From RS Italy a survey of indirect materials procurement

RS Italia and ADACI, the Italian Association of Purchasing and Supply Management, in collaboration with the European University of Rome have conducted research on indirect materials procurement, titled "Keeping Control While Pressure Increases"

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RS research procurement

RS Italy e ADACI, the Italian Association of Purchasing and Supply Management, in collaboration with theEuropean University of Rome have produced the first Italian survey on indirect materials procurement, "Maintenance, Repair, Operations." The survey is set in a particularly challenging scenario for Italian companies. The Covid-19 pandemic has reshaped the logics of exchange on a global basis, the geopolitical crisis has changed the perception of the future, and technology is also reshaping inter-organizational relationships. It is no coincidence that the research was titled "Maintaining control while pressure mounts, " an expression that underscores the commitment of Procurement practitioners in an increasingly complex world.

RS research procurement"The commodity categories analyzed in the survey cut across multiple industry and service sectors, and the MRO procurement typology is analyzed through multiple perspectives, useful in defining trends and best practices but also shared criticalities and vulnerabilities." explains Emanuela Delbufalo, Dean of the Faculty of Economics of theEuropean University of Rome and Full Professor of Operations & Supply Chain Management. "A complex and articulated picture of needs and methodologies emerges from the results with, against the backdrop, the complexity of the phenomenon and the impact that uncertainty plays on its evolution."

The results of the research

Enterprises are under great pressure and to ensure business continuity and organizational development, they move within a complex and multifaceted framework of requirements and methodologies. How to overcome critical issues and, at the same time, ensure control of purchasing costs? There are several strategies: optimize the number of suppliers, manage information through new ways, innovate and digitize communication processes between internal and external customers, pay more attention to sustainability. The benefits are many (saving money and increasing efficiency in purchasing flows) but the road is strewn with obstacles.

The research takes a snapshot of the Italian landscape, investigating the most common practices and shared critical issues regarding sustainability, digitalization, outsourcing and supplier management by Italian companies. Data were collected between May and August 2022 through a telematic survey administered to the database of ADACI members and RS clients, without any sectoral or geographic clustering. 121 the number of validly collected and processed responses.

From the responses collected, it appears that the purchasing department is under pressure from internal customers and fails to impose itself to standardize processes, define procedures and choose the best suppliers for MRO. The collection of requirements is, therefore, heterogeneous: many companies are not structured, and, especially in the case of MRO procurement, they decide to enlarge their stocks or buy as needed. As a result, the rate of need and emergency purchasing is extremely high and produces a false perception of control over the procurement chain: 55 percent of respondents say they send spot requests to suppliers with medium to high frequency. In contexts of high uncertainty, businesses therefore feel pressure to change and revise purchasing procedures. In particular, 22.6 percent of the sample also intend to rationalize the number of suppliers (to simplify expenditure control and performance monitoring), and 18.9 percent of the surveyed enterprises say they want to increase the efficiency of MRO procurement with new operating procedures.

The inability to quantify ex-ante indirect materials requirements prevents 28.4 percent of Italian firms from systematically consolidating needs and reducing the efficiency of purchasing processes. In general, neither in-depth planning nor ingrained sensitivity regarding the procurement of indirect materials and, in particular, MRO, appears to be present among the surveyed enterprises. While the purchasing department struggles to take a central role vis-à-vis internal and external customers, MRO stock managers find themselves having to do more with smaller budgets, without losing sight of the goals of sustainability, efficiency and innovation.

Photo_Comella_RS ItalyAs he pointed out Diego Comella, Managing Director of RS Italy, at the presentation of the research, in Milan, last Nov. 10: "The pandemic of Covid-19 has reshaped the logic of procurement and exchange on a global basis, prompting companies, including those in Italy, to embrace a cross-cutting change. The role of procurement professionals has become central: greater control of communications with internal and external stakeholders and better quantification of MRO requirements are indispensable elements to ensure the efficiency of the entire process. In this sense, technology is now a key support to ensure the sustainability of the entire supply chain, the rationalization of procurement and the achievement of significant cost and raw material use reduction targets. Relying on a single supplier, such as RS, certainly brings significant benefits-whether it is reducing costs or enabling companies to take care of activities directly related to the business. Inflation, rising costs and identifying risk factors in supply chains will be the challenges to overcome. I am confident that the results of the next edition of this research will testify to the success of our efforts." 

Photo_Santini_AdaciThe consideration of the president of ADACI is also interesting, Fabrizio Santini: "During the past three years there has been a perfect storm where, faced with stratospheric increases in the cost of raw materials and distribution problems and the uncertainty of market forecasts, it was understood that specializations suited to the new and unexpected demands were needed for the human resources employed in the company. Among the many difficulties--from sourcing goods to monitoring the supply chain, from inventory management to meeting customer expectations--the company's ability to foresee and manage unforeseen events by reacting in a time and manner appropriate to its own business preservation was particularly lacking. Business managements have realized that supply managers/CPOs are essential figures, because profitability is often played out in the supply and distribution chain. Knowledge, creativity, tenacity and resilience are needed to overcome this complex time and to be able to promote innovative solutions from the perspective of Value Analysis-Value Engineering (VA-VE). This is why ADACI seeks to be close to the procurement professional to make them grow in knowledge, skills and abilities through networks, conferences and training courses to obtain professional attestations/qualifications/certifications such as Q2P under Law 4/2013." 


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