Trends Shaping the Future of Sourcing & Procurement Beyond 2021 Other Services

As the past year was all about taking a halt standing where you are and being more unpredictable, this year is more about thinking about new ways and adapting to new changes. But these changes can be difficult for some sectors like sourcing and procurement as it might take some time for it as everyone is trying to change.

Looking at the travel and tourism industry they are working at less capacity, if you look at the retail sector they are all coming online with their respective e-commerce websites. For some industries like travel, the cost would go down due to decreased demand and others might increase the rates to ensure proper sanitization for the place. Most of the companies would now be turning to group purchasing to strengthen their sourcing & procuring lines.

Key sourcing and procurement trends that will settle future challenges:

Trends have become the new fashion these days, there are various trends followed in various sectors today and people feel left out if they don't follow the trends. So instead of looking back at the unevenness that are been created in the previous year due to pandemic and which impacted most of us, there are many trends that are followed in the year of 2021 which picked by momentum out of which few are listed below:

1. Strengthen Sourcing & Procurement Resilience:

As the sourcing and procurement sector became more global and interconnected, there were various challenges faced by the organization which included the rise of the multipolar economic system, climate change, geopolitical risk, mass healthcare events and so on. The companies who have got complex supply chain networks like the companies who manufacture automotive and technology are most vulnerable. Companies are now focused on the assessment of their sourcing and procurement risk and how are they going to manage it. These companies are now trying and creating better transparency with suppliers so that they can gain information about their next-tier suppliers and their upstream value chains. Continuous planning has now become a new thing and designing contingencies not just for a single supplier plant to go offline, but for entire countries to be inaccessible.

2. Enhance Sustainability:

Also, with properly defined vendor and business requirements, the team that selects vendors would easily be able to find that one vendor who perfectly suits the requirement, which has the calibre to deliver the product/service that you have outsourced on time. You need to tell your team to generate a list of such vendors, understanding that not all vendors are capable of understanding and fulfilling your needs.

Once the research and interviews are done to find the best suitable vendor and understand it’s background, there would be few vendors who need to give more further information. For this your team who is selecting vendors can write Request for Information (RFI) and send it to the selected vendors. After this the next step would be collecting the responses from the vendors, analysing and evaluating it and then further shortlisting some of the vendors.

3. Sourcing & Procurement as a Service (ScaaS):

As of now most of the companies manage their respective supply chain process within the company (i.e. inhouse) but the experts in the industries predict that in near future most of the companies would get used to the supply chain as a service (ScaaS) models, outsourcing the likes of manufacturing, logistics, and inventory management. It has been thought about as and when the supply chain management team gets smaller, organizations will have more skilled individuals whose focus would be taking strategic decisions so as to improve the supply chain.

4. User-Driven Artificial Intelligence & Digitization:

Procurement has gathered many e-marketplaces so that they can guarantee the delivery of products/services whenever demanded. This process along with the user interface has gone through an ultimate change with Artificial Intelligence/Machine language along with NLP (Natural Language Processing) keeping in mind the ease of requesters. The procurement process speed has been increased due to which the time taken by the fulfilment cycle has been reduced when compared to the previous few years. This is mostly because of the technology and also adapting to it positively.

Procurement teams are now designing automated intelligent bots to take care of most of the run of the mill procurement tasks with lesser or no human involvement. From managing large-volume orders to running repetitive sourcing events, from negotiating with suppliers for low-value items to updating inventory lists, AI will undertake all these activities, thus putting mundane tasks on auto-pilot mode.

5. Integration with Circular Supply Chains:

Organizations are now adapting to circular supply chains which will soon replace the linear supply chain with an approach to stand and gain from the cost that was reduced over a long run, along with reduced waste and correspondingly reduced impact on the environment. Strict regulations for recycling and disposal of waste are the key aspects in the adoption of this approach along with incentives given for efforts made.

6. Localisation of Suppliers:

The acceptance of local vendors and suppliers has increased due to this Covid-19 pandemic. Companies have already started looking for local suppliers on a small or medium scale and also in regional groups like local tribes. Here the idea is to encourage diversity of thought and participation.

7. Future-Ready Organization:

The match with the current situation and lead the way to new normal procurement & sourcing departments of the companies have to transform the way in which they operate and collaborate with the stakeholders (both internal and external). Getting used to an agile operating model would support procurement functions that scale up and down quickly so as to respond to sudden supply challenges. This would be done by inviting new talent and also upskilling the existing ones. Most of the top companies are now conducting virtual training and investing in making digital tools so as to engage the workers and develop their talent. These organizations that adapt to continuous learning structure would always find and have a way to excel in their path of life. 

The Path Forward

With all the changes that are happening in procurement and sourcing, the use of technology would prominently be seen to make strong strategic planning and advising in the business. The more the company automates its tasks, the more speed of the company would increase and along with speed their supply execution speed would also increase leading to more business gaining.

However, the sourcing and procurement process will get back on track very soon. Along with sourcing and procurement leaders willing to spend and adopt new technologies in order to stay in competition along with other leaders.