The importance of market intelligence for effective procurement services

The use of market intelligence solutions in procurement services has gained adoption in many businesses as a strategic growth driver.

The increase in acceptance and demand for these services is attributed to increasingly complex modern supply chain processes and the necessity to strengthen them to handle ongoing disruptions. The rising global commodity prices and increased volatility have further highlighted the importance of using market intelligence across all procurement services to drive business resilience and value. Read on to learn how market intelligence's incisive insights can help businesses fulfil their procurement and sourcing goals.

Better supplier selection

According to research, companies with better supplier collaboration outperform their competition significantly. Hence, finding a quality and suitable supplier will not only ensure efficient operations but may even help give you a massive competitive advantage. However, choosing the best supplier from a vast pool of potential suppliers is quite challenging for any organisation.

Using market intelligence procurement tools like independent market pricing and analytics can help procurement teams to choose the most suitable supplier. In this way, businesses can make procurement decisions quickly and efficiently and gain access to the raw materials they need for efficient operations without wasting time sorting through irrelevant data.

Trends and spends analysis

Using market intelligence procurement software can help businesses constantly evaluate the market to identify suppliers who can supply essential raw materials at cheaper rates. The company can analyse its current expenditures and compare them with current market trends to continually refine and improve its supply chain.

The capability of quickly analysing market trends and spending data can help alleviate other notable pain points like overspending and off-budget costs. In addition, running spend analysis using market intelligence data can result in cost savings, minimise supply chain disruptions and boost long-term prosperity and growth.

Improves risk management

Various risks like inability to fulfil demand, undependable supply of materials, avoidable increase in material costs, and others can adversely affect your company's profitability. Using market intelligence can help improve risk management as it allows you to stay up to date with current market commodity prices and future price forecasts. Businesses can consider hedging and switch to efficient alternatives during a period of low supply, thus maintaining their daily operations and meeting customer demand without any hassles.

Speed up approval rate

Most procurement decisions in a business are subject to approval by senior-level managers. Integrating market intelligence in supporting procurement services ensures managers can make smart decisions more efficiently. A procurement dashboard with accurate and detailed reports and analytics can help speed up the approval rate and drastically improve the efficiency of the entire supply chain. Analytics and reporting provide businesses with clear and consolidated oversight of their procurement activities and whether they align with the broader business goals.?

Negotiate better deals?

Procurement tools like market intelligence help businesses evaluate commodity prices better and negotiate deals accordingly. It ensures that your firm is always prepared and never goes into any commitment blindly.

Going into supplier contract negotiations with robust market intelligence data will create positive outcomes, avoid expensive mistakes, and safely secure deals that significantly benefit your business. Furthermore, price forecast tools can guarantee that your firm will choose vendor partnerships to support your future evolving needs, allowing you to innovate and expand confidently.

Improve sustainability

Embedding sustainability across all parts of the business is necessary to meet increasing consumer demand, regulatory requirements, and investor pressure. Using market intelligence in procurement services allows companies to explore more sustainable options in their supply chains. A sustainable approach involves making sustainability a major part of how the firm does business, from raw materials and vendor selection to the products it makes and customer support. Companies looking to be more eco-friendly can evaluate vendors and create reports in a procurement dashboard before choosing the most environmentally conscious suppliers.

Improve accuracy in demand forecasting

Procurement teams must be ready for demand changes and how they may affect supplier relationships and market commodity prices. While demand increases are always welcome for any business, a significant reduction due to volatility or high market commodity prices can affect profitability. The recent health pandemic disrupted supply chains worldwide and caused changes in consumer behaviour. It forced professionals offering procurement services to use market intelligence to enhance the visibility of their processes and support faster reactions. For instance, with demand and price forecasts, a company that produces electronic components would have switched to making medical inventories like respirators and ventilators over basic consumer goods.

Conclusion

Leveraging market intelligence can help businesses improve decision-making, reduce risk, and remain competitive. It also allows businesses to quickly identify market trends and make the necessary changes to maximise profitability. Mintec offers a comprehensive market intelligence solution for the food, CPG, and capital goods supply chains.

Contact us today for more information https://www.mintecglobal.com/contact-us

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