OMNIA Partners Blog

How to Turn Crisis into Opportunity with Your GPO

Posted by OMNIA Partners on September 15, 2020


 Total Read Time: 5 minutes

Embracing the new business environment implications will help companies rise to the occasion and be a leader in longevity. By empowering companies to adopt change, leaders can increase agility and resilience, making any crisis disruption an opportunity for innovation - rather than an impediment to overcome. Whereas businesses hesitant to adopt new strategies, or avoiding change, are risking being left behind with diminishing returns. Enterprises looking for ways to simplify adoption, streamline processes, future-proof, and contain resource expenditures can look to their group purchasing organization (GPO) to help turn crisis into profit by implementing impactful change.  

Recently The Hackett Group released an infographic detailing how businesses can move beyond crisis. They assert, “the disruption of Covid-19, now compounded by recession, has dramatically increased the importance of continuing digital transformation initiatives.” We have summarized a few key areas finance and procurement should focus on to turn crisis into an advantage, rather than a vitality risk. 

WAYS ENTERPRISES CAN DRIVE SUCCESS

1. Digital Business Models & Automation for Simplification

Enterprises Can Drive Success With Digital Business Models & Automation for SimplificationTechnology is constantly transforming and with it, the way enterprises conduct business. Technology, when addressed correctly, will represent an ongoing journey of trial and error. Digitization should never be viewed as a one-off project, or one-time purchase. Rather, it should be viewed under the scope of continuous improvement. To that point, given the current supply chain disruption, enterprises need to take a critical eye to their technology architecture. Specifically, analyzing stakeholder engagement points, and where stakeholders need to be addressed but currently aren’t. Meaning, IT purchasers should ask themselves:


Q:  Are internal and external stakeholders constantly hitting a roadblock at a specific point in their journey?

If the answer is yes, or, “define constantlythen the next logical question for procurement teams with IT responsibilities will differ based on the stakeholder they are addressing, but could look a little like this:

Q: INTERNAL STAKEHOLDER  Q: EXTERNAL STAKEHOLDER 
How can we automate that impediment to establish a better and more seamless experience that will increase solution compliance, productivity and ROI  How can we automate that impediment to establish a better and more seamless experience that will increase engagement, new sales, return sales and overall profit?   


R
edesigning the business model to fit stakeholder needs at the point of engagement is imperative. During crisis, most stakeholders are not purchasing, acting or working in a typical manner. Instead they are turning to web solutions like digital storefronts significantly more than before. Many retailers have shifted their model to ecommerce solutions - with consumers staying indoors retailers need to reach them where they are. This means, considering the most cost-effective shipping solutions, and packaging, in addition to the technology to withstand a digital storefront.  

29% of manufacturing companies are unsure or do not think they are equipped with the right technology

 

RELATED CONTENT:

➡️Small Parcel Solutions Spend Management Category

➡️ Freight & Logistics Spend Management Solutions for Procurement 

➡️ Packaging & Supplies Spend Management Opportunities

 

GPOs can help transform technology challenges during crisis

As The Hackett Group states, companies should rearchitect their technology model to accelerate time to value. If stakeholders are engaging through web tools, companies need to model their IT infrastructure to move towards this value opportunity. This can be done through a shift in technology solutions, rather than commodity solutions, the focus should be on business-enabling capabilities and automation. Low levels of automation have been cited by G&A functions as the biggest factor impeding effective crisis response, meaning, increasing  automation and streamlining services could encourage proactive crisis response. Resulting in large gains and an easy entry point for internal and external stakeholders alike.

45% of manufacturers are investing in wireless connectivity during the crisis

Enterprises can lean on their group purchasing organization for a suite of IT & telecom solutions that optimize flexibility, security, and agility all while realizing savings. For those companies, like most, that need to augment their current digital infrastructure, using a buying group is a smart resource solution. Often businesses can remain with their current incumbent while adding complementary solutions, gaining the business enablement tools required. Further, GPOs serve as a resource during change management and implementation processes, freeing up even more time to focus on new strategy decisions.

 

The #GPO serves as a resource during change management, implementation, & #categorymanagement processes, freeing up #procurement to focus on new strategy decisions. Time is critical during #supplychain disruption @OMNIAPrivate

Tweet this GPO tip for supply chain crisis control with procurementCLICK TO TWEET

 

This will help companies move towards the goal of continuous improvement with their technology landscape. 

RELATED CONTENT:

➡️ The GPO Role in Supply Chain Planning During a Crisis

➡️ The Case for Technology Spend in a Pandemic Economy

➡️ Free Guide: How You'll Benefit From a GPO

 

2. Re-shore For Lean(er) Supply Chains 

During disruption, a common challenge is time constraints in receiving solutions required to properly run the supply chain and service customer bases, due to demand being in hyperdrive for many production and OEM facilities.  

 

Enterprises waiting for supply from overseas are delayed and unable to satisfy the required services on time (or at all). This setback begins a domino effect that can lead to not meeting demand, loss in profit potential, or stakeholders turning to competitors. By re-shoring as much supply as possible businesses will facilitate a more stable supply chain environment, with substantially shorter lead times, and enable themselves to gain an edge on their competitors.  

 

.#Supplychain in hyperdrive from pandemic demand? A #GPO can help #MFG #reshore & diversify suppliers to gain supply quicker & meet demand. @OMNIAPrivate 

Tweet this Supply Chain Re-shoring tip for Procurement CLICK TO TWEET 


Moving as much business ashore as feasible will be crucial to significantly
increasing uptime and production. As stated in a previous post, during a crisis, while procurement focuses on balancing finances, their GPO can proactively identify suppliers that will provide  competitive pricing and optimal lead times for the most critical and challenging needs.  

 

RELATED CONTENT:

➡️ Freight & Logistics Suite of Solutions for a Lean Supply Chain 

➡️ Supplier Partner Sampling


3. Prepare & Plan For Hybrid Offices 

Streamline procurement strategic sourcing processes with a GPO to transform the supply chain

The pandemic has proven that workforces can thrive outside of their typical work environments. Brick and mortar might not be as closely correlated to productivity as once believed for specific types of work. A hybrid approach, physical office/facility-based work combined with work from home, will likely become the new standard. While this could lower capital expenditures, it could also result in a strain on IT & telecom solutions, leading to overspending if enterprise procurement teams are not strategic in their technology investments. We summarized how organizations can balance this new workforce set-up in, The Case for Technology Spend in a Pandemic Economy. 

 

In a hybrid scenario, physical office scenario, or remote scenario, procurement can gain support from their group purchasing organization no matter the unique need. Allowing businesses, of all industries, to employ necessary resources in other strategic areas. Rather than spending hours sourcing a suite of enabling technology-based solutions and trying to effectively manage said solutions once adopted, the GPO will streamline a collaborative approach to savings and category management. 

MOVING FORWARD FROM DISRUPTION TO DOMINANCE

Moving Forward From Disruption to Dominance with Your GPO

Enterprises should be ready to employ all resources available to drive through disruption. Any disruption in the supply chain can be detrimental to the private sector, and economy- as evident by recent events. Businesses surging forward with an action plan to optimize, innovate and adapt will be stronger in the end - especially compared to counterparts that shy away from adopting change.  

 

As markets evolve, group purchasing organizations will be aware and able to immediately assist in shifting strategies and support needs, all while assisting through the full scope of category selection, adoption, implementation and ongoing category management. This extra layer of support will simplify change management, streamline processes and resource expenditure containment, helping turn change into profit. 

 

To get started customizing a solution that represents resource containment and increased value with OMNIA Partners, organizations should contact their dedicated account representative, or sign up for savings 


Have you reviewed the OMNIA Partners COVID-19: Resources for Resuming Operations? We make updates on a consistent basis to address fluctuating needs with the shifting markets. 

Topics: Group Purchasing Organization, Procurement, Emergency Situations

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