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What does the coffee market teach us about procurement's future?

RiskSupplier relationship managementInnovationprocurement technologyNew TechnologyRisk MitigationTechnology Implementation+-
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Procurement has gone digital and there’s no turning back. Our digital way of life is reinventing how business is done, from operational processes to customer engagement. Look as far as the local coffee shop. There, you’ll see a bevy of smartphones and tablets – the realisation of workers’ desire for flexible office space.

 

Mobile access to big data generated from the Internet of Things and Industry 4.0 allows decision-makers to get the information they need anytime, anywhere. Advanced analytics is accelerating decision-making without sacrificing accuracy or performance quality. Business networks are bringing a level of collaboration that is highly efficient, productive and value generating – even if team members are scattered around the world.

 

Procurement professionals are the unsung heroes of adapting to such changes, operating under the mantra of costs and savings. But the most innovative ones are using self-service portals, mobile apps, cloud solutions and social collaboration tools to streamline processes and manage spend. By using technology to simplify complex purchasing experiences, procurement executives are empowering buyers to comply with internal policies and best practices while keeping costs down and raising the strategic value of each purchase.

 

Procurement organisations are tasked with delivering buying experiences and supply chains that are fast, simple, sustainable and low risk. But it boils down to adding value to services and goods for customers – this is the future of procurement.

 

As businesses continue to transform purchasing processes and optimise supplier networks, procurement has an opportunity to move from a back-office cost centre to a strategic boardroom partner and to fuel innovation that affects both the top and bottom lines. Take the coffee-pods market as an example. To deliver the perfect coffee experience, companies are simplifying the buying process and focusing all businessrelated activities on generating value for the enterprise and the customer. One business now handles the entire buying cycle – from pricing and quotes to orders – through a cloudbased application. Not only does this digital strategy make it easier and more intuitive for customers to buy coffee (the application can draw on purchasing data to replicate previous orders without having to re-enter them and make recommendations for new items, for instance) but it also allows the retailer to tap into market data and customer preferences to reinvent its business model. This enables it to increase sales productivity, expand consumer adoption and enhance its understanding of the buyer engagement cycle.


Blending data analytics with decision support allows brands to gain greater visibility and insight from their supply chain and operations, creating value on several fronts.

 

  • Supplier innovation: by analysing suppliers and their capabilities more critically, procurement helps accelerate the introduction of new products and find new ways to drive down material costs.
  • Risk management: by analysing spend and supplier data across categories down to the component level, procurement can uncover emerging risks that may lead to supply shortages and production disruptions, and prevent such problems from occurring.
  • Secure and sustainable supply chains: by mapping suppliers against order schedules, buyers can identify the right mix to ensure all materials are delivered on time, to a high quality and in the right quantity.

Procurement has changed greatly in the past decade. The ultimate winners will embrace the digital transformation that is taking hold, reimagine their roles and make the most of the technology, data and insights that are now at their fingertips.

 

Dr Marcell Vollmer is COO at SAP Ariba

 

This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.

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