With the world still reeling from the pandemic, it’s more important than ever for businesses to have a robust and effective procurement strategy. And while every region has its own unique challenges, there are some overarching themes that will be especially relevant for Asia Pacific in 2023. In this blog post, we’ll share some insights from a recent webinar on the Top 3 procurement priorities for Asia Pacific in 2023: effective supplier risk management, co-innovation with suppliers, and ESG (environmental, social, and governance) considerations. A stellar lineup of speakers comprising of industry experts such as Rakesh Agarwal – KPMG, Qing Liu – Moody’s Analytics, Daniel Karlsson – Asia Perspective, Sanjay Saini – Stemly AI, Carl Kimball – Zycus, & Jon Hansen – Procurement Insights joined us to share their views. Whether you’re based in the region or doing business with Asia Pacific suppliers, these priorities should be at the top of your list!

Effective supplier risk management – What are the risks & how to mitigate them?

Supplier risk management cannot be taken lightly, especially in the Asia Pacific region. As procurement agendas become increasingly globalized and procurement priorities move towards 2023 and beyond, the risks associated with supply chains have risen significantly. From issues such as complex trade data and a high container traffic volume to unexpected logistical challenges, manual processes, pen & paper or excel data entries, these issues can easily disrupt procurement operations if left unaddressed.

Businesses in Asia Pacific are heavily dependent on export markets such as Europe or the USA. However, with consumer demand increasing in the Asia Pacific region as well, Asia Pacific supply chains need to find ways to serve not just the West, but also locally within the region as well. In addition, consumer demand in Asia Pacific is more varied than anywhere else in the world, with a wide range of products and services being traded across borders. As such, businesses must be aware of supplier risks when engaging in international trade, as these could have severe consequences for their operations if not managed properly. It is essential for companies operating in Asia Pacific to take proactive steps towards mitigating supplier risk and ensuring a secure supply chain that can handle whatever comes its way. Therefore, procurement managers and businesses must adequately mitigate supplier risks by investing in new technologies, integrating quality assurance strategies with their supply chains, and maintaining close relationships with trusted suppliers. By taking a proactive approach to supplier risk management, businesses can create better value for their stakeholders in the long run.

Check Out Our On-Demand Webinar- Building Blocks for a Robust Supply Chain: Balancing Supplier Performance and Risk

Another key aspect of minimizing supply chain risk is regionalization. Organizations can no longer sleep easy with having their suppliers in a far-off location. Recent events such as the COVID outbreak in China or the war in Eastern Europe have brought the idea of near-shoring to the top of the C-suite’s agenda.

Co-innovation with suppliers – How can this be done effectively for the best results

To successfully co-innovate with suppliers, procurement teams need to have actionable information at their fingertips that allows them to make informed decisions about procurement priorities. Leveraging AI to tap into vast amounts of data and insights generated across the entire supply chain can help procurement teams identify and take proactive measures to mitigate risks associated with the suppliers. Organizations need to collaborate with their suppliers in order to find innovative solutions and approaches that will work best for both parties in terms of better supply chain visibility, cost savings, and improved efficiency. By leveraging AI-powered technologies, organizations can deliver one central platform where they view all procurement priorities or activities while collaborating with suppliers on evidence-based procurement initiatives that bring value, innovation, and transparency across the broader supply chain ecosystem. This allows for better forecasting, increased collaboration within the supply chain, and improved decision-making. Additionally, AI-enabled technologies can help organizations identify potential opportunities and gaps in their supplier relationships that could lead to greater competitive advantage. Supplier management software can also play a key role in helping organizations optimize their procurement processes and create a more efficient, cost-effective, and resilient supply chain. With the help of such software, organizations can streamline supplier onboarding and onboarding processes, improve supplier selection and performance, and ensure supplier compliance.

Read Our Blog- Supplier Relationship Management: A Comprehensive Guide 2023

Procurement leaders should also create an open dialogue with suppliers to promote co-innovation initiatives. Suppliers should be encouraged to participate in the co-creation of new products and services that leverage AI technology to meet customer needs. This can help foster trust between buyers and suppliers and strengthen supplier relationships. Additionally, organizations should use AI-based analytics capabilities to assess supplier performance. This will allow procurement teams to identify opportunities for greater cost savings through improved supplier management and analytics.

Finally, organizations should commit to continuous improvement of their co-innovation initiatives with suppliers through effective communication, feedback loops, and process reviews. This will ensure that the best practices are being shared between both parties regularly to continuously improve the working relationship.

ESG – What is it & how important is it for procurement in APAC going forward

ESG (Environment, Social, and Governance) is quickly becoming an integral part of the procurement agenda 2023 in the Asia Pacific region. It focuses on reducing the negative impact of procurement activities on society, the environment, and the company\’s reputation. For organizations to be ethically sound and drive sustainability initiatives across the supply chain, it is important for them to co-innovate with their suppliers to ensure that ESG mandates are upheld. Those who do not follow ESG mandates risk being out of business in the future. This is because consumers today have become conscious of the steps that organizations take to curb harmful emissions and have started to distance themselves from organizations who do execute on their sustainability promises. In order to remain competitive and ensure regulatory compliance, procurement leaders will have to embrace co-innovation with their suppliers now more than ever.

Read Our Blog- Top 4 Procurement Trends 2023: Asia-Pacific

AI-driven insights can help organizations identify potential risks in their supply chain and quickly respond to any issues. This enables companies to stay ahead of regulatory changes and ensure long-term sustainability. Additionally, with the rise of predictive analytics, it’s easier than ever for procurement teams to proactively monitor supplier performance against ESG goals before any negative outcomes occur.

Achieving Excellence: The Hackett Group’s Story with Zycus Generative AI

Witness The Hackett Group’s journey toward achieving excellence in procurement. This video highlights their strategic use of Zycus Generative AI to overcome obstacles and set new benchmarks in the industry.See Their Journey – Click to Watch!

Conclusion:

It is evident that supplier risk management, co-innovation with suppliers and ESG are key procurement priorities for organizations in Asia Pacific. While they may be managed separately, it is important to understand how they are all interlinked in order to gain a competitive advantage. Investing in modern-day technology like AI may not be on everyone’s radar, but the speed of disruption in the Asia Pacific region will be difficult to manage using archaic manual processes & systems.

Download Our Whitepaper- Supplier Risk Assessment Program Best Practices

At Horizon 2023, our expert panel will discuss these topics in more detail and provide practical tips on how to manage them effectively. Register now to gain insights into the latest trends and developments in these areas.

Want to see how you can reduce supply chain risks with Zycus’ AI powered Merlin for Risk solution? Request for a demo today and we’ll be happy to show you how you can fool proof your supply chain using technology.

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5. White Paper – The 11 Most Important KPIs to Unlock Sustained Procurement Performance in 2023