Supply chains are similar to humans—imperfect. Their successes within business plans are a product of accurately forecasting how to survive crises and minimize damage in high-risk scenarios. Balance is the key to surviving most situations. In a supply chain, the accord between supply chain efficiency and risk mitigation can be difficult to achieve.
Wouldn’t it be nice to know the future for certain? There are few fail-proof ways to see shifts in the business landscape before they occur, but there are ways to ensure your goals stay on the correct path regardless of what direction the future takes. Procurement departments, for instance, have objectives that require analysis of factors beyond historic trends—considerations like supply market volatility, supply chain disruption, regulatory changes, and a whole slew of other unpredictable situations. Unless corporations start adding fortune tellers to the payroll, successful procurement groups will continue to optimize their function from the insight gained through predictive analytics.
“The whole is more than the sum of its parts.” – Aristotle
We believe we have good data… but is it complete?
I’ve had many conversations with Travel and Procurement managers about how much addressable travel spend the company has. This is a critical number as it validates a company’s volume, and dictates the sourcing strategy and execution. In most cases, I’m immediately presented with the Travel Management Company’s report of phone and online bookings. While this data is helpful and telling, there is an average of another 55% of travel spend that is not being accounted for in those data sources*.
It’s no secret that when a company is looking to solicit bids for a project, opening up a Request for Proposal (RFP) offers a simplified, standardized, and centralized means to compare diverse bidders. A well-crafted RFP separates the best-fit from the less qualified. A poorly executed request, on the other hand, will shut out even the most qualified providers before they have a chance to shine.
I recently read an op-ed piece on the Sourcing Journal by Sigi Osagie that stood apart from other procurement perspectives I’ve come across recently. It observed that soft issues — issues based upon the fundamental mindset of employees — are holding businesses back from realizing their full potential. Although procurement practitioners often have a desire to better their effectiveness, they do not always recognize that these soft issues are the answer to their desire for increased influence and prominence. So how can procurement improve in line with existing performance metrics without loosing perspective of the larger organizational perspective?