Purchasers failing to pass on supplier insights to wider business

Paul Snell is managing editor at Supply Management
16 October 2015

A majority of procurement professionals do not use information from their suppliers to inform the business about what’s going on in the market.

A poll of 40 senior procurement executives by Proxima found although more than half – 57.6 per cent – do ask their vendors for insight into the market, some 81.2 per cent do not include these findings in reports or dashboards to share with the business to inform decisions.

Guy Strafford, chief client officer at the procurement outsourcing business, said: “This statistic suggests there is perhaps a slight disconnect between information being collected from suppliers and insight that business leaders need to make strategic decisions. If the procurement team is unable to bridge the two, this insight is often, unfortunately, kept within the procurement department, leaving the rest of the business to their own devices. This often leads to divisional leaders looking externally for the same information.”

The media was the most common source of market insight, for 65.3 per cent of respondents. Commodity pricing came second with 61 per cent, and currency volatility was third with 57.6 per cent. Some 8.8 per cent use the Purchasing Managers' Indices as their most important source of gauging market sentiment.

And 7.6 per cent of those polled admitted they did not track the market at all, with more than a quarter citing a lack of resources, including money and people, as the reason.

“Less mature procurement functions, defined by their size, scope of influence and heavy focus on savings, will often struggle to connect deeper supplier insights back into other business activities. As a result, these functions (not for lack of want) cannot achieve wider benefits such as supplier-led innovation, more flexible terms and faster responsiveness to demands,” Strafford added.

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