Procurement predictions for 2018: Embrace disruption and new ways of working


How will the function change? It is the perennial question that CPOs, academics and staff at Procurement Leaders ponder on a daily basis.


With the adoption of new technologies and new ways of working as well as the geopolitical uncertainty that exists in the world and the constant threat of natural disasters to supply chains, there is no doubt that at the end of 2018 the function will be very different to the one that exists today.


In what ways will it be different? Here, members of the Procurement Leaders team predict the ways in which the function will change.



Procurement will need to build real communities

Nandini Basuthakur, CEO: "I see a move away from PowerPoint presentation and social media towards embracing high-value face-to-face interactions that deliver stronger social learning and community outcomes.


In speaking with the Procurement Leaders community and our Advisory Board there was very little ambiguity on this: while technology and social media are great for developing communities, true belonging, real connections and real empathy require meeting real people in a real space in real time.


That isn’t to say that technology should be ignored. Since suppliers, consumers, innovators, stakeholders, employees and teams can be easily connected in the virtual world, this can help establish relationships quickly.


One CPO summed it up nicely recently when they said: ’In-person relationships can be built at a rapid pace because we may already feel as though we ’know’ the other person.’


If we as leaders really want people to show up, speak out, take chances and innovate, we must create a culture in which people feel safe — where their belonging is not threatened by doing things differently – and support them when they make the decision to brave it, to stand alone, call out insensibility or just be authentic. To create stronger relationships, procurement will need to build real communities where there is structure, purpose and meaning and some face-to-face contact."



Supply chain assurance and risk mitigation will take priority

Eva Milko, managing director: "We will continue to see wild and unpredictable weather patterns that disrupt supply chains across the world.


Procurement’s attention to supply chain assurance and risk mitigation will take priority, which will impact category strategies and potentially disrupt targeted cost savings results. The function will be lucky to keep up with its supply sources and will be challenged to scout, develop and implement new supply solutions.


There will also be a rebalancing of supply chains from global to local, given increasing labour rates in emerging countries, the price of oil inching up and the political climate favouring protectionism.


Stakeholders will look to procurement teams to ensure operations are running and supplies show up despite any chaos around them. The most successful procurement teams in 2018 will be those that rebound from downtime faster than others. Scenario planning and agility will take on a whole new meaning in 2018."


Procurement skills as they are won’t suffice

Steve Hall, director of content and community: "We’ve already heard about the rise of agile working methodologies, but I’d argue there’s an even bigger technology influence here. Procurement functions are frequently asked to be a bridge between the ocean of data on the supply side of the business and the decision-making that influences commercial and product teams.


Procurement executives are asked to partner with the business and turn complexity, such as the costs a business incurs, into something that stakeholders can act on.


Systems thinking is a tool for navigating complex problems and it encourages a focus on relationships, recognising behaviours and, ultimately, understanding and influencing ecosystems.


Procurement skills as they are won’t suffice for the next step that functions need to take: our method of thinking needs to develop if we’re going to make sense of data and translate that into fruitful activity. Irrespective of whether it’s widely adopted, it is an increasingly interesting approach in the engineering and design communities and absolutely the sort of mindset that procurement chiefs should have a grasp of.


Agility might help teams move more quickly, but it will be a focus on upgrading our skills and practices to help harness data that will be the vital step. Maybe this is the year we focus on the human element of the technology problem."


The category management process needs to mature

Cara Wiggins, head of executive advisory (EMEA): "If procurement is to successfully evolve, the category management process needs to mature into a more strategic approach that leads the business. This will require category managers to expand their skillsets from technical procurement abilities to develop more rounded business acumen, leadership skills and emotional intelligence.


Perhaps the approach should mirror that taken by HR in being a business partner?


Functions that prepare themselves for change and think about how they can do things a little bit differently will be the ones to thrive under any challenging circumstances."


To read more predictions for what 2018 has in store, Procurement Leaders members can read the 2018 Trends report, available now.


This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Tim Burt
Posted by Tim Burt

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