Supply chains are one of your organization’s most important assets. Without them, your business’ products are not present in the market. In most supply chains, manufacturing is outsourced as is the logistics and fulfillment of the supply chain. It is only the sourcing, planning, R&D and customer relationship – along with the finance, legal, IT and human resource functions – that are maintained in the organization.

In recent weeks, more and more companies have merged or acquired suppliers or outlier differentiator suppliers or competitors to bring more competitive advantage to their supply chain.  Here are a few in the past week:

  • Walgreens Boots Alliance (WBA) purchased AmerisourceBergen Corporation (ABC). This is a great path forward for this pharmacy alliance because it now owns a generic medicine supplier.
  • Apple’s primary supplier Foxconn purchased Sharp. Foxconn has more bench strength now as an electronics maker and an assembler. Sharp is the manufacturer of Apple’s main LCD display for the iPhone and iPad.

Procurement Tools

These acts alone put procurement right in the middle of the M&A (mergers and acquisition) process. For procurement to be a success, it must utilize tools that help it look at spend, segment the supply base, understand the suppliers from capabilities to markets to products and help the business select the suppliers that will make a difference to the business. To be this strategic, procurement teams need fantastic tools to help manage the data, turning it into information and allowing action to be quick and swift so the business doesn’t miss an opportunity to gain market share.

The strategic procurement tools are Spend Analysis, Supplier Relationship Management, Advanced Sourcing and Contract Lifecycle Management. Without these tools, procurement is just looking at information from outside the company and not utilizing its own resources to make the right decisions for the business.