What will the procurement landscape look like in a year, or five years? These are highly relevant questions, because the major innovations coming down the pipeline will be more helpful and effective if companies lay the groundwork for them now. Embracing the future of the supply chain isn't a one-step process, and it isn't optional. There is change coming, and businesses may find themselves either riding the waves or getting blindsided by them.
Procuring goods and services is one of the fundamental pillars of any organization across regions and functions. Leaders who don't have a handle on the future may find themselves losing ground in the present, as no status quo lasts for long. New technologies and strategic priorities are constantly appearing, and being ahead of the game is the best option.
Being strategic means considering the future
While no two companies have identical procurement setups or needs, there are a few universal practices that can set organizations on the right path. Supply & Demand Chain Executive consulted industry experts, including Source One's own associate director Jennifer Ulrich, about the art of strategic procurement. Trying to run a procurement department without an overall strategy underlying major decisions will lead to a lack of direction and potential waste. One of the major ideas behind strategic supply chain leadership is an acute awareness of future possibilities.
Useful strategies involve the future as much as the present, laying out a roadmap for the way procurement departments can help their respective companies over the next few years. Having such a vision is challenging, because there are still unknowns in how the supply chain will operate in three to five years. However, companies that haven't considered their future role and value are already falling behind, as SAP Ariba's Marcell Volmer told Supply & Demand Chain Executive.
Some of the big changes coming to the supply chain involve new technology, but Ulrich offered a reminder that these innovations should be made to serve strategy, rather than becoming ends unto themselves. Procurement's value is based on what it strategically contributes to the organization. Technology may make the department's life easier or harder, but it never exists independent of its functional role.
There are no sure things when it comes to procurement, and planning for the future means dealing with many unknown elements. Supply Chain Management Review quoted the latest AlixPartners research on global market dynamics, which found there is the potential for ongoing shifts in the balance of power between buyers and sellers around the world. Technological progress is playing several roles, alternately helping procurement departments improve their operations and disrupting business models they've relied on.
As unpredictable factors such as tariffs between major trading partners cloud the global supply chain outlook, procurement departments will have a complex and tricky few years ahead. This uncertain climate doesn't mean they shouldn't be planning ahead, however. A good strategic overview will always consider future market dynamics, due to the fact that current conditions won't last long. Planning for tomorrow is always important, because tomorrow tends to come quickly.