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Unleash the maximum potential of your organisational procurement strategy by leveraging reliable insights and expert-led direction of tried-and-tested procurement consulting services.

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In times of economic instability, organisations need to be strategic in their procurement decisions—they must navigate a challenging landscape where the stability and sustainability of their operations are at risk.


The goal of procurement is to ensure that an organisation has the right goods and services, at the right time, and at the right cost—and getting this right amid significant challenges can assure the continuity and efficiency of operations.


Implementing an effective and adaptable master strategy for procurement can help an organisation mitigate risk and thrive in uncertain times, enabling them to get an edge over the competition.

Let us look at the procurement strategy considerations that organisations need to make to navigate economic instability.

What are the common challenges stemming from economic instability?

Regardless of the specific form it takes, economic instability can have severe consequences for businesses. Some of the key challenges that organisations face during times of economic instability include:

Supply chain disruptions

Economic instability can cause supply chain disruptions, making it challenging to acquire the necessary goods and services.

Cost fluctuations

During times of economic instability, prices for goods and services can fluctuate rapidly, making it challenging for businesses to plan and budget effectively.

Reduced demand

When incomes are affected, economic instability can lead to reduced demand for goods and services, putting pressure on organisations to cut costs.

Cash flow issues

As creditors offer less favourable terms and emphasise faster repayment and debtors demand longer payment periods, economic instability can also cause cash flow issues, making it challenging for organisations to pay bills and invest in future growth.

Economic instability can take many forms, from a recession or depression to hyperinflation or currency devaluation, a few of which are currently evidenced or forecasted to take place on a global scale.

With expert predictions of a grim economic outlook throughout Europe, explore how businesses can partner with Kronos Group to avail specialised procurement consulting in France and beyond.

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What measures should organisations consider to finetune their procurement strategy?

Conduct a spend analysis

A spend analysis is an assessment of the organisation’s spending patterns, which can help identify areas of overspending or opportunities for cost savings. During times of economic instability, it is essential to have a clear understanding of the organisation’s spending habits to identify areas where cost savings can be made.

Evaluate supplier risk

Supplier risk is a critical consideration when developing a procurement strategy. During times of economic instability, suppliers may become financially unstable or may be forced to close down. This can lead to a disruption in the supply chain, which can have a significant impact on the organisation’s operations. It is essential to evaluate supplier risk by reviewing the financial stability of suppliers and identifying any potential risks that may arise.

Diversify the supplier base

Relying on a single supplier for critical goods or services can be risky, as disruptions to that supplier can cause significant problems for the organisation. By diversifying the supplier base, organisations can reduce the risk of supply chain disruptions and ensure a more stable supply chain.

Negotiate contracts

During times of economic instability, it is crucial to negotiate contracts that provide the organisation with the best possible terms and conditions. This may include negotiating lower prices, longer payment terms, or more favourable contract terms. Organisations should also be prepared to renegotiate contracts if economic conditions change.

Develop a contingency plan

Contingency plans outline the actions that an organisation will take in the event of a disruption to the supply chain. This may include identifying alternative suppliers, stockpiling critical goods, or developing alternative production processes.

Leverage technology

Adopting innovation and leveraging technology is an increasingly important strategic consideration for procurement excellence. Technology can be used to streamline procurement processes, automate tasks, and provide real-time data on supplier performance. During times of economic instability, technology can help organisations make more informed procurement decisions and improve supply chain efficiency.

Consider sustainability

Organisations should consider the environmental and social impact of their procurement decisions as well as the financial impact. During times of economic instability, it may be tempting to prioritise cost savings over sustainability, but organisations should strive to balance these considerations to ensure a sustainable procurement strategy.

How can Kronos Group help integrate procurement
digitalisation within businesses?

At Kronos Group, our experienced procurement professionals have provided their expertise to many organisations in Europe and around the world. We have been able to train procurement teams and establish sustainable procurement functions across several industries.

Our team of consultants understands the changing procurement function and the demands that come with it. Keeping this in mind, we have been able to develop complete procurement solutions.

Procurement outsourcing

Procurement advisory

Procurement training

Targeted procurement expertise

Procurement outsourcing services

With procurement functions and technologies expanding at a rapid pace, organisations must stay ahead of these transformations to overcome intense environments posing procurement challenges.

Get in touch with our team of procurement professionals and find out how we can add value to your procurement efforts with specialised procurement consulting to help secure your procurement function from obsolescence.

How procurement plays a vital role in mitigating
organisational risk?

Procurement plays a crucial role in mitigating the risks associated with economic instability. A well-designed strategic framework for procurement can help organisations:

  • Ensure supply chain continuity: Procurement can help organisations ensure the continuity of their supply chains by identifying and mitigating potential disruptions.
  • Manage costs: Organisations can manage costs by negotiating favourable terms with suppliers, identifying opportunities for cost savings, and optimising procurement processes.
  • Mitigate risk: Effective procurement practices can help organisations mitigate risk by diversifying their supplier base, ensuring compliance with regulations, and implementing effective supplier risk management practices.
  • Improve cash flow: Efficient procurement can help organisations improve cash flow by negotiating favourable payment terms with suppliers, optimising inventory levels, and implementing effective procurement processes.
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