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The report shed light on the challenges related to strategic souring to support sustainable procurement for goods and services delivered in the Australian market. The business environments across the globe have beam evolving over the years. In one hand the advents of advanced technologies have made the business operations simpler and easier, on the other hand, the incrementing rate of globalization has made the competition more intense. In this context, the entire business organizations are vehemently trying to maintain their sustainability quotients and competitiveness in the market. Hence, currently, the main aim of most of the business organizations is to develop effective strategies to ensure sustainable development of the organization (ACFID, 2019). Regarding this matter, the procurement is one of the most important sections of an organization and it plays vital roles in obtaining sustainable competitive advantages to the organization. Effective procurement not just supports in maintaining the quality standards of the organization's goods and services but also help in improving the cost efficiency of the organization. Hence, effective procurement management supports business organizations in offering better quality goods or services at competitive prices. Currently, advanced technologies like big data, social media, internet of things (IoT), etc., are widely used by business organizations to improve their various operational efficiencies. Like other important divisions, the procurement divisions are also using these ground-breaking technologies. Furthermore, the adoptions of these innovative technologies have improved the efficiency of procurement divisions. However, it is becoming a challenge to the business organizations to adopt more advanced technologies to gain sustainable competitive advantages from the market. Hence, it is recommended that organizations should adopt effective strategies regarding technological adoption to maintain competitive advantages in the market (Gep, 2019).
Selecting the appropriate e-Procurement platform plays the most vital role in releasing big data potential. This would facilitate in enhancing the procurement strategy. leveraging the big data analytics has the propensity to raise the functions of procurement. This would help the industry to take the decision effectively. The big data analytics also play a most important role in towards developing the strategies of the overall business. The organization faces challenges in order to utilize big data analytics most efficiently for gaining competitive advantages. Big data analytics provide the industry with real-time data and historical data. Monitoring the supplier’s behavior would be very easier and effective. With the help of this data, the procurement teams could be able to evaluate the level of customers’ satisfaction, costs, cash flow and lead time. The procurement team faces challenges for understanding the business risks when the business is associated with only one supplier. Thus the usage of these data in an appropriate manner is very important for identifying whether the supplier is charging higher than others or not. Insights were gathered by retail businesses regarding big data analytics. The pricing models could be developed through the utilization of historical data, artificial intelligence, and machine learning. One of the leading challenges that Australian retail industries face in terms of using big data analytics is its ability to turn out to be more predictive in spite of reactive (Kpmg, 2016). The procurement team faces issues related to configuring the rules of business within the analytic system. These business rules would enable the e-procurement platform to estimate the demand for some stock. It would also help in ensuring that proper resources were sourced in terms of price, quality, and supply. If the company is using these big data analytics most efficiently then it is also possible in the coming future that these data would have the ability to purchase goods based on intelligence. The issues of poor supplier management data are prevailing in the retail industry. The retail industry is also facing issues related to late payments, poor contract compliance, and poor supplier disputes. If the business is successfully using the big data analytics then they are more likely to minimize these prevailing issues from the sustainable procurement. The big data analytics helps to reduce the social, governance and environmental risks in the retail supply chain. It also helps in mitigating the main cause of sustainability challenges. Monitoring and measuring supply chain risks requires proper access to reliability, accuracy, and consistency. the big data facilitates in higher analysis, enhanced transparency and greater collaboration. the definite analysis will results in enhanced decision making which also plays the most important role in minimizing the prevailing risk. the companies face challenges to gather information for analyzing the risks in the multi-tiered and complex supply chain. this involves huge quantities of structured data and unstructured data (Moretto, Ronchi and Patrucco, 2017).
Utilizing social media in the retail industry in the procurement is itself a challenge. Social media provides opportunities for the supply chain in the retail industry. In this modern era, the use of social media in the business arena is expanding day by day. Leveraging of social media in the retail industry for new kinds of suppliers is important. Social media and social networks have emerged from the '90s but the use of social media in business is started later by. In business, it is started with marketing and sales. This has helped out the businesses to connect with customers effectively. The sector like product development and engineering have made good use of social media. They had used social media as a tool for collecting information and feedback from customers regarding product issues or quality issues or service issues. This has let them understand the demands of products in the future. However, it is important to say that procurement has embraced social media in a later period (CIPS, 2019)
The modern era has helped procurement to use social media as a distinctive tool for managing their entire process. Social media has helped to distinguish the product from one brand to another. The value of social media is dependable upon how much involved is a network with the site. Social media has helped to build a strong network. It has helped the retail industry to choose their suppliers. Thus, it has helped them to build their branding. The benefit of procurement is that social media acts as a valuable source for business purposes. These have helped them in press releases then offerings of new products. Social media such as facebook, twitter, and other related social tools helps the industry to go in a process. Therefore retailers must try to utilize these rich resources of social media. It will make them build a strong customer base. Other than that it will help them to make perfect decisions regarding selling, buying and stoking of products. It will let them know what sorts of products are liked by customers.
Internet of Things is said to be the system comprises of mechanical, computing devices and digital machines. Internet of Things has become the emerging technologies in these few years. Industries like retail industry have already started adopting smart technologies for improving the performance of business and customer services. The potentiality of IoT is not restricted. IoT is emerging at an extreme point and in every sector. For instance, IoT has influenced the World cup by offering remote-controlled robots. Another example that could be depicted is location-based devices that will help the person to locate the products in shops. However, procurement and supply will be benefitted from IoT crucially. IoT majorly helps in this industry by managing the reordering of stock and monitoring of the stock. An example could be illustrated in this case such as weight-operated warehouses devices, that could easily let know automatically that when stocks are getting low. This will also further talk to the management system for ensuring the actual amount of stock. IoT helps in reduction of the maintenance costs. Thus, the Internet of Things provides procurement an insightful window into the supplier performance (Vass, Shee, and Miah, 2019). The deployment of IoT, mobile technologies and Cloud can make procurement more challenging for huge data for the organizations. Procurement processes and technology is required to make effective use of the data. For acquiring actual benefits from the IoT the supply chain and the purchasing department are required to have appropriate systems for managing the data. IoT presents a better understanding of the usages of supply and equipment of procurement. Thus, it will help the procurement team to spend as per the requirement and exactly what is needed. It does not increase operating costs.
IoT enables the company to manage its carbon footprint. The emergence of IoT has opened up the new path for analyzing, monitoring and handling of the carbon footprint throughout the supply chain. The retail industry could use IoT for scrutinizing the carbon footprint in the supply chain. As a result, it will enable to reduce the use of energy and lower down the carbon footprint (Reidy, 2017).
Cognitive Computing helps the retail industry in resolving numbers of challenges prevailing at the process of the supply chain. The applications of cognitive computing were mainly directed at risk management, preventative maintenance, and material quality. the retail industries are facing challenges regarding the proper utilization of cognitive computing abilities to parse the unstructured data like social networks and news feeds could enhance the learning of supplier performance and supply risk scoring. Cognitive computing facilitates the retail industries to bridge the performance gap by overcoming the limitations of systems. The cognitive computing has the propensity to enhance the industry in a significant manner. Almost ninety percent of retailers believe that cognitive computing plays a most disruptive role. But eight percent of retailers believe that cognitive computing possesses a critical influence on the future. The cognitive computing facilitates the enhancement of consumers’ experience. For example, RedAnt mainly utilizes cognitive computing to identify the buying preferences of the customers by analyzing their purchase history, demographics, and wishlists. The local pricing, product information, technical specifications, and customer reviews were also analyzed through the cognitive computing approach (Environment, 2013). Another example where cognitive computing has been incorporated is the example of Sellpoints. Sellpoints is an e-commerce provider that has introduced the “Natural Selection” application. This application facilitates the users to understand the preferences of the individuals. The retail industry is facing challenges in the empowering the human procurement professional for further productive than they can through the utilization of traditional technologies. The cognitive systems enhance the decision making process, situational awareness and procurement performance. The company implements cognitive computing to enhance the ability of humans to take enhances decisions towards environmental sustainability (Bales, 2017).
In the world of globalization, procurement management is very important. A few specific challenges in regards to procurements that are being faced by retail industries in the Australian market are-
The challenges of the strategic procurement for the goods and the services provided by the Australian retail industry are identified. The complications are seen in the development of the radical transformations as carried out by the Australian organization. The expansion of the responsibilities from the demand side is creating an impact on the cost control processes. The challenge is faced by the renovation of the organization. The efficacy of strategic procurement is heavily impacting the recognition of the functional peers. The procurement professionals are also hindering the lack of appropriate skills and knowledge. It is reflecting the problems and the opportunities that arise strategically in the business functions. The purchasing process of the raw materials is creating an impact on the procurement processes carried out in the retail industry in Australia (Ceruti, 2017). The vital concerned factors are reflecting the development of impact on the government influences and the variation in the requirements seen during the time of delivery. These factors are impacting the processes. The competition level is seen to be increasing with the variation in government policies. The variation in the requirements created pressure on the process of providing services to the people. The increased use of technologies, increased consideration of the environmental issues and the increased complexity in the product choices are creating an impact on the strategic procurement processes. The impact is seen to be developed on the organization as well as the business processes are not smoothly carried out (Commission, 2017). These challenges are reflecting the development of impact on the skills of the staffs as well as it is impacting the commercial processes carried out by the organizations present in this industry. The biggest challenge which is seen in the strategic procurement process is that the lack of awareness is seen which is seen to be creating an impact on the overall processes. The lack of awareness is creating an impact on the order processing in the retail industry. It is reflecting the development of the impact on the business processes as is seen in this process. Based on the identified weaknesses, the recommendations are provided below (GURNANI et al., 2012).
The recommendations are reflecting the mitigation of the impacts identified in the strategic procurement process. The mitigation process is indicating the overcoming of the issue of lack of awareness seen in the strategic procurement process. It is due to the development of the impact on the organizational processes as is seen in this study. The mitigation of this issue is reflecting the appropriate improvement in the knowledge and skills as well as the managerial orientation process should be developed. In the retail industry, the taste and the preferences of the customers should be considered. It will be helping the organizations present in the industry to improve the supply chain processes. The government influence can be mitigated by the help of adhering the norms and the regulations in an appropriate way. The adhered norms and regulations will be helping the industry to gain a positive impact on the business environment (Wang, Gilland, and Tomlin, 2010). The enhancement in the business processes will be seen which will be fruitful for the organization. Apart from this, it is seen to be beneficial for the organization as it is enabling in attaining the demands of the customers. The commercial sense should be maintained by the individuals involved in this process. It will help them in improving the operations with overcoming the issues. The strategic alignment is essential as it will be helping the organizations present in the retail industry to gather the data appropriately. The joint venture processes should be executed for delivering the products on time (Wang, Gilland, and Tomlin, 2010).
Presently, the significance of sustainable procurement is increasingly growing and almost all the business organizations across the globe have given adequate stress on every aspect of sustainability and the importance of sustainability factors are thus increasingly growing. Procurement is one of the most important functions in the organization and procurement efficiency helps in increasing the quality and cost-efficiency of the organization. The entire organizations are thus trying to develop the most effective procurement strategies to gain the required competitive advantages. Furthermore, regarding this matter, advanced technologies like big data, social media, and internet of things are playing vital roles in enhancing the procurement functions of an organization. The big data analysis helps in making more effective procurement decisions (Caputi, 2011). The social media has supported in connecting everything and the firms' get more benefits which are navigating more effectively in the social media and can be able to distinguish themselves more effectively. In Australia also the uses of big data and social media in the procurement divisions are common. Moreover, many Australian companies are using the internet of things (IoT) for procurement to enhance the efficiency of the department. The companies which adopt a newer version of technologies get additional competitive advantages. Here, the challenge is that the technologies are advancing day by day and the adoption of new technologies required a significant amount of investments. Hence, the companies have to adopt the most suitable technologies to enhance their procurement efficiency and overcome the challenges regarding sustainable procurement.
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