What does the future hold for procurement and supply?

There's no denying it's been a few disruptive years around the world, with procurement and supply professionals facing many overlapping disruptions. There's been Covid-19, the Suez Canal blockage, the impact of Brexit, the invasion of Ukraine, trade wars, shortages and rocketing inflation - so what does the future hold for the procurement and supply profession?

Over the last few years, challenges have highlighted the interconnected, complex nature of global supply chains, and heads of companies and states have turned to experts and trusted organisations such as CIPS to find solutions.

While procurement was regarded as a function two decades ago, these pressures have put procurement into the spotlight, highlighting the skill and strategic importance of a profession that underpins successful global operations. However, change has been on the horizon since long before 2020, requiring procurement to quickly adapt.

Speaking at the CIPS Risk and Resilience Conference 2023, food delivery firm Deliveroo's director of procurement, Rob Turner, said firms must design agility into their process to respond to sudden and rapid change quickly.

He said, "When disruption happens, procurement professionals need to be able to pivot and stand up resources quickly to respond to it. We would never have guessed Covid was coming. Disruption is happening more and more, and the results [of it] are getting more and more extreme."

What does the path ahead over the next two decades look like?

Events such as the 2021 COP26 would have made sustainability a top priority for organisations even if the pandemic had not happened. And it is likely to be a significant issue for procurement teams over the next 20 years.

The growing acknowledgement of the importance of sustainability is an opportunity for procurement to make lasting, impactful change to "people, planet and profit", speakers told delegates at the CIPS Sustainable Procurement Summit.

Drinks manufacturer Innocent's head of procurement, Elodie Chavagneux, said: "We are probably the first procurement leaders to see we are at a pivotal point in changing the way we are buying, and the last generation to be able to make an impact. Buying sustainably is not only the right thing to do morally but also the best way to ensure the longevity and success of your business."

Charlotte Payne, general manager, CIPS ANZ agrees: "Procurement's role in sustainability is going to be massive. Procurement professionals are uniquely placed to help lead on emissions reduction and renewable energy targets."

Accelerating digitalisation

Digitalisation is one of the key weapons in procurement's armoury when it comes to managing environmental, social and governance concerns, including emissions and human rights issues, which are often hidden deep in supply chains. The move towards digitalisation of procurement was well underway pre-pandemic, but the need for control during global disruption has accelerated the adoption and implementation of what may have been slower, long-term plans.

A McKinsey global survey of executives in late 2020 found that the pandemic encouraged companies to fast-track digitisation of their customer and supply chain interactions by three-to-four years. A follow-up survey in mid-2021 found that this rang true even for industries reluctant to commit to additional IT investments amid the uncertainty of early 2020.

Sam Achampong, general manager, CIPS MENA, says that procurement is increasingly leading the conversation on technology. "Those who are able to utilise technology most effectively will be the most resilient to change," he added.

Paul Vos, general manager, CIPS Southern Africa says "The procurement and supply chain profession in Southern Africa is at a crossroads. Embracing digitalisation is no longer a choice but a necessity for success, to transform our regional procurement and supply chain landscape."

Flexible skills for a changing world

Despite the challenges posed by these new trends and technologies, non-technical skills remain as important as ever. The top five global skills in demand are all non-technical, as noted by the CIPS Procurement Salary Guide 2023. Supplier relationship management takes the top spot, followed closely by negotiation, communication, internal stakeholder management and leadership as the most sought-after skills.

One issue made evident in the wake of global upheaval is that the fundamentals of best practices in procurement are unchanged. Achampong notes that organisations with strong supplier relationships, credible risk management strategies and appropriate contractual arrangements in place were able to emerge from the pandemic far more successfully than those without them. Paul Vos agreed, adding that the future of procurement and supply lies in mastering key skills.

Taking the lead

In some respects, it seems procurement and supply professionals will have to combine prodigious data-analysis skills with the emotional warmth of a good therapist. Unfortunately, they will have to achieve these feats alongside the talent shortages the profession faces. After all, people are the most significant assets within any business.

Scott Dance, UK&I Procurement Engagement Director, Hays said, "Organisations prepared to take a creative and tailored approach to talent attraction will be best placed to secure the skills they need, with flexible working practices, a strong organisational purpose, defined sustainability commitments and an open and transparent culture are just some of the key aspects of a role candidates expect to see communicated to them at the initial point of contact."

He also added that a strong employee value proposition from a company-wide perspective, as well as from a personal one, is critical to attracting the right talent.