The old model of purchasing agents talking only to salespeople, especially for key customers, is thrown out the window, he says. The reason? Few salespeople have all the information customers need. “For instance, a customer that says, ‘our line shuts down if we don’t have this material by the 25th; what can you do?’ likely needs to talk with supply chain, not sales,” Duty adds. This probably isn’t a sustainable model, given the other responsibilities supply chain executive have. However, it may drive development of technology that allows customer service or sales reps to offer the needed information, he says.
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Like any good intermediary, leading procurement teams don’t just take insights and value from one point and move them to another. When insights are gathered from product, sales, finance, and supply chain teams, procurement teams add their own insights to the mix, providing value-adding context. Often, it’s this context that ties all those diverse insights together and helps translate them into clear actions that can meet the needs of multiple teams at once. The best way to illustrate this is by walking through a quick example. The situation starts with four siloed insights, held within individual departments, each lacking the wider context needed to bring them to the attention of the business at large: In sales , teams have noticed an increase in customer objections based on the sustainability of materials used in product packaging. In the supply chain , logistics operators are concerned about emerging restrictions that may limit the use of certain non-sustainable packaging. In finance , a gradual decline in revenue can be seen across long-standing product lines, indicating the possible need for a refresh. In product development , teams are actively seeking opportunities to incorporate new materials into existing products, to reduce waste. Each of those departments is capable of actioning those points on their own. But, through close collaboration with them all, the procurement team is uniquely positioned to see the clear line that runs between. Once you add the procurement team’s insight into the mix—that its category intelligence efforts have identified an opportunity to source a new kind of recyclable packaging at a low cost—five distinct trends can be seamlessly translated into a single strategic business action. The word intermediary doesn’t scream strategic value. But by using their position at the nexus of multiple lines of business, procurement teams have become exactly that—a highly relevant intermediary, capable of delivering strong strategic value. Nowmore than ever, it’s crucial that the procurement department is given a seat at the strategic table, so that its aggregated and contextualised insights can be translated into strategic product, pricing, and promotion decisions that deliver measurable value. – Omer Abdullah, co-founder, The Smart Cube
Take steps toward resilience. While resilience has proven to be critical, it also doesn’t require a binary yes/no approach, Raman says. Instead, it’s actions on spectrum. For instance, a company might decide to thoroughly qualify every single supplier, or only those whose business exceeds a certain level. No matter a company’s budget, they can identify actions that boost resilience without breaking the budget.
Look at the bright side. The challenges of the past few years have exacted a toll on many people and organizations. Yet, there’s a bright side for many supply chain professionals: The critical role of supply chain innovation and strategic execution has been thrust into the spotlight. While the pandemic revealed serious gaps and vulnerabilities, Skurtovich says it also “highlighted many strengths and differentiating strategies that enabled some organizations to not just survive, but thrive.” n
128 Inbound Logistics • January 2022
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