The future of supply chain is no more limited to ensuring reduced price and timely delivery of goods but also about being mindful of an increasingly complex landscape dominated by legal issues, sustainability concerns, and regulatory and ethical considerations that affect not only a company’s revenue but also brand standing.
On this note, the decade ahead calls for procurement leaders or practitioners who are prepared to deliver beyond the expected. They now have to role-play guardians and advocates for their businesses. They would need to acknowledge the below 7 challenges set to disrupt the current supply chain. And by way of this, be able to successfully navigate through all potential risks for the brighter shore of supply chain.
Risk: One of the top challenges will be about adopting a holistic risk strategy that includes minimizing total risk exposure, risk mitigation investments and risk transfer. And for procurement professionals to achieve this, category managers with keen understanding of next generation supplier risk management will be the rescue rangers. They know the importance of pre-screening suppliers before on-boarding them to followed by continuous monitoring.
Sustainability: Companies then will operate from a frame of mind that rejects “linear economy” based on exploitation of resources and move toward a more “circular economy” based on recyclable opportunities. Economic growth propelled by this model of sustainability in supply chain will spark new economic growth embraced by the younger professionals.
Finance: Finance will no more be a skill limited to finance department. Leading procurement thinkers will discover newer potential of the skill and thereof transactions will be more cross-departmental. It is a fact that in many of the organizations CPO report to CFO. A strong collaboration between finance and procurement will be the strategy to kill competition and advance market presence.
Information: If you wish to count your organization among one of the high performing ones, then your procurement wing must get comfortable with advanced data mining and analysis technique in big data. It will be a data world more complex than it already is, so the preparation for sustaining in that decade would need you to focus on evolving big data strategy and technology.
Technology: How can we think of waging a battle without best-of-class technology? There will be no room for anything manual and the entire practice of procurement will run on basic commands of artificial intelligence, intelligence augmentation, machine learning and scores of newer technologies now underway. Where do you stand in technology today would determine your coping mechanism.
Transparency: Imagine if your brain gets visible and people can watch your thinking. Scary, right? Well, in businesses, if there will be any visible function in the operations, it will be procurement that by dint of digital media, will solicit a lot of attention and scrutiny. And without a strong practice in place, your procurement will be vulnerable and exposed which will cost your company a fortune. With increasing regulatory pressure it is now a necessity for businesses to be transparent in their organizations; this transcends down to individual functions and Procurement is not an exception to this.
People: None of the above suggested solutions to the 7 key challenges can be fulfilled without a dynamic people resource. Chief procurement officers are expected to participate in the recruitment process to insure there is good young blood, infusion of new cultures, progressive mindsets and dynamic procurement geeks.
The conclusion is already known. Let’s do it or be done without. The above seven challenges accompanied by solutions are the areas that should get leading procurement companies go all the way to lead the future. Like we discussed in the beginning, it is no more about cost or timely delivery. While that remain basic, the ask of the hour is a more holistic approach toward procurement that would contribute toward an advanced supply chain.