Identify the Right Procurement Strategy for a Better Bottom Line

What's the best approach to managing your entire supply chain and ensuring that procurement benefits your company's bottom line? The first step often starts with identifying your company's overall strategic plan and position: What product or service do you produce, and why should your customers and the market care? Where do you reside in your market? Do you occupy the premium brand space, or more of the value space? Where in the growth curve do you find yourself? Starting with a macro approach like this often makes everything flow downstream a little easier. It's all about having the right strategy.

Some companies are visionaries in the industry and have pushed the envelope by developing new products with new features. They got there first, and want to stay number one. Their approach to picking supply chain partners is different than some of their competitors who occupy the “me too” space. While these “me too's” produce perfectly good products at a reasonable price, they're not quite viewed as innovators in the market.

Innovators, on the other hand, command a relationship with their vendors based on engineering, customer service, marketing, and logistics. Quality is a given, while agility and time to market are also extremely important.

What if you're not that trailblazer, but instead are recognized for consistently producing a reliable product with pared-down features that perfectly satisfices your niche? While engineering, marketing, and logistics support from your vendors is still important, it's less of a priority than it is for those who set the trend.  In this scenario, you're most likely able to give your suppliers better forecast estimates with longer and more consistent lead times.

If your company also happens to be targeting the socially-conscious sustainability market, that's going to send you in some different directions when partnering with suppliers as well. One of our endorsed suppliers of corrugated boxes is Pratt Industries. Pratt practices sustainability throughout its business with the key goal to reduce impact on the environment for Pratt and its customers. As a steward in this field, many manufacturers look to conduct business with Pratt because of these shared values.

No matter what your company's position or goals in the marketplace are, there is an appropriate procurement strategy for you. By asking the right questions, you can identify precisely what that strategy is and your bottom line will undoubtedly thank you.

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