Supply chains: not only are they key to a profitable business operation, but they are also becoming the cornerstone for investor buy-in. In an economy where consumers are estimated to increase by 1.8 billion people by 2025, these trends should be appealing to both corporations and investors with the potential they bring for an advance in cash flow. However, this isn’t entirely the case. With more consumer demands needing to be met, additional pressure is being put on the business sector to act responsibly in their supply chain implementation policies.
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Supply chains are a vital component to a business’s overall competitiveness and its level of success. However, the global nature of supply chains also makes them increasingly exposed to a range of risks especially with regards to the legal landscape. It’s for this reason that companies are urged to put their focus on their business practices to mitigate the risk of potential oversights.
In recent findings, Standard Bank notes that companies are spending more of their revenue on products and services than they were thirty years ago. Looking back over the years, it’s evident that the needs of both corporations and consumers have shifted with the likes of globalization and a complex business market at the fore. It’s for this reason that efficient procurement standards are more valuable to a company’s success than ever before. With a well-managed procurement process, it can contribute to an efficient and cost-effective business operation that ultimately results in a competitive edge within the market.
Corporate supply chains are growing in complexity with the increasing need for goods and services that uphold customer values as well as the ever-advancing technological progressions. With some businesses spending over 70% of their total spend in the supply chain, it is clear this is where the real impact can be made. Sourcing materials, managing suppliers, and navigating the way through emerging economies are common practices in the global business market. With this in mind, supply chain issues are bound to arise especially in the case of upholding important ESG (environmental, social, and governance) criteria, now of critical importance to consumers and investors.
When we talk about procurement today, it should be viewed as much more than a simple financial transaction. In fact, when considered strategically and applied correctly, social procurement can help local communities achieve their government’s economic, environmental and social objectives while underpinning a productive supply chain. With the right implementation, social procurement can easily become a critical tool for achieving a stronger triple bottom line for corporations, helping them meet investor and customer objectives and reduce their risk over the long run.