Sourcing leaders take significant steps to overcome inflationary pressures
While procurement professionals are no stranger to supply chain woes, skyrocketing inflation is the latest (and potentially greatest) challenge facing them today. In fact, a 2022 Supplier Information Study by TealBook, the leading supplier data foundation that autonomously enriches supplier data and powers e-procurement technology, reveals that 100% of procurement and sourcing leaders are rapidly taking action to thwart inflation pressures, including finding new suppliers to lower costs (48%).
Business deals are also changing behind the scenes, with procurement executives renegotiating contracts with existing suppliers (44%) to address inflation concerns and entering into pre-defined agreements for products expected to have a high rate of volatility (40%). More emphasis is being put on diversity, too, as 46% of leaders say they benefit from a supplier diversity program as a response to inflation challenges. Finally, an overwhelming 94% of procurement and sourcing execs are making visibility into Tier 2 suppliers a high or moderate priority in order to find new and potentially lower cost suppliers.
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However, a shocking 77 percent of sourcing and procurement leaders say they are extremely concerned about their ability to handle supply chain disruptions because their company’s supplier intelligence hasn’t improved since the start of the pandemic, making it even more difficult to pivot quickly if needed due to inflation pressures.
“With the onslaught and continuation of threats to the supply chain, even the most agile companies are not immune to supply chain disruptions and the negative impact of sky-high inflation,” said Stephany Lapierre, CEO of TealBook. “Access to the data needed to work with suppliers that can help mitigate inflationary and supply chain challenges gives companies the ability and agility to ensure the goods they need to run their business arrive on time and on – or under – budget.”
The study also found that 64 percent of procurement professionals recognize that accurate, up-to-date supplier data allows them to quickly and cost effectively source materials in a crisis, and 99 percent of professionals want to increase supplier diversity to deal with future problems – as well as seize innovation opportunities.
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A staggering 100% of respondents have faced negative consequences from taking too long to identify a supplier, including delays in project timelines (56%) and exceeding project budgets (50%). All respondents (100%) cite the benefits of having a data foundation: a centralized system of supplier information that enables a business to manage supply chain issues more effectively.
“As the world looks toward a post-COVID future, sourcing and procurement leaders continue to face challenges the likes of which they’ve never encountered before,” says Stephany Lapierre. “There are a number of issues that inadequate supplier data has only exacerbated – and ensuring organizations have the data foundation they need to survive future disruptions is paramount.”