The role of of procurement is about ensuring business oeprations running smoothly and involves understanding the current environment as well as potential future enviroments.
Covid-19 demonstrated how market changes without any notice and the importance of reducing risk especially for the Food and Beverage industry. All business currently operate under the pressure of market volatility, uncertainty, complexity and ambiguity. Going forward, F&B manufacturers are likely to operate with more uncertainty, placing an extra burden on the procurement team.
McKinsey analysts also calculated the damage associated with a severe and prolonged disruption (100 days) and used probabilities to estimate the financial impact that companies can expect over a decade. The report predicts the global food and beverage sector can, on average, expect losses equal to almost 30 per cent of one year’s profit over a decade.
To help manage the disruptions caused by the pandemic and plan for the unexpected, food and beverage industry shoudl look at these 4 steps strategies to de-risk the procurement function in the wake of global vulnerabilities.
1: Anticipate and plan for uncertainty
Today, the rigorous process of gathering information is being replaced with a data-driven approach. System like Bisync is enabling businesses to make real-time decision in their business with the AI-driven integrated data ecosystem that are underpinned by predictive analytics and can then be applied in forward planning on both strategies and performance.
Bisync contains a system that helps the F&B operators to forecast items like stock availability, demands and contingency stock requirements; and integrate this into operator’s unique business model. ERP like Bisync can help procurement de-risk as it provides a single integrated platform that shares all teh information across all functions. This allow operators to optimise inventory forecasting capabilities and improves the quality of the decision making within the organisation.
2: Embrace the limitless potential of digitalisation
With the pandemic, many F&B operators now realise the true potential of digital transformation in teh procurement process.
Digitalisation can assist strategic sourcing to become more predictive, automated and supplier relationship management more proactive. Digital procurement solutions are enabling the future by providing access to previously unavailable insights or bringing order to massive (but unstructured) data sets, ultimately driving more complex analysis and better supplier strategies, enabling more efficient operations.
3: Enable end-to-end supply chain visibility
End-to-end supply chain visibility is a necessity to ensure procurement accuracy and resilience. Such advance insights are needed to improve customer service, reduce costs and mitigate interruptions that will effect inventory levels and production. With customers demanding better services, system like Bisync with embedded AI capabilities provide real-time intelligence, actionable insights and recommendations that reduce disruption time from days to hours, improving customer service in line with expectations.
4: Focus On Building A Robust Procurement Model
There’s no standard business models to help food and beverage operators manage what we currently face. The pandemic exposed the fragility and thin margins on which many business run. Highly indebted companies, working from lean inventory, supported by just-in-time supply chains and under-staffed by short-term workers are suffering the longer-term impact of market unpredictability.
Food and beverage operators need to identify their own business model that suit their business and consider how to reengineer their supply chain to reduce risks, factoring in the increased complexity and uncertainty as to the new normal. In future, effective supply chain management will be all about agility and finding the perfect balance between just-in-time process and just-in-case scenarios.
Global crises are an inevitable factor of life. By planning for the unknown, implementing the right technology for end-to-end supply visibility and building a robust procurement model, the food and beverage industry can de-risk procurement functions and enable resilience in an uncertain world.
Bisync, with functions from procurement to inventory management has all the tools that an operator needs to reduce risk in their business. Just sign-up for a free trial and give the system a go or drop the team a message at email@example.com and let the team help you with easing your headache in making the right decision.