Procurement is Facing a Moment of Reckoning… Here’s How to Be Part of What’s Next
When the going gets tough, the tough get going. It’s time to check in with our global procurement and supply chain network. Take the What Next survey, produced in conjunction with Compleat!
Last year, we were bracing for impact. The spotlight turned to procurement. When we published our How Now report, many of you told us that your interest in supply chain had exponentially increased, and your procurement careers were beginning to take shape in new and unprecedented ways.
We got our seat at the executive table. We were brought to the front lines to manage high-stakes business decisions. Procurement – we became mission-critical.
Fast-forward to 2021. At Procurious, we’ve been mulling over the state of things. The procurement community has come so far, but as far as we’re concerned, we’re at a moment of reckoning. A crucial junction, where we have to gather up everything we’ve learned, and figure out how to press forward with whatever new challenge lies around the corner.
Lockdowns. Check.
Supply chain disruption. Check.
Suez Canal blockage. Check.
Political turmoil and calls for social change. Check and check.
We’re here, and we have not only survived… we’ve thrived. But a new question has come bubbling up to the surface, and well… quite frankly, we don’t have all the answers to it. That question?
With no certainty of what global event or crisis is around the corner, and no clear blueprint for the future, we have to ask ourselves how we’re going to tackle the next big challenge. What in the world is everyone up to?
We’re proud to be a uniting force of the global procurement community – and now, we need your help. It’s time to check in, and find the million-dollar answer to our burning question, What Next.
You’re the real experts. Yes, you! That’s why we’ve designed a new survey along with Compleat, which will be an integral tool for procurement to reset, adapt and move forward.
So before you read on, and learn about the themes and trends that have shaped procurement so far this year, share your experiences here and help us take a crucial temperature check on supply chain confidence levels.
Are you finding strategies to adapt and reset? Are you wondering about what your global peers are up to in all this?
Us too. Specifically, we’ve been thinking about the themes that industry experts believe have shaped procurement this year so far. Here are just some of them:
1. Exploring joint innovation partnerships
For years now, savvy procurement functions have realised that their value lies far beyond simply cost reductions. And one great way to deliver value is to establish innovation practices in conjunction with your suppliers. Research shows that innovating regularly in partnership with suppliers can deliver earnings growth of up to 10%.
According to McKinsey, 88% of procurement professionals have now started, or plan to start, joint-innovation partnerships with suppliers. These innovations were initially focused on process, service or production, but many are now also exploring opportunities to innovate from a business model and vertical integration perspective.
2. Evolving to continue to meet customer values and service requirements
Gone are the days where companies simply ‘sell’ and customers simply ‘buy’. Instead, customers from both a B2C and (increasingly) a B2B perspective expect superior, seamless, and personalised service.
This service, according to Deloitte, needs to include many facets. Customers, especially millennials and Gen Z’s, only want to buy from companies whom they trust (transparency is key), and also who invest heavily in sustainability. Beyond this, when ordering a product online, they also expect a tailored product experience, which includes but isn’t limited to self-service portals, seamless ordering and billing, accurate order tracking, and no-hassle returns.
3. Globalisation to regionalisation
Any of us – and there were many of us – who had our supply chain thrown into disarray with COVID-19 closures realised firsthand how challenging single-source dependencies can really be. But what the pandemic really made us realise is that, perhaps, the globalisation upon which many of our businesses had been built was actually less than ideal, and it might be high time to consider an alternative.
According to IMD, many of us are making the move from globalisation to regionalisation, with logistics hubs beginning to re-emerge at regional levels. The move has many benefits, including diversifying supply chains and making them more flexible and adaptable.
The move away from China, IMD reports, may continue as the labour cost differential continues to shrink.
4. An increasing focus on risk and resilience
Given how the last eighteen months has played out, the one change that may be needed more than anything is a transformation of how we manage risk and resilience in our supply chain. And that change, according to CIPs, is already in motion.
Changes already occurring are a shift to more resilient digital supply chain models, as well as focus on transforming capabilities to enable greater responsiveness to continuous disruption.
These capability transformations don’t just apply to supply chains, but to the people who manage them – us. Increasingly, procurement talent is looking quite different to what it has in the past.
5. Re-prioritising sustainability
At the start of the pandemic, we at Procurious were very concerned that sustainability had been ‘shelved’, due to sudden (and necessary) shifts in the priorities of companies experiencing major COVID-ridden disruptions. The tracks being made in global procurement conferences seemed all but forgotten, as businesses scrambled to make contingency plans and try to keep the wheels turning on their operations.
But according to our recent report with Ivalua, sustainable procurement is re-emerging as a hot topic and among the top items on the agenda of many procurement and supply chain leaders.
While the number of advanced sustainable programs and adoption processes has a way to go in its recovery, the mindset of procurement leaders has taken a turn. At least half of C-suite respondents to the 2021 Ivalua survey believed that sharing supplier sustainability intelligence and ratings with peers and competitors was a key strategy to creating impactful programs.
Meanwhile, it has become clear to the leadership community that sustainable programs are driving commercial and positive economic activity. According to the report, procurement leaders with advanced programs are more than 2 times more likely to report an increase in sales, and improved product and service quality.
While sustainable procurement took a significant hit from the pandemic, it’s clear that this area of industry focus is undergoing a reboot, and will be back with gusto.
So far, these themes have dominated the supply chain this year. But will they continue? Can they? Tell us what you think will happen next with our exciting new survey created in conjunction with Compleat, What Next?
Oh, and did we mention that it takes less than 15 minutes? What are you waiting for! Take the Survey here.
