Andrés Birlain
Expert Contributor

What is the Future of Industrial Purchasing?

By Andrés Birlain | Thu, 10/28/2021 - 15:11

I started my career as an industrial supplier 10 years ago. During this time, I have had the opportunity to visit more than 1,000 plants in multiple industrial sectors, from cement facilities to e-commerce distribution centers.

During these years of professional maturation, I’ve identified particular pros and cons in the way in which professionals dedicated to the industry operate at the supply and procurement level. My choice as a key advantage (compared to other markets) is that in the industry there is certainty in buying and selling. We typically see good, paying clients and suppliers meeting their supply and service commitments.

This makes the industry an attractive commercial and economic sector for many to do business in.

On the other hand, I can also identify a triplet of cons that have slowed the evolution of our competitiveness compared to other sectors and, more importantly, to other regions in the world. The first is related to the sales and procurement cycles. Considering (from the vendor perspective) the demotivating process of getting our customers attention first, which worsened just after COVID-19 happened due to the low connectivity between sellers and buyers, and on top of all the process related to matching the vendors’ and buyers’ needs, resulting in processes that take from one month up to three years or even more.

Secondly, the decentralization of purchases (one process for one item to buy) and the mechanism of corporate transactions in international companies that had been focusing on creating “bullet-proof” procedures to ensure the “best” purchase for companies had deteriorated the capacity of building strong supplier/customer relationships and long-lasting cooperation that create value and challenge, together, the status-quo.

Third, for buyers, the process of "recruiting" new suppliers is a desired but very difficult task to achieve, due to the lack of platforms or groups that enable a 360-degree view of the offer and the freedom to make decisions.

The future is leaning toward the simplification of purchasing processes; quick, effective purchasing processes will be just as important for companies as it is to maintain a more integrated supplier portfolio that enables them to meet operational requirements with competitive prices.

Building the future requires creativity. As Albert Einstein said during an interview published by The Saturday Evening Post in 1929: "Imagination is more important than knowledge."

Photo by:   Andrés Birlain