There is a lot of AI hype, and it's nothing new for many in procurement and supply chain. Yet, these models are only getting better, and the speed of improvement has never been faster. If we don't have internal discussions and form clear boundaries and specific intentions ahead of this technology's acceleration, we may be stuck with the ideas and recommendations that AI itself generates.
What’s more, as 2023 continues to roll forward, supply chain experts are warning of factors that will continue to cause headaches for businesses. Factors such as ongoing geopolitical instability, raw material shortages leading to missed deliveries timeframes and increased cyber threats are complicating the equation for supply chain managers across all industries.
Continued hyperinflation has kept prices high, so how can procurement help their organisations to maintain the integrity of their goods and services while addressing the need to control costs?
The supply chain in 2022 continued to be a point of frustration for businesses and consumers alike. A recent Gartner survey found that 76% of supply chain executives say their company is facing more frequent disruptions than three years ago. Meanwhile, shipment delays between China and major United States and European ports have quadrupled since March 2022.
The increasing challenges facing the supply chain are in the news every day, and manufacturing leaders are often struggling to find solutions that can make a real impact. There is growing excitement around the deployment of advanced AI solutions and how these could play a critical role in solving the supply chain crisis. The reality is that analysis, a role that is often played by AI, only solves about a third of the problem. Execution is two-thirds of the problem in the supply chain today.
Due to a relatively rapid shift in supply chains and related conditions, buying and selling critical materials isn’t as easy as it used to be for businesses. In response, resident procurement teams and suppliers are going through a massive transformation to reap a more competitive advantage.
The dramatic shift in the procurement agenda comes down to the changing nature of risk. Compared to their larger competitors, midsize companies have less buffer to absorb pressures from inflation, supply shortages, demand uncertainty, and other factors of economic turbulence.
Delegates at the Ivalua Now 2022 conference heard companies aiming to cut carbon footprints needed to develop both an internal ecosystem of stakeholders and an external ecosystem of suppliers.
Procurement leaders are facing one of the toughest market environments of their careers. A combination of macroeconomic factors—including COVID-19 shocks, trade policy shifts, workforce scarcity, energy transition, and even extreme weather events—have upended long-running trends that have benefited the global economy for several decades.
The conflict in Ukraine is only the latest jolt to global supply chains. Disruptions caused by the Covid-19 pandemic, climate-related events, and geopolitical tensions were already undermining their rationale. As companies rethink sourcing, they will have to consider new factors concerning geography and geopolitics, logistics, decarbonisation and sustainability, and suppliers’ health.
The last couple of years have forced procurement to prioritize dealing with urgent supply disruptions. But CPOs continues to rank innovation contribution amongst the top priorities – although 39% of procurement organizations are rarely involved in innovation despite most innovations coming from commercial third parties (Deloitte Global CPO survey, 2021).
Construction contracting tech startup ProcurePro has raised $2.6 million in a seed round. The funding round included several local construction industry executives, including Geoff Tarrant, co-founder of construction progressive payments fintech Payapps, as well as several Australian and US-based investors. It will be used to accelerate Australian and international growth plans.
“Why is fair and open procurement important? It’s because this is livelihoods, this is someone’s business, they have employees, they have invested in teams and it’s on the line. It’s the right thing to do and government projects should and must be available to the widest cohort of businesses.” Chris Atchison, President of the BC Construction Association
Canadian tech companies with manufacturing processes, shipping times and supply chains that were upended during the pandemic now predict it will be months -- at the very least -- until their processes are back to normal and warn it will take even longer to make up for lost profits and elevated costs.
E-auctions have undergone a quiet revolution, incorporating big data, artificial intelligence and the internet of things. So if you’re still using email, spreadsheets and meetings to make your deals, it could be the time to take another look.
Partial and full lockdowns across Canada (and the world), border restrictions, and ongoing supply chain shortages present a serious challenge to business. Thankfully, there are several short and long term strategies that can support Canadian businesses in mitigating supply chain and procurement risk in 2021 and beyond. Let’s take a closer look.
The future procurement function must ready itself to act as a strategic lever to make organizations more resilient and to better respond to rapidly changing market dynamics.
As 2020 draws to a close, the question is no longer what we could have done better this year, but instead, what do we need to do next year to ensure we’re better prepared? The answer to that is complex, but the essential first step is to understand what the top supply chain risks will be next year. Tony Webster-Smith, Regional APAC VP at Avetta, believes that the following five risks will be the most important for next year.
We successfully leveraged the COVID-era attention we got – now how does Procurement remain relevant and authoritative in the long term? Alex Saric shares how to build the influence to make your presence felt.
It goes without saying that procurement will have a different and more refined approach in the coming year. Global supply chains have taken a hit. While countries are slightly opening their doors, it is crucial that procurement makes changes that prepare them for what is coming.
Are you starting to plan for 2021 and what the next phase could be for your category or your team? Are you pondering what the future might hold and how to prepare?
Planning in time-horizon chunks, being in a “perpetual state of beta” and measuring your performance twice a week are just some of the recommended ideas.