Last week, scoutbee and ET Advisory hosted a webinar exploring the impacts of enhanced supplier market visibility. From their lively discussion and valuable expert advice, we share a quick summary – and the on-demand recording.
- Tony Bergström, Founder and Managing Partner, ET Advisory.
- Martin Lidén, Vice President Fleet Inventory (Supply Chain & Procurement), Voi Technology
- Benjamin Eichinger, Director of Sales Partner Management & Focus Accounts, scoutbee
- Moderator: Andrea Heubach, Global Business Development, Next47
In 2021, procurement teams must find ways to optimize category costs, drive innovation, raise resilience and embrace sustainability. To protect business health and market share, supplier competition is critical. Yet many still struggle to identify optimal supply markets, and to access innovation or cost opportunities. Lots of industries face visibility challenges and inefficiencies that are often limiting performance.
Of course, the effects of COVID-19 and the latest supply chain disruptions were a natural topic of discussion for our experts:
Martin Lidén was not surprised at the extent of supply chain constraints. For him, however, they were by no means inevitable. Although the industry expected a downturn, the global markets did not slow down as expected. This led to imbalance in supply and demand and challenges in the logistics system with constraints on capacity. There was also stockpiling of raw materials and electronic components taking place to drive up prices which didn’t ease the situation.
Benjamin Eichinger underlined how a crisis like COVID-19 hitting all markets poses a high financial risk. Which of my suppliers will be most at risk? This risk forces companies to act to bolster resilience and build up second sources or have a strategy of optionality around their supply chain.
Proactive digital scouting at category level unlocks great value
Martin Lidén considers that proactive scouting will enable companies to find new and best technologies, to ensure that they understand their market, the optimal supplier candidates, and their offerings.
For Tony Bergström proactive supplier scouting is not just a matter of finding new suppliers. It is also about getting better knowledge vis-á-vis different categories. It also puts companies in a better position to start working with their supplier ecosystem in a more strategic manner.
Benjamin Eichinger believes that it all comes down to competition in the marketplace and amongst suppliers. He is convinced that suppliers often drive the competitive advantage for companies, either to be more resilient or faster, or just simply being better than the competitor. Bringing in the right innovation into the network allows companies to win a competitive edge.
Analyzing your supplier landscape will drive supplier competition
For Benjamin Eichinger, often the unavailability of data is an issue limiting supplier competitiveness and performance.
“There´s one KPI that is not often used in organizations: How often has my organization challenged my supply base in the last twelve months? One should ask, do I even have access to the right supplier information to make informed decisions and can I use this to create a competitive edge, become more agile or even drive innovation into my company? The availability of data is key to asking the right questions and challenging suppliers to become more competitive and deliver more value – the digital tools are here, we save a lot of time, it’s an automated process supported by artificial intelligence, which is a game changer.”
Supplier insights directly enhance cost orchestration
Tony Bergström emphasized that the cost orchestration discipline is all about companies taking a holistic view of their product cost. This is the fastest way to large product cost savings:
“It is important to have processes and tools that give companies the ability to work in a transparent way and have all product cost related information in one single source of information. Digitalization is key for companies to stay competitive in a global market where innovation and cost management is crucial. The best of the best have a clear digitalization strategy that includes digital cost management.”
Top Tips for using supplier market intelligence to improve resilience
“Build a buffer, have multiple sources for a category, but I strongly believe that it is about supplier relationship management. By developing strong relationships with your key suppliers, you will be prioritized, and the supplier will probably invest in line with your needs.” – Martin Lidén
“See the project or program from a long term perspective. The preparation phase is crucial in order to have a successful result, what the business drivers behind the supplier scouting are. Also start thinking about your RFI and RFQ documentation.” – Tony Bergström
“It’s always about the availability of data: how is the supplier market intelligence inside an organization, which insights can I create, what are the changes that constantly happen, what´s my existing portfolio like, what suppliers do I have, do I have different data perspectives and a good view on the existing suppliers? Am I using the best tools, how are my connections with my existing suppliers?” – Benjamin Eichinger
- Strategic sourcing is crying out for better optimization through technology
- Scouting insights at category level will unlock a wide range of business value and help tackle challenges
- Cost orchestration can be vital for competitiveness, and stimulating supplier competition is integral to this
- Resilience in reality means the ability to respond to different types of risk; and supplier market knowledge equips you with available options. To compete effectively you should base decisions on a verified picture of the overall market.
- Place a high importance on supplier relationship management
The on-demand version of the webinar can be found here.