Automated Storage And Retrieval Systems Market Procurement Intelligence Report

A changing ecosystem within the Warehousing and Storage market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Automated Storage And Retrieval Systems. Sustainability has emerged as a pivotal theme for procurement decisions related to supply chain. Companies are expecting their suppliers to internalize globally accepted sustainability practices and demonstrate a solid history of putting in practice similar principles. It is worth noting that practices of sustainability are not limited to only environmental impact but has taken a greater meaning of practices that can reduce the overall cost of operations in the long term.

Managing the logistics risks and building a resilient supply chain has taken the centerstage among corporate priorities. Companies are investing heavily to be able to detect disruptions in time and respond in a manner which does not put the core operations at risk. All suppliers within the ecosystem are expected to play their part and embrace the processes, tools and technologies that their customers have implemented to build a resilient supply chain.

Suppliers are increasingly adopting a demand-driven planning of their assets and resources to reduce costs and optimize operational efficiency. Part of the cost savings are passed on to buyers, but this also creates supply chain risks for them that need to be managed jointly with the supplier.

As market conditions become more dynamic and procurement practices get more sophisticated, category managers need to be cognizant of the best practices that work for their Automated Storage And Retrieval Systems category procurement. The report offers a succinct analysis of Automated Storage And Retrieval Systems procurement best practices.

For example, It is important for category managers to track and measure supplier performance against a defined set of KPIs that are agreed upon by both parties during contract negotiation, including inventory accuracy, dock-to-stock, and on-time shipment. This is critical to ensure the optimal level of service. Suppliers' performance can also be linked to a part of their fee, which can be paid depending on the level of services rendered.

Buyers need to discuss business goals and strategic imperatives with service providers to understand their mode of operation and establish control over important parameters of the supply chain.

Buyers should negotiate for administrative control over all technological systems that contain critical data. This will ensure 100% transparency and visibility over logistics operations. In addition, buyers should demand visibility across the entire supply chain using real-time metrics such as mobile and telematics systems.

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Automated Storage And Retrieval Systems procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Automated Storage And Retrieval Systems procurement. Some examples include:

• The category is highly impacted by the global economic factors. Economic downturn and political upheaval, particularly in major international markets such as the US and China, results in huge uncertainties. Uncertainty in customer demand owing to changes in freight and shipping market from general economic fluctuations and decline in international freight demand negatively impact the category
• Contract-related risks where unfavorable credit terms may severly penalize buyers for delayed payments or entitle the supplier to demand pre-payments or shorten the payment terms are not very common in the category but they do exist in certain situations where buyers' liquidity or financial health is in question
• Pricing terms in the contract could prove to be inadequate to safeguard the buyer from impact of a sudden increase in supplier's cost, often arising from a lack of clarity on scope of products or services to be delivered

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