The intricate network of people and systems that make up global supply chains can be compared to a constantly changing maze. Procurement experts thrive in this fast-paced and challenging environment, overseeing suppliers from all corners of the world and maneuvering through intricate trade laws and regulations. Succeeding in this maze necessitates the ability to adapt, act quickly, and have access to necessary tools. Fortunately, the future brings hope in the shape of cognitive procurement solutions and Generative AI - invaluable allies that can help conquer this complex landscape.
Artificial Intelligence (AI) has created a profound transformation in procurement, revolutionizing processes and operations across industries worldwide. From automating mundane tasks to making intelligent purchasing decisions, AI has proven its potential to enhance efficiency and accuracy in procurement.
Procurement departments are having to adapt and evolve in an increasingly challenging business landscape. The traditional role of indirect procurement—managing the purchasing of non-core goods and services, from office supplies to IT equipment—has never been more critical. Now, however, the function is expanding. Amidst a storm of inflationary pressures and other economic headwinds, procurement is becoming a key player in de-risking business processes. Its objective is not just to ensure the smooth procurement of goods and services, but to act as a safeguard against supply chain disruptions, ensuring business continuity in an era of uncertainty.
In recent years, sustainability has emerged from the periphery to become a central focus of modern enterprise strategies, significantly impacting procurement practices. According to one study, nearly 85% of companies recognize the importance of sustainable procurement. By 2025, it is expected that 90% of procurement industry professionals will require their suppliers to demonstrate carbon neutrality.
The procurement industry is currently grappling with a significant staffing crisis. While layoffs have been sparse within the procurement sector itself, shortages of human capital and increasing cases of employee burnout have created a chasm in managing contract renewals and other critical functions.
In the dynamic world of procurement, the only constant is change. Traditional approaches are being upended by innovative technologies, global economic forces, and an increasingly digital marketplace. The metamorphosis of procurement processes is not merely a result of periodic incremental improvements; it is a fundamental transformation brought about by disruptive technologies and unprecedented global events.
Manulife is investing in the development of new innovative platform equipped with powerful tools for streamlining purchasing and procurement.
Adidas promotes practices where procurement and marketing works hand-in-hand for long term brand success and relations.
We talk a great deal about customer experience when it comes to industries such as retail, but we rarely think too carefully about the topic when it comes to the business of procurement. This makes perfect sense of course.
While we often like to think we live in a fairer and more equitable society than many previous generations have enjoyed, the fact remains that people belonging to traditionally oppressed demographics still face many systemic challenges that others do not.
Onboarding new suppliers is one of the most critical elements of the procurement process which makes it all the more surprising that so many organizations are still relying on inefficient manual processes and outdated forms. Used by the purchaser to collect key information from a supplier such as contact details, contact start and end dates, which categories of product are authorized for supply, and other key data, a procurement intake form will often be the document which seals the relationship between a purchaser and a supplier and will be used in the future to settle any disagreements or simply to corroborate key information.
For all but the most stubborn, dishonest, or deepest in denial, the effects of manmade climate change are being wrought large all over the planet. From unusually extreme weather in traditionally moderate countries, to flash fires and floods, there are almost daily reports of how this shift in climate is impacting real lives and communities.
Understanding where your business is spending money and where it should be spending its money is a core tenet of any fiscally responsible brand. However, one area where things can quickly spiral out of control for many businesses is in the area of tail spend. With so many of the company objectives being focused on the expenditure which is directly related to the core operations of the business, it can be easy to lose focus on ancillary spend on products and services which are not.
The CIPS defines category management as, "a strategic approach to procurement. It’s where organizations segment their spend into areas which contain similar or related products. It allows more focus on categories that have opportunities for consolidation and efficiencies.”
Business travel is changing just as rapidly as the travel industry itself. New trends like process automation, artificial intelligence (AI), virtual reality, intelligent assistants, and blockchain technologies are not only helping travel companies stay competitive but also enabling procurement teams to ensure the safety and satisfaction of their business travelers. Credit card company VISA has some exciting ideas about how technology could help change business travel for good. Here, we will explore how technology and the pandemic made businesses rethink their travel programs.
When everything works together harmoniously, your procurement function can drive growth for your company. But if there are any weak links in the chain, it can hold your procurement team back. Here, we'll explore why it may be the right time to transform your procurement ecosystem. We'll also discuss how you can make positive changes and investments to turn your procurement function into a revenue driver.
Senior leadership is directly involved in the decision-making progress. Essential travel and non-essential travel are more difficult to designate. Duty of care, health and wellness, sustainability, and safety have become top priorities. Here, we'll explore what you need to consider when evaluating and reshaping your future business travel programs based on safety, sustainability, and the traveler experience.
Most procurement functions are already using a host of digital enablers to varying degrees. For example, most businesses are already using cloud-based technology. However, not every company is using digital enablers to enhance their business travel programs. Despite the availability of cloud-based business travel software, tracking applications, and even IoT sensors, some organizations still rely on manual methods to manage their travel programs. Here, we'll explore how procurement teams can use digital enablers like the cloud to enhance their travel programs.
Most procurement leaders are now familiar with the concept of Sustainable Procurement. This business prerogative will be key to building trust and sustainability moving forward, and it must extend from the procurement department to its suppliers and vendors. Here's how procurement leaders are working to establish ESG in the function and where there is room for improvement.
CPOs now occupy a strategic position within the organization, weighing in on everything from financial decisions to new technology upgrades. Many of today’s CPOs have also transformed their procurement functions into operations that generate substantial revenue for the company. These are significant gains for the position, but they don’t come without challenges. Many CPOs still struggle to achieve buy-in from other decision-makers when it comes to major transformation initiatives. Companies are racing to implement the latest procurement technologies, but they require investment.
As procurement departments strive to become more agile, outsourcing is becoming an important strategy as well. Business process outsourcing (BPO) has proven to be essential for procurement teams that are making major changes to their processes but can’t risk any interruptions. Some procurement-based BPO revolves around day-to-day procurement or back-office tasks. However, many procurement teams outsource tasks like securing and managing vendors to external firms. Here, we’ll explore which processes procurement leaders are outsourcing and why BPO is becoming such an important tool for the function.
Procurement leaders are always on the lookout for new opportunities, especially when it comes to saving on spending and making the business operate more efficiently. As such, they have many insights about effective management that could be valuable to the rest of the organization. There are also opportunities for procurement to collaborate with other areas of the business to help all parties achieve their goals. After all, many of procurement’s categories impact the entire organization.
Chief financial officers (CFOs) are ultimately responsible for overseeing the organization’s working capital. They may be skeptical about procurement’s ability to align with the overall company mission, especially if it isn’t clear how procurement is taking advantage of savings and helping with the bottom line. Here are a few ways procurement leaders can change the conversation and show the CFO how it delivers financial value.
Implementing a new enterprise resource planning (ERP) system is a large undertaking that will have a significant impact on the entire organization. For this reason alone, it’s important to take a careful, measured approach to this process. Here are a few pointers for how to get started.
Procurement leaders have long had to focus almost entirely on savings. But in recent years, procurement executives have become strategic leaders themselves, coordinating efforts with other departments within the organization to unlock value.
According to Harvard Business Review, "As companies focus less on efficiency and more on resilience, procurement becomes central to strategy. That’s because it is uniquely positioned to orchestrate long-term value-creating systems that can accommodate incompatible value holders, withstand exogenous shocks, share loads, and grow dynamically."
Many aspects of global business have been impacted by the pandemic over the past two years. But perhaps none have been more acutely impacted than business travel.
Procurement leaders need to be aware of what new risks are in-store for business travelers in 2022. They also need to stay vigilant about changes to travel restrictions considering emerging variants of the COVID-19 virus. Risk and travel restrictions are the factors most likely to impact spending.
Here’s what’s in-store for travel spend in 2022.
There are many aspects of the procurement function that are purely transactional. Suppliers provide goods and services and the organization pays for them based on a contract agreement.
But procurement leaders have long understood that their supplier relationships can be beneficial to long-term prosperity. Strategic partnerships with suppliers can yield substantial benefits to the business and even protect both parties’ interests during times of disruption.
Here are some of the benefits of treating suppliers as partners.
Businesses can no longer focus solely on their own interests and the interests of their shareholders. Although profitability will always be a top priority, companies must also recognize their place in the community and the environment.
Every decision the procurement department makes has an impact on the world around it. Decisions around spending, supplier partnerships, technology deployments, and more must all be weighed against the potential harms or benefits they’ll have for society.
Previously, businesses have relied on contract and spot freight procurement, but the global COVID-19 crisis has made long-term contracts significantly less dependable than they would have been in the pre-pandemic world. This has caused the spot market to surge and shippers to face record capacity lows and unprecedented demand, leading to all involved in the procurement chain scrambling to adjust and adapt.
Agile is a method of working which allows an organization to operate in an effective and efficient manner while retaining the flexibility necessary to change direction at a moment's notice in order to adapt to an evolving business landscape. Procurement is seeing the benefits of adopting the agile business philosophy, especially when it comes to the traditionally arduous task of supplier selection.
Procurement officers can regularly find themselves in negotiations with a supplier that is far larger than their organization is, meaning they'll have to reach an agreement from a position of relative weakness. Making this situation even more challenging is the fact that a supplier will also often be your only option when it comes to procuring certain items. To make matters worse, the supplier will likely be aware of this fact and can enter negotiations knowing they're your only option. All is not lost, however, and there are ways of effectively negotiating in either of these challenging situations.
Manmade climate change is an undeniable fact and it's disheartening to see the people with the power to facilitate meaningful change once again failing to do so. The extreme weather events and disasters such as wildfires and flash floods we have been witnessing in recent years are only the beginning, and the time to act is rapidly running out if we are to mitigate the worst of its effects. Procurement has a role to play in all this. Sustainable procurement is a lofty goal, but one that all corners of business should strive towards.
The apparently simple business of moving products from one place to another has become considerably more complicated in this unfamiliar environment and the adage "no man is an island" has never been more applicable than right now. This means procurement officers need to work with others to ensure a steady flow of goods to where they need to be.
The workforce is ageing and young people, fresh out of education, are not gravitating towards procurement as a career choice. What, then, can the industry do to make sure it better retains its existing people while simultaneously making itself more attractive to the hottest young talent?
Supply chain risks have been rising in recent years, and although the COVID-19 pandemic is to blame for many of them, some of the disruptions to the supply chain are systemic issues that have been present for some time. Organizations that don't have the tools to obtain visibility into their supply chains and manage their data are at higher risk than others, if only because they have little to no control or accountability over what occurs upstream.
The past two years have been marked by supply chain challenges. The first issues revealed themselves because of social distancing restrictions and lockdown orders, which were issued as a response to the COVID-19 pandemic. These lockdowns bred logistics challenges that had a ripple effect across the supply chain, leading to shortages of everything from machine parts to medicine, technology, and toilet paper.
The government often turns to the private sector to access the expertise and capabilities it doesn't keep in-house. Although this practice is commonplace today, it wasn't always as streamlined as it is now. In the old days, individual government agencies had to rely on procurement methods that went through a significant amount of red tape just to access the services and technologies they needed.
Organizations have demanding expectations of marketing procurement professionals. To make matters more challenging, marketing is a notoriously complex procurement category. Most other categories can be analyzed through analytics that demonstrates exactly how each dollar spent brings value to the business, whether it's indirect spending or direct spending.
In a perfect world, procurement functions would be able to devote the time and attention they need to every spending category. Managers for each category could then conduct in-depth market analyses and discover opportunities for cost reduction and value generation.
Unfortunately, not every procurement team is large enough to dedicate specialized people and resources to every spend category. Many procurement teams are relatively small, so they must balance the needs of their marketing spending with other indirect procurement categories. As a result, marketing procurement may not always get the attention it needs, resulting in wasted spending or mismatched marketing services.
Business travel was one of the areas most seriously impacted by the COVID-19 pandemic. According to Marketplace, business travel was still down as much as 50% from pre-pandemic levels in July 2021. Compared to leisure travel, which rebounded significantly over the summer, business travel may take years to recover.
Procurement has quickly adopted a role as a strategic asset to the organization. Where once procurement was typically viewed as a cost center, recent innovations, technology developments, and changes in thinking have revealed that procurement can not only help the company reduce costs but also add value to its operations.
2020 was a challenging year for consumer-packaged-goods (CPG) brands. Changes in consumer behavior were rapid, and the shifts in how and where consumers chose to spend their money varied depending on what new revelations about the COVID-19 pandemic emerged each day. Manufacturers and retailers struggled with supply chain disruptions and brands had to work quickly to shift customer engagement to digital to take advantage of a quick rise in eCommerce.
Many companies are now addressing issues of diversity, equity, and inclusion internally. They are putting forth HR programs that focus on equitable hiring practices, and they are seeking out ways to develop diverse talent within the organization to open doors for more diversity in their leadership.
CPOs and other executives have historically had separate roles in the organization. For example, procurement leaders have typically focused on risk management, cost savings, and value production within the organization's spending, whereas IT executives have focused on managing the organization's technology solutions and securing its data.
Procurement teams from almost every type of business struggled to reconcile with disruptions caused by COVID-19. Beginning in China, regions around the world were hit by the pandemic in succession, leading to a cascade of disruptions in manufacturing and the provision of business services.
As the COVID-19 pandemic escalated, demand for personal electronics skyrocketed as well. People were stuck working from home, and in many cases, their only connection to friends and family was through devices like smartphones and laptops. This led to an acute shortage of semiconductors and computer chips, the immediate impact was felt in the technology industry.
According to findings from the ProcureCon 2019 CPO Study, 50% of CPOs consider their digital transformations as complete, or mostly complete. As time goes on, this number is set to grow, as the urgency of transforming to remain competitive becomes increasingly apparent and the work of making changes is done.
While in the past, a decentralized approach to procurement may have been a tolerated strategy, today the majority of organizations have recognized that procurement is most effective when given the power to consolidate spending across the organization under their umbrella.
Are you part of the procurement community and looking for a helpful place to view upcoming conferences & events? One of the best ways to keep updated on trends in the industry is by attending procurement conferences. Not only can you take away actionable insights from executives from the world’s largest companies, but you can also leave with long-term business connections with your industry peers. In this blog post, you’ll find some of the top procurement and sourcing conferences & events, why you should attend them, and what you can expect.
Every year uncovers new challenges in procurement. Terrorist attacks, natural disasters, increasing regulation, and mystifying new technology make accurate predictions almost impossible. The following are some of the greatest challenges we are looking out for and our recommendations for overcoming them.
Sustainable sourcing is not just the right thing to do, it can also be a powerful business strategy. Companies that commit to sustainable, ethical procurement can benefit from greater brand loyalty and improved procurement planning practices that reduce waste, all of which can boost the bottom line.
While in the past, a decentralized approach to procurement may have been a tolerated strategy, today the majority of organizations have recognized that procurement is most effective when given the power to consolidate spending across the organization under their umbrella.
Every business has a unique culture, vendor management systems are faced with This lofty challenge. They must be flexible enough to handle a variety of needs but strong enough to enforce business rules. They must be robust enough to connect as a hub to many different systems while keeping sensitive information private.
If you're an indirect procurement director, the trends for 2019 will be a mix of what you've faced in the past as well as new twists on familiar challenges. We'll look at some of the top indirect procurement trends for 2019 and what they mean for your enterprise.
AI and robotics technology are driving innovation in many corners of the procurement industry and automated trucks are set to make sure that larger loads get to their destinations in a more expedient and efficient manner than ever before.
The ever-changing nature of the geo-political landscape and the technology that powers it is leading to progressively more sophisticated cybersecurity concerns. How can the procurement industry meet these challenges?
Blockchain has the potential to be one of the most game-changing technologies in the supply chain. Already well-known for sending reverberations throughout the finance industry in the form of cryptocurrencies such as Bitcoin, the technology also has a whole host of innovative applications set to revolutionize procurement.