Is inflation on your mind? You’re not alone. Rising costs lead to rising overhead—and rising stress about sourcing.
Not only is it more expensive to get crucial goods and services today, but supply chain issues and labor shortages create extensive delays. These disruptions significantly affect large and small companies' production and inventory.
Plus, rising fuel costs mean that getting everything from hand soap to building supplies requires an even bigger financial commitment, which could be going toward marketing, R&D, or expansion.
And yet, despite all the talk about the financial impact of inflation on sourcing, there’s an important point missing.
Inflation, at its core, isn’t really about money. It’s about uncertainty.
This is good news because organizations that solve for uncertainty can maximize value and thrive despite economic change.
How to Mitigate Uncertainty
There are five key factors that are crucial to navigating sourcing uncertainty when inflation, supply chain issues, fuel shortages, and labor issues mean certain goods and services are in short supply.
First, companies that can see what’s available and act quickly have a significant edge. Agility and increased visibility are key competitive advantages.
So is having the right partners. Solid relationships with a variety of vetted and trusted suppliers not only make it easier to purchase what’s needed. These relationships also significantly mitigate risk, reducing the likelihood of overcharging or receiving poor-quality goods and services.
Third, having the ability to easily participate in community buys can dramatically increase leverage, reducing costs and increasing purchasing power.
Finally, expertise is a game-changer. Knowing the most effective bid strategies and how to run better sourcing events help organizations take advantage of near-term volatility in a rising price environment.
The challenge? Enabling agility, increasing visibility, and nurturing supplier partnerships isn’t just a full-time job. It’s a job for a team. And even with an in-house full-time sourcing team with extensive capacity, participating in community buys can be difficult.
The solution? Taming the uncertainty of sourcing during periods of inflation by aligning with businesses that have common purchasing needs to leverage spend volume and sourcing expertise to capture greater savings.
It’s simple: Take advantage of available group event opportunities with best-in-class sourcing experts and technology. Combining spend and negotiating better prices with vetted, trusted suppliers in various categories will lead to reduced purchase risk while driving costs down.
Plus, taking this strategic approach to sourcing will allow you to source more frequently while still reducing sourcing workloads.
One way in which organizations can better manage uncertainty is by sourcing smarter and more efficiently. By taking advantage of increased visibility and agility, you can transform risk, reduce effort, save money, and mitigate the effect of shortages.
“Sourcing strategically now can also help future-proof your organization and increase resiliency through future economic disruptions. Especially in this highly inflationary economic environment,” says Ayush Sharma, Senior Director, Global Source to Contract, Sourcing Advantage at Coupa.
“Anticipating demand and identifying cost-effective solutions based on community intelligence data and spend analysis exercises are a vital strategic opportunity to keep organizations competitive and counter market forces,” Sharma adds.
Learn more at our webinar on Tuesday, December 6, 2022, at 10 am PT | 1 pm ET, “When Inflation Bites, Bite Back with Coupa Advantage: How to Source Smartly in Times of Inflation.” Save your spot below!