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Finding procurement savings in an era of rising customer expectations for quality

Jan 08, 2020  |  Dennis Santare  |  procurement, S&OP | 0 Comments

Delivering the best possible quality to customers with the minimum possible input costs has always presented executives with a difficult balancing act. But the growing importance placed on quality and freshness in buying decisions and overall rising consumer expectations are creating more pressure than ever to source the best raw materials without increasing costs.

To make things even harder on buyers, most companies operate with very lean procurement departments. For a relatively small team with limited bandwidth, it’s a big enough task just to manage the basic procurement functions week to week. Lack of time and resources inevitably results in a less granular focus across categories and on individual items. This doesn’t only lead to missed opportunities at the point of execution. It creates a broader issue when leadership can’t find time to fully assess performance and leverage that insight to inform and enhance sourcing strategy.

Despite all of this, when there’s uncertainty around the direction of the global economy, procurement is often the first department to get handed down the directive for a substantial cost take out. For procurement teams that have already looked everywhere for savings, how can they reduce costs even more without sacrificing quality and freshness of raw materials?

How much is S&OP misalignment costing your business?

More than ever, businesses today operate through a complex, interconnected system of handoffs. Often what looks like underperformance in one department is in fact a symptom of underlying misalignment between several business units, each acting on competing priorities.