From data insights to artificial intelligence, Dayo Wright explores the top procurement trends to watch, no matter which industry you’re working in.
Every year we see more companies seeking out competitive advantages by investing in their supply chain operations. Companies are at different stages. Some may be implementing software to help them streamline processes in-house for the first time. But other, more mature companies are going through total procurement transformation across people, process, performance metrics and tools in the search for the ultimate “procurement roadmap”. Whatever stage you’re at, it’s worth keeping an eye on the current procurement trends to make sure you’re ready for the next big disruption.
Insights into spend data
Economic turbulence, coupled with uncertainty around how Brexit might unfold and Trump’s policies, are driving many companies to tighten their spending. One of the most effective ways to do this is with clear insight into what that spend is. So the first trend we expect to see more of is slicing and dicing the spend data. This will mean that action can be taken where it will have the most impact.
There is an increasing demand on goods and services to be ethical. This includes knowing where they have come from and the impact they’ve had on the environment. Companies are putting more pressure on suppliers to provide transparency about the products and services they are providing. And this goes beyond a corporate social responsibility policy. Companies expect their suppliers to show them exactly how they are being ethical with clear examples and practical scenarios.
Perhaps also linked to the Brexit and Trump fallout is uncertainty around international trade agreements in the future. There is a potential here that we will see a boost to home-grown supply, leading to a small reduction in overseas dependency. In addition to this driving force, many industries are seeing more foreign companies looking to develop and implement robust local content strategies. A minimum level of local content is generally required under local trade laws but we may see this increase in the future.
The artificial intelligence era
Probably the most exciting trend we are seeing is around technology – more specifically, artificial intelligence (AI). During 2016 many were saying that AI was set to rewrite the procurement rulebook. Like most industries, technology allows us to automate much of the procurement process, but with a new era in AI, we will see true technological intuition. So how might this unfold in procurement? AI could soon help tackle some of the big challenges facing the industry. Things like identifying new markets, managing supply chain risks, tracking exchange rate volatility and finding the best value without compromising on quality. And all this may be happening sooner than you think.
Collaboration with suppliers
With more automation in procurement, the admin-heavy supplier processes will become a thing of the past. Which should pave the way for purchases to focus on how they can get higher value add from their suppliers. Working more collaboratively with suppliers on developing innovative solutions to supply chain challenges is a win-win for both parties.
You can learn more about some of the ways we have been collaborating with our clients with our on-site support services here