Procurement and logistics operations form around 70% of an organization’s complete cost. And, these costs are directly related to the company’s working capital through inventory and accounts. Efficiency of an organization comes when both procurement and logistics are collaborated. But today, logistics and procurement are seen to be individualized in companies, which leads to inefficiency and in turn, a lethargic production value. Today, supply chain managers are so focused on increasing production value that they have disregarded the importance of procurement. Many companies don’t even understand where their procurement operations are! This is because of the difference in standard operations between the two. Therefore, to compete with these inefficiencies, it is vital that the supply chain managers and procurement teams partner with each other and put in group effort for the company. This will enable better information and resources flow leading to better data-based decisions and in turn efficiency.
Technology has gone beyond limits to amplify efficiencies in every field and make processes easier. It has also made boundless contributions in the supply chain industry, where companies have access to real-time data on consumers. This means that companies are able to collect an overwhelming amount of information about consumers, which is fed into their forecast model. This analysis helps them to generate changes throughout their organization to meet the needs of the market. Changes here are made in both procurement and logistics processes.
Supply chain managers must work in a way to make the supply chain more attractive to the workers. However, they must also involve procurement practices in everyday operations for a positive feedback. People must be tempted to learn more about the supply chain and understand how goods are purchased and converted into final products. Increasing such kind of awareness will help people get more involved with the industry’s growing level of technology, and will thus lead to better collaboration.
Now speaking about suppliers and manufacturers, they do not trust each other completely; and this mistrust is the major reason for the disconnect today. This leads to unsatisfactory purchasing practices and limited supply chain value. Competition in every field is highly increasing with businesses striving to earn high profit margins. This has made the levels of trust go further down. But, if the trust is restored, it can lead to more confidence and lower prices in the long run.
Supply chain is demand-driven, where suppliers are affected by demand and the supply chain is affected by consumers. After all, consumers are king because they can get all that they wish to without leaving their home, by purchasing all that they want from practically anywhere! In fact, with one-day deliveries and two-hour deliveries, why would customers want to go elsewhere? Technology is only getting more advanced and complex. With these advancements, technology enables companies to track more data on consumer purchasing habits, which helps to empower logistics operations.
We can thus conclude that if supply chain managers and procurement officers do not decide to team up, it will result to more inefficiency and thus, downfall. But, if you are tied up with Jayem Logistics, the best supply chain company in India, you have nothing to worry! We have all the experience and efficiency to take care of all your supply chain and logistics operations in the best possible way for the benefits of your company.