Another year has gone by without me getting my hands on a crystal ball. That said, I’d wager a few concepts will be on everyone’s mind. You’ll find my predictions below in no certain order. While all may be big topics moving forward, they aren't necessarily concepts that Procurement pros have made their minds up about yet. In my mind, 2019 won't be about whether these trends continue, but how Procurement reacts to them.
Where do you stand on these hot button items?
In the world of technological advancements, blockchain technology has split Procurement into two groups. One that says “enough already,” and another asking, “what the hell is blockchain?” If you’re in the second camp, worry not – I posted an article covering the highlights earlier in the month you can check out. For the rest of you tired of hearing about this technology – add earplugs to your Christmas list. It isn’t going away any time soon.
For good reason, too. Blockchain promises a perfect, unalterable record of supply chain interactions. New tools like Smart Contracts promise to help Procurement more efficiently and easily manage daily activities. Add to this another sensational technological term – big data. The term isn’t new, and I know you’ve all heard it. But how many of you are actually taking steps to capture, manage, and mine the myriad data points generated by your supply chain right now? Strategic shifts around big data have been at the forefront of many larger operations, but not necessarily small or medium organizations. But this is changing – software solutions make big data and BI easier, and more organizations are cropping up as outsource data analytics service providers to fill in organizational resource gaps.
Procurement is still trying to figure out what technological advancements are real and, for those that are, how impactful they will be. I can’t claim that all the promises of technology will be fulfilled next year, but Procurement should at least understand what advancements have to offer and how the technology can be incorporated.
Shrinking Resource availability
Speaking of gaps in resources, Procurement will continue to face challenges borne of a lack of talent. This certainly means tech-based resources. It also means logistics resources, something known to anyone managing transportation costs… The US has had a driver shortage for some time.
But even beyond these needs, Procurement resources need a bigger, better set of skills than we traditionally have. Procurement needs to think wider, as global trade fears begin to come to fruition. Procurement also needs to think deeper – grow more strategic instead of just keeping our collective heads down to manage the tactical elements of our jobs. We can’t simply chase the lowest cost, forsaking all else. We need to better understand how our suppliers fit into our overarching goals.
Simply put, our organizations are facing new challenges. The old skill set alone won’t help us prepare for them.
Supplier Relationship Management
OK, not a new trend by any stretch. But relevant – especially in terms of the strategic shift above. Long story short, if Procurement is going to assume a more strategic role, then the best way to do this is to work with our supply base as partners. This will require a shift in perception, and adopting an SRM mindset and SOP will be critical.
What makes this a hot button? The problem here is one of, again, resource availability. If Procurement teams are already strapped for time, then devoting more time to building supplier relationships may seem like a daunting task. Many Procurement pros still think more focus needs to be on traditional concerns – in a world of uncertain tariffs and trade deals, we need to ensure cost-competitive purchasing. The two, however, aren’t mutually exclusive. Procurement needs to strike a balance between cost cutting and growing the strategic supplier relationships we will need to remain innovative.