Accurate and relevant data has become an essential asset for all business departments, including procurement. Procurement professionals need market intelligence to make informed procurement decisions. However, the collection of relevant data is made more difficult by changing external influences. For example economic conditions, geopolitical factors and public health emergencies like global pandemics.
Procurement departments need to monitor these external influences regularly and take them into account alongside market intelligence when making purchasing decisions. In this article, we will look at the supply market intelligence available and how to source it.
What is supply market intelligence?
Procurement cannot source a product or service successfully without understanding the market the supplier operates in. Supply market intelligence is external information that companies use to find and manage the supply of goods and services. It includes information on markets, customers, competition and suppliers.
Sourcing supply market intelligence
There are a variety of sources of supply market intelligence available. It’s essential for procurement to research as widely as possible, so they get an overall picture of potential suppliers to make the best purchasing decisions.
The Atamis system allows users to view supplier performance data, including trends in annual financials, daily credit rating analysis and share price indicators. This helps procurement teams to identify and mitigate the risk of failure.
Suppliers are a useful source of information. They have specific knowledge about the markets they operate in, factors affecting the supply chain and products and services. Procurement can get further information about suppliers from:
● Company websites
● Financial statements and annual accounts
● Face-to-face interviews
Combining these sources of data gives organisations a clear understanding of individual supplier performance. It also reduces the risk of appointing a supplier who won’t deliver on contractual obligations.
If suppliers are already known to an organisation, there will be internal records they can access to get market intelligence data. If a company has a supplier relationship management system, it should provide information on supplier performance (KPIs) and risk profile. Procurement can also interview internal stakeholders to find out whether they have a valuable and workable relationship with the supplier.
There are many free resources available to procurement, such as
● Google alerts
● Trade publications
● Price index forecasts
● Analyst reports
● Blogs and social media
● Competitors’ websites
An internet search is a good starting point and can provide valuable information but shouldn’t be relied on as the primary source of data. The data may not be objective or relevant to the research being undertaken and may lead to poor decision making in the procurement process.
Another way of getting supply market intelligence is through an external provider. There are several different kinds of firms procurement can use.
Market research: carry out independent research and provide high-level data on market trends. Research is usually designed for a broad audience, so may not contain the detail needed to make informed decisions.
Custom intelligence providers: use a mix of internal and market data to provide evidence-based research. Will also carry out research directly with suppliers.
Hybrid intelligence providers: offer a combination of custom and high-level market research data depending on what an organisation needs.
Why use supply market intelligence?
There are several benefits an intelligence-driven supply chain offers organisations.
Improves risk management: market intelligence plays a vital role in supply chain risk management. It provides businesses with information to prepare for different scenarios and insight into supplier stability during the assessment process. It also provides early warning alerts to events that may impact a company’s ability to deliver goods or services.
Enhances supplier management: market intelligence can help organisations find suppliers who are reliable and perform consistently. It ensures organisations are aware of changes to suppliers’ businesses and can take action to mitigate any negative impact. The information also gives more leverage for negotiations when contracts are due for renewal or with new suppliers.
Elevates customer satisfaction: supply market intelligence helps companies create agile, streamlined supply chains so they can efficiently deliver cost-effective goods and services to their customers. Being better informed also means organisations can react proactively to customers’ needs and provide them with a better service.
Creates a competitive advantage: agile organisations often have a competitive advantage over others in the market. Real-time market intelligence allows companies to react quickly to unforeseen disruptions. For example, moving suppliers if they appear to be in trouble financially.
Cost savings: procurement professionals can negotiate more effectively as they have in-depth knowledge of the market and suppliers.
Supply market intelligence helps organisations make better decisions, react quickly to customer needs and remain competitive. Those who understand its value and know how to use it effectively will maximise the benefit to their business. With a comprehensive understanding of markets, suppliers and external factors, companies will have more control over costs and the delivery of their goods and services.
If you would like to learn more about how Atamis can provide market intelligence, please contact us.