In the current competitive scenario, purchasing and supply chain management is a reverse of prior practices where manufacturers supplied product to customers. Now customers tell suppliers how and when they want their inventory delivered. The objective behind purchasing and supply chain management is to remove inefficiencies, excess costs and excess inventories from the supply pipeline which extends from the customer back through suppliers.
By effective purchasing and supply chain management, it is hoped that inventories, caused by uncertainties and slow response, will be significantly eliminated. However, it is increasing challenges for businesses. The intersection of many disciplines, such as marketing, procurement, management, operations research, and logistics is making it difficult for businesses to analyze the impact of purchasing and supply chain management.
At SpendEdge, we understand the impact that purchasing and supply chain management can have on your business. Therefore, in this blog, we have compiled a list of purchasing and supply chain management challenges and the possible ways to overcome them.
Purchasing and supply chain management can provide tremendous competitive and business advantages. Request a free demo and know how our experts can help you leverage the same.
Purchasing and supply chain management challenges
As navigating global markets is becoming challenging day by day, understanding and following the compliance requirements of various regional, national, and international markets is getting invariably complex. No matter what your company offers in terms of products and services, there are always sets of rules and regulations that your purchasing and supply management must comply with.
This includes various safety laws, environmental protection laws, standards and quality specifications that your product should be compliant with.
Your team, from managers and engineers to people managing your inventory and logistics, need to be aware of the relevant rules and regulations across the complete purchasing and supply chain management process.
Solution: Thorough understanding of supply partners and the risks associated with them in a timely and cost-effective manner are the basic steps towards effective purchasing and supply chain management. SpendEdge can help you in identifying the need and planning the purchase by critically evaluating the procurement process while complying with regulatory requirements.
Rapidly evolving markets
Consumer behavior is usually affected by cultural social, personal, and psychological factors that rapidly evolve due to changing market demands. This fast-changing market brings purchasing and supply chain management challenges and increases pressure on your procurement teams to keep up with the latest trends. You need to innovate new products while keeping the total manufacturing costs low as the trends don’t last long. Additionally, you constantly need to update the features of your products to sustain the competition. This increases the complexity of purchasing and supply chain management.
Solution: The accurate real-time insights pertaining to supply markets will help you make effective planning decisions and tackle challenges arising in the purchasing and supply chain management created by fast-changing markets.
Unlike earlier, supply chains are no longer confined to specific regions. The production of products can involve dozens of countries and hundreds of parts vendors and facilities. Even something as humble as pen or pencil might involve quite challenging logistics. This requires an efficient purchasing and supply chain management and detailed analysis of market size and entry barriers.
Solution: Extensive understanding of these global trade lines, and the ways they impact your company’s products and roadmap will allow you to optimize supply chain purchasing process and utilize emerging opportunities while expanding to a new market.
While managing your supply chain is crucial, selecting the right supply chain partners and the right suppliers is important for purchasing and supply management. They ensure that you are able to gauge market opportunities and achieve your organizational goals. Moreover, with the right set of suppliers, you can follow the necessary standards, and pass the quality controls that your business demands.
Solution: The detailed study on every attribute from the supplier’s financial stability to the level of short and long-term liabilities will consolidate suppliers and reduce the risks associated with currency and interest rates. SpendEdge can also help you to reduce purchasing and supplier management costs and increase the efficiency of your procurement process.