GEP has released its ‘7 Leadership Themes for Procurement & Supply Chain Leaders in 2024’ paper, which outlines the essential trends that procurement leaders need to stay on top of.
The must-read paper, which recaps a recent GEP-WBR webinar, is led by Pramod Sethumadhavan, Senior Director of Consulting at GEP.
It provides a summary of findings from the organisation’s Outlook Report, as well as predictions that readers can use to inform their procurement and supply chain decision-making.
“The Outlook Report is one of GEP’s flagship publications, which clients and partners look forward to each year. GEP conducts a significant amount of research to generate the results of the report, surveying supply chain and procurement leaders to reveal the key trends that inform and influence decision-making each year,” said the leading global company.
The seven specific themes that should be top of mind for procurement leaders include:
1. Crafting a resilient supply chain strategy for the future
The top three focus areas for supply chain leaders include logistics disruptions, sustainability and optimising working capital.
“Supply chain leaders now have the opportunity to leave behind reactionary tactics in favour of forward-thinking approaches aimed at bolstering resilience and profitability. A departure from the old playbooks, this new phase calls for a reinvigorated focus on business continuity planning, specifically redesigned for the intricacies of a post-pandemic economy,” says GEP.
New models like “China Plus One” and “Friendshoring“ rise as ESG and geopolitics shift the map, while balancing cost, resilience and ESG in a high-cost world reshape supply chain investment strategies.
2. Harnessing the potential of artificial intelligence
Tools like ChatGPT are accelerating AI’s potential in procurement and supply chain, with 65 percent of organisations expecting to integrate AI chatbots into their supply chain operations over the next 12 months.
GEP says business leaders’ focus on AI will require new tech roadmaps beyond traditional ERP systems, which are increasingly incorporating low-code and no-code platforms for their simplicity and quicker implementation.
AI saves time in procurement processes and supply chain management, while enhancing supply chain resilience, mitigating risks and accelerating ESG initiatives.
3. Investing in a digital, AI-first future
“CIOs are recognising that neglecting the quality of their data can lead to costly long-term implications, given that AI technologies largely draw upon the quality and accessibility of data. Additionally, the rise of low-code and no-code platforms is altering the technology ecosystem, presenting more agile and user-friendly solutions that cater to the rapid pace of innovation,” says GEP.
“Such platforms are quickly becoming preferred over traditional approaches due to their flexibility, which is vital for companies that can no longer rely on rigid, extensive technology roadmaps.”
The challenge of skilling the workforce with unfamiliar digital-first competencies remains, while concerns surrounding data security and fears surrounding job displacement will need to be managed to ensure long-term success.
GEP’s key considerations for investments in data and AI tools in 2024 include:
- Data engineering is crucial
- Rise of low-code platforms
- Team capabilities enhancement
- Effective change management
- Choosing AI tools
4. Developing a supplier relationship management strategy for the digital era
Recent supply challenges have tested supplier relationships, with both failures and successes. Basic delivery failures by “strategic” partners have exposed cracks in trusted partnerships.
AI and digital technologies are reshaping Supplier Relationship Management (SRM), prompting a re-evaluation of partner selection, while ESG considerations are predicted to become integral facets of supplier partnerships.
GEP’s key focus areas for SRM in 2024 include:
Resiliency: Ensuring uninterrupted and adaptable supply chains
Cost: Structuring SRM to lower expenses and improve working capital
AI and Digital Adoption: Expecting suppliers to align with digital advancements
ESG Partnerships: Driving ESG priorities, especially in supplier development
5. Joining procurement and finance as partners in cost management
“The relationship between procurement and finance is pivotal in managing costs, especially when price flexibility is constrained by a market slowdown. With supply chain stabilisation and increasing competition, except in logistics due to Middle East unrest, procurement leaders are encouraged to take decisive actions to impact the bottom line positively,” says GEP.
The organisation says procurement should prepare a supply chain financing strategy adaptable to potential rate declines.
A reassessment of supplier relationships is deemed necessary, focusing on those who have shown growth and profitability to renegotiate terms effectively, while understanding the financial stability of key suppliers is crucial.
6. Putting ESG and sustainability back in the spotlight
There is a renewed ESG importance, due to its interconnectedness with other business pressures, which is creating a complex framework for goal-setting and accountability across companies.
GEP’s key strategies include focusing on reducing carbon emissions as an underleveraged tactic for cost savings and brand enhancement, investing in supply chain traceability to meet consumer demands for product transparency and risk management, and diversifying suppliers to foster innovation, flexibility and resilience.
7. Overcoming the ongoing talent crisis
Procurement continues to be affected by a shortage of talent, particularly post-pandemic, with increased digitisation and ESG goals requiring a highly skilled workforce that is often hard to find.
Strategies for attracting and retaining procurement talent include:
- Planning a career pipeline
- Ensuring stakeholder collaboration
- Reimaging procurement
- Highlighting the sustainability agenda
- Reskilling and restructuring
To learn more, download the full paper here.
