It’s that time of year – now that 2020 is upon us, where will supply chain shift this year? What are the hot topics Procurement pros are talking about?
Unfortunately, there aren’t many predictions for game-changing shifts. Why? Because, at the end of the day (decade?), we’re still waiting on the big innovation promises of previous years to come to fruition. However, the move into the mainstream, itself, is pretty exciting.
So, what does 2020 have in store?
My Seven Predictions for 2020
If I were to put money on where 2020 will lead, I’d guess on the following shifts occurring. None necessarily new, but I predict Procurement actually putting our money where our collective mouths are:
- More Investment in E-Procurement. More and more organizations are embracing digital source-to-pay and contract management tools. These tools make it easier and more efficient to make purchases, enforce Procurement SOP, and track all the data points and KPIs organizations need to keep an eye on to ensure operations run smoothly. Based on how available these solutions are, there’s no reason for an organization to ignore them moving into 2020.
- More Attention Paid to Data. As technology is further ingrained in purchasing decisions, Procurement pros have more access to granular data. This is nothing new in and of itself – however, many companies are starting to realize that merely having the data doesn’t accomplish anything. Data is only as useful as the knowledge and insights it produces. Expect more companies to invest in tools and processes that take all this data and, well, do something with it this year.
- Reorganization of Procurement Teams. As a direct result of the first two points, Procurement teams are going to need to get more technical. They will need team members fluent in data and the applications that leverage it. They’ll need resources to not just implement new technologies, but advocate for their use among organizational stakeholders. You’ll likely see some new roles added to your team before year’s end to accommodate.
- Blockchain will… still be talked about…. Maybe? I hope I’m wrong on this one. But for all we hear about the benefits of blockchain on the supply chain, most companies haven’t moved towards this technological advancement – and won’t in 2020, either. Sure, Walmart and Maersk are committed – but how many hundreds or thousands of smaller companies are there for any given Walmart of Maersk? More offerings are needed that make blockchain accessible by smaller companies before the technology can become commonplace.
- Green Initiatives will Gain More Share. I hope I’m right about this one. We hear more and more about environmental sustainability each day, and organizations are starting to listen. Supply Chain pros have a direct opportunity to evoke change here, and they are taking full advantage. More organizations are interested in bringing in suppliers that offer green alternatives to not just improve sustainability but also cut costs.
- Greater focus on Indirect & Tail Spend. Managing indirect spend, including the thousands of tiny suppliers that make up tail spend, is a huge headache for organizations. However, bringing this spend under management also offers one of the greatest opportunities for cost savings. Expect greater emphasis to be placed on identifying this spend and developing plans to bring it under management.
- Supplier Relationships will be Heavily Prized. Organizations aren’t just looking for vendors to sling commoditized products. They are increasingly looking to develop strategic partnerships with key suppliers who can help them grow and evolve over the long run. Procurement teams would do well to understand who their key strategic suppliers are and develop plans to better leverage them to provide value beyond cost reductions.
Here’s to a New Year (of Old Promises)
I recognize that you aren’t really seeing anything new in my list above. We’ve all talked about these points before… in 2019 and earlier. The difference I am betting on, however, is that 2020 will be the year we stop talking about these moves and actually work to implement them.
Who knows, maybe better adoption of these points in 2020 will lead to some real game-changers in 2021. Hell, maybe blockchain will be more than a talking point by then. Well, I can dream, at least…