The Future of Procurement

Procurement 2025: 1st Pillar – Improved Supplier Performance

15 December 2021

In line with Hackett Group study and findings from 2021 world-leading procurement events, like PROCON Online Forum, supplier cooperation, and value generated from supplier-originating innovation open the list of essential pillars of sustainable and effective Procurement and the future of modern organizations.

 

 

 

 

More and more organizations are on their best way to recover from the pandemic falls towards a sustainable future. The virus imposed a significant test on many organizations and raised questions about the price-cost-risk connection and strategic security relying on supply chains stability and supplier relations.

 

Vision for Procurement 2025

Several vital issues repeatedly arose during the latest projects and cooperation with clients and partners, in-market observations, news browsing, and discussions on the events around the globe. Described and mentioned by global CPOs, sourcing experts, buyers, and other procurement leaders, these factors can be grouped into five main pillars of the future of Procurement.

 

 

The Pillars of the Future of Procurement (Procurement 2025 Pillars):

  • Improved Supplier Performance
  • Business Value Chain Integration
  • Financial & Operations Optimization
  • Intelligent Platforms
  • Digital & Specialized Workforce

 

 

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Supplier collaboration, innovation, value

 
- In 2025, Procurement is expected to be an influencer in the way companies design, produce and deliver products and services by bringing supplier collaboration, innovation and value into the business value chain. - says Mateusz Borowiecki, CEO & Founder of OptiBuy.
 

 

Procurement must focus on the suppliers - early and deep collaboration to influence costs and discover innovations to foster stability and sustainable growth. CPOs are expected to lead that collaboration via embedding a holistic approach towards suppliers and external partners while building relations based on mutual trust. It is crucial to choose partners that are worth the relationship-building efforts. There are no shortcuts to building effective relationships and managing suppliers – it should become a keynote, a long-term strategy for the entire organization.

 

Short-term – an investment into the long-term

Optimizing the supplier database, reviewing contract terms, and challenging specifications may bring the so-called quick wins. However, a strictly tactical approach will most likely backfire in the long term. 

 

 
- Short-term optimization and cost-cutting projects should be perceived as an investment to long-term initiatives – says Jorge Vicente, Middle East Director of OptiBuy’s operations - Often, we have seen organizations trying to achieve sustainable transformation with tactical activities that later on brought a lot of frustration and disappointment. A proven path to achieve the strategic, long-term costs reduction and drive operational efficiency is investing in digital transformation and innovation that links back to the trend of intelligent platforms and supplier collaboration.
 

 

On the other hand, C-level officers should not neglect the small steps, the basics of any business venture. Analyzing, identifying, and mapping a company’s internal processes, along with relations and statuses, should be a first step in the digital transformation journey towards procurement excellence. 

 

How to handle the supplier pool? - CPO Business Breakfast / Dubai, Jan 7th 2022

To dig deeper into the dependencies between suppliers, innovation, and value. Discuss the issues of managing suppliers, building trust, and generating value via mutual profits; if you happen to be in Dubai on January 7th, OptiBuy invites you to the II CPO Business Breakfast held in Central Park Towers (DIFC). 

 

Join the CPO Breakfast

 

Join other procurement leaders, gather benchmarks, get new insights, grow your network, and tell us… How do you handle your supplier pool?

 

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