Powersports is a dynamic and rapidly evolving industry and is projected to continue to experience tremendous growth. According to Fortune Business Insights, by 2030 the industry is expected to reach a market size worth a staggering $54.52 billion and a robust CAGR of 5.31%. The top names are heavily invested in leading edge technologies (including electric) that will help generate continued interest and propel growth. This blog will explore 10 reasons why strategic sourcing is not only advantageous for supply chain management for the complex powersports industry, but for any business interested in increasing value and gaining a competitive advantage.
Strategic sourcing, an approach to procurement and supplier management, has proven to be a major catalyst for the betterment of the supply chain. Due to its proactive, data-driven methods, it has emerged as the integral component to maximize efficiency and productivity and mitigate supply chain disruptions. Business leaders can make informed decisions by leveraging all supply channels within a procurement cycle and easily identify and evaluate preferred suppliers to source products, goods, and services. From end-to-end, strategic sourcing aligns an organization’s tactical plans, ensuring business objectives are met and long-term value has been created.
How can strategic sourcing benefit the extraordinarily intricate and interconnected supply chain of the powersports industry (among others)? Here are 10 key benefits:
- Adds long-term value – Gaining access to a consolidated group of premier suppliers can be a game changer—especially when contracts are in negotiations. Leveraging relationships can also open additional business avenues.
2. Lowers costs – Identifying opportunities for items such as outsourcing can result in sizable savings. Volume discounts, favorable inventory levels, and stronger negotiating and buying power by capitalizing on the vast network of suppliers are a few ways to save on procurement costs.
3. Fosters stability – Having a consistent supply of goods and materials from trustworthy suppliers (who have solid back-up plans) can minimize risks, prevent unwanted delays, and create the desired stability in the supply chain.
- Builds long-term supplier relationships – Relationship-building is what business is all about. Strategic sourcing welcomes collaboration with suppliers and promotes an environment of fostering long-term relationships.
5. Improves customer satisfaction – By effectively tailoring procurement strategies with your customer’s wish list, the results are bound to be positive. Customers can enjoy on-time delivery, a timely response to inquiries, personalized solutions that align with their business objectives, and more.
6. Maximizes efficiency/productivity – Automating basic tasks saves time and increases employee productivity. Utilizing important data tools allows business leaders to effectively strategize based on informed decisions. Establishing best practices with similar industries deepens relationships.
7. Identifies possible roadblocks – Carefully analyzing both the global market and the supplier base ensures that potential hazards can be quickly identified. This allows businesses to be proactive (instead of reactive) when supply chain disruptions are looming.
8. Reinforces the importance of compliance – In today’s competitive marketplace, establishing stringent policies and procedures remains necessary to help alleviate product quality concerns, encourages transparency among suppliers, and could help deter legal situations.
9. Propels innovation – Surrounding your team with knowledgeable suppliers who excel at technology, innovation, and problem-solving can ignite creativity and spark a continued interest in continuous improvement practices and groundbreaking ideas. Utilize AI as a business tool and the power of BI, the new standard in real-time traceability.
- Promotes sustainability efforts – Collaborating with suppliers who demonstrate a commitment to sustainability initiatives will have a positive impact on your business. Environmentally conscious customers gravitate to organizations who make a concerted effort to reduce waste and conserve energy. EcoVadis is the sustainable standard for the OEM/powersports industries. With this sustainability rating tool/platform, you can evaluate your own sustainability practices or those of a supplier on critical areas including environmental, sustainable procurement impacts, ethics, labor, and human rights issues.
Bring unprecedented value to your supply chain
Strategic sourcing allows businesses to navigate unexpected challenges, make educated decisions, strengthen day-to-day procurement practices, and accelerate long-term value within the supply chain. Whether it is the fast-paced powersports, automotive, or heavy-duty industries, it is best to work with a trusted, experienced team who can confidently handle all details of strategic sourcing—so your organization and your customers can realize the full value.
About Kem Krest
Kem Krest, a certified minority business enterprise (MBE), is the nation’s leading provider of supply chain optimization solutions to automotive, powersports, and heavy-duty OEMs. Through our dedicated team members, lean operating system, and streamlined technology, Kem Krest ensures a resilient and uninterrupted supply chain for the programs we manage. Through customized end to end solutions that address every facet of the supply chain—from inventory management, fulfillment, warehousing, kitting, packaging, logistics, and transportation management, Kem Krest enables companies to increase operational efficiency, deliver superior customer and employee experiences, focus on growth initiatives, and achieve cost savings. Kem Krest partners with companies to virtualize their supply chains through a growing network of 12 facilities in the US and Canada, featuring 1.75M sq. ft. of warehouse space and 600+ full-time team members. For more information, please visit Kem Krest’s website at KemKrest.com.