Seven procurement trends to consider in 2022
Source: “Seven procurement trends to consider in 2022” by Supply Management
Since the beginning of the COVID-19 pandemic, supply chains have faced unprecedented challenges at every step of the process. Logistical problems have affected multiple industries, and regardless of your specific sector of business, challenges and accompanying trends are expected to continue. In “Seven procurement trends to consider in 2022”, Supply Management provides insight into those challenges and trends.
- Unsynchronized Supply Chain: Everyone relies on lean, efficient supply chains in one way or another. Before the pandemic, the process of emptying and returning containers to China and elsewhere was finely synchronized. Now, there is major disruption, which is best evidenced by highly congested traffic in the ports of Los Angeles and San Francisco. As a result, businesses haven’t been able to build inventory buffers to meet demand.
- Depleted Workforce: Industries are losing their workforce for a variety of reasons, but mainly in professions that traditionally have challenging work conditions in low-paying roles. Many businesses are investing in their workforce by offering better training, sponsoring college degrees, and proving that they care about the development of their people in other ways.
- Emphasis on the Environment: Sustainability and environmental awareness – particularly carbon emissions – are growing in importance to businesses, consumers, and governments. To get ahead of this trend, large organizations are measuring and cutting back emissions. Businesses of all sizes will have to explore ways to lower carbon emissions and meet the guidelines being instilled around the globe.
- Production Constraints: There are multiple production shortages happening across industries, the largest being the shortage of semiconductor chips, mostly affecting the automotive industry. There’s no way around shortages as large as the ones we’re seeing now, and entire sectors will struggle with strain on production.
- Inflation: In the past, procurement has been able to hedge against inflation by being aggressive on the sourcing side, but the low-cost markets that have avoided cost inflation are now seeing the cost of business rise. This will require maneuvering of spending and budgeting to avoid additional future price increases.
- Strong Social Obligation: Procurement departments are more obligated than ever to make sure working conditions and salaries provide a high standard of living. Nobody wants to be affiliated with a brand that doesn’t compensate their workers well enough.
- Data: Harvesting and using data will help businesses navigate trends in procurement. Companies are becoming more sophisticated at finding data and using it to build systems, protocols, and processes to better tackle the challenges of today and beyond.
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