It’s Time to Think Differently About Indirect Procurement
Senior management’s top priority remains the same – drive value for the business. And while indirect procurement manager’s feet are held to the fire to achieve cost reduction targets and improve productivity, [tweet type=”inline” text=”many struggle because they are still using outdated tools and technology.”] Alternatively, for end users, their focus is simply to get their job done right, and as quickly and easily as possible. By applying new technology, insights, and thinking to the challenge of indirect spend, manufacturers can corral indirect and MRO purchasing and finally meet everyone’s needs:
- Senior management can have access to informative, standardized dashboards and reports that provide a clear view of indirect expenditures and consistent processes that help reduce indirect expenses and improve the bottom line.
- Procurement managers can create a closed-loop, real-time indirect procurement process that applies discipline across all requests and purchases, helps ensure the right data is captured in the right way at the right time, and provides valuable performance measurements at every level—by supplier, user, plant, and enterprise.
- End users can use tools that help them make more effective procurement decisions (including smart forms, online coaching, and real-time feedback loops) and communicate easily and more adequately with every supplier.
Wrangling the complexity of indirect spend is no easy task. It’s a distinct challenge that requires skill, insight, and the right tools to do the job. Yet it’s clear that for those willing to take the next step, there’s a gold mine. The time has come. By taking advantage of the convergence of supply chain innovation and the ever-growing power of consumer, social, and big data technologies, manufacturers now have the opportunity to harness the data, processes, and significant costs of indirect procurement—and settle the “next frontier” of supply chain optimization.