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Procurement Priorities 2014 – South East Asia – Part 2

By Sherna Jay
In Procure-to-Pay
Oct 2nd, 2014

With an overview of the top business challenges, average cost savings objectives in Procurement Priorities 2014 – Part 1; in part 2 we explore the top challenges in procurement, the business climate for procurement and various procurement strategies.


Top challenges in Procurement

Top challenges in Procurement – Procurement Priorities 2014

Top challenges in procurement:

With a share of 47% Forecasting and strategy building is the topmost challenge that procurement pros. face across Asia. Following the lead is Supplier Performance at 40% and Resources (talent/time) at 33%. While supplier performance is by far the most common hurdle, change management and lack of experienced procurement pros. also seem to have a looming effect over the procurement cycle. With a close margin, Risk Management/Detection also features in the list and surprisingly the last entrant in the top 5 is a tie between Internal Collaboration and Procurement Tools/Solutions at 26%. Though the top 3 challenges need to be pursued at a large extent, procurement pros. must also emphasize on the last entrants i.e. Internal Collaboration and Procurement tools strongly as both the challenges carry a high weightage.

Business Climate for Procurement:

Procurement pros. in South East Asia predict a strong economic growth in the whole region, with over 50% predicting a rapid growth. This would also result in tightened labour supplies, inflation and rising wages even in the balanced markets. Other sectors where the economic growth might result in scarcity include finished consumer goods, intermediate materials, services and energy.

Skilled Labour scarcity

Skilled Labour scarcity – Procurement Priorities 2014

Diverse Procurement Strategies:

When asked about which strategies would South East Asian procurement pros. emphasize on to accomplish their KPI objectives; 56% replied that they will focus on strategic/competitive Sourcing. Around 47% marked to pursue procurement efficiency and 36% marked cost/spend reduction. A significant influence was also present on managing supply risks, supplier performance and aggressive negotiation. However, if we look at the business climate for 2014, supply risk needs to be at the top of the chart followed by cost reduction.

Diverse Procurement Strategies - Procurement Priorities 2014

Diverse Procurement Strategies – Procurement Priorities 2014

Study Conclusions:

Instead of being motivated by poor economic and business performance, South East Asian procurement pros. seems to be motivated by systematic constraints on growth. This brings in a fresh perspective towards the common approaches followed in the procurement cycle. Some of them include:

  • Rationalizing supply bases, aggregating demand and so on to enable process efficiencies and improving labour productivity
  • Improving internal collaborations and bringing artificial intelligence to enable efficient demand forecasting, hedge inflation and other supply risks
  • Usher process efficiencies to free existing talent for growth oriented activities.

Click on the download button below to access your copy of Procurement Priorities 2014.

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What do you think about the upcoming procurement trends in your region? Share your view in the comments section below.


About "" Has 30 Posts

Sherna is a Senior Marketing & Communications Executive at Zycus. An avid blogger, a maniac editor and an animated colleague; you'll find her tweeting and visualizing new Pizza Treats when she's free.

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