Redefining Procurement for ANZ Businesses: Why Suppliers Are More Than Just Vendors

October 16, 2023

Redefining Procurement for ANZ Businesses: Why Suppliers Are More Than Just Vendors

In the bustling landscapes of Australia and New Zealand, terms like 'strategic sourcing' and 'supplier relationship management' frequently echo across boardrooms. These concepts, often aimed at reducing costs and forging stronger supplier ties, have reaped rewards for many enterprises. Yet, are ANZ businesses truly maximizing the potential of these partnerships?

Unearthing Hidden Value in Procurement

While there's no doubt about the achievements of established procurement strategies, there's a consensus among industry observers, including us at trace., that more value awaits discovery.

Procurement teams tend to pull on certain levers for refining supplier relations, such as:

  1. Minimising overall costs, from unit costs. supply chain operating costs, to return expenses.
  2. Refining trading conditions, exemplified by the cash-to-cash cycle.
  3. Ensuring prioritised service during product scarcity.
  4. Guaranteeing top-tier product quality and minimal returns.
  5. Encouraging innovations, from product launches to tailored marketing campaigns.
  6. Promoting sustainability, from modern slavery compliance to carbon neutrality goals.
  7. Nurturing relationships marked by trust and seamless business dealings.

Yet, a disproportionate emphasis on cost and trading terms — often bundled as 'value for money' — can sideline other invaluable aspects. This tunnel vision, further exacerbated by KPIs heavily tilted towards quantifiable savings, calls for a holistic review of procurement functions.

Learning from the Leaders

Industries like grocery and high-tech have successfully navigated this realm, prioritising innovation and nurturing relationships essential for product and tech advancements. Their success stories are a testament to the gains possible when businesses look beyond mere cost-cutting.

Tapping into Untapped Opportunities

To truly amplify the potential of procurement, businesses should:

  • Prioritise Sustainability: Collaborate with suppliers to minimise waste. For instance, adopting roll cages can decrease the need for cardboard packaging, plastic wraps, and pallets. Strategise with suppliers to optimise transportation routes, potentially transitioning to electric vehicle fleets.
  • Share Information Authentically: Provide genuine insights on forecasts, inventory, and promotional campaigns, fostering mutual growth and cost reduction.
  • Introduce Comprehensive Partnership Metrics: These should encompass ease of business, innovation, and adaptability.

The Supplier: An Extension of Your Enterprise

When suppliers are viewed as integral to the supply chain, the dynamics shift radically. Visualise a scenario where a business opts for vertical integration. The strategies surrounding planning, scheduling, and product ownership would starkly differ from traditional supplier liaisons.

Facing the Challenges Head-On

Certain roadblocks persist:

  1. Procurement teams occasionally lack the intricate business knowledge necessary to identify unique value drivers.
  2. Businesses don't always immerse themselves deeply enough in the procurement process, withholding vital insights.
  3. Many existing KPIs are reactive, curbing proactive measures.

How trace. Can Illuminate the Path Forward

At trace., our seasoned experts have championed clients through these intricate challenges. Leveraging diverse tools tailored to individual needs, we've played pivotal roles in strategic sourcing, bridged gaps between suppliers and consumers, and introduced cutting-edge supply chain technologies.

Keen to delve deeper? Engage with the trace. team. Let’s share success stories and carve out bespoke solutions to elevate your supply chain endeavours.

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