Procurement plays a crucial role in the manufacturing industry. It includes sourcing, purchasing and delivering goods and services required during production. Today, procurement goes beyond simple purchasing; it involves strategic sourcing, negotiation, and managing suppliers—all while ensuring cost optimisation, quality, and efficiency. We look at some of the top trends in procurement for the manufacturing industry.
Digitalization and procurement automation
In India, the manufacturing sector depends on procurement, with estimates suggesting it contributes to over 60% of a company’s total expenditure. Optimizing procurement processes is essential for enhancing competitiveness and driving growth in the Indian manufacturing landscape.
Digital procurement has increased substantially in recent years.
Smarter solutions are replacing spreadsheets, paper contracts, and files. Businesses across the board are automating and relying on digital procurement tools to remain competitive and avoid costly capex mistakes
Procurement automation will impact procurement processes such as vendor relationships, sourcing, milestone management, etc. as companies adopt a more deliberate approach toward digitalisation.
Data and analytics
No one wants to make wrong business decisions. Data is the best tool to make the right decision. In a survey by SAP and the Indian Institute of Materials Management (IIMM), procurement has been hampered in over 50% of organisations by outdated technology and unclear data.
Instead of basing decisions on instincts and long-standing patterns, rely on data. AI-powered systems can process large volumes of data to identify patterns and offer actionable insights, improving the accuracy of demand forecasting, supplier selection, and risk management.
In 2024, the companies prioritising data will succeed, allowing them to make informed decisions that lead to superior outcomes.
Supplier Partnerships for a Robust Supply Chain
We live in volatile times. The pandemic and current geopolitical instability have disrupted supply chains, causing shortages, increased supply costs, and transportation bottlenecks for suppliers in Asia and Africa. These challenges have affected businesses worldwide and may have impacted your internal operations.
Suppliers are an indispensable part of your business operations. Building a strong relationship is essential to ensuring a steady flow of materials. Foster a collaborative problem-solving and information-sharing strategy, to proactively mitigate risks and address challenges together.
Contingency Planning and Business Continuity
To ensure business continuity amid unforeseen supply chain disruptions, it is crucial to establish comprehensive backup plans. These plans should include backup inventory management, alternative transportation routes, and sourcing strategies. By implementing these contingency plans, organisations can minimise the negative impact on operations and reduce downtime by responding swiftly to interruptions.
Other proactive steps you can take include:
- Explore alternate suppliers to reduce dependency on a single source.
- Conduct risk assessments of potential suppliers to evaluate their reliability before forming partnerships.
- Identify high-risk areas in your supply chain and address them by diversifying your sources.
Organisations can successfully respond to disruptions, minimise downtime, and retain operational stability.
Localisation of suppliers
Today’s manufacturers are constantly seeking ways to optimise their operations. One growing trend with significant benefits is local sourcing. By partnering with local suppliers, manufacturers can unlock several key advantages:
- Faster Deliveries: Local suppliers mean shorter distances, leading to quicker component arrival and smoother production flow.
- Improved supply chain: Local suppliers reduce reliance on long-distance logistics, making your supply chain more agile and resilient.
- Stronger partnership: Geographic proximity makes communication, inspections, and collaboration easier.
Sustainability and Ethical Procurement
These days, sustainable and ethical procurement is becoming a crucial component of procurement strategies and necessary for the long-term viability of businesses. Industry leaders should therefore anticipate increased scrutiny on the social and environmental effects of procurement processes from stakeholders, such as investors, customers, and regulatory agencies.
The focus is on reducing carbon footprints and waste throughout the supply chain. Suppliers must comply with stringent environmental, social, and governance (ESG) standards. Businesses must demonstrate transparent and traceable sourcing practices throughout their supply chains.
Venwiz: Disrupting Capex & Engineering Services Procurement
Venwiz is India’s leading digital platform, transforming the way you source and collaborate with Capex vendors. We streamline the entire vendor engagement process, making it objective, digital, and transparent.
Vendor Scouting
Vendor scouting goes beyond just finding vendors. It’s about strategic identification of the best-fit suppliers for your needs. Imagine it as an upgrade to traditional vendor searches. With Venwiz, you get:
- Smart filters: Shortlist vendors based on our smart filters.
- Targeted Discovery: Not just a broad list, but curated suggestions of 4-5 vendors that closely match your requirements.
- Deep Dive Intelligence: You can access in-depth information about each vendor’s capabilities, financials, and reputation.
- Perfect Fit Analysis: We ensure the vendor’s quotations align with your project or product requirement.
Detailed Vendor Assessment
Venwiz goes beyond basic vendor information to provide in-depth assessments to help you
- In-depth vendor assessment: Our vendor profile helps you get insights into a vendor’s capabilities, financial stability, and track record.
- Venwiz Inspection Reports: Access our team’s on-site evaluations for a firsthand perspective.
- TPI Quality Reports: Leverage Third-Party Inspection reports for additional verification.
- Past Client Feedback: Read reviews from clients who worked with the vendor.
Vendor finalisation
We provide extensive support in every stage of the procurement process.
- RFQ preparation: Venwiz’s customer service team has extensive project experience. We help you prepare concise and clear RFQs aligned with your project requirements. We help you clearly outline the pre-qualified requirement (PQR) in the RFQ to ensure vendors are on the same page.
- Compare quotes: Venwiz eliminates the headache by offering detailed technical and commercial analysis of each proposal with our quote comparison tool. We also standardise the format of the quotes, allowing for effortless side-by-side comparisons. This empowers you to swiftly identify the vendor that best aligns with your requirements and budget.
- Payment terms alignment and closure: Venwiz acts as a bridge, fostering clear communication between you and the vendor. We’ll help you reach a mutually agreeable payment structure that ensures a smooth project launch.
Project execution support
Venwiz doesn’t stop at vendor selection. We offer comprehensive project execution support to keep things on track:
- Project Monitoring with Milestone Management Tool (MMT): Project delays can be a nightmare. Our user-friendly Milestone Management Tool (MMT) streamlines project monitoring, helping you identify and address potential delays.
- Our value-added-support: We provide vendors with support through the procurement process with material, sub-contracting and financing support.
Venwiz can potentially provide a 50% reduction in timelines with its initiatives across different project stages.
Contact us: contact@venwiz.com
For further insights into the latest developments in the manufacturing sector, visit our LinkedIn page.
