Using market intelligence to help improve procurement in your company
Procurement professionals need market intelligence to make informed procurement decisions. For years, accurate and relevant insight has been essential for every business department, including procurement. However, changing external influences make it harder to collect pertinent data. For example, economic conditions, geopolitical factors, and public health emergencies constantly alter the landscape.
Procurement departments should regularly monitor these external influences and consider them alongside market intelligence when making purchasing decisions. This article will look at the supply market intelligence available and how to source it.
What is market intelligence in the supply industry?
Your procurement team cannot source a product or service without understanding the market that they are operating. They would need to utilise market intelligence and analysis to locate and manage the supply of goods and services. They would be able to assess potential pitfalls in product quality and supply chains so that, as a company, there would be minimal impact if anything fell through the cracks. Essentially, market intelligence includes a multitude of information on suppliers of certain products, potential customers and who the competition would be, and how they operate.
What research needs to be compiled?
As mentioned earlier, teams must do a wealth of research to secure the best market intelligence possible. You need to know all the ins and outs of each product and who the competitors would be. It all ties into one eventually, as when your procurement team uses market intelligence to do a competitor analysis, they might also come across what suppliers they use. Many companies try and keep this a secret, especially if they believe that they have got a good deal, so it is always beneficial if you can find out which manufacturers and suppliers they are using. The overall picture should contain enough information for a procurement team to make the best purchasing decisions for the company.
Some systems allow procurement teams to view supplier performance data and look at the trends in annual financials of potential products. A procurement team would need this sort of data to help them identify what risks there are and how big the failure would be.
Adapting to different sectors
Of course, every industry is different. Therefore, procurement teams need to look at the specifics of each product within the industry. For example, a company would want to be satisfied that the supplier is ambitious and innovative. And that the product has no immediate future glass ceiling. Therefore, it becomes crucial to look into the background of the potential supplier or manufacturer of specific goods.
Example of when market intelligence and analysis REALLY matter
If, for example, a procurement team was identifying a space in the sciences industry, they would want to specify a manufacturer that can deliver an idea from concept to reality. Getting technical, research would need to be conducted on the supplier’s reputation and what protection there would be if a deal were struck. Sometimes non-disclosure agreements are not enough, and a team would want to ensure their intellectual property was safe and confidential if they wished to proceed.
For instance, if a group were looking to purchase bespoke chemical compounds. The research compiled when sourcing a company that offers chemical synthesis services would have to be very thorough, as there are so many moving parts. This is why it is such a good example. Positive market intelligence would need to be off the scale for the decision-makers to follow through on such an idea.
Using market intelligence to help improve procurement in your company
In conclusion, procurement professionals need market intelligence to make informed decisions. Accurate and relevant insight is essential for every business department, including procurement. By using market intelligence, procurement professionals can make better decisions that will save the company time and money.
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