Procurement must never be an afterthought in any enterprise. Manufacturers need to have the right raw materials and supplies available. Supply chain entities need to know vendors will be held accountable and adhere to the terms within vendor-supply chain partner service level agreements.
Supply chain professionals must also know how they will be shipping freight. In other words, shippers need to know how they will be getting enough trucks to fulfill their orders. The answers to these questions lie in understanding a few of the top industrial procurement trends to expect in 2018.
Companies Will Seek New Ways to Use Technology in Procurement
As with many other topics affecting industry trends in the transportation, trucking and manufacturing industries, companies are looking for ways to increase the use of technology in procurement, explains Melissa Deleen of LinkedIn. The global supply chain creates many challenges and opportunities in procurement. Manufacturers can tap into the raw materials of one country and produce products in another, while customers continue to exist in an entirely third country. This global footprint demands a digital supply chain. Digital technologies reduce errors, time, and costs associated with manufacturing and order fulfillment, and procurement costs can be effectively reduced by increasing the vendor-manufacturer relationship.
Integrated Procurement and Payment Systems Simplify the Process
The use of technology naturally lends itself to integrated procurement and payment systems. Thanks to the use of these types of systems vendors and suppliers no longer have to manually execute processes and have easier documentation visibility and storage due to the move toward digital, automated systems. Of all of the industrial procurement trends, the implementation and utilization of a procurement and payment system allows procurement professionals and shippers to handle the entire procurement process much faster and efficiently. As a result, suppliers can sell more product and materials, manufacturers can produce more finished products, and transportation staff can ship more freight.
Brexit Will Continue to Cause Disruptions in Procurement.
While Britain still has one year remaining before its official exit from the European Union, it will begin to make a serious impact on global supply chains. Freed from the constraints of the EU, Britain will shop around its supplies and services to other countries, which may free other transportation and manufacturing industries that have already been working with Britain and while it was part of the EU.
Analytics Driven Procurement Will Take Center Stage as the Key Player in all the Industrial Procurement Trends
As explained by Procurious HQ, 2018 will be the year that procurement becomes smarter and cognitive, meaning it will use more analytics-driven processes in decision-making and activities. This will increase cost efficiency by 10%, as well as increased service performance by 5% over the next two years. Similarly, artificial intelligence (AI) and machine-to-machine learning will make equipment smarter and intuitive, enabling self-optimization and reduced costs associated with procurement.
Sustainability and Visibility Become a New Focus of Auditing
The number of consumer and regulatory watchdog groups around the globe is growing, regardless of changes within US policies. Sustainability and visibility are going to become more in important in 2018, and advanced auditing tools, including the use of outsourced auditing services, will be a driving force in maintaining compliance with regulations and upholding a positive image in the public eye.
More Companies Will Invest in Cybersecurity in Procurement Logistics
Cybersecurity is an ever-present envelope around any of the industrial procurement trends. By some standards, cybersecurity is more vulnerable than ever. This is due to the increased use of technologies around the globe, but more information and advances in cloud-based technology have built impenetrable walls in the networks of supply chains. For vendors, this increased level of cyber security will propel them to take advantage of technologies that have often been left reserved for the post-manufacturing supply chain. The convergence of vendor, manufacturer, and transportation provider systems will generate a new era of accountability, efficiency, and productivity throughout the world supply chains, and cyber security will be an area of top investment 2018.
Executives Seek to Lead by Example
Supply chain executives will also face greater pressure to lead by example this year. Sam’s Club announced recently the closure of 63 stores, turning some into distribution centers, in response to increased E-commerce sales by their parent company Walmart. This move comes on the heels of companies giving out bonuses in response to the new tax plan, and Walmart is one of the companies that has already announced plans to increase minimum wage for its employees, explains Walter Loeb of Forbes. This is a paradox, and although sister companies, Sam’s Club and Walmart have the added challenge of trying to lead by example while still behaving in recession-mode. Executives must take all steps to avoid the unexpected closure of stores, and if store closures are inevitable, employees and consumers must be given ample notice. Although the year has barely started, the move by Walmart and Sam’s will make the public and regulators hold supply chain executives’ feet to the fire.
Start the Process of Leveraging These Industrial Procurement Trends Your Enterprise
The importance of strong, robust procurement processes for both supply and logistics procurement needs cannot be overstated. Supply chain executives must understand industry trends when it comes to procurement and leverage this information to make informed decisions about change management, new technology and ways to reduce procurement costs throughout the supply chain.