CPOs face unique challenges in today’s complex, fast-changing world. Targeting for ideal supply chain management solutions demands greater expertise. As per the Hackett Group, procurement workloads will climb 10.6% in 2023, while productivity will drop due to talent shortages. This situation highlights the need for CPOs to employ strategic, innovative approaches. They must navigate complexity, optimize margins, drive efficiency, and meet global market demands, all amid limited resources. This article explores strategies to empower CPOs to overcome these hurdles, cultivate supplier relationships, and lead with agility despite fierce competition. 

Strategic Sourcing: A Key to Cost Management

A Deloitte survey found that 76% of CPOs prioritize cost reduction. Strategic sourcing, therefore, is imperative for CPOs to improve supply chain efficiency. It involves market analysis, supplier selection, and risk management for cost savings. CPOs can also leverage e-sourcing tools for cost comparisons and go for process automation to reduce operational costs further.  

Demand Forecasting: Enhancing Procurement Efficiency 

Demand forecasting allows CPOs to predict future needs accurately and manage resources effectively. Gartner’s findings highlight that retailers focusing on demand forecasting achieved a 32% reduction in out-of-stock items and a 20% improvement in inventory level optimization. Efficient demand forecasting can significantly reduce these losses, making it an indispensable tool for CPOs. 

Negotiating Tactics for CPOs

CPOs use effective negotiation tactics to manage procurement costs while maintaining supplier relationships. Here are some tips: 

• Use data and facts to strengthen arguments and counterpoints. According to IBM reports, consumers increasingly favour businesses with quantified, data-supported results. 
• Gain insights into supplier’s priorities and supply chain MRO to leverage during negotiations. 
• Be prepared to walk away if the deal doesn’t meet your minimum requirements. This shows you’re not desperate and can bring the supplier to your terms. 
• Go for a personalized approach, as 90% of consumers find it highly appealing to companies offering such experiences. 

Leveraging Technology for Cost Savings 

Adopting technology in procurement is rapidly becoming a priority, with the procurement software market projected to reach $9.5 billion by 2028. That’s why CPOs are using various technologies for cost savings and optimizing supply chain MRO inventory. Some of the key ones are:

• E-procurement systems: to streamline and automate procurement operations (including MRO procurement) 
• Spend analytics tools: for gaining insights into spending patterns, identifying cost-saving opportunities
• Cloud-based solutions: offers real-time data access collaboration without spending on IT infrastructure 
• Artificial Intelligence and Machine Learning: to forecast market trends and identify opportunities for cost reduction

Sustainable Practices in Procurement 

As per a recent report, strong procurement practices can reduce costs by 5-10% and increase brand value by 15-30%. CPOs establish a clear, sustainable policy to balance environmental responsibility with economic benefits. The policy covers various aspects of sustainable practices. For instance, one of the best ways is to reduce resource use and waste in your supply chain. Companies also switch to lightweight, recyclable, eco-friendly packaging solutions from renewable resources. 

Building Collaborative Supplier Partnership

According to a McKinsey survey, building collaborative supplier partnerships helps companies achieve higher growth, lower operational costs, and greater profitability than their industry peers. Therefore, CPOs should focus on open communication, develop long-term relationships, engage in joint planning with their suppliers for regular performance reviews and acknowledge great work to build strong supplier partnerships. 

End Thoughts 

CPOs can significantly enhance procurement efficiency with strategic sourcing, demand forecasting, and effective negotiation tactics. Aiming for collaborative supplier partnership ensures further profitability. Indeed, optimizing margins and overcoming cost challenges are complex. However, with the right strategy and tools, CPOs can easily lead their organizations to optimize margins throughout the supply chain. Take advantage of modern supply chain management solutions with Moglix Business. Also, check this case study to know how Moglix enables an automotive OEM to unlock 2% cost savings in indirect procurement through supplier consolidation. Visit our website to learn more.

Around 50% of Indian companies face challenges in procurement due to outdated technologies and confusing data. However, the other half are leveraging e-procurement to gain a winning advantage over their competitors. E-procurement, or e-sourcing, is all about sourcing products online for businesses of all verticals to save money and improve supply chain efficiency. Let’s understand how e-procurement helps businesses thrive over competitors. 

Top Advantages of Leveraging e-procurement in Business 

Here are a few top advantages of leveraging e-procurement in a business:

Better Supply Chain Management 

The COVID-19 pandemic has caused supply chain disruptions for 75% of Indian companies due to headcount reductions over increased financial liabilities. With an e procurement process, companies easily handle paperwork related to purchases and transactions electronically from a central system to streamline their supply chain without any hassle. 

Cost Reduction 

A study shows around 38% of mid-sized and 40% of large-sized companies focus on cost reduction during procurement. An ideal e procurement process can help you cut down the cost of purchase order requisition by up to 75%. You do not need to place orders by telephone or mail or have to follow up on those orders manually. It can be done in a matter of seconds. All these benefits translate into cost and resource savings in the long run. 

No Human Error

78% of manufacturers believe procurement automation is imperative as legacy procurement systems are prone to human errors. Errors may surface as incorrect data capture or failure to save changes. However, modern e procurement systems use automation to automate data entry and mitigate the risk of manual handling of purchase orders to keep things flowing without any blunder. 

Budget Management

Reports say 39% of companies find it hard to control their indirect spending during procurement. Also, with a legacy e-procurement system, there’s a small scope to seek approvals for over-budget purchases, as all the budget calculations are done by hand or in spreadsheets. Modern e procurement systems automate budgeting and alert authorised users to available funds and spending impacts before costs are incurred. adding extra flexibility for budgeting needs.  

End Thoughts

The Indian Government is actively digitising the procurement process through this link with digital solutions and automation. However, only 5% of Indian organisations have automated their procurement functions, indicating significant potential for further automation. Take advantage of a modern e-procurement system with Moglix Business. Check this case study to know how Moglix has helped one of the world’s largest diversified natural resources companies to save 10-15% cost through its e-procurement solutions. Visit our website to learn more.

The automotive OEM market is currently valued at US $243 million. It is expected to reach US $296.22 million by 2033. This growth can be attributed to advancements and the increasing demand for hybrid vehicles. This article explores strategies aimed at improving the OEM supply chain through B2B supply chain management that lie ahead in this industry.

Top 6 B2B Supply Chain Strategies in Automotive OEMs

Lets learn more about how these strategies are resolving the complexities of automotive OEM: 

Lean Manufacturing

FedEx’s adoption of lean manufacturing during the 2008 recession is a prime example for the automotive OEM industry. By introducing 68 C-check milestones, FedEx reduced maintenance man-hours from 32,715 to 21,535 and doubled annual C-checks, leading to significant cost savings. Automotive OEMs apply these principles to synchronize production with demand, minimize inventory, and continuously improve processes, enhancing efficiency, reducing costs, and improving customer satisfaction.

Global Sourcing

Global sourcing in Fiat Auto’s Project 178 significantly reduced costs and diversified the supply chain, leveraging international expertise for quality and innovation improvements. This strategy facilitated market adaptation and strengthened supplier relationships, underscoring its importance in automotive operational efficiency and competitiveness.

Just-In-Time (JIT) Inventory

Just-in-Time (JIT) inventory, pioneered by Toyota, revolutionizes automotive parts distribution by minimizing inventory costs and storage, thereby streamlining the supply chain. This strategy enhances efficiency and quality control, as parts are ordered and inspected only as needed. Auto manufacturers utilizing JIT enjoy optimized inventory management and reduced transit times, significantly boosting production efficiency and industry performance.

Supplier Relationship Management

In B2B supply chain management, it is essential for automotive competitiveness, focuses on operational efficiency and navigating supply chain transformation challenges. Effective SRM, as shown in research involving 673 automotive executives, helps OEMs handle disruptions like production volatility and raw material cost fluctuations. This approach, crucial for industry competitiveness, enables OEMs to optimize production schedules, manage risks, and enhance product differentiation, especially during significant industry transitions.

Conclusion 

The supply chain transformation in the automotive OEM market thrives by adopting lean manufacturing, global sourcing, and strategic partnerships, driving enhanced production and sustainability. This approach is pivotal for industry leaders seeking economic gains and ecological responsibility. Insights and methodologies from the Moglix case study can guide stakeholders through this transformative journey.. For in-depth insights and guidance on adapting to these industry changes, learn more at Moglix Business.

The procurement industry is experiencing a trend where 74% of supply chain management leaders are not maintaining their investments in procurement but also increasing them. This indicates a recognition of the role that technology plays in overcoming procurement related challenges. To improve efficiency and reduce costs the industry, including MRO procurement is embracing emerging technologies such as Artificial Intelligence (AI) Predictive Analysis and Blockchain. Let’s explore these trends further.

Emerging trends in Procurement industry for 2024

Here are some emerging tech trends that are evolving the procurement efficiency:

Artificial Intelligence in Procurement

AI is utilized in software tools like spend analytics contract management and strategic sourcing to solve problems efficiently in digital procurement. The projected growth rate for AI in procurement stands at 55.2% from 2017 to 2025 with a market reach of $1.3 billion by 2024. This shows that AI enhances data comprehension, cost savings and operational improvements making procurement more efficient and competitive. E-procurement systems complement these AI advancements by streamlining procurement, enhancing automation, accuracy, and strategic decision-making.

Blockchain in Procurement

Another emerging trend is the use of Blockchain technology in procurement software. By ensuring security, transparency and efficiency Blockchain tracks transactions, from their origin to payment thereby enhancing trust and eliminating vulnerabilities.The World Economic Forum highlights that by removing hindrances in supply chain management across trade we could potentially witness a 5% boost in global GDP and a substantial 15% increase in global trade. 

Notable advantages include visibility into the supply chain, the implementation of smart contracts to streamline operations and significant cost reductions. While traditional tools still hold value there’s no denying that Blockchains long term impact on procurement is profound; it paves the way for heightened efficiency and noteworthy financial savings.

Predictive Analytics in Procurement

Procurement departments are rich in data, essential for strategic planning. The rising importance of predictive analytics enables forward-thinking decision-making, a competitive advantage acknowledged by over a third of leaders. 

For optimal use, setting up a spend analysis system and integrating diverse data sources is vital. This approach leads to improved supplier management, better risk anticipation, precise spending forecasts, and alignment with key performance indicators, thereby enhancing procurement’s agility, efficiency, and strategic significance within an organization.

Conclusion 

As we look towards the future, it’s evident that the procurement industry is on the brink of a technological revolution. Technologies like AI, Blockchain, and Predictive Analytics are not just trends, but pillars of a new era in procurement. These innovations promise enhanced efficiency, cost-effectiveness, and strategic depth, fundamentally transforming procurement practices. For insights into cutting-edge solutions like MRO procurement,procurement software, e-procurement systems, and digital procurement, visit Moglix Business Solutions for a glimpse into the future of procurement. You can download the case study for detailed insights.

Are you struggling with warehouse efficiency and feeling like it’s holding back your business growth? Don’t worry, you’ve come to the right place! In this article, we’ll provide you with valuable insights on how to optimize your operations and overcome the stumbling blocks that are hindering your warehouse efficiency. Whether it’s the imbalanced stock, warehouse layout, employee training or even tech and equipment, we’ve covered it all! Get ready to unleash the proven strategies to propel your business forward! 

Table of Contents

1. Introduction
2. Messy Warehouse Layout
3. Imbalanced stock
4. Not looking after equipment
5. Not using tech right
6. Deficiency in employee training 
7. Conclusion

Introduction

In the world of B2B supply chains, time is like gold in your pocket. Surprisingly, only about 22% of businesses have really dialed in their supply chain game. Imagine the potential waiting to be unlocked! It’s like having a treasure trove of opportunities just waiting for the taking. 

And every second wasted due to inefficiencies costs you financially and gives your competitors an edge. Let’s see the common pitfalls in the warehouse and how to avoid them.

1. Messy Warehouse Layout

A confusing layout can slow things down for a manufacturing industry. Instead, focus on optimizing your warehouse layout. In the realm of manufacturing, an inefficient layout can significantly impede productivity. Therefore, it’s crucial to optimize your warehouse layout for seamless operations.

• Aisles: Much like well-maintained paths in a park, ensure your aisles are narrow enough. When designing warehouse aisles, it’s important to strike a balance between width and efficiency. Narrow aisles can help facilitate efficient movement and access to different sections of the warehouse. 
• Product Placement: Prioritize proximity to the exit for high-demand products. Placing frequently requested items near the exit streamlines the retrieval process, enhancing efficiency.
• Signage: Think of signage as the street signs within your warehouse. Clear, visible labels and signs help workers locate items swiftly, reducing search times and increasing productivity.
• Adaptability: Embrace a culture of adaptability. Regularly assess and, if needed, reconfigure your layout based on evolving demands. This flexibility ensures that your warehouse remains optimized for current production needs.

By paying attention to these key factors, you can significantly enhance the efficiency and productivity of your manufacturing warehouse.

1. Imbalanced Stock OR Uneven inventory

• Good Systems: Establish a robust tracking system to monitor inventory levels within the warehouse. Utilize advanced software solutions tailored to the manufacturing industry, ensuring accurate and real-time stock visibility.
• Rotate Stock: Prioritize a “first in, first out” (FIFO) approach. Ensure older materials or products are positioned at the front while newer items are placed at the back. This rotation helps to keep inventory fresh and minimizes the risk of obsolete goods.
• Regular Checks: Conduct routine inspections to validate physical inventory against digital records. This practice helps identify discrepancies early, allowing for prompt corrective action and preventing potential production delays.

1. Lagging on equipment care

• Update Equipment: Periodically evaluate the condition of your machinery. In some cases, retiring older machines in favor of newer, more efficient models is a strategic move to enhance productivity.
• Fix Problems Fast: Promptly address any malfunctions or breakdowns. Swift repairs prevent disruptions to the production process and curtail potential complications.
• Regular Checks: Implement routine maintenance checks akin to health check-ups for machines. This proactive approach helps identify and address potential issues before they escalate.

1. Not Using Tech Right

Tech can help, but only if used properly. Only 63% of businesses have tech solutions in place. 

• Pick Wisely: Get tech tools that fit your needs.
• Train Everyone: Make sure everyone knows how to use new tools.
• Have a Plan B: If tech breaks down, know what to do next. For example, if a warehouse relies on automated conveyor systems for transporting goods, a backup plan could involve having manual conveyor systems available in case of a breakdown.

1. Deficit in staff training

The people who work in your warehouse are on the front lines. They know the ins and outs of daily operations and can provide invaluable insights:

• Training: Ensure everyone is well-trained and up-to-date with the latest best practices and technology.
• Feedback Loop: Create a system where employees can easily share their observations and suggestions. They might spot potential problems or have ideas for improvements that have yet to cross your mind.
• Reward System: Recognise and reward employees for their ideas and efforts to improve warehouse efficiency. A motivated team can make a significant difference in achieving operational excellence.
• Open Communication: Foster an environment where communication flows freely. When everyone is on the same page, avoiding and addressing common pitfalls becomes a collective effort.

Conclusion

Warehouse inefficiency can cause 34% of delays in shipping, which causes unnecessary business costs. Here is one case in which Moglix has solved the problems of un-optimised inventory, data discrepancies and a fragmented vendor base. You can achieve a streamlined, efficient warehouse operation by avoiding these pitfalls. Regularly review processes, embrace data-driven decision-making and adjust proactively to stay ahead in the competitive B2B supply chain management world.

Over 6 in 10 firms are considering technological investments to optimise their supply chain. The trend is evolving as inflationary pressures and economic stagnation concerns grow.

Transformation usually focuses on improving customer engagement. But this time, the focus is shifting to the supply chain. So, while firms gear up to invest in supply chain management software, do you know the role of technology?

Are you curious about how cutting-edge technologies optimise operations, enhance supply chain visibility, and reduce costs? Read on to discover.

Table of Contents

Technology Takes Charge in Supply Chain Landscape

Harnessing the Power of Robotics for Efficiency

IoT’s Visionary Impact on Visibility

AI Drives Cost Reduction

Transforming Supply Chains into Profit Engines

Technology Takes Charge in Supply Chain Landscape

As much as 60% of supply chain leaders consider technologies a competitive advantage. These technologies include robotics, artificial intelligence (AI), and the Internet of Things (IoT). Let’s explore how these technologies can become a competitive advantage for you.

Harnessing the Power of Robotics for Efficiency 

By 2026, 75% of large enterprises will adopt some form of robots in their warehouses. Let’s see how automation using robots can optimise operations for your supply chain:

• Automate: Robots can pack items, reducing human labour and improving order fulfilment speed. Let automation handle repetitive and time-consuming tasks. This streamlines processes and leads to faster and more efficient operations.
• Reduces errors: Plus, it reduces the risk of errors in data entry and inventory management. This ensures orders are fulfilled, reducing returns and improving customer satisfaction.
• Data-driven decision-making: Automation generates a vast amount of real-time data. You can analyse it to identify bottlenecks, inefficiency, and areas of improvement. This can help you make informed choices to optimise operations. 

IoT’s Visionary Impact on Visibility

Two-thirds of business leaders emphasised increasing visibility in their supply chains to maintain operational stability. Here’s how IoT can improve visibility:

• Real-time tracking: Devices such as sensors and RFID tags help you track a product’s journey across the chain. It helps you spot and mitigate risks right away, should they arise. 
• Predictive maintenance: Predictive maintenance software can track the health of delivery services in real time. This increases the visibility of the delivery processes. Plus, it can help reduce vehicle downtime and repair costs by detecting issues in advance.
• Condition monitoring: IoT can track environmental conditions such as temperature to reduce the wastage risk. This is critical for goods with specific storage requirements, such as pharmaceuticals.  

AI Drives Cost Reduction

Reports say AI-driven operations reduce errors by 20–50% and administration costs by 25–40%5. Here’s how you can use AI to reduce costs: 

• Supplier performance monitoring: AI tracks supplier performance and detects issues. This reduces supply chain disruptions and associated costs.
• Route optimization: Advanced algorithms can calculate the most efficient delivery routes. They consider factors such as road closures or traffic conditions. This minimises the delivery distance, improving delivery times and saving fuel costs.
• Process efficiency: AI can analyse your datasets and identify inefficiencies in your processes. It can then suggest process improvements, reducing operational costs, and streamlining workflows. 

Transforming Supply Chains into Profit Engines

A company’s supply chain represents over 10% of its overall costs6. So, optimising the supply chain can boost your bottom lines dramatically. That’s what Moglix did for India’s leading tire manufacturer.

Moglix helped the firm improve its supply chain efficiency by optimising its inventory management processes. As a result, the firm saved 3% of its total cost of ownership. If you want to learn more about how Moglix can help make your supply chain a competitive advantage for you and achieve your business goals, schedule a call. 

Did you know Artificial Intelligence (AI) can help pharma reduce manufacturing cost by 15–30% and personnel cost by 50–70%? 1. A manufacturing strategy called lights-out manufacturing minimises human presence in factories. AI is set to alter the pharma supply chain sphere dynamically. They are in an excellent position to capture 70% of the future value2.

In the past, manufacturing companies have initiated digital shifts in the supply chain. And they’ve all had one likeness — untapped data and technological breakthroughs. They all leverage technologies such as advanced analytics, AI, and blockchain. But pharma companies are yet to make any bold moves. 

AI is transforming the supply chain through real-time data processing and decision-making. This would make supply chains data-driven by reducing human subjectivity and bias. Read along as we explore how AI improves MRO procurement and optimises the supply chain.

Table of Contents

Transforming Pharma Supply Chains with AI

Optimise Inventory and Demand with AI

Boost Efficiency with End-To-End Visibility

Quality Excellence with Predictive Maintenance

Transforming Pharma Supply Chains

The pharma supply chain generates massive amounts of data, which must be utilised more. Processing data with AI will support real-time decision-making and improve operational efficiency. Plus, it will create a cost-effective and near-autonomous supply chain. 

Here are a few critical supply chain processes where AI will likely have the highest impact.

• Optimising Inventory: To optimise the supply chain, you must accurately adjust inventory levels. Use advanced AI tech, such as predictive analytics, to track the state of drugs. This will enable you to take proactive measures if the supply chain encounters obstacles.
• Boosting Efficiency: Visibility across the supply chain means knowing the status of every transaction and demand trigger. Regardless of the logistics movement, you should know the state of the drug. One can achieve this via supply chain control towers serving centralised hubs. You can use these hubs to audit, track, and generate insights to boost efficiency.
• Achieving Quality Excellence: Pharmacos face challenges due to quality, safety, or compliance issues. AI-enabled predictive maintenance can cut this. It can provide information and insights into operations, equipment performance, and forecasting faults. This can help you improve operational effectiveness, thus improving your bottom line.

It’s a no-brainer for pharma cos to embrace AI and unlock its potential to meet market demands.

A case in point is this leading vaccine manufacturer from India. It faced high inventory holding and volatile monthly MRO procurement spending. After collaborating with Moglix, it reduced inventory costs by 10%. Click here to schedule a demo and see how to team up with Moglix to make your supply chains resilient.