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Felix Felicis for commodity managers – Would it be of any help?

Felix Felicis for commodity managers
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“Luck is what happens when preparation meets opportunity.”– Roman philosopher, mid-1st century AD

As a buyer in the procurement department, did you get a feeling about your luck being bad when you recently made an important purchase of a commodity and it backfired? Are you looking for things to correct your luck before the next purchase?

If your answer is yes, then we are sorry to say we do not have that secret recipe for you to improve your luck. But yes what we do have is a solution that takes care of the luck side of things.

The role of procurement has drastically shifted in the past decade. The questions, that CPOs today face, are far removed from those that they faced, even five years ago. With the supply base for almost all organizations having gone global, the measurement of procurement efficiency is not just the amount of cost reduction achieved. Also with a global supply base come the challenges of ensuring seamless supply in the face of new challenges like economic and political differences or even geographical catastrophes.

Rather than making things more difficult these challenges can be looked at as an opportunity for procurement departments to replace cost reduction as an aim and instead focus towards value addition. As the economy continues to be volatile, procurement needs to look at becoming more pro-active to issues and challenges that it might face compared to being the fire fighting, reactive approach that it generally resorts to. The infusion of technology like spend analysis, e-Sourcing and others has to be supplemented with market intelligence and analytics to ensure that procurement moves beyond the role of a buyer and becomes a business advisor, adding strategic value to the organization.

Commodity managers need to be prudent and hedge for possible volatilities in the commodity market to prevent remorse after making purchases. They should not only depend on historical spend to make decisions but they need to prepare to live in times of volatility by incorporating tools within their spend analysis solution to become more proactive. So, before the reactive approaches get on your nerve, make sure you have the right tool in your hands and leave the recipe part for the kitchen.

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