Using Cloud ERP to mitigate sourcing challenges in procurement
By Paulo De Matos, Chief Product Officer, SYSPRO Manufacturers continue to face challenges like increased demand, enduring labour shortages and rising direct material costs. Buying better is also simply not enough and manufacturers will now need to answer the call for sustainability in ethical sourcing and focus on investing in supplier partnerships and innovation by accelerating the adoption of digital and analytics. Previously procurement strategies were driven by cost-reduction, low-cost sourcing and relied on single-sourced suppliers, with limited risk management. Now manufacturers have had to reset and focus on digitalisation for strategic sourcing to improve operations and ensure profitability. As industries are working towards rebuilding their supply chains to be more robust, collaborative, and accessible, some procurement strategies are likely to include: The diversification of supply chains by collaborating with local suppliers, developing new delivery strategies, and sourcing from multiple vendors Improved systems for automated procurement and traceability to ensure ethical sourcing Focusing on supplier relationship management strategies Here’s how manufacturers can use cloud ERP to manage current sourcing challenges and maintain competitive advantage: Repositioning the supply chain for strategic sourcing Manufacturers are now having to balance the trade-offs around cost versus risk. Is it still best to find the cheapest raw materials by sourcing overseas and accept the heightened risk of non-delivery? Reports also show the cost of shipping increased by 600 percent in 2021 and the impacts in shipping delays and bottlenecks are widespread globally. Manufacturers should consider repositioning their supply bases by shortening their supply chains and consider dual sourcing strategies to mitigate risk. Through a supply chain portal enabled by a cloud ERP system, manufacturers can obtain increased connectivity and visibility across the supply chain, which allows them to identify alternative sources of supply more easily. With cloud ERP, analytics can be used to improve, classify, […]