Raw Material Procurement Sourcing Strategy is not just about buying something as inexpensively as possible. It is also about buying something that will last as long as possible. The big question is, how do we do that? We do that by being smart about who we buy from and how we buy. You can make smarter decisions by having good data, the right insights, and a good strategy.
The best procurement organizations in the world are focused on creating value in their extended supply chains and are very good at measuring this value.
Benchmarking complements this effort, helping procurement groups identify new sources of value, pinpoint new capabilities, and make a case for change. But benchmarking is part of a broader competency in performance management that keeps procurement aligned with stakeholders and their dynamic needs. So before delving into particular benchmarks, you need to learn to benchmark better to get any value out of them. You need to not just buy better but also measure better so that you’re focused on doing the right things before focusing on just doing them the right way relative to others.
When benchmarking any Raw Material Procurement Sourcing Strategy, it’s usually pretty easy to tell if its services will be affordable and cost-effective. But you’ve got to remember that there are a few other things to consider aside from the raw physical costs involved when determining what agencies and vendors work best for your company.
Benchmarking is a process of identifying areas of progress in the supply chain and addressing them as part of a constant improvement approach. It’s also a useful form of comparing offers from other suppliers, whether those offers vary in price, quality, or other measures.
As benchmarking applies to suppliers in the supply chain, it lays to marketing suppliers — generally marketing agencies or advisors.
Procurement Supplier Performance Benchmark can use marketing benchmarking data for several objectives, whether
- They are looking for further leverage before documenting negotiations with an agency,
- Trying to set measures with a current marketing supplier, or
- Simply researching the current field of marketing opportunities.
However, marketing supplier benchmarking evolves into a race to the bottom to lower costs. Marketing allotments are tight and getting tighter. Additionally, more and more associations are deciding to give more of their marketing pay to technology rather than people and assistance.
Supply Dynamics can help you forecast consolidated material needs and deliver a dynamic picture of your sourcing strengths and exposures by value-stream mapping basic raw materials used in part production and merging that with the demand for those parts. Sharing these details with contract manufacturers and raw material bases allows transformational association.
We understand that direct materials procurement must instantly be linked to customer satisfaction. If an affordable alternate product is inferior to the product it substitutes, then the cost-saving advantages do not overpower our clients and their client’s utmost satisfaction.
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The bottom line is that the world-class Procurement Supplier Performance Benchmark comes from a benchmark-informed performance management system that aligns procurement-led supply progress to measurable enterprise-level financial advancements.
Read Also –
Raw Material Sourcing Model for Efficient Worldwide Procurement
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Ankur Gupta, Head Marketing & Communications