procurement, sourcing, supplier relationship management

In their list of common nightmare scenarios to try to prepare for, few procurement leaders could have predicted the business disruptions of 2020. Global pandemic and lockdowns probably didn’t make it onto their bingo cards of potential disruptions that traditionally include rising customer expectations, volatile markets, fluctuating raw material prices and geopolitical considerations, among others.

Those procurement leaders with forward-thinking supplier management strategies that utilize digital technology fared better than others, according to QAD’s Brent Dawkins in his article, “3 Ways Procurement Benefits from Digital Transformation” in Manufacturing.net.

Brent discusses how now is the time for enterprises to redouble their efforts to upgrade their operations with digital technologies and innovations that improve sourcing and supplier management. For too many enterprises, obstacles to digital transformation persist.

Obstacles to Digital Transformation

Planning for digital transformation and actually implementing it are two entirely different things. Multiple barriers prevent executives from achieving a fully digitally transformed enterprise, including:

  • Lack of vision at the top
  • Unaligned executive priorities   
  • Too many technology choices (AI, AR, blockchain, etc.)
  • Delayed results from a “digital readiness assessment”
  • Difficulties or delays in changing the operating model
  • Organizational and/or geographical silos 
  • Legacy staff resistance to change
  • Shortage of digital talent needed to scale 
  • Insufficient budget

Add to these barriers, decentralized processes and manually intensive procedures to identify and select suppliers and monitor supplier activity – optimal efficiency becomes a far-off goal.

The Role of Adaptive ERP

QAD Adaptive ERP addresses issues procurement teams face involving supply and sourcing decisions, supplier quality, and the means to improve integrated supplier activities. By integrating and connecting processes with suppliers, enterprises gain real-time data and insight into their supply base, better response rates to disruptions, and cost and quality control.

Finding the right ERP that creates strong supplier relationships is a must-have. Digital transformation for procurement processes with an adaptive ERP promotes modular supplier relationship management and eases the challenges of supplier selection and risk. Three steps to achieve improved sourcing and procurement via ERP are:   

Eliminate manually intensive sourcing Procurement professionals spend too many valuable hours using manual processes to identify and select preferred suppliers. Spreadsheets, emails and guesswork complicate the sourcing process. When automated, sourcing can yield more efficient and accurate supplier selection at the best cost – procurement teams gain the ability to assess and compare suppliers and their offers by cost, quality, capacity and services. Enterprises are more competitive with a more standardized sourcing process that also includes supplier monitoring, governance and development.

Boost procurement analytics – Procurement teams need more than historical data of spend analysis to gain future predictions. They need prescriptive analytics, real-time data and artificial intelligence to fully understand spend behavior patterns, forecast future budgets and anticipate supply requirements.

Evaluate the supply base – The review and analysis of the supply base is an ongoing requirement for successful procurement teams. Repeated risk assessments and evaluations of supplier relationships yield a more integrated and efficient supply structure.

Where to Start

Enterprises looking to improve their procurement and supplier organization activities should consider flexible supplier relationship management solutions for the best results. QAD Adaptive ERP is an agile and effective cloud ERP solution, providing the analytics and automation to address supplier and procurement challenges. Integrated supplier management guides enterprises to plan, execute and adapt to business disruptions. Find where your enterprise stands on the adaptability scale using QAD’s Integrated Supplier Management diagnostic tool.

LEAVE A REPLY