As many embarked on their first conference since the pandemic started, you could feel a buzz in the air. We entered the Omni Hotel and Convention Center attending ProcureCon Indirect East 2022 with over 500 attendees and vendors. Top industry trends were presented, discussed, and debated, and attendees agreed the event was successful and beneficial. When I look back on the topics we discussed at the conference, I see six “Ss” clearly emerge.
The Six Ss
1. Supply chain bottlenecks
As global supply chains tighten, organizations may need to change their internal processes and relationships with third-party suppliers to overcome new pressures. There are many best practices your procurement team can consider implementing to overcome the bottleneck, including:
The consequences of a supply chain disruption can be upsetting, but with the right planning, you can minimize the impact, mitigate risk, and get ahead of the competition.
2. Source to contract
The role of a buyer has changed drastically over the last decade. As processes evolve, so must procurement. While some companies still incorporate category management, others are separating it from sourcing. And some companies are saying the days of RFP/RFQ are over thanks to new software and data sources. Others are putting contract management at the start of sourcing, which is changing the process, but the benefits could be huge like speeding up the pace of purchasing. With supply chain shortage, source-to-contract must be lightning speed.
3. Supplier relationships
Sourcing professionals are encountering many challenges relating to supplier relationships. With supply chain shortages and the demands to develop supplier diversity and sustainability programs, the focus on supplier relationships is vital. Success comes from finding new suppliers quickly when items are low or late, or prices are inflated. By developing the relationship with current suppliers, they may be willing to assist with replacement items when inventory is low, late, or inflated to retain your business. The relationship has shifted, and the suppliers have more power than they ever have before due to supply shortages and heightened demand. So, maintaining a good working environment could give companies a competitive advantage.
Are sustainable sourcing and supplier diversity two different sourcing methods? In the modern age of procurement, these innovative programs have become more interwoven, as social and environmental responsibility is now vital to a company’s reputation. Many leadership teams are setting huge sustainability goals for their organizations. One example I heard at ProcureCon was a goal to be carbon neutral by 2029! This is a huge task for procurement teams and very crucial to the world.
It’s important to keep sight of the big picture and establish a robust ESG (environment, social, governance) program framework that can withstand the test of time, investor demands, and cultural shifts. Being proactive in ESG allows time to build more strategic plans vs. one-off quick reactions that may be disruptive without being effective. Teams must develop and implement a successful and cost-effective ESG strategy to uphold their company’s responsibilities to society and their corporate values.
5. Stakeholder relationships
In the business world, embracing change in procurement is more critical than ever to have a successful organization. However, we know that many encounter resistance to change from managers, executives, and team members. The best way to work with your stakeholders is to earn their trust by working together and providing them with data and analytics as well as providing solution options for them to choose from. Also, when working with stakeholders, try to create a seamless and transparent communication of both parties’ goals and objectives for the organization to identify the best solutions.
Technologies are evolving at a rapid speed. Many business departments have already been significantly impacted by software innovations, and now organizations are looking at procurement and purchasing processes and how to improve them with technology. Procurement can benefit from technology that can collect data to reduce errors by saving all the necessary information electronically.
Many at ProcureCon mentioned there is still hesitation by stakeholders, which is preventing widespread adoption. Procurement teams mentioned needing help in creating a tech plan that will enable them to sell the dream to leadership and knowing what software will make “the dream” come true.
The Varis team who attended ProcureCon Indirect East found the conversations we had there about these topics valuable. Being able to offer a solution that makes achieving these goals simpler is one of the most rewarding things about being part of the Varis Team.
Until next time – be cost efficient with your travel expenses. Procurement is watching.