2020 has shown itself to be a wake up call for many departments within businesses. Many were caught unaware by the coronavirus and no one could have predicted that the whole world would be on lockdown because of a global health pandemic. Since March, the United States economy has shrunk at the fastest rate since 2008 and more than 26 million Americans have been furloughed. The procurement industry has not been spared either with disruptions occurring at every level along the supply chain.
One person who seemed to get a purchasing and supply chain management prediction right for 2020 is International Data Center’s Simon Ellis who predicted that in 2020 we would see companies opting for more automation and artificial intelligence integration in operations. Seeing as most procurement processes are now remote-based, he couldn’t have been more accurate.
The current state of affairs in the procurement industry
In an ideal world, every business would have a business continuity plan (BCP). Sadly, this is not the case. According to Aviva, only 17% of businesses in the country had a contingency plan that would guide operations in times of crisis. 59% of businesses had no BCP in place and 15% of respondents in the Aviva SME Pulse report said they did not think they needed a contingency plan. This has led to many procurement companies finding themselves in deep waters during this current COVID-19 pandemic.
In China, where the coronavirus first broke out, the country’s industrial production has dropped by 13.5% compared to 2019. The country’s own imports went down by at least 4% and exports also dropped by a staggering 17%. Global sourcing in supply chains have been severely disrupted with some saying it will take years to recover from this knock.
What has become clear very fast is the need for solutions that allow companies to continue operating albeit with a reduced taskforce and revenue. Procurement optimization should be a top priority. One of the ways this can be done is by integrating eProcurement software from leading companies like ProcurePort.
What the experts are now saying about purchasing and supply chain management for the rest of the year
With the way goal posts have changed for the industry, the predictions being made about purchasing and supply chain management for the rest of the year pertain to companies finding solutions that will allow them to continue operating in crisis management until business resumes to a standard closer to ‘normal’.
· Data and analytics will play a leading role in efficient supply chain management
During these times and even post-COVID, data and analytics will play a central role in purchasing and supply chain management. In order to make the best decisions, procurement managers will need access to the most current and up-to-date information in order to make decisions that are in the best interests of the company. As the year progresses, data will be used in more advanced and predictive ways.
· Businesses must invest in procurement systems to streamline operations
We live in an ever changing tech world. Systems are always changing and revamping. Ecosystems such as the procure-to-pay (P2P) systems and ProcurePort eProcurement solutions will take center stage as more and more people work from home. Despite teams working remotely, work can still be done in an efficient manner using these systems.
· Re-evaluating and re-engaging with your suppliers
Relationships with suppliers will need to be maintained during this slow phase. Suppliers are a vital element in the supply chain. However, there is no surety that you will still be doing business with your current suppliers. You may discover that your suppliers have been hit hard and may not recover at all. According to the Federation of Small Business, 80% of SMEs that suffer a major crisis such as the one we’re all going through close within 18 months. So part of your supply chain management for 2020 will involve supplier re-evaluation and re-engagement.
Invest in a trusted eProcurement solution today
With the U.S. economy in a tumultuous period, it would be wise for procurement companies to start looking at ways to improve procurement operations. ProcurePort management software simplifies procurement and makes working remotely easier on all involved. To learn more about this innovative technology request a demo today.