These days, sourcing has become a common discipline in supply chain and transportation management. There is an organizational expectation that transportation modes will be sourced and cost will be taken out of the network with some regularity. However, meeting these expectations while maintaining service year-over-year has become more challenging.
A survey of more than 750 U.S. manufacturers shows continued optimism about revenues and employment as well as increasing demand for flexibility and responsiveness in supply chains. Moreover, confidence in growing revenues extends into 2016.
For most of the past three decades, private equity firms and other investors have relied on two simple questions to assess the supply chains of the companies in which they've invested: Are our companies leveraging low-cost country supply sources and are they keeping supply chain costs in check? Deeper inquiries have always seemed unnecessary, so private equity firms and investors have focused on other aspects of the businesses they own to drive value.
Globalization and evolving social, economic and regulatory trends have elevated corporate competition to a new level altogether. For procurement departments in particular, cutting costs, doing more with less, and running agile operations are the new standards for success.
With their operating budget expected to grow by just 2.7 percent this year, procurement leaders are focusing their transformation efforts on cultivating procurement's role as a trusted advisor, investing in next-generation training and development, and harnessing big data.
We're all familiar with maturity curves, but how helpful are they really? Telling a company how mature they are, based on academic factors, means next to nothing if it's not rooted in practical applications that relate to a procurement professional’s day-to-day work.
At the Smarter Commerce Global Summit, IBM (NYSE: IBM) today announced a study that says companies with high-performing procurement organizations are driving better bottom line results, according to an IBM study. These organizations report profit margins of 7.12 percent as compared to just 5.83 percent for companies with low-performing procurement organizations. Also, companies with top-performing procurement organizations report profit margins 15 percent higher than the average company - and 22 percent higher margins than companies with low-performing procurement organizations.
A rising percentage of organizations are choosing e-invoicing to reduce processing costs, accelerate approval cycles, and increase on-time payments, according to a PayStream Advisors study sponsored by Syncada from Visa. Internal pressures such as green initiatives and increased centralization contribute to e-invoicing adoption, as do external changes, including global supplier requirements. The study recommends first implementing top tier customers to achieve the most financial and operational impact.