Retail Procurement in 2021: Tips and Trends

COVID-19 has swept the world with itself and during its lash out, the global supply chains faced unprecedented interruptions. But, by prioritizing resilient procurement processes, organizations found a way to keep their businesses running by rapidly moving towards digitization which relies on data-driven environments.

Things began to change significantly. Where cost control was previously the most important item on the procurement agenda, now the main procurement goal was business resilience. Along with that, ethical practices, risk mitigation, and cybersecurity became even more significant. Now it’s time for the remaining companies to throw out their clunky, old-fashioned manual procurement operations and replace them with streamlined automated procurement processes that help in mitigating risks and builds resilient supply chains.

To do that, here are some tips:

Understand Why
An organization must always have clarity about its goals. This includes the level of inventory, COGS, profitability needed, or product delivery timelines, etc. What you need to do is start with an analysis. This will help you in creating a solid roadmap of what needs to be accomplished and the key performance indicators (KPIs) that shall be met.

Must Read: Benefits of Artificial Intelligence in Supply Chain

Multiple Vendors
To achieve a resilient supply chain, it is important that your sourcing has the ability to replace vendors as and when needed. For this purpose, your procurement should be strong enough not to rely on one or limited vendors. This helps to eradicate risks in procurement.

Study Demand Predictions
Understanding when to increase or decrease vendor orders highly depends on consumer demand. This is because demand changes with seasons, holidays, economic turbulence, market trends, or even a pandemic.

Move Past Cycle Counting
A lot of procurement managers turn to cycle counting to ensure profitable inventory flows and recording accuracy. But, the fact is that cycle counting is just one tool and it can work against you if your cycle counting is done infrequently in an isolated manner. That’s because this way, it does not account for related data trends.

Use a Swift Software
Use software (DigiProc) that has the ability to make your procurement better with faster processes and automated reports.

Procurement is a process that involves sourcing and purchasing products that you want to sell or their raw materials in order to make and sell your own products. This process is such that it can be difficult even for the most seasoned business owners. But if managed well with awareness, businesses are always likely to succeed. So, here’s a glimpse of the key procurement trends expected to emerge in 2021:

COVID-19 put breaks on a lot of businesses due to a lack of consumer demand. This began to change in 2021 when a sudden rise in demand was witnessed in a lot of industries. With this unexpected rapid increase in demand, supply chain issues triggered yet again. Organizations that implemented smart solutions found their way through but those that didn’t were stuck and couldn’t provide goods in a timely fashion. Availability will now be a key trend to focus on in the months ahead.

Also Read: The Supply Chain Journey of Skechers

Over the years, retailers believed in placing their trust in limited vendors but today, times have changed. Now, retailers with the most number of vendor relationships are the ones succeeding as they are moving according to the changing needs of their consumers. Procurement professionals may create shorter contracts with added flexibility to allow for adjustments to the overall terms if a pivot is required.

Procurement processes cannot function properly in a vacuum unless there is communication between all key members that affect the procurement process, which is:

– Existing vendors
– New vendors
– End users
– Procurement leaders

We believe that success, in the coming months and years, will rely on the ability of procurement leaders to communicate and this is why it is likely to be one of the most important trends of procurement in 2021.

In times like the pandemic, budgeting is increasingly important. This is due to the anticipated revenue shortfalls. These shortfalls will be more drastic for some organizations than others but the fact is that by teaming up to meet demands within a budget, you will be able to add more power and flexibility in your operations and will simultaneously be able to increase efficiency and save costs.

Conclusion: Procurement leaders and their departments have all realized that demands are now more intense than ever. But, this calls for help to your organization. Companies must prioritize their current customers and not take on new customers unless they have strong relationships with their vendors. So, be proactive about communicating your specific needs to them and look out for all the tips and trends that we suggested.

Recommended Read: How Freight Technologies Enable Greener Supply Chains

For more articles like “Retail Procurement in 2021: Tips and Trends”, follow us on Facebook, Twitter, and LinkedIn.

Related Post