Large organisations are beginning to embrace procurement transformation as valuable method of adding value to their financial and operational performance. This is through reducing costs and risks within their supply chain and improving working capital and cashflow.
The modern business environment is an ever moving, volatile environment with increasing pressures on businesses to be agile and able to quickly adapt to changing demands from customers and the wider market forces.
The role of procurement in the business environment is evolving as a high pace, where teams have previously as a high pace, where teams have previously been focused on cost reduction, there has been a shift to now become more strategic in approach. Procurement is now becoming a fundamental part of a business’s sustainable growth strategy. To meet these new expectations, procurement functions must transform their legacy processes and structures to bring them in line with the business’s direction.
When considering business transformation, the greatest challenge is the implementation. Businesses often begin on a transformation path which requires knowledge and expertise which falls outside of the available internal resource. Without external support transformation programmes commonly fail to realise the projected benefits in a real world scenario.
When considering undertaking any form of procurement and business transformation it is invaluable to have expert support and guidance throughout the whole process. SCB Procurement Solutions have developed extensive expertise helping SME’s in many different sectors and industries transform their procurement and supply chain function.
SCB Procurement Solutions can support your transformation at all stages of the process from building the business case, through developing the strategy for transformation and policy creation, to implementation and review of the success of the programme.
It can also be beneficial in the longer term to upskill, empower and support your internal resource to manage the transformation programme within the procurement function. This approach can assist in gaining employee buy-in to the process as they feel part of the change instead of having change thrust upon them. SCB Procurement Solutions encourage employee engagement and can provide initial training and ongoing support for staff during the process including supporting or leading key supplier negotiations and contract development.
Transformation programmes can be very complex and difficult to visualise and implement, engaging with an expert source to logically design and manage the transformation can greatly improve the changes of realising the full benefits of the process.
It is fundamentally important following any transformation to understand the realised benefits following a transformation in relation to those initially proposed. Whether the programme over or under achieved, conducting a scrutiny of the successes and failures provides key lessons to implement going forward.
Understanding the product, its construction and make up, working with the current supply base and new opportunities with a view to reducing cost, re-engineering cost from the product or utilising new technologies to create a better more effective product.
Creating a map showing the full supply chain process for the business’s product range including all supply chain transport and production processes, enabling the business to capitalise on opportunities for cost reduction.
Creation of robust processes to optimise the flow of products through the business. Assessing current process structure and modifying where needed and introducing new processes to create a linked intelligent supply chain.
Assessing all elements of the supply chain both internal and external and streamlining processes and operations to remove non-value add actions.
In the modern changing business environment, it is important for SMEs to be able to quickly adapt to better service their customer base capitalising on their core strengths. There has been a fundamental shift in recent years towards adding value to your customers instead of just making profit from them.
Profit and cashflow are at the heart of any business action or decision whether SME or larger. Transforming your procurement function has a direct impact on both cashflow and profit through building stronger relationships with suppliers, reducing costs through value engineering and negotiation. Focusing on core internal functions highlights wasteful processes or processes with have no added value to the business, stripping these out and working towards process efficiency provide benefits throughout your business.
Transforming procurement within your business from an operational scope to a more strategically focused function helps to build confidence throughout your wider supply chain. Large organisations which actively look to trade with SMEs place significant emphasis on the level of strategic thinking within the purchasing team of both potential customers and suppliers. Risk is a large factor when trading with SMEs, showing a ‘joined up’ approach helps to highlight and manage risk which in turn promotes confidence.
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