6 trends to shape procurement in the coming years
Procurement & sourcing events, gathering practitioners and experts, create a perfect opportunity to combine the most interesting opinions and views on future shifts in procurement.
1. Progressive automation and digitization
Shortening life cycle of products, more often imposes the automation of purchasing processes. Simplification of selected, e.g. repetitive tasks, enables the processing of more complex supplier offers and effective category management.
Automation does not only apply to P2P model (procure-to-pay) based on e-procurement software, but is expanded with solutions based on the use of vending machines, intelligent storage modules and the increasing mobility of production processes (3D printing).
2. In-depth cooperation with suppliers
The importance of partner relationships is constantly gaining in importance. Relations based on mutual trust, cooperation – convey much more benefits within the supply chain, than the competition.
a. Sustainability – ethics and transparency
During the March PROCON Indirect Forum 2017 conference, prof. Dr. Arjan van Weele, a modern legend of procurement, has repeatedly raised the issue of partnerships with suppliers as one of the fundamental roles of the purchasing departments.
– Procurement is all about integrity, about ethics, about meeting commitments that we have made to our suppliers, to position the company as an attractive partner to do business with. Only then, supplier will do their best to perfrom in your relationship – said prof. Arjan van Weele.
It has been a long time since innovations became a factor for gaining competitive advantage for the entire organization. The benefits of implementing innovations start with cost reduction and end with revolutionary end-products for customers. The procurement department, cooperating directly with the supplier, becomes the main agent driving innovation in the enterprise.
– (…) An important leaver to profitability is to challenge suppliers to bring the best innovations to the company – advised prof. van Weele.
c. SRM & sourcing
The basis for purchasing department operations is the usage of Supplier Relationship Management models. Data and knowledge stored within IT solutions, combined with a well-defined cooperation frameworks, turn out to be invaluable when sourcing and selecting the right (and best) suppliers.
– The SRM model allows for a certain benefit systematics that cooperation with suppliers may bring. (…) If we define the SRM model in the context of a long-term plan, perceived in an extensive scope: the distribution chain, individual costs, companies we work with – simply, define a number of elements that can be incorporated into such a model – then we can expect profits – says Magdalena Wojtowicz, VP Supply Chain Management at Kalmar.
3. Agility in procurement
As a result of applying the latest technological advances, e-procurement systems, artificial intelligence and development and deepening of relationships with suppliers, internal clients as well as external organizations – companies will reach a new level in terms of productivity, swiftness and efficiency of purchasing processes.
4. The increase of indirect procurement’s importance
The increasing role of purchasing departments as an internal business partner of each organization will favor indirect buyers in a break out from the sole reduction-cost related role.
– Today procurement is reduced in many organizations to cost reduction and in the future we will look much more on procurement as a department to create added value, as a department to drive collaboration internally and externally with suppliers – says Andreas Pohle, Managing Partner at a. m. consult.
5. Big Data & risk management
Big Data (or Smart Data) unlocks new possibilities in procurement and risk management decision-making processes.
– Contemporary software allows us not only to analyze data derived from the history of cooperation with the supplier, but data from the business intelligence sources, data studied in regard to risk associated with suppliers. The combination of all these sources (…) will cause companies to know more about their suppliers – assures Mateusz Borowiecki, CEO at OptiBuy.
6. Human role in procurement
Globalization and all of the above points imply many threats and challenges for the very role of the human being in the organization. However, as in other sectors of the economy, solutions facilitating everyday work will allow the buyers to focus on strategic thinking and activities. They will enable alliances with suppliers to be created and plans for the future to be perfected, leaving routine operations to the machines. IT solutions and the purchasing processes themselves are created and determined by people.
The words of Shahriar Tabrizi (Chief Procurement Officer at Sivantos), one of the Special Guests of PROCON/POLZAK 2017 procurement conference, can serve as a great summary:
– There are not procurement people anymore. The title will be a value manager or value organization
Reactive (past) and proactive (future) procurement approach comparison (Table)
OPTIBUY Sp. z o.o.
ul. Jana Kazimierza 3