Procurement teams are masters at the balancing act. Balancing costs with services, relationships with bottom line, and time spent with knowledge gained.
The challenge is, as supply chains grow in complexity, the success of your procurement operations become increasingly reliant on the accuracy of your market intelligence platforms and the efficiency of your procurement processes.
The less accurate or efficient, the more time your team will spend monitoring the freight market, pulling data and trying to understand the relationship between market benchmarks and their company’s performance at different degrees of granularity. This time eats into effective decision-making, team efficiency and identifying business opportunities.
Often, teams will find ways to mask cracks caused by procurement inefficiencies. But as executives request more and more detailed freight intelligence, and market disruptions put additional pressure on already busy teams, this causes cracks to multiply.
When this happens, unnecessary risk enters your supply chain.
The consequences of inadequate data
On average, logistics professionals comb through 3-4 freight data sources before feeling they “know the market” enough to make a decision on freight rates, LSP or transport mode.
And even then, only 4% trust their data entirely.
This lack of trust is echoed by non-procurement executives, with 79% lacking confidence in using procurement data when it comes to strategic decision making1. Which means that despite being aware that the market is shifting, a fragmented market view stops decision-makers from seeing it unravelling in realtime – preventing them from accurately forecasting or measuring its impact.
Other procurement professionals share stories of inconsistent processes or finding it difficult to work with internal stakeholders who fall outside the procurement loop. The challenge here is a lack of market transparency that leaves procurement teams in a precarious position when urgent requests come in.
So, what we have are procurement teams using inadequate data sources and processes, asking executives to make decisions with data they don’t trust.
The consequences of relying on inadequate data sources and processes are significant:
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Siloed operations which slow down decision-making
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A fragmented view of the market making it more difficult to forecast which disruptions will create market volatility, and where
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Goods not arriving on time due to capacity shortages, transit diversions or cargo being rolled – which can lead to unhappy customers and in some cases, factories being temporarily closed
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No transparency over long-term vs short-term rates or surcharges, and uncertainty on when to push back against opportunist behavior
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Time wasted chasing rates that no longer exist, which can damage trust in partner relationships
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Missed opportunities to secure contracts when the market works in your favor (or knowing how long to delay signing long-term contracts)
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Unnecessary risk added into your supply chain
Close the efficiency gap
Procurement workloads are expected to increase by 8% in 20242, further straining already complex supply chains affected by external factors like geopolitics and weather events. This increase translates to a productivity gap of 6.6% and an efficiency gap of 6.4%2.
So while you’re thinking of ways to do more with less, you have a team of people being asked to use more freight tools than they have time to use; tools which are producing data their executives don’t trust.
It’s a lose-lose situation, with your procurement team and supply chain taking the biggest hit.
Centralised operations for 40% savings
Working with Xeneta, British American Tobacco chose to centralize procurement operations, move away from being 100% cost-focused, and put granular market intelligence at the centre of their supply chain – decreasing freight spend (close to 40% on some critical high-volume lanes), and lowering time spent in negotiations by over 30%.
Just imagine what you could do with 30% more time and 40% budget back in the business purse?
Steps towards an anti-fragile supply chain
In today's congested market landscape, navigating supply chain challenges has become increasingly complex. With more idle container ships, crisis-related surcharges and declining schedule reliability, relying on a fragmented view of the market is no longer practical.
And neither is combing through 3-4 freight data sources every time you need to make a business decision around procurement.
Whilst it’s not always simple to follow in British American Tobacco’s footsteps, there are three steps you can take today:
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Align procurement operations with wider business objectives: Ensure all supply chain executives understand the relationship between freight rates and factors such as schedules, capacity, and carrier strategies. This can help facilitate urgent requests, improve cross-team knowledge and collaboration and move the focus of negotiations away from chasing the final dollar.
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Anticipate and embrace market volatility: Learn to identify which disruptions will impact shipping and market conditions, and their expected ripple effects.
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Alleviate data fatigue: If you’re team currently combs through 3+ data sources, improve efficiencies by streamlining the number of sources you use. You can start by identifying the freight intelligence providers that offer consistent, real-time data that your team and executives can rely on for freight negotiations, procurement planning and cost-justifications – and removing those that don’t.
Achieving transparency with Xeneta
If you’re looking to enhance transparency and predictability in your procurement lifecycle, Xeneta offers an industry-first, 360-degree market view.
This uniquely holistic perspective removes the pain of fragmented data, a fragmented procurement team, and creates a smarter way for you to quickly understand and analyze the metrics that move the market.
By leveraging Xeneta, you not only enhance operational efficiencies and margins but also equip your team with unparalleled confidence in negotiations and strategic meetings. You're also supported by 450m+ real-time rates and can pivot with purpose. No matter the market conditions, your Plan A, B or C will hold strong against any competitor or supplier that relies on inadequate data sources.
Don't just take our word for it:
“We use Xeneta to give a historical context to DSV colleagues who need to know more about a certain trade, forecast the future as accurately as possible and provide knowledge on all our RFQs.”
-Morten Nielsen, Senior Product Manager, Head of Procurement, Seafreight, DSV
Book your discovery call and see first-hand how Xeneta data can deliver faster decision-making and alignment across your procurement operations.
1 https://www.scmr.com/article/majority_of_procurements_professionals_dont_trust_their_data
2 https://www.thehackettgroup.com/insights/the-cpo-agenda-2024-procurement-key-issues/
