10 Worst Challenges faced by Sourcing Managers and How to Overcome Them

10 Worst Challenges faced by Sourcing Managers and How to Overcome Them

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Sourcing managers handle multifaceted tasks and are responsible for a wide range of functions, from identifying requirements to managing vendors and making payments. There is never a dull moment in the head of procurement department.

As a result, the position of a procurement manager is fraught with obstacles and difficulties. It also implies that recognizing and addressing procurement difficulties is a good use of time, money, and effort because procurement has a direct influence on an organization's bottom line. 

Procurement challenges differ depending on an organization's size, area of business, ways of operations, etc. Here are the 10 worst challenges faced by sourcing managers that plague companies of all sizes and the ways to overcome them -

How to Overcome the Challenges faced by Sourcing Managers
Sl. No.Challenges faced by Sourcing ManagersWays to overcome them
1Complex supply chains spread across geography - Visibility throughout the supply chain is a critical tool for achieving regulatory obligations, reducing risks related to logistics and supplier health. According to Deloitte's 2018 Global CPO study, 65 percent of procurement professionals have little visibility beyond their top-tier suppliers.Technology platforms can provide clear visibility on the supply and logistics side and assist the sourcing manager in mitigating risks while delivering value and lowering costs. These software platforms help in getting a comprehensive perspective of globally-spread supply chains. 
2Need improved risk management systems - The most frequent types of risks include market risks, possible frauds, cost, quality, and delivery hazards. Furthermore, compliance issues like anti-corruption, policy adherence, and others keep the sourcing managers awake at night.These risks can be addressed most effectively with centralized, efficient, and transparent data and supply management. Strong buyer-supplier connections should be prioritized by the head of procurement department.
3Uncontrolled spending - Inadvertent orders, rush orders, and purchases from vendors offering extra things done outside of the company's defined procurement policies are examples of indirect spending that results in revenue and control loss. These acquired products challenge procurement strategy, overshoot department budgets, weaken inventory control and financial audits since they cannot be easily accounted for in financial and stock records.Visibility is the only way to gain control over corporate spending, and data assists in achieving that visibility. Streamlining spend management is the finest move a sourcing manager can make to guarantee that all cost areas are managed as efficiently as possible.
4Factual issues - Organizations require precise and trustworthy data in order to make effective procurement decisions. Making purchases based on incorrect procurement data and raw material prices can result in excess inventory, inventory shortages, and high procurement costs that can greatly impact the organization's operations.Consolidated data management solutions and the subsequent right analytics, forecasting can enable seamless operations throughout the procurement process.
5Tracking supplier’s compliance - With so many diverse suppliers, it's impossible to know whether they're meeting their duties. According to reports, 29 percent of organizations believe compliance has to improve.The best solution would be to implement an automated software application that records supplier performance information and allows you to simply monitor whether suppliers are living up to expectations and adhering to contract requirements.
6Supplier Financial Risks - There are several cases where suppliers' businesses fail over time due to financial reasons. Such financial failures lead to contractual failure and the inability of the supplier to provide the raw materials on time or not at all. This directly impacts manufacturing as raw materials are not available in such scenarios. This needs continuous due diligence on the supplier’s business financials at least once a year. For this, sourcing managers can either check the public reports or use some third-party tools which provide such data. Another way to mitigate such risk is to look for alternate sourcing.
7Manual sourcing processes - Manually managing your sourcing procedures may look straightforward at first, but as processes get more complicated, they become the most significant barriers to success.Instead of relying on paper invoices and requisitions, not all the information and monetary exchanges can be done digitally. Various E-sourcing software help to reduce various manual efforts in the sourcing process and improve the turnaround time and productivity. 
8Ensuring quality of raw material supply - Sourcing managers have to ensure that raw materials are procured not only at the cheapest price but also at the quality standards. If quality is compromised, then it can affect the manufacturing of the end product which is sold to customers. If the end product is not up to the mark, it can result in customer grievances and impact the brand image of the company.There is various software that can help to compare the quality standards of the raw materials from various suppliers. Sourcing managers can leverage such tools and reviews to quickly decide on whether the sourced items meet quality standards.
9Managing the right payment cycles - The sourcing managers are responsible to manage the payment cycle with suppliers. Based on the criticality of the supplier, relationship with them over years, and budgets he needs to construct an optimized payable day. This needs astute financial budgeting and alignment with other corporate functions of the organization and strategy of the organization
10Meeting the key Sourcing KPIs and scorecards - Important KPIs across dimensions like volume, variation, velocity, variety, and visibility are essential for carrying out best practices procurement. Sourcing managers often find it difficult to juggle around these numbers to meet all these KPIs parallelly.There are various frameworks and tools set up by standard bodies like APQC, SCOR which can help in defining the sourcing performance tracking. 
How to Overcome the Challenges faced by Sourcing Managers

Procurement is gradually becoming a critical component of a company's cost-cutting and efficiency-increasing strategy. Procurement departments, which are in charge of contract administration, risk mitigation, and supplier relationship management, encounter a range of issues on a daily basis. However, sourcing managers can efficiently deal with a wide range of procurement challenges with the right strategy.


There are numerous sourcing challenges in your fashion business. However, collaborating with an effective manufacturing platform that manages everything from design to delivery with a tag of sustainable fabric can solve the global supply chain challenges. So, connect with Fashinza, and find the best manufacturers in the industry to scale up your fashion business.


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