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Three Key Procurement Trends
Procurement practitioners will need to become more creative and more closely involved in product creation. In most cases, this would cause procurement departments to raise personnel or outsource operations related to product design, engineering, and manufacturing.
Fremont, CA: Procurement has undergone a reshaping phase following the 2008 financial crisis. Several companies were in survival mode during this time, and procurement was focused on drastic cost-cutting steps. Recently, however, procurement has been reshaped by strategic initiatives designed to enhance financial efficiency, mitigate risk, and maintain a stable supply base capable of boosting new growth.
Here are three of the critical trends expected to transform the procurement landscape:
Re-evaluating the Make versus Buy Decision
Not only can technology help to control suppliers and refine current systems, but it can also be used to produce goods instead of purchasing them. Further technical advancements, such as robots and 3D printers, would continue to challenge and eventually disrupt the purchasing process. Organizations would need to re-evaluate long-standing procurement practices and strategies to be able to decide when it is easier to produce rather than purchase a commodity.
Because the capacity to manufacture goods grows prevalent, procurement practitioners will need to become more creative and more closely involved in product creation. In most cases, this would cause procurement departments to raise personnel or outsource operations related to product design, engineering, and manufacturing.
Building Better Supplier Relationships
Goods supplier management offers customers more visibility, eliminates sourcing risks, and improves trust between suppliers and buyers. For example, automated procurement systems provide a means of transforming supplier spending data into a predictive matrix that can be used in decision-making. Technology may also be used to track and evaluate the compliance of suppliers. This ensures that licensed suppliers can produce consistently high-quality, reasonably priced goods promptly.
Leveraging Digital Data
Modern digital systems can take leverage from artificial intelligence (AI), big data processing, cloud-based applications, and robotic process automation (RPA).
By taking advantage of recent digital data advances, procurement professionals may now capture and evaluate past performance data from suppliers and grant contracts on a value-driven basis rather than at the lowest cost. Procurement managers should also collaborate with manufacturers to improve transport logistics, ensuring that essential products are delivered on schedule and to the right venue. The capacity to execute such tasks becomes vital in cases of emergency.