Significance of Procurement Research

Published on 08 Aug, 2017

Large organizations are shifting their focus toward developing a procurement strategy based on detailed procurement research. Procurement research, including detailed insights on the current and future market trends (check this addition), allows organizations to manage supply chain risks, as well as achieve operational efficiency.

The business landscape is highly competitive and in order to succeed every business needs to ensure that it has a well-defined plan. An important aspect of planning is procurement, and procurement research is a critical element of this process.

It helps the business in achieving greater transparency in sourcing, making it cost-efficient and reducing supply risks. Research entails delving deep into various facets of the procurement process. Moreover, the data and insights enables decision makers across the procurement lifecycle to develop a strong strategy and define processes for continuous monitoring and evaluation.

The increasing significance of procurement research can be attributed to the following reasons:

  • Operational Efficiency – Due to precise intelligence gathered, procurement research can direct organizational resources to key priority areas and help the organization in quickly adapt to changing supply market dynamics. Procurement research can also include a ‘make versus buy’ analysis (of associated cost and value drivers) to understand what will be more cost-efficient: manufacturing or outsourcing it.
  • Effective Sourcing – Most companies intend to source top quality materials at the most reasonable cost. Comprehensive procurement research provides complete details of the supply landscape, including potential suppliers with their capabilities and prices, which helps in taking the right decisions. Procurement research can also help in identifying the most cost-effective geographies for sourcing.
  • Use of Technology – Technological innovations and disruptions that are redefining the supply market can be identified. Leveraging the understanding of potential benefits of new innovations, existing processes can be upgraded. Adopting useful technologies is important to gain a competitive edge over others.
  • Risk Management – Every supply chain is exposed to a myriad risks. Procurement research can help predict some of them, helping organizations to be ready with an action plan. Warning signs can be spotted and businesses can be hedged accordingly. Consequently, any negative impact can be minimized.
  • Value Addition – Organizations can add value additions. Expert evaluations, timely intelligence and deep insights help in designing effective strategies.

Armed with information and analysis, businesses can address the challenges of supply chain management. They can take informed decisions, which would enable them to increase cost savings, reduce supply risk, effectively manage the supply base and add strategic value to the organization.

Aranca provides procurement research and advisory services, having dedicated category-specific teams with high credentials. With access to reliable data sources, we don’t just provide facts but also intelligence and insights not possible from published sources alone. We have expertise in both primary and secondary research and create a unique analytical perspective. Sourcing teams leverage our research expertise across multiple business needs, including Category 360 Framework, Should-cost Models, Best Cost Country Sourcing Analysis, Should Cost Modelling, RFx (RFI/RFP) Management, Supply Risk Assessment, and Supplier Diversity.

Procurement research is a crucial requirement for an organization, given the multiple benefits it offers.