Are the days of a one-stop procurement shop over?

In today’s market for procurement and supply management, less is certainly proving to be more as organisations look to streamline their services and create a truly efficient, customer-centric experience.

For Trevor Weldon, Director of Business Development and Services at OT Group, the benefits of supply chain consolidation are proving to be significant…

No matter the size or scope of your business, a varied range of products and solutions – from general office supplies and furniture, to more diverse services such as print management and document destruction – are crucial to help keep things running smoothly.

But such multifaceted procurement needs bring challenges too. Budgets will only stretch so far, for example, so purchasing decisions end up being made according to what – on the face of it – represents the best deal at a given point in time, often irrespective of quality or supplier reliability.

Organisations don’t always know what to look for either, so the temptation is to seek out specialists in each field – individual suppliers who can advise on and wholly satisfy each need. On the face of it, this makes perfect sense – we all quite rightly aspire to work with ‘best of breed’ providers. However, the flipside is that this approach quickly results in a disparate supply chain fraught with risk.

This goes some way to explaining why marketplaces, if trusted, are becoming increasingly popular – over 50% of the gross market value for the top six ecommerce players worldwide is on marketplaces, CMO of OpenJaw Technologies, Colin Lewis, told attendees at Econsultancy Live this week. Going to a partner who has already done the hard work from a sourcing perspective and can provide access to a wealth of choice – not least in terms of price – presents a wealth of benefits.

So, while some headlines may report that we are living in an era of the specialist, the days of a one-stop-shop are seemingly far from over – quite the opposite in fact.

Our industry leading e-commerce engine, SmartPad, provides unrivalled access to over 100,000 products – spanning everything from office supplies to state-of-the-art technology solutions – from over 10,000 suppliers. It goes beyond acting simply as a shop window too, by providing valuable access to procurement data and dynamic business intelligence, so customers can continually buy smarter and overcome barriers to strategic growth. And with an extensive network of trusted industry partners, all available in one place, the benefits of supply chain consolidation really come to the fore.

These include:

Improved supplier relationships

By consolidating your supplier base, it’s easier to focus on building robust, long-term relationships with organisations who grow to really learn and care about your business needs. The result is a more efficient and responsive supply chain, which leaves employees free to concentrate on the core elements of their roles.

Reduced purchasing and process costs

As a supplier base reduces, purchasing power increases – not only can customers negotiate better prices for products and services, but shipping and handling costs will decrease as well. There’s also only one invoice, from a single supplier, which further compounds the cost and time saving benefits.

Minimised risk

With fewer suppliers to manage, organisations can mitigate risks throughout the supply chain and focus instead on creating a better quality of service for their own customers.

Once the right partner is chosen, companies typically benefit from consistency of quality, compliance and transparency, which means less volatility for the entire value network.

Greater expenditure visibility and compliance

By implementing an easy to use, intuitive procurement system, organisations can take back control of costs and eliminate rogue spending and budget leakage. SmartPad is designed to define and digitise workflows for employees – both in the office and at home – so that the right people can procure the right things at the right time, whilst providing procurement and finance teams with full expenditure visibility.

Increased productivity within your teams

Supply chain consolidation significantly improves team productivity by freeing time for core, revenue generating tasks and providing a consistent business focus.

Boosts CSR performance

Committing to a corporate social responsibility (CSR) is now a non-negotiable priority for most organisations – certainly in the eyes of the increasingly environmentally-conscious consumer.

Not only does supply chain consolidation offer the ability to minimise the environmental implications of product sourcing and delivery, the curation of strong relationships with CSR-savvy suppliers satisfies the ‘green’ conscience for all concerned.

Utilise valuable data

Some (not all) intuitive marketplaces help to collate and make sense of valuable procurement data, which is when the strategic value of a ‘one-stop-shop’ really comes to life. Using the business intelligence insights provided by SmartPad, for example, our customers can transform raw data into meaningful analytics that power procurement efficiencies, cost savings, and maximum value from your supply chain. It becomes easier to identify otherwise untapped trends too, which empowers the C-suite to make better, data-driven decisions.

When it comes to supply chain management and product sourcing, less is proving to be more. And although we’re all well and truly engrossed in the era of the specialist, when businesses fragment their procurement strategy across too wide a supplier base, the logistical, pricing and quality risks soon multiply.

So, the days may admittedly be over for Jack-of-all trade businesses and companies that don’t place customers at the heart of everything they do. However, the days of a trusted, expert one-stop procurement shop are only just beginning – and their place in the market is as valid as ever.

To discover more about the benefits of supply chain consolidation, click here.

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