Just imagine that you have entirely relied on your sourcing team for qualitative procurement. But in the end, the team mess it up with a wrong sourcing decision. One lousy product and your business face several blows! Nightmarish, isn’t it?
Well, the little anecdote does not seem that impossible! If the only downside of a bad procurement decision were the loss of money, it would not have been that great of a blow. We are not unknown how substantial a difference an effective sourcing team can make to the nutraceutical industry business. Now that we have landed here let us run through a few downsides of an ineffective procurement team.
· Misinterpretation of contracts
Often when the procurement specialists build business relations with the vendors, there are hundreds of things that might go wrong. Most of the time, vendors tend to misinterpret the contract, which leads to a mess in the supply chain.
· Inaccurate supplier evaluation
Evaluating the suppliers is a primary task of the sourcing team. It requires verification of the authenticity of the suppliers on different levels, apart from the documents that a source must mandatorily bear. Hence, these decisions also give birth to risks like bad product quality.
· Faulty need analysis
The procurement starts with an accurate need analysis. Sourcing managers must be very clear about the need, when it is required, and its cost. Clarity heads the business to better procurement and efficient risk mitigation. Often, an ineffective sourcing team ends up making faulty need analysis.
· Unethical sourcing
Most of the time, when you fail to do a thorough background verification, you end up buying ingredients that are sourced unethically. The situation can even result in compliance breaches and other hazardous legal troubles.
· Untimely delivery
Time is one of the significant factors in the nutraceutical industry. Bad procurement decisions often lead to untimely delivery. As a result, these approaches can turn off your clients, ultimately hampering the business to its roots.
· Overspending
Bad procurement decisions also lead to overspending on products. Expert sourcing managers do not make impulsive decisions. They keep on researching until they get a product at a reasonable price. It saves your chunks of money from going in vain.
Final Words:
Now that you know how an ineffective sourcing team can blow your business, fix your team as soon as possible. Above all, you can choose not to do the leg work and enjoy a final qualitative product. Now, how’s that possible?
Green Jeeva is here for you to do thorough background verification, add value to your business parameters and ship your products as soon as possible.
So, why not focus on your core business and let Green Jeeva do it all for you?
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