8 Trends in Procurement for the Year Ahead
By Hugo Britt | July 1, 2021
Slowly but surely, the world is recovering from the devastation caused by COVID-19. But amidst multiple setbacks, new virus variants, and continued supply chain disruptions, procurement professionals’ top concern is how best to navigate their way out of this crisis.
How can the profession best mitigate against future disruptions, protect their supply chains, and drive value to recover their organizations’ recent losses?
Below, we address the top eight trends in procurement for the year ahead.
8 trends in procurement for 2022
In the past year, several climate experts have expressed concerns that governments and businesses across the globe won’t prioritize a green recovery post-COVID-19. In an effort to reboot the economy and return to normalcy as soon as possible, the focus might instead be on achieving financial stability – at all costs.
Several leaders, for example, appealed for the U.S. government to temporarily relax environmental regulations, while others decided to pause the development and implementation of their sustainability initiatives.
Unfortunately, this blinkered approach to recovery serves no one in the long term, particularly in an age where consumers care so deeply about environmental issues. In 2022, forward-thinking procurement teams will invest time, money, and resources in making their supply chains greener.
This will include a shift towards green logistics, a commitment to finding sustainable suppliers, and a move towards circular supply chains. As a result, organizations will benefit from increased customer loyalty.
Blockchain has well and truly landed, but adoption is slow in procurement and supply.
Procurement and supply chain professionals will continue to experiment with blockchain in 2022. The technology promises to improve supply chain transparency and protect sensitive information, ultimately reducing disruption and delivering a more reliable service to the end customer.
Despite the technology’s lauded benefits, Gartner predicts that 80% of supply chain blockchain initiatives will remain at a proof-of-concept (POC) or pilot stage through 2022.
This is likely because blockchain for supply chains is a totally different ball game to other industries where it has proven successful, such as banking and insurance. Today, supply chains are sprawling, complex, and there are often many key stakeholders.
3. Voice-enabled and bot purchasing
In 2022, procurement teams will increasingly leverage voice-enabled bots to aid both employees and suppliers. These bots will be capable of answering procurement queries, providing order details (including shipping updates), or issuing notifications about purchase orders and contracting.
As a result, interactions are much more efficient. Procurement teams will spend less time functioning as a supply-chain helpdesk and redirect their efforts to strategic, value-adding activities.
4. Nurturing SMEs and minority-owned suppliers
The last eighteen months have drawn procurement’s attention to the importance of nurturing SMEs and minority-owned suppliers. During times of crisis, these suppliers are disproportionately affected. For example, they may not have the inventory to cope with increased demand for their products and services or the cash flow to stay afloat in the event of missed or late payments.
In 2022, procurement teams will commit additional effort to support these suppliers, whether that’s through re-evaluating contract terms, offering expedited or advance payments, implementing preferred supplier programs, conducting risk assessments, or collaborating with vendors to develop business continuity plans.
5. Touchless procurement
It’s no surprise that in the wake of the pandemic there will be an increased demand for touchless procurement, which sees the elimination of paper documents, spreadsheets, or similar manual processes. Not only does this negate the need for human interference, thus minimizing physical contact, but it also reduces error, accelerates and optimizes operations, improves transparency, and drives better data analytics.
6. Contingency planning
With the aftershocks of COVID-19 still being felt throughout supply chains around the world, risk mitigation and contingency planning will remain a top focus for procurement professionals throughout 2022.
Strategies might include:
- Moving production out of China to other low-cost countries.
- Re-shoring (i.e. to U.S. soil) or near-shoring (e.g. to Mexico) to shorten the supply chain.
- Diversifying the supplier base so the business is not dependant on a single-source supplier.
- Implementation of robust preferred supplier programs to drive supplier loyalty.
- A focus on supply chain transparency, which includes better visibility into the practices of second and third-tier suppliers.
- A shift from JIT (Just-in-Time) supply chains to JIC (Just-in-Case) supply chains, which will see organizations purchasing in greater volumes and filling up their warehouses with extra inventory.
7. Big projects put on hold
With the exception of digitization (and hopefully sustainability), many large-scale projects will be put on hold in 2022, as organizations focus on regaining their losses from the past couple of years. Given that this is likely to include hiring freezes across the board, procurement will be challenged to drive more value than ever before, with fewer resources.
8. Facility management
Indirect procurement will continue to evolve massively in 2022, following a more permanent shift to remote working.
As large proportions of the workforce remain committed to establishing home offices for at least some of their working week, it will fall to indirect procurement professionals to support this transition.
With the traditional workplace a thing of the past, demand for office-based technical equipment, office supplies, and catering will decline and there will be an increased need for home-office resources. Indirect procurement managers will need to develop and implement new procurement policies that enable the workforce to purchase what they need from a new pool of preferred suppliers.
It’s never too early to start planning for the year ahead. Una can work within your procurement strategy for 2022 to help you unlock massive buying power, save time, and save effort. Contact us to learn more.