HVAC Trends Impacting The Strategic Sourcing Process
Top 2021 Trends in the HVAC Industry That Are Impacting the Strategic Sourcing Process
4 MIN. READ
It is out with the old and in with the new. As HVAC contractors move past the pandemic, it is time to take a look at the strategic sourcing process. All the shifts that are happening in the market are ideal for capitalizing on gains and minimizing wasted money and effort in order to build the most efficient business. It is also time to further transition to digital tools that offer better value and cut down on inefficient, time-wasting activities that you and your team are doing manually right now.
To help you refocus and reprioritize, consider these trends as you prepare for the future of your business.
The necessity of a new outlook
According to Yossi Sheffi, director of the MIT Center for Transportation and Logistics, supply chains were already undergoing a transformation before 2020. However, the dramatic shifts that occurred during the pandemic definitely accelerated those changes and sped up some inevitable developments. Many manufacturers and contractors were already looking for ways to improve end-to-end visibility in the supply chain and diversify their suppliers to minimize risk.
Additionally, there has been a steady movement away from global supply chains to onshore and local suppliers whenever possible. The changes might have seemed dramatic 18 months ago. But today, they are viewed more and more as an essential strategy for maintaining a successful contracting business.
Trends in the strategic sourcing process
HVAC contractors interested in setting their business up for continued success must embrace these changes. You may not be able to do all of these things all at once. However, these trends in strategic sourcing should be on your radar and part of your long-term plan.
Embracing digital technologies
Visibility into your supply chain and the ability to analyze every step of your procurement process can help you find and eliminate waste. Cloud-based computing allows you to visualize your business from anywhere — at the office, on site at one of your jobs or even on the beach when you are taking a vacation. You can instantly access relevant information to keep your operations running smoothly.
AI and other actionable technologies allow you to make better decisions, predict customer needs, effectively manage subcontractor relationships and find the best prices to keep costs low in your strategic sourcing process.
Advocating for sustainability
In a 2021 Deloitte survey of 750 executives, 30% said they are already feeling the impacts of climate-related disasters. Four out of five say they are concerned. They acknowledge that the world is rapidly approaching a tipping point to mitigate a disastrous climate future. In August, the National Oceanic and Atmospheric Administration reported that July was officially the hottest month ever recorded on earth.
So, what does all that have to do with an HVAC contractors supply chain? Well, maybe everything.
Every purchase you make affects our global climate future. Businesses must find new ways to limit negative environmental and social impacts. The supply chain is one place where you can examine your impact.
In complex global supply chains, it can be easy to lose track of who you buy from. But ultimately, the business practices of those suppliers contribute — for better or worse — to our global well-being. It is important to have effective procurement tools that can help you find suppliers that engage in good labor practices, create safe working conditions, mitigate pollution and make an effort to reduce carbon emissions at each step of the supply chain.
Strengthening supplier relationships
Most HVAC businesses try to keep costs low, which allows them to provide low bids and still make a profit. However, cost is not the only factor to consider in the strategic sourcing process. It is also important to look for suppliers that are reliable and trustworthy — and investing in innovations that will improve your business (and theirs) in the future.
Raiven’s purchasing management software can help you find new partners and keep track of the ones that share your values. Solid supplier relationships can reliably make you more competitive and help you stand out during RFP rounds.
Building contingencies into your supply chain plans
When COVID-19 hit, many businesses were left in the dark with supply chains. Complex global supply chains meant that the person you thought you were buying from was not always the original manufacturer. Sometimes your suppliers had their own network of suppliers. Any breakdown in that chain created a ripple effect that negatively impacted you and your customers.
Overseas manufacturing also created challenges as countries continue to struggle with varying levels of success in containing the COVID-19 pandemic among their own populations.
Having a healthy network of local and national suppliers can lessen the shock of major events. While this might not be able to completely insulate you from worldwide catastrophes, it can help your business build resilience for the future.
How Raiven can help your HVAC business thrive
Raiven is an innovative tool for HVAC contractors who want to embrace the changes that will create stronger businesses, improve innovation and boost supply chain resilience. Our purchasing platform offers access to top suppliers, cost savings, and the ability to structure a more dependable supply chain and a more strategic sourcing process. Learn more by contacting us to discuss your needs and schedule a demo.