Open Call for Predictions: What does the Future of Procurement Hold? #FutureBuy
The best way to predict the future is to create it.
- Peter Drucker
If we knew what the future held for procurement, we would undoubtedly change some of what we are doing today. Since is it impossible for any of us to be certain about the future, our best option is to form a vision for what we hope the future will hold and align our initiatives to that vision.
Procurement is managed differently in each company and industry, but there are certain trends that form a common professional ground. We strive to create more value and we explore the potential of transformation. All procurement organizations face the challenges of managing talent and measuring performance in such a way that drives the right results. Whether we realize it or not, we are creating our future today, step by step and project by project.
Because this is too interesting of a concept not to explore further, Jon Hansen (PI Window on the World, Procurement Insights) and I have decided to write a book about the Future of Procurement. We aren’t going to write it together as much as we are going to write it in parallel. We each have unique ideas about what the future holds – and we have different aspirations for our colleagues and for ourselves. What we absolutely share is an enthusiasm for procurement today and whatever the future holds.
Jon and I have different backgrounds, as do all of you. Our effectiveness as a professional community is largely based on our diversity of thought and approach. To that point, we are issuing an open call for predictions and aspirations about the Future of Procurement.
Using the Twitter hashtag #FutureBuy we will be sharing our perspective and that of business thought leaders through the summer and into the fall. We want to hear from you! We will gladly spread your predictions, and will select the best, most insightful ideas for inclusion in our book, with full credit.
So what are you waiting for? The future begins today. How will yours look? #FutureBuy
The future of the supply chain and relationships will radically change. Normally the procurement professional tells or indicates to the suppliers, logistics partners or links along the supply chain train what is needed. Procurement is usually the engine driving the supply chain train. In the future, with the advent of mega-data analysis, the supply chain will become more self-sustaining. Each link along the chain will become more predictive. They will anticipate demand and just execute. To some this may seem like a scary loss of control, but it depends on suppliers being just as knowledgeable or more knowledge than procurement. They can predict changes accurately and just execute. They will follow the axiom of "It is better to ask forgiveness rather than permission." Multiple shared data warehouses and databases will make this possible. Thus the supply chain train will be driven by every car in the train! It requires a broad and deep understanding by everyone along the supply chain, but access to mega-data will make it possible and the norm.
A great topic for you to cover Kelly.
Purchasing tools and process will be transformed as what is common for consumers with mobile, social and applications is integrated with Corporate Purchasing Solutions and Process.
Some specific broad trends:
Open Requirements - The idea that an product or service can be reduced to only the elements you really need and then you can source those and build as needed. The concept really has seen tremendous results from technical groups at organizations like Facebook which did not accept the need to accept what was offered by the traditional enterprise server and router companies which has resulted in massive purchase and total cost savings.
Everything as a Subscription: Even physical things being acquired as a subscription over the total life cycle and returned at end for disposal.
Thought Leadership: Purchasing and Supply Chain thought leadership and best practice is being equally driven between US and other parts of the world: India and China in particular.
Logistics: Again consumer like expectations prevailing with Amazon like delivery options. Transparency of reporting through supply chain and ultimately 3D printing eliminating need for shipping of some items altogether.
KPIs: Reflecting more direct contribution of value to organization as well as getting supply chain risk reduction right.
It is debatable whether the skill set of a Buyer today is correct to meet future requirements which creates a threat that other organizations will take the lead.
From an individual point of view Buyers must try to forget the things the used to do
Being an expert with excel, access, worksheets etc.
Focus on cost savings.
Purchasing centric individual quantitative measures of how many transactions and how fast.
Blaming other departments for inability to deliver better results
You must sit at your desk and process transaction. (Better to get rid of your desk altogether)
Skills that will be needed
Must Acquire at least some level of Category Expertise and Stay current even if not directly responsible for the category
Do not focus or sign up for the traditional “nibbling” minor cost savings goals of 2% to 5%
Identify more disruptive / disagregation driven total cost savings of 30% or more
If you are involved in tactical Purchasing own, understand and manage the process rather than just participate in it.
Become immersed in your key supply chains. Your contribution and value to your organization will come from your work that takes place with your product development groups, at your key suppliers, optimizing logistics and insuring end customers needs are met.
For Purchasing Managers and Directors looking for a position: Rebrand yourself as an experienced technical expert in the category you are best at. High level experts category Mangers salaries approach and exceed that of Department Managers.