The strategic sourcing process is key for all companies, as it allows them to obtain better negotiations with suppliers, increase savings opportunities, reduce costs and reduce the materialization of risks inherent to the supply chain.

However,  in the day-to-day life of the Purchasing areas, some practices can arise that can affect their optimal performance . In this article we tell you three common behaviors and how to avoid them to continue promoting the strategic transformation of Supply departments:

1.Do not invest in Supply areas

Senior managers of companies often consider policies that include a high percentage of savings to boost the organizations’ profits.

 Many purchasing directors are committed to this purpose and in order to set an example for other areas of the companies, they begin to reduce their own operating costs. This often leads to an increase in the workload of the Purchasing teams, a decrease in response capacity, an increase in complaints from user areas, and noise that escalates throughout the company.

In this case,  it is key to remember that the success of supply processes requires investment in personnel,  technology and change management. A more successful strategy is to propose a clear strategy for meeting the objectives of the Purchasing area that includes the necessary tactics and resources.

2.Do not measure the commitments of the area

One of the objectives of the Purchasing areas is to comply with the Service Levels with other users and areas of the organizations. However, they are often not analyzed to correspond to the reality of the area. For this reason, on many occasions commitments are made that cannot be met, so promises of delivery dates are postponed.

In this case,  the workload, available resources and time required must be realistically evaluated before making commitments.  Likewise, the use of technological tools can be implemented that allow measuring the SLA, analyzing Purchasing planning in detail and automating operational tasks to free up the Purchasing team’s time.

3.Believe that technology solves everything

Without a doubt, there are technological platforms that help Purchasing teams increase their efficiency, transparency and productivity. However, it is often overlooked that one tool alone will not solve all the critical points in the area.

Therefore, when planning the acquisition of platforms for purchasing automation, in addition to first understanding the critical needs,  change management must also be budgeted for.  This process is often underestimated and it is key to measure the amount of effort to understand the needs, train, communicate the change and provide support to the user areas.

Considering the best technology, change management and the necessary resources, success will undoubtedly be achieved in the  digital transformation projects of the Purchasing areas.

Source: GEP publications.