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How can companies improve procurement of business services?

How can companies improve procurement of business services?
in Legal

It is important that businesses make their supply chains as efficient as possible, taking into account energy efficiency, raw materials and the importance of running procurement plans that are financially savvy. 

A recent study from IBM found that businesses and supply chains have become significantly more global over the last ten years, highlighting that the number of transnational companies more than doubled between 1995 and 2007.

The research highlighted that cost containment is their number one responsibility for businesses, ahead of both enterprise growth and product/service innovation. However, it was found that rapid wage inflation, spikes in commodity prices and credit freezes are becoming increasingly relevant.

IBM suggested that supply chain executives are now reacting to whatever cost issues appear to be at the time, ranging from increasing fuel prices to cost changes. 

When it comes to translation services, it is important that all communications are sent in the correct language and translated properly. Any mistakes can lead to problems in the supply chain and result in substantial money wastage. 

How does the economy affect procurement?

While global supply chains are becoming increasingly popular, any procurement activities depend largely on the condition of the economy, which has enjoyed a significant recovery in recent years.

A study from the International Monetary Fund (IMF) found that global growth is moderate and there are uneven prospects throughout primary countries and regions, meaning companies will need to continue being safe with their financial planning or risk being left in a dangerous monetary position. 

“At a time when, generally speaking, information is abundant and connectivity is more feasible than ever, supply chain executives still rank visibility as their greatest management challenge. 

“Although more information is available, proportionally less is being effectively captured, managed, analyzed and made available to people who need it.”

In the current economic climate, saving money is likely to be a key priority for many businesses. Even with more opportunities opening up in the world economy, it is clear that there will always be an element of risk with any supply chain activities. 

How can supply chains become more energy efficient?

Another area of improvement for many companies is the energy efficiency of their supply chains, as many companies are left with old-fashioned approaches to procurement, with little consideration of the carbon emissions of companies. 

A study from the Carbon Trust has looked into how businesses can make an effort to make their company more sustainable, stressing that managing the carbon footprint of products is the next step for organisations to decrease carbon emissions and cut the effects of climate change.

“As we move to a more carbon-constrained world, business will have to meet customer needs in a way that generates fewer carbon emissions. Business energy efficiency has played, and will continue to play, an important role but more fundamental solutions are also needed,” the Carbon Trust explained in the study.

At a time when many businesses are looking to save as much money as possible, energy efficiency is in danger of being overlooked by managers who are looking to cut their budget. 

However, there are many benefits to having an efficient supply chain, ranging from increases to direct energy costs to legislation that carry large fines for high energy consumption. With this in mind, companies can make massive improvements to their supply chain, save money and potentially improve their reputation in the industry. 

The importance of reputation management

In the modern era, there has been a gradual shift towards fair trade products and businesses need to make sure they are not involved in any procurement scandals. 

Many companies brand themselves as environmentally-friendly, sustainable and fair trade so, if they are found to work with businesses that break the law and violate supply chain rules, their reputation could be damaged within their industry. 

This is especially important for globalised businesses that are working with groups from a number of different countries, where laws could differ greatly. This, combined with potential translation issues, could lead to misunderstandings. 

To make sure businesses reduce the chances of suffering PR damage, organisations should carry out significant research on their partners and make sure they employ specialist translation services. 

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