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• The use of data for decision-making has grown extensively over the last decade. Leaps in data use and data leverage are courtesy of new technological developments in spheres like cloud computing, big data, analytics, and automation platforms.
• Procurement analytics simply relates to how organizations use big data in terms of procurement spend analytics and spend data to make more informed sourcing and supply chain decisions.
Over the last 36 months, the world of procurement has faced challenges like no other. The COVID-19 pandemic and the geo-political instability in Eastern Europe have resulted in production disruptions and price distortions. There are important lessons to be learnt on resilience that will shape procurement trends in the immediate future. Most surveys of procurement officers indicate their willingness to invest in solutions that put them in a better position to react to major unexpected events more swiftly than they did to the pandemic.
These procurement trends and bits of knowledge will offer pointers to the progressions you want to make to guarantee your association endures the consequence and flourishes in spite of the new ordinary.
Procurement trends are viewed as signs by acquisition directors that now is the right time to consider what’s to come. Furthermore, that assertion is mostly evident; as we’re gradually moving into 2022. That is the reason it’s just correct that for this article, we will discuss Procurement trends for the year 2022 subject matter authorities agree.
We will translate each pattern and realize whether it’ll be destruction or misery for the year 2022 for acquirement groups from everywhere the globe.
Subsequent to perusing this article, you’ll seem like a genuine master when you begin conversing with individuals about Procurement trends during your organization’s year’s end party.
At ProcurePort, we believe that having the right tools is always the first step in making informed decisions during times of uncertainty. That said, here are some important trends in procurement heading into 2023.
Reliance on Third Party Due Diligence on Suppliers
Globalization in supply chain sourcing will only increase despite the challenges of the last two and a half years. However, globalization adds complexity to the supply chain and firms are often unable to complete proper due diligence on potential suppliers. Therefore, the rise of third-party firms that specialize in gathering risk information about suppliers is a welcome trend for procurement teams. These solution providers collection information on social, political, environmental, media, financial risk in thousands of companies to help teams make faster and accurate assessments.
Artificial intelligence for Supplier Discovery
Other departments including marketing have been relying on AI-technology to help discover new leads, which in turn has helped boost their ROI. Sourcing teams can now rely on similar automation to help find suppliers quickly. The sourcing teams simply need to input their search criteria and the tool will bring up suppliers who fit the criteria with a score for each.
The main advantage is being able to search for suppliers from a very big database. The final decision is also made more objectively. The database is also updated continuously and there is always the chance to unlock new opportunities.
The Reliance on Supplier Performance Management Tools
Supplier performance management is one area procurement teams struggle due to the lack of reliable data to work with. There are numerous KPIs to track and deciding on the most important ones is never easy. The most commonly used ones are the prices, frequency of price changes, delivery lead time, and the quality of products. However, there are other important factors that aren’t as easy to measure, including communication lag time, the financial stability of the vendor, and overall competitiveness with competing vendors.
The use of supplier management tools is meant to make the assessment easier. The solutions have inbuilt modules to help come up with on overall vendor score. In addition, they have dashboards where visualizations help make better sense of how performance is changing over time.
Supply Chain Tier Mapping
Heading into 2023, there is more pressure from regulators for big companies to take more initiative in ensuring they promote sustainability through their supply chains. This means that companies have to map out their supplier chains beyond Tier 1. Businesses have to develop elaborate means of collecting data on supplies, both local and international.
Supply chain tier mapping can have consequences downstream on issues such as corporate governance, labor practices, and environmental conservation. However, it can help improve supply chain resilience by being able to foresee disruptions brought about by a supplier’s financial instability or legal challenges. The company can also protect itself by avoiding working with suppliers who pose political and reputational risk.
Beyond protecting its image, supplier mapping can be used by a company to push affirmative agenda. Companies can set aside certain quotas of its procurement budget to help uplift businesses owned by marginalized group.
Even as companies adopt more software to augment their supply chain operations, most of them will want software that is available both for PC and for mobile devices. Most vendors today are offering their solutions on the cloud, which makes it easy for a company to have teams working remotely. This will continue to be an important consideration for the new crop of talent today. Mobile versions of e-procurement tools mean that managers have constant access to real-time information and can make informed decisions from wherever they are.
The Growing Role of Procurement
The greater investment in procurement technology indicates the growing importance of procurement to drive value in companies today. Organizations have realized that the resilience and stability of a company’s supply chain is as important as having a great marketing strategy. As customers push for more value, procurement will have an important role to play to unlock new opportunities through better sourcing and good relationships with suppliers.
Procurement leaders will need to be able to optimally use all the tools at their disposal.
- They must be able to take in large amounts of information and rely on their dashboards to make decisions.
- Procurement leaders will also need to use their savvy to make fellow leaders aware of upcoming disruptions and help their organizations pivot accordingly.
Increased visibility into supply chains means that the organization will have more risks to hedge against. This will require constant tweaking of the supply chain operations but this is necessary in a dynamic operating environment.
What are the regions covered by procurement and supply chain?
Procurement and supply chain are important for a wide capability busy with getting the vital administrations and items to guarantee the smooth running of an organization’s item production and delivery.
Procurement and supply chain are turning out to be more lined up with one job frequently covering the conveyance of the two angles from buying to assembling and dispersion.
ProcurePort is the world’s leading provider of e-procurement solutions. We have built a wide-range of solutions to perform functions such as contract management, spend analysis, procure-to-pay, and reverse auction. We also build custom solutions based on requests from our clients. You can schedule a call with us for a discussion on the right tools for your company.