Following the COVID-19 pandemic, businesses have started to bounce back. However, new variants and other geopolitical issues continue to disrupt supply chains, encouraging procurement professionals to learn from the lessons and prepare for the future.
To reduce the risk to supply chains, avoid disruptions, and generate more value to overcome losses, businesses need to consider the emerging procurement trends to strategize and optimise their investment.
Top 9 Trends in Procurement and Supply Chain
Here are the top 9 trends that will shape procurement and supply chain in 2022 and beyond.
To support faster recovery after COVID-19, policymakers and businesses are not prioritizing green recovery and maybe putting various sustainability initiatives on the sidelines. However, consumers are now more concerned about environmental impact. This underlines the need for procurement teams to think about greener supply chains and logistics to find suppliers who care about ethical sourcing. Hence, a circular supply chain can be the next logical step which will not only do good for the community but also drives business’ profitability.
2. Risk management
Following the aftershocks of the pandemic, risk mitigation and contingency planning will be a priority for businesses. You need to identify and monitor potential risks throughout the entire supply chain. This means utilizing advanced risk management tools to navigate through uncertainties and volatility. The contingency planning may also involve implementing preferred supplier programs to improve loyalty, ensuring transparency and visibility in second and third-tier suppliers, as well as promoting a shift from just-in-time to just-in-case supply chains for better inventory control. Moreover, when risk is identified at the sourcing stage, it can be mitigated early on.
3. Digital transformation
Technologies are accelerating the digital transformation in procurement. Businesses would focus on getting their shippers, forwarders, and third-party logistics on a real-time platform for enhanced connectivity. This will also empower them to handle issues rapidly. Moreover, with the addition of machine learning and artificial intelligence, predictive analytics will become robust to analyse risks and keep supply chains uninterrupted.
4. Bot and voice-enabled purchase process
To support both buyers and suppliers, businesses will focus on the bot and voice-enabled technology for purchase order (PO) related queries, shipping updates, notifications on contracts and POs, and much more. This will not only improve real-time interactions but also save the time for the procurement team as a help desk to focus on growth strategies.
5. Procurement automation (Touchless)
Businesses may witness an increased demand for paperless procurement, eliminating many manual processes and the use of spreadsheets and paper documentation. Automation will enable effective vendor management, inventory management, reconciliations, and more. This will translate to improved operations, reduced costs, higher transparency, reduced human errors or bias, as well as better data analytics.
Blockchain is still in the nascent stages in procurement and supply chain. It can help businesses avoid disruptions in delivery, maintain transparency in supply chains, and protect sensitive information. Despite considerable benefits, the adoption of this technology still majorly remains a proof-of-concept. With increasing stakeholders and complexity in supply chains, this technology is here to stay.
7. Visibility in supply chains
Businesses would focus on improving their ability to gain complete visibility of their supply chains. As discussed earlier, this not only means having visibility on trading partners, shippers, and forwarders in real-time but also mapping out and categorizing risks. Moreover, you may need to diversify your supply chain and move beyond traditional risk diversification strategies. This will enable you to avoid situations wherein your tier-one supplier is relying on similar three-tier sub-suppliers, ports, or manufacturers.
8. Mobility technology
With the increasing use of mobile devices such as smartphones and tablets, it has become critical that procurement professionals have access to mobility technology, helping them save time away from the desk. This means rapid adoption of cloud-based technologies and mobile technology to enable remote management and control.
9. AI-enabled contract review
Contract negotiation is one of the most challenging phases of the procurement process. Since it is primarily a manual process, it may take three to six months for businesses to finalize it. With the adoption of automated contract tools, businesses would be able to make faster decisions based on workflows, avoiding situations wherein contracts sits with irrelevant parties. Moreover, it will take significantly reduce time to verify a contract due to back and forth between the legal and procurement teams as AI tools will ensure your business’s rule book is followed.
With technology and automation, the procurement sector will witness increased transparency and productivity. Induzbuy is supporting the seamless and rapid adoption of such smart technologies with its procurement management solution to help you stay a step ahead. To know more about how we are helping businesses chart growth stories, click here.