The past few decades have seen an increased emphasis on—and interest in—global procurement.
And given its many benefits, including access to cost-effective suppliers, market expansion and new opportunities, and scalability and flexibility, it isn’t surprising that this globalisation has led to a period of continuous procurement transformation.
Companies that wish to remain competitive must adapt to ever-changing market conditions and trends, while simultaneously navigating any challenges, such as international regulations, maintaining cross-border supplier relationships, and managing logistics complexities, to name a few.
Thus, while global procurement may sound like a great idea—and it is—it comes with its own unique set of challenges that procurement teams must overcome.
Managing and balancing all areas that are critical to the global procurement process involves ensuring that the four pillars—people, process, technology, and supply chain—it stands on remain strong. This blog post will take a deep-dive into each, with actionable insights that will help you ensure continued global success.
Pillar #1: People
People represent the first pillar of the global procurement process.
Why?
Because finding the right people is the first step to global market success.
People bring the necessary expertise, cultural awareness, negotiation skills, and adaptability required to effectively manage the complexities and opportunities presented by sourcing from a global supply chain. Their involvement is essential for ensuring successful procurement outcomes, risk management, and the overall efficiency and sustainability of the supply chain.
People are an instrumental part of:
Negotiations and relationship building
Procurement involves negotiating contracts and building strong relationships with suppliers. Skilled procurement professionals understand cultural differences, communication nuances, and negotiation tactics required when dealing with international suppliers.
Supplier selection and evaluation
This is because identifying and selecting the right global suppliers can be challenging. Experienced procurement professionals have the expertise to evaluate potential suppliers based on criteria such as quality, reliability, financial stability, and ethical practices, ensuring that the best suppliers are chosen.
Breaching cultural and language barriers
In global procurement, dealing with suppliers from various countries means interacting with diverse cultures and languages. People who are knowledgeable about these cultural differences can avoid misunderstandings, facilitate effective communication, and build trust between parties.
Mitigating risks
Procurement professionals can identify and mitigate potential risks associated with global sourcing, such as geopolitical instability, transportation challenges, or currency fluctuations.
Ensuring regulatory compliance while managing ethical and social responsibilities
Global procurement involves adhering to various international trade regulations and local laws. People well-versed in these regulations can ensure that the procurement process complies with legal requirements, minimising the risk of legal issues or disruptions. Similarly, they can ensure that suppliers follow ethical labour practices, environmental standards, and social responsibility guidelines.
Innovation and continuous improvement
The right people may identify new sourcing opportunities, encourage supplier-driven innovation, and drive improvements in procurement strategies to stay competitive in the global market.
Adaptability and problem-solving
Global procurement often requires dealing with unforeseen challenges, such as natural disasters, geopolitical changes, or supply chain disruptions. People involved in procurement must be adaptable and skilled at creative problem-solving to navigate these situations successfully.
Pillar #2: Process
The success of global procurement depends on well-defined, streamlined processes.
By streamlining operations, efficient processes lead to cost savings and improved productivity. They also facilitate risk management, helping organisations proactively address challenges like geopolitical uncertainties, supplier reliability, and currency fluctuations—while simultaneously promoting organisational transparency and accountability.
Furthermore, compliance with international trade regulations and local laws is essential in global procurement, and well-structured processes ensure adherence to these requirements.
The processes also emphasise supplier relationship management, fostering collaboration and mutual growth by evaluating supplier performance and maintaining regular communication.
Data-driven decision-making is facilitated by structured processes, allowing organisations to identify opportunities for cost savings, supplier improvements, and strategic sourcing decisions.
Pillar #3: Technology
Just as with people and processes, technology is essential for global procurement because it:
- Connects organisations with suppliers worldwide, making communication and collaboration easier.
- Streamlines the sourcing process through e-procurement platforms, saving time and reducing errors.
- Provides valuable data insights for better decision-making, cost-saving opportunities, and optimisation.
- Offers real-time supply chain visibility, allowing businesses to track shipments and manage risks.
- Facilitates secure electronic invoicing and payment systems, improving financial transactions.
- Simplifies contract management, making it easier to create, negotiate, and oversee contracts.
- Automates repetitive tasks, freeing up time for strategic activities.
Pillar #4: Supply chain
Finally, just as a chair cannot stand on only three legs, what good are all the other pillars if your fourth—the supply chain—is dysfunctional?
The supply chain serves as the backbone of your sourcing operations and impacts various aspects of your work. It is essential for:
- Supplier selection and sourcing
- Logistics efficiency
- Risk management
- Cost savings
- Supplier relationships
- Compliance and ethics
- Product quality
- Customer satisfaction
- Adaptability
The list could truly go on and on.
The bottom line is, your supply chain lies at the forefront of the new age of procurement. When combined with people, processes, and technology—you have all the tools you need to achieve global procurement success.
Except there’s always room for one more tool in your arsenal.
Get in touch with us to learn how Prewave can aid you in your global procurement efforts.
Why Prewave?
Global coverage: Prewave provides deep coverage on a global scale by focusing on regional, local and international sources.
Multilingual: Prewave analyses texts in their local languages, gaining a deeper and more accurate understanding.
Predictive: Using predictive analytics, Prewave reports on risk events before they happen.
Machine-readable: Prewave Alerts are highly-structured data points with all relevant attributes extracted.
