analysts.



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