Price increases and volatility in 2022 – what actions your organization needs to take
Price increases and volatility are a big concern for many Procurement organizations, and a lot of resources and effort go into mitigating the negative impact of suppliers pushing increased pricing onto their buyers. Still, for many, it’s also about ensuring materials are ready and available for the continuous production of goods.
The below picture shows two exciting pieces of information – actions the CPOs are taking to battle inflation and volatility and the percentage of category-focused professionals who expect price increases in 2022.
The actions include:
- Increased collaboration which is usually a great lever to accomplish very complex goals
- Using alternatives or innovative products more aggressively
- Developing new strategies
- Using contractual powers or clauses
Also, looking at the percentage of professionals who expect price increases and volatility in their respective categories makes you think.
The operational/tactical approach to procuring goods and services isn’t sufficient anymore, and organizations have to become strategic in how they think, collaborate, and build relationships with their suppliers.
Category Management is still a golden standard for achieving those goals. Still, it is often misinterpreted or not implemented successfully due to capability or resource constraints, poor alignment with stakeholders but also within Procurement, incomplete knowledge management, and many more.
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