Product innovation and sustainability are key areas of importance for procurement directors. In fact, a recent survey conducted by Bearing Point found that 48% of procurement directors believe innovation to be equal to value creation, alongside gaining a competitive advantage and the development of new markets.
Unfortunately, the COVID-19 pandemic put a huge strain on supply chains worldwide. In some cases this forced a complete shutdown of manufacturing and innovation, with many procurement departments forced into reactive mode to try and combat the impact of supply chain disruptions.
However, in the aftermath of the coronavirus crisis, the trend across procurement departments has switched from reactive to proactive status. Why? Companies have recognized the need to seek out supply chain improvements in order to anticipate disruptions, rather than reacting to a crisis when it hits.
A structured approach to innovation and sustainability
Procurement is now entering a new era, which brings an opportunity and an obligation for it to drive two highly important business functions:
- The acceleration of product innovation and sustainability at a time of rapid technological advancement.
- Meeting changing consumer demands and market needs.
The question is, how does proactive procurement help companies to drive these significant business functions?
It all starts internally. Product innovation requires proactive, cross-functional collaboration. This means the involvement of other departments within your business – other than those traditionally in charge of innovation – such as research and development and marketing, which are key to success.
Your purchasing department is also key because they have the knowledge of the supply market. They can identify those suppliers who can support your business with the delivery of innovative technologies and the parts you need.
The purchasing department can also give you insights on existing suppliers, but if you have no existing suppliers, they can identify ways to source suitable and reliable suppliers fast.
Proactive procurement helps to drive improvements in the sustainability of your products, too. Your purchasing department can ensure that your company is working with suppliers that are working towards reducing their carbon footprint and comply with ESG (Environmental, Social and Governance) regulations.
As a means of driving sustainable product innovation, your suppliers should be able to provide product parts that are made up of sustainable materials.
With customer demand trending towards sustainability, a proactive approach to procurement across your supply chain ensures that you are able to identify suppliers who can help you meet your sustainability goals and the demands of your consumers.
Proactive procurement is the future
In the past, the procurement discussion has been left until the last minute resulting in higher costs, sub-standard deals, poor collaboration and limited leverage when working with suppliers, which all stifles product innovation and sustainability.
Empowering proactive procurement ensures earlier engagement with customers and suppliers, lower costs, improved sustainability across the supply chain, greater innovation and a quicker route to market, which gives you a huge competitive advantage.
Proactive procurement with Scoutbee
The Scoutbee Supplier Intelligence & Discovery SaaS Platform allows procurement teams to be proactive rather than reactive. With reliable knowledge on your existing suppliers and AI powered supplier discovery, procurement teams are able to advise business units on suitable existing suppliers and new suppliers in the market. Learn more, here.