An industry expert has urged professionals in procurement jobs and supply chain jobs to place less emphasis on cost reduction when it comes to choosing suppliers. Instead, they should embrace a nuanced data-driven approach using smart procurement tech.

Writing in Supply Chain Digital, marketing executive Alex Saric notes the rising pressure on organisations to innovate quickly in order to keep up with rapidly shifting customer expectations. Because customers are always seeking “the next big thing”, this effectively shortens product life-cycles. But the rollout of new products often doesn’t hit the mark: recent Gartner research found that 40% of new product launches fail to meet business objectives.

This is where Saric believes that the emerging new skill sets required of professionals occupying procurement jobs, including procurement interims and supply chain interims, can play a crucial role. Employees in these positions will be able to help their organisations to meet fast-changing consumer expectations by taking a more intelligent approach to supplier selection.

For Saric, there are dangers in assuming that all well-ranked suppliers are equally able to meet New Product Introduction (NPI) objectives. By focusing excessively on cost, supplier evaluations sometimes omit vital information, such as performance or risks in supply decisions – omissions that can jeopardise the NPI launch.

Examples of evaluation omissions cited by Saric include suppliers who have insufficient capital for vital equipment, a track record of delayed deliveries, poor processes and lack of experience with a material or technically complex manufacturing process.

When tech-mined data is harnessed to illuminate these shortcomings, value rather than low cost becomes a priority. This gives excellent, innovative suppliers the opportunity to come to the fore of procurement. These suppliers may also be more willing to share precious Intellectual Property to companies who reward them duly for their efforts, yielding competitive advantage with more profitable customers.

Procurement technology such as cloud-based data aggregation and analytics, Saric explains, uncovers “a treasure trove of potential innovation” within the supply chain, giving procurement leaders an immense influence on their company’s bottom line. As Saric notes, “Suppliers possess deep industry expertise and can introduce creative ideas to improve the end-product.”