4 Low Cost Sourcing Trends that You Should Watch Out for in 2017
Earlier, the businesses used to limit their procurement efforts to cost minimization only. But, now the companies are shifting their priorities, they are adopting a proactive approach for mitigating the risk and obtaining competitive advantage from low cost country sourcing. In past years, the sourcing experts have watched some trends which are going to a continue in 2017 also. Before you start drafting the strategies, check out these latest procurement trends.
Put an end to the Decentralized sourcing:
Having a decentralized system for sourcing products from foreign market may be easier to maintain. But, in the changed scenario, this decentralized system to procure products will not be effective. In order to exploit resources available in global market, having centralized departments has become necessary now. The trends are indicating that for getting products successfully from foreign market, you should focus on maintaining good relationship with suppliers and effective contract management.
Transforming the procurement with technology:
Advanced tools are being available now and this is the right time to transform the procurement process. With the advanced new technology, you can evaluate performance metrics and other processes more effectively. The businesses which purchase products from the global market, are now attempting to leverage the existing technology for upgrading the procurement system to the next level.
Start hiring new talents:
Any plan regarding procurement cannot be implemented successfully unless you have the best talents. But finding out the top professionals especially for low cost country sourcing is getting more and more difficult day by day. As the need of experienced professionals is increasing, businesses are taking a different approach. Nowadays, while hiring procurement experts, businesses are putting stress upon analytical skills also along with the years’ of experience. Maintaining the own procurement team can be slightly difficult for small organizations. In that case, you can involve the professionals available in the sourcing destinations also. Instead of developing and maintaining own team, assistance from the experts will let you manage the cultural conflicts more efficiently.
Alter the matrices:
With time, procurement is changing its nature. Procurement is no more limited to cost reduction only. Instead the businesses are now focusing on making the supply base diverse too through procurement activities. Bringing innovation to the sourcing process is another task that the businesses are trying to do by expanding their supply chain. It indicates that in 2017, you have to think beyond savings while getting products from foreign market. Try exploring the new opportunities available in foreign market and utilize those for improving operational efficiency in your own organization. When purchasing products from foreign markets, think beyond it. Set new matrices and alter the procurement team so that the new objectives can be fulfilled.
As the industry matures, procurement is creating more a name for itself than just being capable of creating visible savings. The role of the procurement department is becoming more focused on the value beyond cost reduction efforts, such as a supply base diversity and supplier driven innovation.
In case of low cost country sourcing, often the new businesses try to copy strategies of organizations which are already successful. However, the strategy that worked for others, may not be effective for you. Thus, do not copy others. Rather try to find out what fits you the best.