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In this guest post, Procurement Leaders invites Doede van Haperen to apply his experience as a software consultant to imagine the future of category management, as enabled by huge leaps in technology. Hold on to your wearable gadgets...
Imagine yourself a day in 2025. For the last decade the biggest challenge in business operations have been the constant juggle between concept valorisation and working capital optimisation. Product lifecycles are getting shortened and procurement has to keep up with facilitating short and flexible supply chains. Consumers have become more demanding in their ways. These consumers expect the same when they are at their work and are also, therefore, procurements' internal customer: agility has become key.
Marina – our avatar for this thought experiment – wakes up at 7:00 hrs. The fact that she got out of bed made some sensors in her telephone (always close) order the coffee machine to start brewing and her car to start pre-heating itself. After a quick shower, Marina, who is category manager within NPR-procurement in a large multinational, picks up her tablet and starts the analytics app to show her some last moment category numbers. For days now she sees an increasing demand in their Asian factories and the predictive analytics reports show an expected increase for the coming month and decline after that. So it is clear to her that the innovation project in Tokyo is taking off.
Non-core categories in her firm nowadays are not contracted to preferred suppliers anymore. Most categories are processed through efficient spot-buys while monitoring the internet with Big Data machines. The biggest risk in this approach is lack of supplier-involvement, exactly the kind that Marina wants to counter during this Tokyo project, so she has to settle this risk with a quick solution.
But she is as always ahead of things. Using the Big Data engine yesterday, she already identified the ideal supplier to contract this sudden project-driven increase in demand for one month. She gets into her car, nice and warm already, where, thanks to the autopilot on the highway to her office, the use of a personalised app in AppleCarPlay helps her in assessing some other open spot-buy requests from the SRM system and deciding whom in her operations team can best pick it up, via her dashboard.
At her office there are two major actions to be taken today: contract that supplier for the predicted month's demand and setup her categories' SRM-system so that all demand is routed to that supplier.
Contracting a new supplier armed with enough prior knowledge is an easy trick in 2025. Research from yesterday's analysis already shows a very decent cost-to-profit ratio in the pricing of this supplier and their delivery terms in the greater Asian region covering most of their factories are very acceptable. “Fortunately they are already a member firm in the SoCo (short for Social Contracting) platform, just like us” Marina thinks. So one tweet-like message on the platform and the contact with all required stakeholders (procurement, sales, legal, etcetera) is established. Experience shows that, when no real negotiation is required, this platform delivers a legal binding contract within 4 to 6 hours. Leaving a royal 2 hours in the end of the day to setup the supplier on-boarding on her SRM system.
The last action of today for Marina is to setup her watch (Marina's wearable of choice) for monitoring. She would like to be fed real-time operational category-data in the corner of her eye for a few days to check if her clients indeed felt no impact on the shift.
Sounds far-fetched? Not remotely so, we think. It is widely foreseen that agility and quick-response become part of the modus operandi in business, and procurement is . When you are responsible for agility in a category, the big trick is letting the tooling work for you. We will elaborate soon on some business and technical rationale of this "day in the life of ...", but for now it is good to realize that the technology behind all these predictions already exists. Nothing is made up, only the application is extrapolated to daily use.
The final message: if you want to prepare for a career in procurement that values ten years from now, build up some digital savviness...
Doede van Haperen has been involved in P2P solutioning for more than 14 years. He runs the business consulting firm LAKRAN Procurement Professionals and software consulting firm AGAIN by LAKRAN.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.