Data and Analytics for Procurement Local Buyers
The definition of a “local buyer” can vary between organizations, with job titles such as operational buyers, tactical buyers, spot buyers, sourcing buyers and strategic buyers often used interchangeably.
However, in general, the goal of a buyer — no matter the word in front of the title — is to execute the overall procurement strategy at a specific geographic level, using data to ensure local needs are considered.
Differentiating between the local buyer and category manager role is important, especially for big companies with mature procurement processes. In such companies, category managers define procurement strategies at a global, cross-company level; they are implemented by local buyers.
The Role of a Local Buyer
When executing these strategies at local levels, buyers have multiple responsibilities:
Gatekeeping. Local buyers serve as “guards” for an organization’s spending policies and practices. They ensure that requestors follow the correct procurement processes, and the suppliers selected are aligned with the defined strategies.
Buying channel ownership. Local buyers also play an important role in determining the best way to source products or services. For instance, if there are multiple transactions, local buyers can advocate for catalogs and direct stakeholders to raise purchase requisitions accordingly. They are the ones to oversee if a supplier is preferred, and therefore have established contracts and prenegotiated prices to apply. To conclude, the buying process, local buyers guide requestors through the purchasing process, from raising a requisition to approving and releasing the PO.
Tendering. Where the projected spend for a required product or service reaches a threshold or “clip level” — defined at the organizational level — the buyer typically conducts an RFI, RFP or RFQ to ensure the best supplier is selected at the best price.
Negotiating. Local buyers often interact directly with suppliers, negotiating and discussing rates and terms as needed. To achieve the best price, payment terms, or savings, local buyers need to be aware of currency fluctuations and patterns in local service markets, as market information ensures they are equipped with adequate knowledge for negotiations.
Contracting. While strategic contracts can be managed by category managers, local buyers play a critical role in contracting with suppliers. This is because (1) certain regulations may require contracts in the local language and (2) country-specific payment terms or legislation may apply.
Maintenance. Tracking catalogs and contracts and managing supplier relationships are all key tasks for a buyer, often demanding a high level of attention and administration.
In the above areas, procurement analytics and the tools that come with it provide a massive competitive advantage for any organization.
Leveraging Historical Data for Analysis
Procurement analytics often involves a first step around spend analytics, where data that lives in disparate sources and ERP systems across the organization is cleansed, curated and merged to create a single data set. The cleansed data set is then fed into a business intelligence (BI) tool to enable visualizations; it’s used to create reports that enable comprehensive analyses and inform decision-making.
Leveraging analytics tools and services has become indispensable for local buyers, offering them insights that drive strategic planning and allowing them to share data with other buyers or category managers from a shared data cube.
One of the main value drivers of procurement analytics is the collation and utilization of historical spend data. Local buyers harness this data by employing BI dashboards that visualize procurement trends over time. Using spend values with minimal formulas and applied filters, these dashboards provide visibility into various topics, allowing buyers to track such dynamics as expiring contracts, purchase commitments and supplier changes.
By visualizing catalog spend and supplier geographic locations, buyers can also identify opportunities to optimize procurement processes and enhance collaboration with suppliers.
Another value driver is use-case visualizations, which focus on spend values using organizational filters and logic to drive intelligence. They dive deeper into the data, applying tailored filters to meet specific organizational needs. This refined analysis highlights cost-saving opportunities, compliance with procurement policies, strategic sourcing initiatives and the like. These targeted visualizations enable organizations to make more informed decisions and implement strategies aligned with their procurement goals.
Reports generated from procurement analytics further empower local buyers by enabling in-depth analysis and informing next steps. For instance, tracking PO commitments through item-level reports provides clarity on remaining funds and helps prevent budgetary oversights.
These reports can be delivered to team members on a regular basis or flagged for team members if the data shows an outlier:
- Savings reports, which offer a benchmark for performance evaluation, comparing targeted savings with actual outcomes.
- Supplier-based reports, which offer a comprehensive view of supplier relationships, highlighting critical information such as supplier types, preferences, and performance metrics. This invaluable data aids local buyers in strategic supplier management and risk mitigation efforts.
- Compliance reports, which play a pivotal role in ensuring adherence to organizational policies and practices. By monitoring PO processes, identifying procurement bypass cases, and assessing turnaround times, local buyers uphold procurement integrity and operational transparency.
It's worth noting that these analytics-driven insights do not rely on a single system but can be derived from various platforms — including BI tools, ERP systems and local reporting systems. This versatility highlights the adaptability of analytics in meeting the diverse needs of procurement professionals.
Leveraging Market Intelligence Data
Market intelligence (MI) data communicates the trends, competitive landscape and consumer preferences of the market in which a business operates. It is used by professionals across industries to develop insights that inform decision-making and strategic imperatives.
In procurement, MI data can be used at all stages of the process — assessing supplier capabilities and performance, ensuring regulations compliance, supply chain optimization, demand forecasting and category strategization.
Examples of MI data application include:
Supplier analysis. Collating all information and relevant metrics related to the performance and capabilities of a business’s potential suppliers in the same place to ensure trustworthy and best-in-class suppliers. This may include analyses of a supplier’s financial stability, quality standards, geographic presence and delivery reports.
Benchmarking. A primary objective for the local buyer role is to ensure the company is purchasing required goods and services at the best available price. Often, the local buyer serves as the “voice of the geography” to leadership, so understanding how trends do or do not match the global market and other geographies is critical. Using MI data, local buyers can compare prices to industry benchmarks, track changes in price, and negotiate accordingly, thereby ensuring cost-effective and competitive prices for all purchases.
Identifying DEI and ESG certifications for qualified suppliers. Many procurement teams have diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) initiatives as part of their strategies. Companies owned by underrepresented groups can bring new perspectives and products to the market, while partnering with ESG-conscious suppliers ensures companies are contributing to ethical practices and environmental standards.
The best way to identify suppliers with DEI and ESG certifications is through MI data. This also can be a consideration for local buyers and their teams in the supplier selection process, especially as buyers navigate the local legislations and rules.
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Access to MI data is increasingly available to local buyers, and it should be a critical element in their tool kits. It helps to create a precise view of the market and enables cost savings and supplier optimization that can generate long-term competitive advantages.
Insights from historical spend analytics, combined with MI, give local buyers power and efficiency. Equipped with quality data and analytics tools, they gain immediate visibility into spending patterns, facilitating decision-making and negotiations.
From maintaining catalogs to monitoring contract expiration dates and ensuring compliance, analytics tools provide indispensable support to local buyers, who are often the “boots on the ground” for procurement teams. By enhancing cost and operational efficiency throughout the supply chain, these tools are instrumental in achieving procurement excellence.
(Photo credit: Getty Images/Shapecharge)