How is the world of procurement changing?

19 January, 2016

Procurement is an ever-changing industry, which means that buying organisations and supply chain managers need to stay on top of their game to stand out from the crowd and keep the level of risk facing their business to an absolute minimum.

One of the biggest changes in the industry in recent years is the emergence of new technology. There is now a whole host of platforms and software available to buyers to help them better manage their supply chains, but they need to be sure they're using the right one for them to minimise risk.

What's more, procurement is increasingly being valued and recognised at boardroom level, meaning buying departments need to up their game to keep this trend going.

So, how exactly have these shifts come about and what can buyers do to make sure they are keeping abreast of the changes?

All change

James Cascone, a partner at Deloitte, explained: "Supply chains have evolved from being primarily viewed as a procurement activity - buying at the lowest cost. An organisation's supply chain is far more expansive and complex, and procurement is just one element."

With procurement being held in much higher regard by c-level executives, supply chains and the risk attached to them is being given greater consideration, which can only be a positive step for the advancement of buyer-supplier relationships.

But for these to be fully successful, procurement teams need to embrace collaboration - another example of something new that has come to the industry in recent years.

However, research shows that there is still some way to go before procurement staff and other departments hold the same views in relation to how successful their supply chain relationships are.

According to a survey from Redshift and Wax Digital, 44 per cent of buying departments believe they have 'very close' relationships with their suppliers, but just 18 per cent of other staff feel the same. This indicates that action needs to be taken before everyone in an organisation holds procurement leaders in the same regard as their c-suite counterparts.

Wax Digital director Daniel Bell believes that this problem can be solved with the introduction of more streamlined procurement processes.

The CPO Rising 2015: The Agility Agenda report from Ardent Partners emphasised the importance of this, stating: "The decisions, operations and performance of an enterprise's suppliers can have a direct and, frequently, immediate and significant impact on its own results."