In the past, purchasing management may have been thought of as a transactional role with the focus solely on acquiring necessary goods at the lowest possible prices. However, in the modern business environment, it is becoming increasingly critical for companies to include their procurement operations as part of their overall strategic planning efforts.
From investigating the availability of natural resources and labor in different locations to monitoring the latest labeling trends affecting global shipping, purchasing managers have to keep track of all the variables that impact their operations. Understanding the underlying dynamics is essential when it comes to making smart decisions to establish secure supply chains. According to a survey of 263 senior finance executives conducted by CFO Research Services, the procurement function at nearly 75 percent of respondents' companies had become more "strategic minded" over the last three years.
"As business gets more complicated and more global, it has added another facet to the whole issue of procurement," Paul Janicki, CFO of Roquette America, explained in response to a survey question. "That's why procurement has become more strategic: it's no longer just the means to do business, but also an area of optimization."
Factors such as natural disasters and the credit squeeze during the height of the financial crisis have also influenced the development of procurement, driving executives to focus on preventing supply disruptions and ensuring overall stability.
Considering the tools available to purchasing managers today, one of the most useful options is to implement a label track and traceability system. This allows distributors and retailers to receive accurate information on where their products are being shipped from, meaning they can pinpoint the source of goods that are damaged or of dubious quality. There is also the benefit of being able to identify inefficiencies and address specific bottlenecks in the transportation network.
Having the capability to track labels in this way can also help companies crack down on counterfeiters attempting to infiltrate their supply chains. It is difficult for a factory to keep shipping knockoff products down the line when standardized labels allow rapid identification of the culprit.