Data, Collaboration, & Visibility: Transforming Direct Material Sourcing

Direct Materials Sourcing is a critical element for any business, and procurement plays a significant role in ensuring that the necessary raw materials are procured efficiently. As businesses face significant challenges, such as supply chain disruptions, trade wars, geopolitical tensions, and regulatory requirements, procurement professionals must adapt to these changes efficiently. 

In a recent webinar, experts from Accenture and Ivalua discussed these challenges and the importance of data collaboration and visibility. This blog post delves into the key takeaways from the webinar and how businesses can benefit from the power of teamwork and transparency.

Procurement’s Role in Driving Sustainable Development

Accenture’s Sushil Srinivasan kicked off the webinar by discussing procurement’s role in driving the sustainability agenda and circular economy within their sourcing strategy. 

As businesses face increasing pressure to adopt environmentally friendly practices, procurement teams must play a vital role in strategic sourcing to ensure that the necessary materials are sourced from sustainable suppliers. 

Sushil emphasized that procurement teams should collaborate with suppliers to achieve shared sustainability goals, such as greenhouse gas reduction, waste management, and reusing or recycling materials. 

Such collaborative efforts can help address critical environmental, social, and economic concerns.

Macro-Challenges in Procurement and Supply Chain

I then led a discussion on the macro challenges procurement and supply chains face today. 

Disruptions, supply chain crises, trade wars, geopolitical tension, conflict, inflationary pressure, compliance, and regulatory requirements are significant challenges businesses must be prepared to address now and into the future. 

These challenges often lead to increased costs, supply chain disruptions, and potentially damage the brand’s reputation. 

The CPO’s Role is Evolving

Sushil led a discussion detailing how today’s CPO’s are being forced to deal with topics that have not been on procurement’s radar.  

CPOs are expected to drive the 360 degree transformational agenda across Financial, Sustainability, Risk and Talent. This presents both a challenge, and an opportunity. From a challenge perspective, CPO’s will be forced to develop and upskill their teams. 

The CPO’s role is also growing, and they now have a “seat at the table”, since their organizations are more often recognizing the importance of Procurement in meeting corporate goals and building supply chain resilience.

Supply Chain Challenges and Opportunities

The pandemic caused unprecedented disruption and major challenges to manufacturers, procurement, and supply chains. 

Sushil and I got into the details during a discussion comparing the challenges brought to light in even the best supply chains, and how a collaborative Source-to-Pay platform, like Ivalua, can help by seamlessly bridging historic gaps in sourcing processes and data flows.

In order to bring more resilience into the ecosystem of these enterprises, data collaboration and visibility through powerful tools like Ivalua and Accenture’s approach can help address the macro challenges posed by disruptions, crises, trade wars, inflationary pressure, compliance issues, and so on. 

As manufacturers continue to grapple with costs of direct materials and just-in-time situations that demand agility in their decisions –  we urge all readers to take advantage of the power of data – in partnering with Ivalua and Accenture – for staying ahead of the curve in these unpredictable times. 

Let’s begin our journey towards building catalytical partnerships for procuring resilience across our multiple industries.

Importance of Data Collaboration and Visibility

Sushil and I emphasized the critical role played by data, collaboration, and visibility in direct material sourcing. Visibility is essential to gain insights into supplier performance, inventory levels, and risk management.

Besides, effective collaboration helps businesses make informed decisions, work with suppliers towards shared goals, and mitigate risks. Improved supply chain management and collaboration using technology solutions such as a Supplier Portal, Supplier Management, and e-Sourcing, can assist businesses in achieving their sustainability goals, improve productivity, and manage supply chain risks.

Building Direct Materials Resilience and Agility

The speakers summarized a few key foundational themes organizations must consider to maximize direct material procurement success:

1. Supply Chain Collaboration ensuring increased visibility
2. Collaborative New Product Introduction (NPI) 
3. Supplier 360° management across the S2P process
4. Inclusion of Sustainability and ESG in procurement decisions

The impact of each of these concepts was discussed in depth by the panel. Each has the ability to make a substantial impact for organizations, but put in place together they can have a multiplier effect, improving resilience and agility significantly through both optimal and challenging times.

Audience Questions and Solutions

The webinar also addressed audience questions such as improving supplier collaboration, managing inventory and supplier risk and measuring the ROI of implementing technology solutions. 

We recommended that building relationships with suppliers is key to successful collaboration–urging businesses to work on long-term supplier relationships, which can lead to a collaborative working model. 

Businesses should also consider supplier diversity, which can also enhance supplier collaboration. Regarding inventory management, implementing inventory visibility tools can help businesses gain insight into their inventory levels and address any issues. 

Finally, to measure the ROI, businesses can set high-level key performance indicators (KPIs) that provide input to the business case based on the value drivers of adopting technology solutions.

Conclusion

Implementing Source-to-Pay solutions with collaboration and visibility capabilities (Digital Control Tower) has become imperative for businesses to survive and thrive in today’s challenging business environment. 

Procurement teams have a critical role to play in working with suppliers towards shared goals around sustainability, mitigating risks, and improving productivity. 

Innovative technology solutions such as Supplier Portal, Supplier Management, and e-Sourcing can help build stronger relationships with suppliers, improve productivity, mitigate risks, and achieve sustainability goals, which are integral to the success of any business. 

Similarly, injecting collaboration into your transactional procurement processes (e.g. Forecast/Capacity Visibility, Ordering) provides procurement with increased agility when responding to potential disruptions. 

By adopting these tools and working collaboratively, businesses can survive, thrive and be sustainably competitive in an ever-changing landscape.

Related Ivalua Solutions: Environmental Impact Center