Why do Procurement Teams Need to be Agile? — Part 1

Being agile is characterized by quickness, lightness and ease of movement. Agility as a way of project management is fast catching up with businesses as the environment in which we operate is getting more and more volatile. So today we have agile project management, agile supply chain etc.

So what does it take to create an agile procurement team?

Before we move onto the ‘How’, let’s first understand the ‘Why’.

• Like mentioned earlier, today procurement teams operate in a very volatile environment
• The manufacturers are fighting for customer attention (the span of which is limited) while trying to balance the cost and profit equation in a way that is beneficial to the consumer and the manufacturer. This requires thorough analysis of the organization’s spending habit
• The global nature of supply chain impedes the supply chain transparency and thus many a times result in supplier related scandals
• The increasing awareness of ill effects of manufacturing practices on the environment, puts pressure on the procurement team to be ready with alternate strategy to procure raw materials that are not as harmful to the nature
• Constant fluctuation in the commodity indices/currency rates that need to be monitored to check if it is within the contract purview
• To look for suppliers that can be partners in innovation and can help procurement gain a competitive edge. Gone are the days when suppliers were just providers or suppliers of raw materials/services.

Procurement teams need to have the right human and technology resources that can enable them to respond to the changes in business, quickly and efficiently.

In the next blog we will discuss how procurement teams can be agile.