The jewelry industry is renowned for its intricate nature and fierce competition, demanding companies to adeptly navigate through a vast array of suppliers, products, and services. To stay ahead in this challenging landscape, many companies have embraced the power of digital tools for jewelry procurement, effectively enhancing their sourcing and acquisition processes. In this blog post, we will delve into the advantages that arise from the integration of these tools within the jewelry industry. Moreover, we will showcase success stories and industry reports, supporting the effectiveness of these tools in driving remarkable outcomes.
What are the Benefits of using digital procurement tools in the jewelry industry
- Improved Cost Savings: One of the main benefits of using procurement tools in the jewelry industry is improved cost savings. Procurement tools can help companies to identify cost-saving opportunities, negotiate better contracts with suppliers, and optimize their procurement processes. A report by Deloitte found that companies that implement procurement tools can achieve cost savings of up to 15%. For example, luxury jewelry brand Tiffany & Co. used a procurement tool to centralize its procurement processes and negotiate better contracts with its suppliers, resulting in significant cost savings.
- Enhanced Data Analytics: Procurement tools can also help jewelry companies to enhance their data analytics capabilities by providing real-time data on supplier performance, market trends, and other key metrics. This can enable companies to make better-informed purchasing decisions, improve their forecasting accuracy, and reduce inventory carrying costs. A report by McKinsey found that companies that use procurement data analytics tools can reduce inventory carrying costs by up to 20%. For example, jewelry manufacturer Richline Group used a procurement data analytics tool to track key performance indicators (KPIs) and identify cost-saving opportunities in its procurement processes.
- Improved Contract Management: Procurement tools can help jewelry companies to improve their contract management processes by providing visibility into contract terms and tracking KPIs. This can help to reduce contract risk and ensure that suppliers are meeting their obligations. A report by Deloitte found that companies that implement contract management tools can reduce contract cycle times by up to 50%. For example, jewelry retailer Signet Jewelers used a contract management tool to centralize its contract repository and automate contract approval processes, resulting in increased compliance and reduced risk.
- Enhanced Compliance: Procurement tools can also help jewelry companies to enhance their compliance management processes by ensuring that suppliers comply with ethical and environmental standards. This is particularly important in the jewelry industry, where there is a high risk of human rights violations and environmental damage. A report by Forrester found that companies that use procurement compliance tools can reduce compliance violations by up to 80%. For example, jewelry manufacturer Bulgari used a compliance management tool to monitor its suppliers and ensure compliance with the Kimberley Process Certification Scheme, which aims to prevent the trade of conflict diamonds.
- Greater Efficiency: Procurement tools can help jewelry companies to achieve greater efficiency in their procurement processes by automating manual tasks and reducing cycle times. This can free up procurement teams to focus on strategic activities such as supplier relationship management and cost savings initiatives. A study by Everest Group found that companies that use procurement automation tools can reduce cycle times by up to 30%. For example, luxury jewelry brand Graff Diamonds used a procurement automation tool to automate its purchase order processes and reduce procurement cycle times by 50%.
- Improved Forecasting: Procurement tools can also help jewelry companies to improve their forecasting capabilities by providing real-time data on supplier performance and market trends. This can enable companies to make better-informed purchasing decisions and reduce inventory carrying costs. A report by McKinsey found that companies that use procurement forecasting tools can reduce inventory carrying costs by up to 20%. For example, jewelry manufacturer Bulgari used a procurement forecasting tool to improve its demand forecasting accuracy and reduce inventory levels.
- Enhanced Supplier Diversity: Procurement tools can also help jewelry companies to enhance their supplier diversity initiatives by identifying diverse suppliers and tracking supplier diversity metrics. This can help companies to meet their social responsibility goals and improve their reputation among stakeholders. A report by Deloitte found that companies that implement supplier diversity initiatives can achieve a competitive advantage and improve their brand image. For example, jewelry retailer Pandora used a supplier diversity tracking tool to monitor its supplier diversity metrics and increase its spend with diverse suppliers.
By leveraging procurement tools like FactWise Source-to-Pay, companies in the jewelry industry can achieve a wide range of benefits leading to favorable outcomes. As the industry continues to evolve and competition intensifies, the use of tools for jewelry procurement will likely become even more critical for companies looking to succeed in the jewelry market.
FactWise is a unified E-procurement platform with a fully integrated suite of procurement products. The platform is used by global product manufacturing companies to transform their procurement organization via analytics and automation to reduce costs, improve supplier diversity and strengthen supplier relationships, mitigate risk, meet ESG goals and standards, and increase oversight and efficiency.
At FactWise, we are committed to building truly distinctive procurement software solutions that delight users and provide sustainable positive impact to the organizations we serve. We do this by providing transparency and insights to leaders (31% increase in governance), streamlining and automating processes to improve efficiency (20% increase in efficiency), and driving bottom-line impact by unlocking savings potential (25% cost reduction for direct spend).