Importance Of Procurement Strategies For Aviation Industry

importance of procurement strategy

In a dynamic and turbulent world and a time when global market competitiveness is expanding, an effective procurement process for enterprises in the aerospace industry is becoming more vital as well as difficult to attain.

The sheer complexity of many global supply networks and the tendency to outsource to other countries expose supply chains as well as procurement processes to ever-increasing risks.

Companies are also being forced to upgrade and enhance their processes or risk losing market share due to increased competition. Hence, many utilize multiple tools to survive in the market. One of these tools is procurement. In this article, we’ll briefly explain the importance of procurement strategies for the aviation industry.

Photo by Alexander Schimmeck on Unsplash 

How Procurement Strategies Play A Key Role In Aviation

Many in the aviation industry have turned towards utilizing procurement strategies, and it’s because such strategies help with:

1. Building Relationships

Creating a supplier network and building trust are critical components of a successful procurement process. To decrease risk and maintain an effective procurement process and cost profile all partners and suppliers must be carefully chosen as well as connections need to be  nurtured. Airlines can achieve this via various procurement strategies.

2. Punctuality

On-time deliveries are a must for any successful procurement procedure. Working with dependable suppliers and partners that can provide important components or supplies in a timely manner will create a smooth and uninterrupted production process, which will benefit the entire company.

3. Shortening Lead Times

Businesses operating in rapidly changing markets might benefit from short lead times by bringing the right products to the market at the right time. Implementing an innovative procurement process can help companies capitalize on periodic growth spurts while lowering the overhead expenses associated with such swings. In today’s market, the capacity to quickly implement a production boost is becoming increasingly vital.

4. Cost Efficiency

Although cost reduction is not the primary goal of procurement, it’s normal for businesses to optimize expenses in ways that don’t harm their operation.

Utilizing procurement strategies can help them lower the cost of goods and decrease overhead by outsourcing the procurement process to a reliable third-party provider.

Bottom Line

Utilizing third-party procurement solutions has become a vital approach for companies to succeed in the aviation industry, since in-house solutions may be costly and challenging, and takes time that most businesses don’t have.

Penny’s procurement service provides a highly qualified and devoted team to handle procurement activities efficiently and affordably while also providing the flexibility required to meet the evolving demands of any procurement department. All you need to do is to contact us and let us help you stay ahead of the curve.



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Frequently Asked Questions

Penny is a cloud-based Procure-To-Pay system. penny helps you digitize and manage your full procurement cycle from request to approval. Manage RFQs to vendors, compare quotations, send POs and even payment. penny was designed to make things easy and consolidate all of your organization’s spending needs into one intelligent system.

  • Allocate, manage and monitor budgets by expense accounts, projects, departments, location, teams..etc 
  • Streamlining procurement means requests, approvals, and POs won’t be lost in emails or offline.  
  • History and records of requests and purchases can be extracted and tracked easily via the platform. 
  • Product requests are more accurate through the catalog, and hence avoid purchasing mistakes.
  • Reports and analysis can be extracted from the platform, giving you a consolidated data center for all your procurement activities.
  • penny is cloud-based and an easy to use platform. The action-board gives your team a user-friendly and simple experience.

Yes, penny is designed to handle complex procurement operations. We make EVERYTHING simple. Via the contract management feature, you can set the terms and conditions of your contract, and the system will recognize the products and the vendors of your request and match it with specified terms of your contract. Easy.

Putting you in control of your spending is integral to our mission. penny allows you to create Expense Accounts that match your P&L, and assign budgets to them. For example, you can assign $X for your “Travel Budget” and reflect on the budget before approving a travel request. In addition, penny allows you to set budgets for cost centers like projects, departments, locations, and so much more. With penny, you can extract reports and view your spend per Expense Accounts or cost center.

Yes. If your product search finds no results, you can submit a non-standard request.

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