Finding qualified suppliers is one of the biggest challenges in the area of purchases. This is because, accustomed to thinking primarily about savings (which are still extremely relevant), companies make it difficult for professionals working in this department to change their perspective and seek new solutions, capabilities and knowledge.
“Companies need a more analytical purchasing department, more attentive to the needs of the business, capable of providing solutions to their problems, and that generates increasing value for the business, benefiting shareholders and customers. This process is not simple and many do not know how to do it”, comments consultant Leonardo de Assis Santos, from CADARN, a Rio de Janeiro-based consultancy specializing in Market Intelligence, when listing the main challenges currently faced in this area.
Another issue, according to him, is the company's own organizational structure and culture, which does not place the operation in purchases as something strategic to the organization's competitiveness.
Santos understands that there is no single solution for managing the purchasing process. However, in his opinion, tools for providing data and market and cost indicators such as COSTDRIVERS and Data Analytics such as Cortex can be of great help in changing the attitude of those who work in this department.
Read the interview with the CADARN consultant below.
COSTDRIVERS – What is the main challenge faced by companies in the purchasing area today?
Leonardo of Assisi Santos – There are many challenges for purchasing activities in organizations. However, I believe that the changes in the demands on work and qualifications in the area are the biggest for companies and professionals. The environment in which companies operate is increasingly complex, with the growth of relationships in the chain, the availability of information and the speed of its exchange, and the rise of competition that is increasingly global and diverse, coming not only from within its sector, but from brokered segments, with new technologies. The company needs a more analytical purchasing area, more attentive to the needs of the business, capable of providing solutions to its problems and that generates more and more value for the business, benefiting shareholders and customers.
Another challenge that I consider very relevant is the difficulty in finding qualified suppliers. Unfortunately, we have a low density of companies to provide some services and product offerings and often those that exist are not properly qualified. Many end up incorporating functions that are not core due to the poor performance of its suppliers, which generates investments, resources and time that could be used more productively within the organization.
COSTDRIVERS – Is there a more appropriate tool for managing purchasing processes?
Leonardo of Assisi Santos – Purchasing processes are somewhat complex and I do not see a single tool as a solution to their work. The company will continue to need an ERP to aggregate information, but tools for providing data and market and cost indicators such as COSTDRIVERS and Data Analytics such as Cortex can be of great help in this change in the purchasing area's posture. The platform COSTDRIVERS contains a lot of information about different sectors and helps a lot in the monitoring process
of the evolution of costs of the categories, facilitating the negotiation and review processes of contracts. Cortex helps to work with internal and external data to the organization, enabling a more analytical view of the performance of the purchasing area and how it generates value for the organization. The company will need to continually work with content, data, and indicators for decision-making and having platforms that enable this process quickly will certainly make this process more dynamic and widespread within the organization.
COSTDRIVERS – What are the main supplier search processes available on the market today?
Leonardo of Assisi Santos – There are several ways to structure a vendor list, but I believe the best one is to talk to market experts, consultants and companies that are not necessarily from your sector, but buy the same products and services, your qualified competitor demand. This is a group of people who have experience, have relationships with companies, use these products and services, that is, they have useful information to form an interesting group of companies to serve. There are services and platforms for aggregating suppliers in the market, but they still do not serve all categories of products and services and there is a huge gap for higher value-added professional and technical services.
COSTDRIVERS – And what are the most appropriate criteria for choosing qualified suppliers? What would they be?
Leonardo of Assisi Santos – It depends a lot on the category we are referring to, as there is a wide range of aspects that could be considered when choosing a company to be a potential supplier to a client. There are things that are fundamental, such as product/service quality; service level; deadlines and quality of service; financial health of the company; portfolio of products and services.
customers; and tax and labor regularity. There are elements, however, that may gain importance depending on the sector, such as, for example, innovation capacity in the technology sector, capillarity in the territory for logistics services; maintenance service costs for some capital-intensive items; quality and cleanliness of facilities for food products, among others.
COSTDRIVERS – In which cases would it be advisable to use your own cost analysis systems?
Leonardo of Assisi Santos – In all cases. The reality is that the price/value relationship is determined mainly by the market and controlling your costs ends up being the best way to work on your margin and profitability. If the company does not adopt adequate tools to perform this assessment, it runs a serious risk of losing competitiveness in the segments in which it offers its products and services. As a 3G manager would say, “cost is like a nail; you can’t let it evolve too much or you’ll get hurt.” Companies end up dedicating a lot of time to sales, because that’s what makes them grow and reach new markets. However, if the company does not have good cost management, it may have profitability/competitiveness problems, compromising the sustainability of the business.
