Greek companies need to make better use of the latest procurement and supply chain techniques as they seek to mitigate the impact of the country’s economic crisis, according to new research from procurement and supply chain consultancy company State of Flux.
According to the report, which surveyed over 130 firms in 20 industry sectors, practices aimed at cutting costs and reducing risk need to be stepped up during the next 12 months.
“Greek procurement professionals need to strengthen their voices and position procurement and supply chain at the heart of their organizations,” said Alexandros Tsagkas, Head of State of Flux, Greece. “Despite the current economic environment, we should not lose faith in the positive impact that efficient management practices have on the competitiveness of our companies.”
Approximately nine out of 10 respondents said cost savings were the number one priority for their procurement functions this year. But 44 percent had no central organization responsible for managing third-party spend on goods and services; and half had not used e-sourcing tools to help drive down costs.
Risk management is also less developed than in other European countries, with eight out of 10 firms having identified risks in their supply chains—with the risk of supplier failure topping the list. But just 28 percent of procurement and supply chain functions had mitigation objectives in place and fewer still (23 percent) had a documented policy for managing risks.
A third of companies said they struggle to measure the value contributed by procurement, while one-fifth do not measure it at all. Almost 40 percent admitted that low or declining resources were a challenge in improving the performance of their procurement and supply chain functions.
Despite these difficulties, many respondents reported that the profile of procurement and supply chain professionals had risen during the economic crisis, and that Greek companies were paying more attention to the various levers at their disposal.
The majority appear to have in place transactional processes for sourcing, procure-to-pay and spend analysis, but they are lagging in more strategic areas such as category management, contracts management and supplier management. It was clear, however, during a series of practitioner workshops held as part of the research project that Greek procurement professionals are committed to raising their contribution to help overcome the economic crisis.
In addition, two-thirds of respondents said that implementing robust buying and management practices was a priority for their organizations. The main areas targeted for improvement were boosting the capabilities of the procurement team (56 percent); designing and implementing a procurement strategy (42 percent); and adopting enabling technology (41 percent).
“We have seen in the past that procurement and supply chain gets more ‘air time’ during period of economic and credit pressures when organizations look to take out costs and reduce their risks,” said Alan Day, Chairman of State of Flux, London. “These research results and the subsequent workshops highlighted some great opportunities in areas such as contracts management, supplier management and risk management that Greek organizations ought to look into to help overcome their economic challenges.”