The importance of effective methods in managing suppliers has elevated and so has the rapidly changing procurement landscape. It will require much more from the usual practices to brace for the 2024 rapidly changing business landscape and still stay ahead of competitors. This exhaustive article will elaborate on the latest supplier management strategies and trends that are definitely making a difference in improving procurement success. In today’s evolving world of procurement, effective supplier management strategies have gained increasing prominence.
And with the year 2024 starting in, businesses need a toolbox of innovative measures to beat competitors. So, taking on a holistic approach this blog enters a list of the current trends alongside groundbreaking strategies poised to drive success in procurement space.
Driving Supply Chain Success in 2024: 7 Trends Shaping Your Supplier Management Strategies
Winds of change are blowing through the global supply chain landscape. The times for systems in isolation are over. By 2024, advanced technology, requirements for sustainability, and changing customer expectations shall call for a forward-looking approach to supplier management strategies. This blog will serve as a compass to navigate you through the seven key trends that will be defining supplier management strategies in the new year.
Trend 1: Rise of generative AI
Imagine software that’ll comb through mountains of data, learn the intricacies of your supply chain, and spit out optimized workflows. That’s the power of generative AI (GenAI).
Widely adopted by 2024, this will streamline procurement, improve production, and revolutionize logistics communication. Prepare to use GenAI to ensure compliance, automating regulatory and procurement reviews. Optimize Production by providing predictive insights for more efficient workflows and improve your logistics through voice assistants ensuring streamlined communication.
Watch Video: Spearheading Innovation with Generative AI
- Key Action: Tangible value for GenAI use cases, namely increased productivity savings and financial impact.
Trend 2: Growing ESG Pressures Coupled with Complex, Multi-layered Supply Chains
Initiate low-touch planning brought about by S&OP + IBP driven by AI solutions. This game-changer reduces manual work and drives predictability through proactive analysis – whilst boosting profitability as a result of better resources allocation.
- Key Action: Enable planning professionals with analytical modeling skills and a cross-functional knowledge base.
Trend 3: Data: The Source for Informed Decision Making
Data is the lifeblood of the supply chain, and data silos are its kryptonite. Crack the code on data quality in 2024 from a use-case basis. Prioritize those improvements to data that matter most, adjusting your dataset incrementally for informed decisions making, optimizing processes, and improved resilience through risk mitigation proactively.
- Key Action: Highlight on Data Availability, Quality, Reliability, Cadence, and Consistency. Remember that Data Management really is an ongoing effort and not a one-time destination.
Trend 4: Transparency Beyond Tier 1 and Tier 2
Limited transparency among suppliers downstream is a blind spot waiting for a new discovery. Innovative technologies such as control towers and digital twins will break the barrier in 2024 between level 1 and level 2 to provide deeper insight, better risk management, and stronger ESG performances.
- Key Action: Collaborate using technology and partnerships to extend the visibility beyond Tiers 1 and 2.
Check out Zycus’ Integrated Supplier Network which provides visibility into every transaction and helps in reducing cycle time
Trend 5: Low-Code Platforms: Facilitating Agility
By 2024, low-code platforms will enable business users to build, test, and deploy applications for the supply chain with little technical power. Adapt faster, be more agile, and empower stakeholders a voice in shaping the supply chain.
- Key Action: Define cross-functional processes, tasks, and schedules to identify appropriate low-code use cases.
Trend 6: ESG and Scope 3 Emissions: Corporate Social Responsibility
Sustainability ceases to be a buzzword; it is becoming an obligation of business. In 2024, everything will revolve around Scope 3 emissions of the supply chain. Segment your suppliers, engage them, advise them of collection of Scope 3 data and invest in technology for centralized sustainability reporting to be ahead of the curve.
- Key Action: Develop a scope 3 change management strategy and consider your business operations. Explore Lythouse: Zycus’ Revolutionary Leap in ESG Solutions. It is backed by granular level spend classification and provides you with the most accurate scope 3 calculations. Request a demo now!
Trend 7: Electric Vehicles, Transport, and Logistics
Driving change with loftily automated and electrified future logistics. Electrification will be speeded up for the purpose of transitioning deliveries for 2024.
- Key Action: Embrace the shift to electromobility and assess the independence of logistics from procurement in order to keep track with the change.
A 5-Step Framework for Proactive Supplier Management Strategy
Let’s delve down into a 5-step framework which you can adopt today to ensure efficient supplier management in 2024:
1. Assessment of Current Capability:
- Undertake a comprehensive assessment of your current procurement abilities
- Find out strengths, weaknesses and areas of improvement in supplier management
- Identify Technological readiness to embrace trends like Generative AI and Low-Code Platforms Explore Merlin Assist, Zycus’ revolutionary AI-powered chatbot that sits as your all-powerful personal assistant, to assist you across the Source-to-pay cycle & suites.
2. Aligned to Organizational Goals:
- Ensure that supplier management strategies align with the broader organizational goals
- Define clear KPIs and metrics for gauging success of the initiatives
- Articulate strategic importance of supplier management to the key stakeholders
Read our eBook on: Discover the 9 Steps to More Effective Supplier Risk Management
3. Technological and Skill Investments:
- Embrace technologies that facilitate trends like Generative AI, data management, and transparency
- Introduce education programs for procurement professionals
- Nurture the learning culture in dealing with technology
4. Foster Collaboration and Transparency:
- Encourage the procurement team to collaborate not only within themselves but also with the key suppliers and all the partners
- Use tidy tools and platforms in their system to increase transparency throughout the entire supply chain
- Supply data on its sustainability goals as well as Scope 3 emissions to the right stakeholders
5. Agile Procedures Response Plan Must Be Developed:
- Create a perfect supply chain response and contingency plan to respond perfectly to the disturbances and changes that happen
- Leverage low-code platforms to adapt easily to changing requirements
- Make the organization agile at every sense not to let any new technologies and strategies out of it
Moving into 2024, the procurement landscape is at the cusp of transformation. With strategies aligned to these seven abovementioned key trends and embracing the 5-step framework – procurement leaders can catalyze success, drive efficiency, stay ahead in the dynamic global market.
Therefore, you must leverage technology, embrace innovation and forge strategic partnerships to ensure that your supplier management strategies are not only current but future proof. The time for proactive adaptation is now. Are you ready for the procurement revolution Request a demo today!
- Supplier Management–Benefits, Process, & Best Practices
- Supplier Management Software – Your Magic Wand for Procurement
- Research Report: Seven Keys to Better Sourcing and Supplier Management
- White Paper: The Why, What And How Of Supplier Management
- White Paper: Supplier Management Automation
- 8 Unique Phases of Supplier Lifecycle Management
- A 5-Step Process to Effective Supplier Management
- Demystifying the Supplier Management Process for Success
- Building Success Through a Solid Supplier Management Framework