In the Strategic Map of Industry in Brazil (e-book POLITICAL AND ECONOMIC SCENARIOS IN BRAZIL UNDER THE 2019-2022 ADMINISTRATION – Level), we notice the level of complexity of the topics industrial companies are facing, such as:
• Competitiveness with sustainability
• Productivity and innovation in the enterprise
• Industrial innovation and foreign trade policy
• Infrastructure
• Taxation
• Labor relations
• Education
• Financing
• Natural Resources and Environment
• Legal certainty
• Macroeconomic Environment
• State efficiency, governance, and red-tape reduction
As a result, Procurement/Supply areas are increasingly called upon to play a more strategic role within organizations.
However, this is not the reality in most companies. According to a study by A.T. Kearney (Mobilizing for Excellence in Supply Management – 2017), only 7% of surveyed companies (considered leaders in Supply Management) showed excellence in Procurement/Supply management competencies and outstanding performance in the following areas:
1. Short-term costs
2. Supply risk
3. Total Cost of the Procurement/Supply structure
4. Innovation
5. Talent Hunting.
The CPO (Chief Procurement Officer) community has been participating in events for strategic discussions, such as the Procurement Club (www.procurementclub.com.br), where topics such as Digital Strategy, Talent/Leadership Development in Procurement/Supply, and leveraging innovation through suppliers are highlighted, reinforcing the importance of Procurement/Supply departments focusing their efforts in this direction.
Procurement Process Optimization with e-Procurement
Looking at these topics from a more operational standpoint, it is worth emphasizing the importance of Procurement processes—activity workflows with defined inputs and outputs—which are essential to help achieve optimal productivity and meet the needs of the company and requesting departments, provided they are designed based on market best practices.
With the evolution of information technology-based solutions, systems (software) have emerged to make the execution of Procurement activities faster, more efficient, and compliant with processes. This software is also known as e-procurement systems. Thus, technology solutions emerged for various processes:
Technology Solutions for Processes
1. Source to Contract:
A process covering everything from the acquisition of goods/products or services in Strategic Categories (Strategic Sourcing) to managing the life cycle of the contract(s) generated by these purchases (CLM – Contract Lifecycle Management);
2. Procure to Pay:
Covers everything from the management and consumption of catalog items (pre-defined product/service contracts) to monitoring the issued Invoice;
3. Supplier Management (SRM):
Comprises processes from the onboarding of a new supplier (pre-registration and qualification) to their eventual strategic collaboration;
4. Spend Analysis & Purchasing Intelligence:
Covering everything from data management related to acquisitions to supporting decision-making for these purchases;
With all this information, looking at the dynamics of most companies in Brazil, we can identify, for example, a common challenge in handling Indirect Procurement. If we look at the 20/80% spend of these purchases (long tail), we see an opportunity to apply the mentioned initiatives, automating these operations with e-procurement systems powered by robotic process automation (RPA).
This example can significantly reduce the operational workload of the Procurement/Supply team, enabling these professionals, or part of them, to better develop their competencies in strategic category negotiation, supplier relationship management, Procurement intelligence, and other activities.
Level Group
Level, with its 12 years of activity, specializes in Supply Chain, providing the Brazilian, Latin American, and Indian markets with e-Procurement solutions, robotization, consultancy for the restructuring of Procurement/Supply areas (Procurement Transformation), Strategic Sourcing Projects, Procurement BPOs, Supplier, Third-Party, and Contract Management.
