Top 5 Trends Transforming Purchasing and Supply Chain Management

Purchasing and supply chain management is a constantly growing business with new practices being introduced or abandoned with growing frequency.

Due to the nature of managing a supply chain, with all of its various moving parts, shifting ideologies have been the primary force behind new trends in the industry.

Here are five major ones any quality supply chain manager should start paying attention to.

1. Vested Outsourcing

So much of supply management involves working with a number of different companies each with their own goals, bottom lines, customer bases, etc. The idea behind vested outsourcing is to form a more permanent bond between these disparate companies.

Now that doesn’t mean there has to be a merger. Simply share common goals with each other in order to establish a sense of comradery. If companies have a tangible sense of helping each other succeed, they are more likely to do so.

In essence, create win-win business scenarios that all members of the supply chain can enjoy.

2. Radical Collaboration

Purchasing and supply chain management is essentially about relationships. The idea behind radical collaboration is removing the inherent boundaries that exist between companies.

Again, this doesn’t have to happen via a merger. The beauty of a supply chain is it functions via companies who are not competing with one another but working together.

By increasing transparency and being truthful about your individual company’s circumstances, you will be well on your way to forging a deeper, more productive bond with your supply chain collaborators.

3. Sustainability and Safety

Now more than ever, companies need to start paying attention to the ways in which they are impacting the environment, their employees, and their customers.

Accidents happen very publically these days, so it’s vital for every company along the supply chain to keep their equipment up to snuff.

Customers and investors are paying attention to the how companies are affecting the world around them. Make sure yours is not getting left behind.

4. Digitization of Purchasing and Supply Chain Mangement

Purchasing and supply chain management is relying more and more on analytics. The amount of data we are now able to record and process have provided companies with the tools required to reevaluate their business model.

Smart, forward thinking companies are looking to discover inefficiencies along their supply lines. Who is not taking advantage of every opportunity to maximize efficiency? Who can we afford to cut-out or replace with something more effective?

With the right data, a supply chain manager can look at the big picture using cold, hard facts in order to make decisions.

5. Developing Locally

More and more consumers are paying attention to where their products are being developed and shipped from. During the recent economic crisis, many looked to companies who outsourced their supply chain overseas to countries with a cheaper labor force.

This practice is becoming harder and harder to defend in the eyes of the ultimate consumer. If you base your supply chain locally, using home-grown companies to fuel it, you will not just build up good will in the eyes of your customers. You will start seeing more and more of their money as well.

By adopting these five trends and working with efficient, forward-looking companies, you will be able to adapt your purchasing and supply chain to fit a constantly shifting industry.