In the wake of increasing globalization, crises and high competitive pressure, the risks in the supply chain are increasing. Past crises have painfully exposed the fragility of the system and caused existential hardship for many companies.

In order to counter these problems, sound procurement planning and functioning supplier relationship management are important measures. On the one hand, this requires a consistent database in order to improve transparency, controllability, the ability to act and cost and performance monitoring, while at the same time fulfilling legal requirements such as those of the Supply Chain Duty of Care Act (LkSG). In addition, companies need a sourcing strategy that fits their corporate strategy and positioning.

Centralized system creates transparency

Software specializing in supply chain sourcing supports supply chain management in terms of strategic procurement planning and supplier relationship management and contributes to their optimization. It is crucial that a central platform is set up on which all data is collected, stored and analyzed in order to promote transparency and accessibility.

A centralized and comprehensive sourcing system provides a solid basis for achieving competitive advantages in the market and long-term success. Centralization ensures data consistency and simplifies data maintenance enormously because any changes made are reflected. In this way, transmission errors can be avoided. The automation of data collection and processing sources also significantly reduces sources of error because manual intervention is minimized. In addition, processing times are shortened and process efficiency is increased. In this context, it is helpful, for example, if suppliers can maintain their data themselves via a supplier portal and update it as required.

Assessing risks with different analysis tools

Advanced analysis and reporting tools should also be part of the IT system because they offer deeper insights into the data. Predictive analytics features, for example, are used for the early detection of problems and the optimization of processes. Real-time analytics features also prove valuable when they provide detailed and short-term insights into dimensions such as spend, savings, categories, supplier analysis, bills of materials and material attributes. Purchase price trend analysis tools also help companies understand and adapt to the dynamics of market commodities. With the support of such tools, risk analyses can be carried out that can provide a decisive competitive advantage - especially with regard to possible supply bottlenecks that can easily result from multi-level supply chains. With a comprehensive sourcing system, geopolitical factors can also be integrated into the decision-making processes and technical specifications can be included.

A strategic sourcing platform should also include automation functions in the procurement process in order to save time and resources and increase efficiency and transparency. Automatic notifications for new supplier registrations and offers, the automatic evaluation of supplier offers based on predefined criteria, the automatic generation of orders and contracts or the automatic tracking and analysis of procurement data are desirable functions in this regard.

Furthermore, spend control can support a strategic sourcing platform by painting a complete picture of spending habits and analyzing patterns to identify areas where improvements can be made. Budget and spend trends are tracked across different projects and procurement programs so that efforts can be optimized.

Optimization of the purchasing process

Overall, a comprehensive sourcing platform optimizes every phase of the purchasing process - from onboarding new suppliers to requisition and catalog management to order management and document processing - and shortens throughput times. Procurement processes are streamlined, saving costs and time. The company-wide transparency created and the real-time data provided significantly improve well-founded procurement decisions and decision-making. In addition, such a tool enables partnerships to be maintained, resulting in stable collaboration, constant availability of materials and services and higher product quality and innovation. This provides manufacturers with significant, long-term competitive advantages.

When choosing an IT system, it is also important to ensure that it complies with the applicable data protection and security standards. Cloud solutions are particularly secure here and their security mechanisms prevent unauthorized access by third parties. It is also important that the data formats for the purchasing process are standardized in order to simplify data exchange with suppliers. For example, if a supplier submits an individual quotation and does not want to use the direct system input, it would be a clever option for the purchasing department to offer the supplier the opportunity to submit their quotation via an Excel upload. The IT system used should be able to export and import the data accordingly.

External advice on selection and implementation

A management consultancy such as Protema supports companies both in selecting the right tool and in implementing it. The external partners use a wide range of expertise from numerous industries, best practices and experience to understand the respective company, its product range and its market positioning and strategy. Based on this, they develop concepts for the business processes and the organization, which form the basis for a tool selection and, above all, for its configuration.

One example of an integrated software platform for strategic sourcing is the Merlin software. The system digitizes the end-to-end value chain - starting with the identification of strategic goals, category management and category-specific strategy - and enables domain-specific expertise by including detailed configurability and templates. Merlin also enables an optimized sourcing and selection process as well as intuitive comparison and selection of the overall best suppliers for each requirement.

Due to increasing risks in their supply chains, companies are required to optimize their supply chain management and thus their procurement planning and supplier relationships in order to maintain their competitiveness. A central, integrated IT platform with a focus on sourcing in supply chain management is crucial for overcoming these challenges. The systems offer transparency, efficiency and the opportunity to build strategic partnerships. However, the selection and implementation of solutions requires careful planning in order to best meet the specific needs and requirements of a company.