Procurement Best Practices Archives - SpendEdge

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Pharmaceutical Industry

Is the Global Pharmaceutical Industry Held Hostage by the Deadly Coronavirus? SpendEdge’s Tridib Bora Offers Insightful Answers to this Imposing Query

The pharmaceutical industry has not been in the pink of its economic health since the outbreak of the novel coronavirus. Supply chain disruptions, soaring prices of bulk drug raw materials, and indefinite shutdown of one of the biggest drug manufacturing hubs are some of the potential symptoms of this perceived failing health of the global pharmaceutical… Click To Tweet Most of the leading drug-makers across the globe are staggering to close the gap in their supply chains and are exploring the option to manufacture the raw materials within their geography. Against this backdrop, SpendEdge’s Tridib Bora offers a holistic analysis of the current pharmaceutical industry, the possible risks faced, and the best practices from a procurement point of view that every stakeholder must consider in the current state of the health sector.

Among the key geographies, who do you think will be the worst hit owing to the uncertainties in the pharmaceutical industry caused by the coronavirus outbreak?

Tridib: It is too early to issue this predicament. However, I will take the liberty to say that for countries where the pharmaceutical industry serves to be one of the highest revenue-generating sectors, the impact will be more prominent. Regular phases of drug development drive the demand growth in the pharmaceutical industry. However, to do so, drug manufacturers from certain geographies are highly dependent on the low-cost imports of raw materials. To optimize the manufacturing cost and to harness the potential of the skilled workforce in low-cost countries, most of the developed nations tend to outsource the manufacturing functions to APAC countries such as China and India. The recent turn of events has put a lid on the manufacturing process as well as the supply of the drug intermediates and APIs in China. This is resulting in immense supply chain complexities which will exert a negative impact on the pharmaceutical industries in developed nations like North America and Europe.

Get real-time insights into the price trends that are impacting the global pharmaceutical industry. Request free access to our platform to access SpendEdge’s recent procurement intelligence reports that enlist the procurement best practices to address the challenge of the rising purchase price.

Get real-time insights into the price trends that are impacting the global pharmaceutical industry.

Will this impact on the pharmaceutical industries across the leading economies hurt the growth prospects of the global pharmaceutical industry?

Tridib: Not entirely. Complexity does not necessarily cull the prospects of growth in any sector. There is no denying the fact that the outbreak of coronavirus will herald procurement and category management complexities in the pharmaceutical industry but it will not block the funnel of investments in this industry. With the number of contaminations increasing, the drug makers are on a war footing to develop an antidote to treat coronavirus. This will lead to steady demand growth for clinical research and pharmaceutical drug development service providers. Government authorities across regions are holding meetings to counter the impact of the supply shortage of drug intermediates and APIs from China. Countries in Europe are resorting to stockpiling drug raw materials in bulk to avert a sudden supply shortage. These factors will continue to drive procurement in the pharmaceutical industry. Sales of wearable medical devices such as face masks are skyrocketing with days in areas that are vulnerable to the outbreak of coronavirus. Medical tests are becoming an essential part of the daily regimen for individuals travelling across geographies which is driving demand in the lab consumables market. It is safe to say that despite the procurement complexities, it will take more for the growth prospects in the pharmaceutical industry to hit the dire straits.

Get your complimentary sample procurement intelligence reports on the global pharmaceutical industry that offer actionable insights into spend analysis and price forecasts across the major geographies.

What are the procurement best practices you suggest to deal with the perceived complexities in the pharmaceutical industry against the backdrop of the outbreak of coronavirus?

Tridib: One of the immediate complexities that I see will trouble the players in the pharmaceutical industry is a disruptive supply chain. Ineffective sourcing will worsen its impact on the growth prospects. However, while sourcing from countries like China that are the manufacturing hubs for bulk drug raw materials, it is imperative for buyers to involve the suppliers in their inventory planning. It is a recommended procurement best practice for buyers to seek suppliers’ assistance in demand forecasting to decide the quantity to be pre-ordered and preserved which will play an important role in addressing supply shortage as well as control storage costs.

Procuring in this global pharmaceutical industry will not be a cakewalk. Request more information from SpendEdge’s experts that state real-time insights into the sourcing strategies and procurement best practices will help buyers devise sustainable and futuristic procurement strategies befitting the pharmaceutical industry dynamics.

Get state real-time insights into the sourcing strategies that will help to devise sustainable and futuristic procurement strategies befitting the pharmaceutical industry dynamics

Bulk drug raw materials procured from countries that have experienced the outbreak of coronavirus have high chances of contamination. To detect the same at an early stage, it is imperative for buyers to incorporate GDP throughout the supply chain. This enables traceability and assurance in the quality of products.

It is worthwhile to mention that SpendEdge’s recently done procurement intelligence reports on a range of products and services in the pharmaceutical sector have identified the main procurement pain points and other risk factors faced in the global pharmaceutical industry and enlisted the procurement best practices to be adopted in this industry.

Procurement Best Practices

Suggested European Procurement Best Practices for Businesses by SpendEdge

The majority of government and private entities now consider procurement as a fundamental enabler of business strategy. It has become a preferred method for achieving sustainable cost reduction and a source of opportunity for process simplification. Based on our experience in working with clients to improve their procurement outcomes, we have outlined key strategies that are imperative for your procurement function right now. These strategies when implemented properly, will significantly lower costs, improve process efficiency, deliver competitive advantage by eliminating wastage in the cycle of source and supply when purchasing goods and services.

Want to know how you can lower the cost of processes by implementing European procurement best practices? Request a free proposal and we will get back to you in 48 hours with our customized solutions. 

European procurement best practices #1: Centralize the procurement function

The decision to centralize the procurement function may not be an easy transition, but it can be vital for your organization to ensure the implementation of effective purchasing practices. Companies opting for centralized procurement operation gain better control of purchasing functions and promote a more effective buying process. They spend less time on ad hoc purchasing and enjoy more discounts from vendors due to greater volume purchasing. A centralized location for all purchasing records also improves visibility into purchasing decisions, facilitates better inventory management, and prevents disruptions, which reflects on the company’s performance.

European procurement best practices #2: Share compliance data 

This is one of the European procurement best practices that companies can implement. Sharing the compliance data with relevant business leaders not only allows companies to improve transparency but it can improve performance as well. Systematic and public reporting of compliance data takes advantage of image-building and competition amongst managers and departments. It drives proactive decision-making and opens up new avenues for collaboration.

Inability to gain specific insights can negatively impact the decision-making process for businesses

Contact us to know more about European and indirect procurement best practices.  

European procurement best practices #3: Realize hard savings 

Procurement cost savings is the main KPI for most procurement departments. Organizations use numerous ways to track these savings. However, focusing solely on procurement cost savings is not a good strategy in the long-term. The changing market dynamics have compelled CPOs to now realize savings based on transaction values and actual consumption. They are looking at achieving hard savings based on reduction in the unit cost of operations and production.

Are you finding it difficult to realize hard savings based on transaction values and actual consumption? Request free access to our platform and know European procurement best practices benchmarks to improve process efficiencies.

European procurement best practices #4: Invest in technology 

Most of the CPOs have had mixed views regarding procurement technology infrastructures. But they have realized that old-age solutions are not the best of the breed. They need to automate supply processes and bring significant bottom-line benefits by allowing greater productivity to increase efficiencies in business transactions. Use of technology is one of the European procurement best practices used by benchmarking firms to measure the efficiency of procurement organizations.

To gain detailed insights regarding European procurement best practices, request for more information from our analysts.

US Metal Enclosures Market

US Metal Enclosures Market: Are Your Spend Management Goals Attuned to the Current Market Trends?

In the backdrop of a tumultuous US healthcare industry, the medical devices sector in the US is raging towards a double-digit consumer spend mark. Such a rapid increase in the spend is paving the way for the advent and sustenance of markets such as the US metal enclosures market, which is now making its mark in the business landscape in the US. Currently, the US metal enclosures market is set to achieve a spend growth rate of more than 4%. However, a key question that comes to mind is whether this spend growth rate translates into a favorable procurement scenario for buyers looking to procure such products? Inferences drawn from SpendEdge’s recent US metal enclosures spend analysis clearly says NO!

# US Metal Enclosures Spend Analysis Insights 1

Buyers in the US metal enclosures market are one of the casualties of the ongoing US-China trade war. This statement is reinstated by the fact that the severe supply crunch of steel owing to the increase in tariffs that are imposed on Chinese steel/iron ore imports will have an inflationary impact on the supplier’s production cost of metal enclosures. The US metal enclosures spend analysis hints at an incremental procurement cost incurred by buyers as suppliers are compensating for their recurring production expenditure by increasing the price of the product.

Gain complimentary access to our procurement platform to know more about the procurement best practices and key challenges facing buyers in the heavy metals category. 

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Know how real-time insights into price dynamism can help you in devising effective and informed procurement strategies.

# US Metal Enclosures Spend Analysis Insights 2 

Lack of spend visibility, owing to an uncategorized supply base, is a perennial source of procurement challenge for companies operating in the US metal enclosures market. A majority of buyers are failing to maintain proper co-ordination with the regional supplier base as well as with suppliers from LCCs. A lion’s share of the increasing procurement spend, as predicted by the US metal enclosures spend analysis, can be attributed to this factor.

Discover how real-time US market spend analysis insights can help you to identify newer and better areas to optimize your procurement spend, request more information.

How to Achieve Spend Management Goals in the US Metal Enclosures Market?

Strategy 1: Strategic selection of suppliers will play a prominent role in helping buyers optimize their recurring procurement spend. It is also recommended that buyers partner with distributors who procure metal enclosures sourced from suppliers based in LCCs in APAC, such as South Korea and India. Distributors offer customization services by engaging manufacturers that are located in low-cost manufacturing countries. This allows buyers to reduce their overall procurement expenditure in the US metal enclosures market. However, buyers must ensure that the goods availability and shipment time align with their delivery requirements.

Strategy 2: By leveraging centralized supplier management systems, buyers can attain better communication among their supplier segments. In the long term, it fosters better spend visibility, enabling the buyers to identify areas to optimize their recurring spend in the US metal enclosures market. The adoption of supplier integration technologies will further help buyers to achieve significant cost savings associated with the management of inventories.

Download the free sample copy of the US metal enclosures spend analysis below and know more about our report’s scope and key geographies under focus.

procurement best practices

Procurement Best Practices that Companies Should Be Employing in 2019

Procurement Best Practices for Companies

Earlier, procurement had a simple mandate of keeping the cost low. But nowadays, procurement has become much more complex and requires a set of procurement best practices that can help companies to gain visibility into the operations through accurate data. Such practices improve procurement outcomes apart from identifying sustainable cost reduction opportunities and help companies to gain competitive advantage.  Therefore, we have defined procurement best practices benchmarks set by leading organizations to increase productivity and profitability.

Procurement Best Practices #1: Online procurement

Merely optimizing the website doesn’t improve the organization’s procurement process. Having a digital procurement strategy that incorporates data from different sources such as sensors in warehouses, mobile technology and addresses the consumer needs is must. Online procurement creates a predictive approach and enables organizations to provide products and services according to demands, reducing waste and increasing efficiency of organizations.

Procurement Best Practices #2: Centralize supply management

A centralized supply management system utilizes information gained from various departments and makes purchasing and sourcing decisions based on that information. It mitigates the risks and threats associated with indirect spend and minimizes maverick spend occurring due to unapproved suppliers. Implementing such practices results in substantial returns for companies.

Procurement Best Practices #3: Develop a procurement spend map

Most organizations do not have a proper spend map and rely on poor quality information to understand spend at an organizational level. A spend map provides the basis for identifying opportunities and risks and helps companies to improve supplier value apart from implementing cost reduction initiatives. Mapping spend provides valuable insights into the total spend the company, improves transaction processes and monitors the administrative cost.

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Procurement Best Practices that Companies Should Be Employing in 2019

How Following Procurement Best Practices Helped an Automotive Company to Reduce Sourcing Costs by 11% – A SpendEdge’s Success Story

The Business Challenge

The client, a well-established automobile manufacturing company in the US, was facing a number of challenges due to drastic shifts in the global supply chain. Since they were looking to expand their business to new and emerging markets, they wanted more information on the procurement best practices. Developing a suitable business model was a key challenge for the automotive company since these markets were posing challenges related to global trade and finished vehicles logistics fulfillment. This was increasing the need to reduce production costs and excess spend. Their primary aim was to outperform competitors, both in home and emerging markets, by reducing operational costs, increasing efficiency, and following the best practices to meet the regulations of the emerging markets.

Want to know how following procurement best practices can help your business reduce excess spend? Get in touch with our experts now!

Solutions Offered

To address the needs of the client, the experts at SpendEdge identified the procurement best practices for the target region and tailored a plan that would allow them to procure raw materials at the lowest possible price. The analysts at SpendEdge followed a scrupulous research methodology that comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures.

In a span of eight weeks, the automotive manufacturing company was able to successfully lower their sourcing and procurement costs by 11%. Our expertise in analyzing the procurement trends and regulations of international supplier markets further helped the automotive company to improve their relationship with key suppliers and minimize procurement risks. By following the suggested procurement best practices, they were finally able to maintain a healthy relationship with suppliers. The engagement also emphasized on the importance of selecting the right supplier, especially when it comes to ensuring the highest quality, flexibility, and cost efficiency of their supplier networks.

Key Findings

By adhering to the suggested procurement best practices, the client was able to enhance their procurement system and synchronize supply management with demand across business processes. They were also able to evolve from a fixed-cost-driven supply network to a variable-cost-driven value network and streamline information flow from the department level to a global scale. This reduced costs for the automotive company by 11.2%.

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What are the Basic Principles of Procurement Best Practices?

Procurement has become a fundamental enabler of business strategy and a preferred method for achieving sustainable cost reduction for many business entities. It is considered to be the most viable option for process simplification with technology enablement. Therefore, businesses should adopt procurement best practices to realize the full potential of their sourcing process.

While following procurement best practices, the team should strike the right balance between short-term savings opportunities and longer-term transformational opportunities. This provides good traction, better substantial benefits, and supply management for companies. Here are a few procurement best practices that companies should follow:

  • Devise a spend map
  • Engage with a wider organization to reduce costs
  • Ensure supply management and contract management
  • Connect commercial and technical capabilities

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Procurement Cycle Challenges and Ways to Overcome Them

Modern companies are operating in increasingly intense scrutiny driven by technology, customer reviews, and expectations for service improvements. Their main objectives are to minimize cost by improving the procurement cycle, manage risks, maintain vendor relationships, and streamline processes.

However, reducing costs still remains the top priority for businesses. Procurement professionals need to think before making any purchase. It might sound an easy task, but only experts will understand the difficulty involved in selecting and creating purchase orders for every request that comes to their desk. This is where unnecessary expenses start. Therefore, it is important for companies to profile the challenges faced during the management of the procurement cycle that can lead to the failure of the project.

Key procurement cycle challenges

#1 Inaccurate planning

Mostly, the decisions made while planning for purchase and delivery are crucial as they affect the overall schedule and total cost of the operations. Improper planning in the procurement process may result in material shortages or surpluses, cash flow problem, and unnecessary delays. Therefore, companies should follow procurement best practices and prototype planning models to facilitate pre-tender and procurement processes and improve their procurement cycle.

Want to avoid unnecessary material shortages and cash flow problems? Get in touch with our experts and know how they can ensure best in class procurement cycle for your organization.

#2 Reducing costs

The process begins with the proposal of the annual budget. However, the reduction of costs majorly depends upon effective supply chain management. Even small reductions in material costs in a company’s total operating budget can impact the organization positively by increasing its profit margins. Therefore, professionals managing the procurement cycle must adopt procurement best practices and negotiate effectively to obtain materials of the highest quality at the lowest cost.

#3 Legal and political environment

Legal environment refers to a broad legal framework that governs all business activities including research and development apart from procurement rules and regulations. It involves various aspects such as manufacturing, finance, marketing, and contracts of the procurement management system. Similarly, the political environment includes trade associations, professional associations, and business firms or companies that are engaged in the procurement process.  Their varied interests affect the overall budget of the procurement management system and disturb the complete procurement cycle. Such an environment requires companies to include detailed provisions in their contracts and develop a strong coalition among policy makers, bureaucrats, and interest groups to get their procurement process in place.

Interested in reducing costs for your organization?

Request a free proposal and know how improving procurement cycle can help you cut costs.

#4 Maintaining vendor relationships

Vendor relationship management is an intellectual approach to manage relationships with vendors who supply goods and services to the organization. The methodologies of vendors pre-qualification in the procurement cycle vary from company to company but the relationships strengthen when procurement professionals follow mutually agreed upon standards to assess the performance. 

How to manage your procurement cycle?

Our team of procurement experts at SpendEdge realizes that ensuring efficiency in the procurement process has a positive chain reaction within the entire organization. Therefore, we are highlighting four steps that are critical to step-up your procurement cycle:

  • Incorporate a contract management system
  • Maintain a good supplier relationship
  • Automate processes
  • Employee training and development

Making changes in the procurement cycle may seem a daunting task at first but it is extremely beneficial in the long run. Request a free demo and know how our experts can help you improve the procurement cycle.

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Procurement Best Practices That Will Help Businesses Stay Competitive In 2019

Doing what you’ve always done is no longer acceptable in business. There are always a set of best practices that can be employed to maintain business excellence and improve productivity. The same is applicable for a companies’ procurement process as well. Companies need to follow procurement best practices to increase their revenues by being cost-effective.

Many government and commercial organizations have started recognizing procurement as a fundamental enabler of business strategy. It is a viable source of opportunity for process simplification and also provides detailed insights into operations through data and information. Therefore, organizations should focus on enforcing procurement best practices benchmarks that can enable them to realize the full potential that procurement can deliver.

At SpendEdge, we understand the impact that a procurement process can have on business. Therefore, in this blog, we have listed out procurement best practices that will ensure supply chain excellence for companies.

Want to improve the efficiency and effectiveness of the procurement process? Get in touch with our experts and know how adopting procurement best practices can help your organization.

Procurement best practices adopted by companies

E-Procurement

Digital procurement strategy is not just limited to creating an online shopping cart or optimizing the website. It incorporates data from numerous sources such as sensors in warehouses and social media and enables companies to create an approach that can address the needs of the audience. Therefore, businesses should adopt digital procurement solutions and strategies and try to reduce waste and unneeded inventory costs. This is one of the procurement best practices that companies can follow  and increase their process efficiencies.

Centralized supply management

A centralized supply management system enables companies to make purchasing and sourcing decisions based on the information and data received from the various departments and experts in an organization. This helps companies to mitigate risks associated with unmanaged direct spend and is considered as one of the procurement best practices by experts. Moreover, such procurement practices ensure the prevention of unnecessary spending with unapproved suppliers.

Do you think that procurement transformations involve complex processes?

Request a free proposal and know how our portfolio of procurement services can help you implement procurement best practices.

Improve total cost of ownership

Strategic sourcing empowers companies to not just examine the purchase price, but also examine the total cost of owning or consuming a product or service. Even best-in-class companies have stopped selecting suppliers merely on the basis of price. They analyze the complete procurement process and then implement procurement best practices that can reduce the total cost of ownership.

Strengthen supplier relationship

Companies today are focusing on “supplier relationship management.” They are adopting various alliance management programs that can provide them a mechanism to strengthen their relationship with suppliers. They are even creating platforms for problem resolution and developing continuous improvement goals to achieve value for both parties.

Optimize inventory

Optimizing inventory becomes extremely crucial for companies during the economic downturn. Putting inventory on the radar help financial officers to find new ways to improve the bottom line and reduce working capital. Therefore, supply chain organizations are advised to review their inventory quantities and adopt procurement best practices.

Want to know how your organization can utilize procurement best practices to drive optimal client outcomes? Request a free demo today!

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cyber security

Spend Management Solutions: A Holistic Guide for Procurement Companies

“Only a truly integrated spend management solution can fetch value for your company and result in intelligent procurement.”

Limited supply chain visibility, poor supplier transparency, new regulations, spend creep, contract management, risk mitigation, and the growing need to do “more with less” are some of the key challenges that procurement companies face. Spend creep has become one of the biggest challenges for companies today as companies are spending extensively to stay ahead of the competitors.

Unnecessary spend happens when businesses buy additional items, products or services, from suppliers that aren’t needed. Also, it happens because of misguided bid management process, weaker supply chain management systems, and lack of auditing and spend analysis. Therefore, procurement professionals need to have the right spend management solutions to tackle these challenges efficiently and effectively.

At SpendEdge, we understand the impact that spend management solutions can have on your business. And to help companies identify latent opportunities to devise strategic plans to minimize their expenditure in every category, our team of experts have provided a comprehensive guide to spend management.

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3 Procurement Trends That Can Change the Dynamics of the Mining Industry in 2019

Today commodities are moving back broadly into the global market balance but the challenges for the mining industry are far from over. In a world of more complex ore bodies, deeper mines, social and geopolitical risks, growing energy costs, resource nationalism and lack of infrastructure, global mining industry remains under exceptional pressure to control costs, boost efficiency and improve safety performance.

Rising cost is a cause of concern for the mining industry as the strategies of mining companies depend heavily on the current state of the market. Also, the rise in cost is resulting in the declining quality of ore and limited accessibility of new deposits. This will squeeze the supply in the years to come, potentially driving a commodity-price rebound as the global demand continues to rise. So, the companies need to analyze the new procurement trends in the mining industry that can offer exceptional opportunities for efficiency gains and can help in controlling costs as well.

At SpendEdge, we understand the impact that rapidly changing procurement trends can have on your mining business. And to help companies in the global mining industry to reposition their portfolios and excel in the competitive landscape, our team of experts has highlighted three procurement treContact USnds that have the potential to change the complete dynamics of the mining industry in 2019.

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