The world of agri procurement has evolved dramatically in recent years, with data and technology increasingly at the forefront in decision-making.

Food procurement nowadays goes beyond just considering cost, quality, and reliability. Geopolitical pressures and environmental factors are also increasingly just as important. Companies and procurement teams use data to varying degrees, but utilizing analytics and intelligence tools are essential in helping to cut costs and drive efficiencies.

Trying to work out the best next steps for your business in fast moving markets can be a minefield. That’s why we’ve set out four key questions you and your team should consider when trying to boost your balance sheet and increase efficiencies.

1. Do I know my company set-up?

Understanding your whole supply chain and product offering, as well as spending is crucial in identifying where you can make efficiencies and maximize your profits. Ensure you regularly analyze information to understand what’s working and what you need to change. Look at supplier delivery times, your own resource hours, food quality, and any other parts of your network. By understanding these areas, you can clearly start to identify where cost savings can be made. 

2. Is my supplier base expansive enough? 

Develop a broad and reliable supply chain network to build up your resilience. This way, you don’t have to rely solely on one supplier and you can pivot if there is any disruption. A varied network also gives you access to a broader set of innovative ideas and products and provides room for negotiation as you have price and performance comparisons. Another benefit is that it can help shorten the time it takes to bring new products to market.

3. Do I understand market conditions? 

If you understand your business and supplier base, delving into market conditions can give you a view of the broader factors that could affect your operations. If you can join the dots between market performance and how your business operates, this analysis can enhance your risk management and help you make the right decisions. On a more granular level, correlating market information with your own data can also reveal what producers it might be more beneficial to source from, for example. 

4. Am I able to pivot quickly?

Once you have all of the above in order, it is crucial to gauge how quickly you can change course if necessary. Switching from one supplier to another to use discounts or moving to a more optimal supplier are good points to bear in mind. What about if one commodity is particularly volatile? Make sure you are equipped to switch swiftly to an alternative commodity that won’t alienate your customer base. Have in mind emergency scenarios or a plan B before you need them.

One more thing…

Be aware of consumer trends and what your customers want and expect from you. Perhaps ethical and sustainable sourcing is important to them, or the kind of packaging you use plays a large role in their buying decisions. It’s always wise to consider adapting your offerings if necessary to meet evolving customer demands for healthy or unique flavors, if indicators suggest the market is heading in a particular direction.

You might also like: 
– Understanding silent market signals to improve commodity procurement strategy
– Finding the right BI tools to optimize bakery procurement
– How to build your first cost model in Vesper: A complete guide for procurement managers