Modern supply chain systems were supposed to be the next big strategic business advantage. But the promise of lowering costs and lessening risks has proved elusive. With today‘s more demanding business landscape, your procurement operations may now need to move front and center in your business technology plans.
A recent post on Forbes.com noted that 2019 would likely prove to be the year of the Digital Supply Chain, and for good reason.
Enter Generation Z
In 2019, Generation Z will surpass the Millennials as the dominant population group globally. Gen Z is the first generation who are true “digital natives,” unable to remember a time when there was no Internet. As a result, Gen Z has become accustomed to solving their own problems and creating their own solutions using digital technology. This always-on, digitally empowered group will push business to react quickly and efficiently with a constantly changing group of suppliers.
The consultancy firm Deloitte surveyed 504 procurement leaders from 39 different countries in 2018. These Chief Procurement Officers responded to the survey with their main concerns the modern supply chain needs to address. The survey found an overwhelming amount of effort trained on the procurement process, centered on three major areas:
- Digital supply chain management should reduce cost. Cost reduction was by far the biggest point on every procurement leader’s mind, with 78% saying that reducing costs of procurement would be their number one priority over the next 12 months.
- The Digital Supply Chain will need to be flexible. The second priority noted by 58% of the survey respondents was an increased need for a new product or market development. With global financial conditions improving, CFOs surveyed in a separate Deloitte study also noted that their focus was shifting toward longer-term business growth strategies, which also demanded new product and market development.
- The Digital Supply Chain should manage risk. Supply chain management needs to handle an ever-increasing mountain of risks so they don’t strangle the overall business operation. In the Deloitte survey, 54% of procurement professionals noted that managing risk was one of their top priorities. Dealing with risks ranging from political and regulatory problems to cybersecurity and brand reputation is a necessity for current digital supply chain solutions.
Enabling this new Digital Supply Chain requires you to start with a comprehensive, secure, digital contract life-cycle management (CLM) system. The digital CLM of today is a vital first step in enabling a visible procurement path from beginning to end.
A recent article at SupplyChainBrain.com noted that even the most streamlined supply chain could consist of thousands of partners. These partners all need management to mitigate risk and cost that could derail profits.
The Contract Management Checklist
With a digital contract life-cycle management system, you’ll have the tools you need to build effective agreements with each new vendor as needed, customizing language and reporting as needed to make sure your relationships keep moving smoothly throughout the process. Your CLM should have the data you need on past and current performance to help separate your problem suppliers from those that will become trusted partners.
To make sure your new digital contract management system provides you with all the power you need to contain costs, battle risks, and manage new products and market opportunities, below is a Contract Management Checklist of CLM best practices.
Every digital contract management system should include:
- Management of all information, communication and storage in a digital format. This enables maximum visibility for all necessary points in the supply chain.
- Methods to leverage the power of augmented systems to create and manage your contracts from creation to expiration.
- Real-time visibility to all vital performance metrics.
- Alerts to watch for contract lapses that could cause costs to escalate.
- Provide a robust, flexible reporting system to keep you on top of all the data that impacts your supply chain performance.
Evaluate your potential CLM solution against this Contract Management Checklist to find the perfect set of tools to harness the power of the Digital Supply Chain for your company. Contact ProcurePort’s team of solution specialists for more information on our Contract Management software.