It’s fair to say that the past few years have not been kind to procurement and supply chains. From geopolitical challenges and Brexit to a global pandemic and rising costs, businesses have had to cope with several unique issues within the supply chain.
Once-in-a-generation black swan events have become a constant barrier of disruption, putting greater pressure on the role of Chief Procurement Officers (CPO) to ensure continuity and instill greater resilience.
Supply chain bottlenecks, disruption, and delays continue to threaten customer-supplier relationships. As a result, procurement leaders are re-evaluating how they use data to provide end-to-end supply chain visibility and become more responsive, giving rise to a new generation of digital CPOs.
Armed with real-time data, not only can supply chains become more efficient, but also more sustainable – another important aspect as ESG initiatives arises up the procurement priority list.
It’s time to adapt procurement strategies
With the one certainty for procurement teams being uncertainty – increasing attention has fallen at the door of the procurement teams to continue to provide the essential efficiencies businesses need to continue to trade, whilst managing supply chain disruptions, which now are commonplace and show little sign of dissipating.
The slick, if not risky strategies of ‘just-in-time’ and cost-dominated sourcing have mainly through necessity, been replaced, or at least augmented to ensure continuity and to increase the longevity of the procurement function.
The next logical step is for businesses to create and implement digital procurement strategies, which will help businesses deploy the resources needed to build much-needed agility into their procurement process, whilst ensuring efficient spending, and sustainability, all wrapped up in water-tight governance. .
Sustainability in the supply chain has to be accounted for along every part of the procurement journey, ranging from selecting ethical suppliers, minimizing waste through efficient supply and demand management.
By taking a much more holistic view of procurement, by adopting sustainable and socially responsible procurement practices, providing end-to-end visibility to digital Procurement Officers POs, that facilitates monitoring and compliance, and delivers continuous value to the business.
The collaborative future
The future of supply chains will be characterized by a dynamic outside-in approach to analysis and collaboration between all actors, from the purchaser to the supplier – this is where a new generation of digital Procurement Officers can make their mark and ensure that procurement strategies have robust flexibility needed to cope with the inevitable black, or perhaps with planning, just swan events!
A robust and sustainable procurement strategy will deliver a great deal to a business by helping it to minimize errors, identify efficiency opportunities, whilst supporting governance with policy compliance, whilst helping to eliminate maverick spend providing the most ethical and sustainable ways of sourcing and acquiring goods and services, ensuring that ESG initiatives are delivered upon.
Keeping digitally grounded
However, it is important to note that as much as there are a plethora of digital tools at the disposal of the digital CPO which can be used to drive better value for the procurement, the digital CPO must work across the business to ensure that the digital journey starts with identifying current business processes where technology can be used either to enhance the user experience and improve both the efficiency and productivity of any given department.
With 75% of CPOs believing that they will deliver a digital procurement strategy in the next five years, there really is no turning back from the upward trajectory the digital procurement officer is on, but it’s all hands to the procurement pump when it comes to tackling ever-increasing costs.
Building resilience in the supply chain
Improved decision-making and efficiency that digital procurement solutions bring to a business are helping to drive more complex analysis, better supplier strategies, and intelligent procurement operations.
As black swan events become increasingly commonplace, supplier collaboration is mission critical for procurement teams, a view reflected by industry, with a recent survey showing that 66% of businesses believe better collaboration with suppliers was needed to increase supply chain resilience.
Supply chain disruptions cause financial loss due to the necessity to make alternative plans at the same time as everybody else – you only need to look at the semiconductor shortage which crippled the production of consumer electronics earlier this year, to see the very real impact these issues have.
Fresh perspective and increased visibility
As digital innovation becomes a reality for procurement teams, CMOs have a chance to gain fresh visibility across not just the entire supply chain, but across the entire business – with data insights, blended with sustainable best practice.
By digitalising procurement processes, organizations can improve risk management and increase transparency in both operational and supplier relationships – whilst streamlining operations and driving cost savings. Enabling them to measure progress against key business priorities such as supply continuity, ESG performance, and innovation.
Ultimately, nobody knows how long the problems with supply chains will last, as new disruptions continue to challenge. Irrespective of current and potential future scenarios, the rise of the Digital Procurement Officer services to ensure accurate and meaningful data is gathered, analyzed, and put to use in order to drive decisions making CMOs are better able to drive revenue for their organizations as well as improve customer and supplier relationships.