The role of the procurement department consists of a wide range of activities. Today, the majority of CFOs are achieving their financial objectives of profitability and cost-saving by collaborating with top-notch supply chain professionals.
Once the procurement process is in place, it stands to bring out significant results, particularly the task of signing up new vendors and suppliers and expediting the quote-to-procure process.
However, for most finance heads across enterprises, a major challenge exists to get a solid grip on activities that surround the procurement process. There are also concerns about the safety of supply chain and international trade agreements that have a significant impact on the performance of procurement.
Traditional purchasing or procurement functions are more focused on cost. Modern procurement functions lean more to achieving organizational growth by forecasting customer demand. With a proper budget in place, companies can cut down the purchasing of raw materials to cater to the unexpected demand for the finished product.
Since demand is also driven by social media, it is imperative that procurement check on internal and external data to get a good sense of how much is available and how and when it is being used. Furthermore, the function of procurement should be vertically integrated within the organization to help optimize performance.
Gone are the days when finance was supposed to drive productivity and efficiency of the supply chain.
Today, a large number of organizations are leveraging technology by implementing cloud-based systems to help functions within HR, finance, and operations use data for budgeting and forecasting.
If you want to know more about how procurement functions can effectively perform budgeting and forecasting in your business, click the link below for more information.