Putting Your Best Foot Forward in Procurement Management
Change is the only constant – this expression best describes the ever-dynamic state of the Global Procurement Market. The dynamism of the market makes it imperative for businesses to continually reimagine and reinvent their products and service offerings in order to keep up with the latest trends. From Finance to procurement; and from Resource Management to Logistics – all business sectors are constantly adapting to the latest trends. Automation of procurement management is definitely on the cards for better operational efficiency and cost-cutting. What are the other procurement best practices? What are the key trends influencing procurement management and supply chain management in 2022? Read on to know.
Changing Scenario in Procurement Management
Procurement management is a business function that has undergone several changes over the past decade owing to changing customer needs, globalization, technological advancements, and the relevance of sustainability.
Here is what has changed over the past decade …
Sourcing has become the core of the procurement strategy. Traditional sourcing values like the choice of suppliers based on costs are obsolete. Instead, quality, sustainability, eco-friendliness, and innovation are the determining factors for sourcing.
2. Total Cost Ownership (TCO) to Total Value Ownership (TVO)
The cost was the sole parameter for evaluating a supplier. Now, societal, environmental, and financial aspects also are considered while evaluating a supplier. This gives a more holistic perspective to ownership.
3. Request for Solution
RFI, RFP, or RFQ were familiar terminologies in procurement management. Now it is a request for solution (RFS), which requests an innovative proposal rather than narrowing it down to a list of specifications.
Traditional paper trails in procurement management are being replaced by a digital procurement strategy. Procurement teams are looking to optimize their strategies and synchronize procurement solutions.
Those were some of the changes that have changed the face of procurement management over the past decade.