For Procurement Specialists | 10 Strategies and Tips to Find, Negotiate and Plan for Raw Materials in 2022
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Everything was about digitalization, automation, and streamlining your supply chain for the last ten years. Integrated suppliers, manufacturing and company departments provided a sense of confidence. Yes, the cloud, analytics and upcoming new technologies will continue to improve.
But since March 2020, we know that the human connection is not replaceable. Creating warning systems, problem resolution and improvising with creative solutions regarding shortages and last-minute surprises about Raw Materials, Bottles, Boxes, Closures, Packaging, Shipping, Tariffs, Duties, and the list goes on.
In today's world remaining competitive Globally requires opening our minds to doing things with a human touch. With the expectation that 2022 will continue to be challenging. We share ideas and approaches that may apply to your unique set of circumstances.
1/ Make sure communications with management are pleasant and stable. Share with management the complexity you are facing in your daily tasks.
2/ With last-minute surprises affecting all industries, discuss possible alternatives to shortages or last-minute surprises that will continue to arise in 2022. Having an alternative solution for a possible shortage will go a long way for the company.
3/ Your Critical suppliers are in the same boat as you—common struggles unit people across countries. Create friendlier relationships with your suppliers when possible. If you think a relationship with one of your suppliers would benefit from management interacting with them.
Why not bring it up on your next zoom call.
4/ Get to know the people you work with directly and indirectly. Buying decisions are more complex and require dialogue across all departments. Promote having frequent pre-scheduled interactions, preferably by video conference.
5/ With 2022, we are almost sure to have more headaches. Make fun of the situation and keep things light with your colleagues. Attend social activities when possible if you have a strained relationship with a co-worker. Maybe promote working together on a task.
6/ Be positive, keep things simple, and you know what to expect. The world of procurement will continue to be filled with disruptions. The expectation of frictionless procurement is somewhat on hold. Removing obstacles and delivering on your business's top priorities remains the objective. So things are not really changing, just more unexpected surprises.
7/ If Pre-pandemic automated ordering or management systems were doing some of the lifting.
- Are they audited, reviewed or updated to adapt to the current times?
- Maybe staying informed about technical updates?
- Or discussing with management if a review is applicable?
8/ Reviewing the last 19 months of data across systems and departments may provide information or warning signs for things to come. Promote the implementation of automated real-time red flag warnings across multiple departments.
Example: Product so and so we have a last-minute problem with a closure liner.
- The liner inside the closure is unavailable for 90 days.
- Are all the departments informed in real-time?
9/ Planning for disruptions is the new norm. We know that Raw Materials, Bottles, Boxes, Closures and Packaging will continue to see disruptions. What ready-to-go alternatives do you have? Asking those questions is not easy but is required in this new world.
- What if you planned for a shortage of closures and liners and have on-hand 50,000 units that could be shipped today to your manufacturing facility.
- Or what if a pre-approved Raw Material from a different supplier and 4,000 litres could be shipped today to your manufacturing facility.
Such scenarios could save the day!
10/ Supply chain, sourcing, negotiations, purchasing and compliance will continue in your day-to-day. Obtaining goods for the lowest cost will stay a top priority for your organization. Procurement departments will remain essential for large corporations and Governments.
Moving into 2022:
Our advice is to promote to management:
- Training and going to procurement conferences as often as possible. Sharing your challenges with like-minded professionals will provide you with the best source of raw intelligence.
Funny how at the end of the day, the human touch is still is important.
It will be interesting to see how 2022 unfolds.
We do see signs that things are getting better. But some Raw Materials, Bottles, Boxes, Closures, Liners and Packaging will remain under pressure for the foreseeable future.
If we had to give two pieces of advice:
- Expect last-minute surprises.
- Plan in advance for shortages.
And if you operate a Starbucks, please stop announcing the suspension of our favourite products.
Products listed are available on our website. You can schedule a call with Ingredient Depot by clicking the link in the description. This is a free service for all your raw materials needs. And not a sales call.
Thank you for reading.