Office Furniture Market Procurement Intelligence Report

Business practices within Office Furniture market are heavily influenced by changing trends across the category as well as within the broader Office Furniture, Fixtures and Fittings market. The category has historically lagged in tech adoption due to inadequate skillsets of majority of workforce and the perennial requirement to reduce facilities related cost. Therefore, suppliers who have demonstrated technological prowess to achieve efficiencies are being preferred over traditional vendors.

A balanced approach to procurement of Office Furniture has emerged, where buyers with multiple locations first outsource at individual locations and gradually move to standardize and consolidate the services across facilities.

Suppliers have historically gained handsome margin-on-margin by sub-contracting a part of their work to another contractor. However, Buyers are now delving deep into the business models of suppliers and negotiating hard to avoid further sub-contracting. In cases where it is imperative to sub-contract, category managers are employing should-cost models to keep supplier margins on sub-contracting to the minimal.

As a result, category managers need to closely monitor the Office Furniture procurement trends and identify changes required in their procurement environment for the category.

Sometimes, procurement functions are unable to timely alter their practices while responding to market conditions. Industry experts acknowledge that periodically reviewing procurement best practices and adopting learnings from across procurement categories can help procurement teams respond to market needs in a more agile way. This report combines our experience of other categories with Office Furniture procurement insights and hand picks best practices that can work for category managers delving in this market.

For example, Category managers must explore opportunities to integrate planning and management activities of categories using analytics, to gain better control over category spend. This will also allow them to consolidate their supply base easily, as well as to segment suppliers based on requirements and spend on each supplier.

Buyers should evaluate the true costs of each product and service within the scope of work for supplier, and also understand the hidden costs associated. This can help them to set accurate targets for cost reduction for their suppliers, and effectively monitor and evaluate their performance against industry benchmarks.

Buyers require industry-specific services to effectively operate their production facilities. Thus, they should opt for service providers that can offer customization and bring in years of experience in serving the needs of that industry.

Office Furniture procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Office Furniture procurement. Some examples include: