How Strategic Sourcing Can Make a Difference

It’s never been more important to focus your efforts on maximizing value and mitigating risk in this challenging workforce marketplace. Although not intuitive, current market unpredictability may present an opportunity for manufacturers, resellers and distributors to actively restructure their supplier relationships in ways that will remedy the short-term margin squeeze, drive significant savings and maintain supply continuity.

Why it’s so important to be strategic with your Tender Processes.

In order to accomplish real transparency with your supplier’s costs, use the Request for Proposal (RFP) process to ask the right questions around cost components. A true breakdown should outline what costs can be controlled versus those that cannot and focus efforts on the controllable parts. This will advance negotiations, drive cost savings and equip buyers with the information they need to protect themselves in erratic market conditions.

Reevaluate Supplier Partnerships

Simply bouncing back and forth to the lowest bidder not only creates an unstable relationship with your suppliers but it is also not cost-effective. Talent scarcity has shifted the workforce market from employer- to worker-controlled, requiring procurement organizations to shift their thinking from viewing workers as commodities.  Challenging market conditions present a valuable opportunity to review and rethink how the supply base is organized. Using a competitive and comprehensive process designed to evaluate your supplier partnerships you can increase the quality of talent available to you while uncovering costs. Educated conversations will lead to stronger relationships with your partners.

In Summary

In this highly interlocked ecosystem, the continuously evolving challenges surrounding hyperinflation will continue through the first part of 2022. Designing and executing projects based on the right impact levers and developing strategic relationships with a curated list of trusted supplier-partners, is a powerful way to turn uncertainty into a tactical advantage and tangible financial and operational benefit.