On http://www.purchasing.com there’s an article on Indian electronics industry called The Bridge to India (under construction) and the current supply markets in this industry. There are two main messages:
1.) The market is growing and
2.) the supply base is relatively weak.
It’s not a real surprise.
In of my previous studies we analyzed Indian’s Supply Chain Management Capabilities. The study captures current practices and their degree of use, identifies significant trends and establishes operational performance benchmarks in five key areas of supply chain management: new product
development, customer order management, supply chain planning, procurement and logistics.
One of their issues on procurement is “maverick buying”, a leading indicator of procurement performance. In India, maverick purchasing is at an average level of 12 percent. More than 40 percent of respondents have indicated that average levels of maverick spending are greater than 5 percent. This confirms the need for Indian companies to focus on spend analysis and contract compliance initiatives.
What it means to buyers?
Next to the potential market development and all the related activities like strategic sourcing, market research or supplier development you should focus on compliance management incl. spend analysis and management. Contract compliance is a fundamental building block of effective procurement – if it is not in place, further work on supplier and contract development may be nullified. Additional information can be found in this paper.
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