Are you aware of the associated risks of your supply chain? From environmental risks to theft and cyber-attacks, even economic instability can all wreak havoc on even the most stringent of supply chain strategies. Interestingly, however, OEMs don’t have to look on a global scale to find one of the biggest threats to their reputation and revenue.
Interestingly, a poorly handled and mismanaged procurement process can seriously damage your brand image as a reliable and effective OEM, harming your progress and growth permanently. Of course, all businesses experience issues within the procurement process, however persistent mishandling of your purchasing procedures could be costing you more than you think. To explore this further, read on to discover the worrying reasons why your current procurement process is damaging your reputation.
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Frequent Mistakes
During the ordering process, your purchasing team can be responsible for processing the sale of thousands of parts including suppressor diode components, datacom transformers, passive filters and more. Issues can arise at multiple opportunities, including when the orders are placed, when they’re processed by your supplier, at the invoicing stage or during delivery. It’s these mistakes that can prevent your OEM from meeting the standards set by your clients, which in turn leads to issues with trust and your clients looking elsewhere for their products.
Poor Relationships with Suppliers
Failing to prioritise and manage the relationships you have with your suppliers, can also cause your reputation harm and disruption within your procurement process. A lack of communication between you can lead to misunderstandings and clarity over everything from your company message to your scheduled delivery. Irregularities with orders, sending the wrong components, unanswered emails and queries are all signs of poor supplier relationship management. If you don’t have confidence with your suppliers, it shows – and how can your clients be expected to work with you if your reputation is already struggling?
Redundant Spending
If your procurement process is poorly managed, it will be reflected within your revenue and yearly growth reports. Frustratingly, it’s not just profits that are impacted by a poor purchasing procedure, when you’re making duplicate orders due to a lack of clarity, paying too much for shipments or to fix mistakes, then it’s also reflected in your reputation. Businesses with a reputation for persistent financial losses and mismanagement will find this status difficult to shake off – making it harder to bring new clients on board and convince the ones you still have to keep working with you.
Poor Quality Components
A lack of communication and understanding will leave your purchasing team confused and struggling to source the right components for the right price. This often means your assembly line is lumbered with poor quality components and as a result, your reputation will be in tatters. Delays on the assembly line due to issues with electrical parts lead to delivery delays followed closely by customer complaints regarding an unsatisfactory finished product.
Final thoughts…
Updating your procurement process means investing in your company image and solidifying your company image positively. Consider the points above to prevent your procurement process from damaging your reputation.
