Procurement Teams - Allow your tender process to embrace the long-term
For the purposes of this post, supply chain refers to any element of supply chain activity: eg sourcing, asset procurement, logistics, warehousing, distribution etc.
"How often is supply chain activity actually a commodity?"
Some companies are (un)fortunate enough to have procurement divisions which preside over the supply chain tender process. The view is that procurement teams know best when it comes to securing a deal. This is most likely to be true when buying a commodity, but how often is supply chain activity actually a commodity?
Supply Chains are unique
At Slater Austin, we argue that every company's supply chain is unique. After all, most company supply chains will be made up of many factors, which will be different to those of their competitors, and arguably even more different to those of other market sectors:
Suppliers - geography, quality, terms and price
In-house supply chain - production and supply chain locations, capacity, capability, systems and processes, maturity
In-house company dynamics - free cash, working capital constraints, business strategy, culture, skills
Customers - geography, value proposition
Technological, environmental and socio-political factors also influence the make-up of the supply chain.
Ensure your Partners add Value
“...your best supply chain set-up will undoubtedly come from allowing all your partners to assess how to improve quality, service, speed, agility and cost.”
Therefore, when it comes to procurement of supply chain assets or services, allow those tendering for the business (including incumbents) to understand your supply chain in more detail and adapt their response to your tender accordingly.
Over time, your best supply chain set-up will undoubtedly come from allowing all your partners to assess how to improve quality, service, speed, agility and cost. That should be one of the main reasons you select them in the first place… unless of course commodity procurement will suffice. In that case, you can always dust off the tender you put together three years ago.
Slater Austin can help you evaluate your procurement processes, and how effective they are for long-term value. Our experts offer free supply chain reviews, which can also cover partner effectiveness. Make today the day you allow a review of your supply chain. A different perspective might just be a hugely rewarding challenge. Click here to obtain a free review.