In a recent survey, more than 60% of respondents stated that this crisis had a remarkable or very considerable impact on their business. This substantial challenge represents significant opportunities for companies’ Supply Chain (SC) Procurement teams, families and communities to become resilient. Procurement will drive decisive business strategies in 2021-22 and beyond.
What has emerged from this survey?
A more agile Procurement when partnering with other divisions - Procurement activities might end up being a smaller-highly-centralised function with specialised people doing tasks within your company’s specific divisions. Procurement could well benefit from remote working, enhancing better collaboration all through your business.
Category managers might be authorities in a business section, dealing with all the section’s Procurement requirements, possible building up a gig-economy workers network to fulfil operational needs.
Globalisation, collaboration and better free trades - Over the past two years, the USA and China administrations disregarded previous free trade policy. The USA placed tariffs on imported products from China, intending to counterbalance trade amounts between the two countries and punished and discouraged Chinese organisations and the government from practising intellectual property stealing.
This situation put the Procurement leaders on the line, conflicts becoming severer due to the pandemic. In the mid-time, the USA signed a renew Trade Agreement with Mexico and Canada. Globalisation will bring better collaboration and unity among countries whilst returning to significant free trades. Chief Procurement Officers and their teams should understand which changes to follow to avoid worse impacts on their costs and SCs by being proactive in trading legislation.
The vaccines will diminish global supply risks - Due to the successful Covid-19 vaccinations, countries worldwide will control the virus and gradually return to a more normal condition when immunising most against the virus or significantly lessening the symptoms and consequences of it.
Health protection agencies’ recommendations and restrictions such as social distancing or lockdowns will continue impacting how we live and work. Thankfully, streaming technologies keep work and education going on. Even now, the economic impact on millions of laid-off individuals or children taking classes in a distance-learning mode is striking homes, as we are too interconnected.
The most significant changes in Procurement - Procurement functions in large organisations will be crucial elements influencing the whole business scheme, development and competitive advantage. Procurement leaders’ teams must change their working frame to enhance innovation, agility and SC stability.
Procurement operations need to prioritise cash management and enhance SC visibility. Sourcing leaders will reconsider their suppliers and bring more Request for Proposal (RFPs) to market to bring crucial business strategies in 2021 and beyond; for sure, the best time to work as a Procurement professional as their skill set will be in high demand.
Procurement will reconsider the SC - CPOs must rethink the SC, provided the advancing of socio-economic factors and trade legislation disrupting our affordability to goods and services. Some countries consider that certain products should be produced locally so that this approach might have a significant impact this year from a global-legislative-regulatory viewpoint. Now, Procurement leaders must gradually diversify their SC.
Digital transformation - Data is influential in helping companies make critical decisions; data challenge maintains such info updated and spotless. Machine Learning is currently cleaning data automatically, making sure that any irregularities are automatically corrected. For instance, monitoring and maintaining data from contracts or in pay sequences.
Working from home has transformed the mindset around technology value for efficiency and collaboration, currently recognising that technology is now the cornerstone for business operations. Companies are now investing more in technology for maintaining people interconnected, more collaborative whilst having better visibility into processes and activities.
Organisations will have a “suite mentality,” opting for integrated platforms. They want a modernised user’s experience with a specific data model and flexible volume-purchasing power from solution suppliers.
The Internet of Things (IoT) supports businesses in tracking outcomes in real-time, such as goods in transit all over the SC to asset-intensive industry-link data crosswise the company to their suppliers, facilitating reliable Procurement to supervised stockpile levels automatically. This course of action will make possible an improved data platform to notify decision-making around spends and purchasing blueprints, supplier’s portfolios, catalogue content, and contract accomplishment.
Robotic Process Automation (RPA) - RPA will become a crucial tool of any Procurement solution to eradicate the high amounts of repeatable tasks; manual interference linked with direct spending. Manual recounting will be removed, aiding Procurement staff focus on more significant work like registering lengthy-difficult reports.
Artificial Intelligence (AI)- The “big data” opportunity for Procurement is enormous.; it tracks and analyses nearly every aspect of a company. Become a master on gathering such data and getting intelligent value from it. Best organisations are already capturing data, developing strategies to build up staff’s technological capabilities. Procurement suppliers are investing heavily in AI innovations to embed them in today’s workforce management solutions.
Internal and external data sources to consider supplier’s risk - Data renovate Procurement, offering stakeholders the opportunity to understand their suppliers much better. Internal data collected by Procurement, market data, contractor info, and analyst data on supplier accomplishment provides an accurate view of supplier’s performance. It will help you build supplier’s risky profiles and empower you with the tools to forecast risk events or activities.
Blockchain will fully integrate into Procurement best practice - The Procurement area recognises Blockchain fully. While it might be costly to develop and deploy, leaders could likely employ it in scenarios where a company needs to track operations to reduce forging or efficiently respond to operational integrity.
Procurement will begin to push control to the regions - CPOs will bring control and thrust autonomy back to the local areas to share risk. From an operational perspective, if, without warning, one part of the world cannot carry on its operations, decentralisation share out the operational risk.
Further comments: The world begins a slow recovery from an unparalleled year of challenge and changes. However, there are many barriers to surmount as the economy starts backing upbringing positive effect.
How have your Procurement staff overcome the pandemic?
Subscribe to our emails & exclusive free content.