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As procurement has become more relevant, organizations are redesigning how they work internally and how they collaborate\nwith customers.<\/span><\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div><\/div><\/div>New skills for procurement’s new role<\/strong><\/p>\nThe procurement department of the future is developing its capabilities by using building blocks. Procurement managers see tomorrow’s focus falling on strategy and cultural change, the development of employee and skills, the use of supplier innovations, and developments in sustainability and responsibility. This expands to current priorities, such as internal collaboration, systematic sourcing, product
\ngroup management and, above all, analytics, data transparency, and data management. The fact that procurement can work across all these areas is the<\/p><\/div>
most convincing argument of all for the department to position itself within the company as the go-to partner that knows the market, supplies the relevant data, and works flexibly in agile teams.<\/p>\n
Supplier management remains a crucial task for procurement, ensuring stability for supply chains and providing input for innovation, where
\nnecessary. Building these blocks up even further is essential for a sustainable supply chain. But existing core competencies are still important, of course; they are just handled differently. Digitization makes operational processes so much simpler, freeing up resources for strategic work.<\/p><\/div><\/div><\/div><\/p>\n
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Future challenges facing procurement<\/span><\/strong><\/h2>\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
Looking ahead, transformation in procurement is set to be a major topic. In addition to the need to develop teams and staff, there are three challenges at play:<\/strong><\/p>\n <\/p>\n
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\n 1. Building more agile, responsive procurement teams: \n <\/h3>\n\n \n
The business environment is changing more rapidly than ever before. Alongside digitization, issues including the COVID-19 crisis and trends toward more protectionism in trade are causing value creation and supply chains to be reassessed. Trade disputes now threaten supply chains long considered secure and product costs are sure to rise. On the other hand, real-time information often enables real-time action, and the coronavirus pandemic has shown us that we can still work efficiently outside of the office. For the first time, staff were forced to work at home for long periods, and to use new
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\n 2. Taking sustainability into consideration:\n <\/h3>\n\n \n
It’s no longer enough to simply rely on the cheapest suppliers. Ensuring your company\u2019s long term supply involves incorporating environmental and climate-related factors into your supply chain planning and evaluation. Leading companies also need to keep an eye on their suppliers\u2019 working conditions to prevent compliance cases or short-term shutdowns. In addition, procurement must evaluate the stability of critical supply chains and have a back-up plan in place for emergencies. Risk management will remain one of the major challenges over the coming years, along with a targeted
\nstrategic reassessment of critical product groups.<\/p>\n\n <\/div>\n\n \n <\/div>\n
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\n 3. Going digital for maximum impact:\n <\/h3>\n\n \n
Real-time information provides wide-ranging transparency in the supply chain when critical partners are involved. More accurate forecasting models can identify early on what internal customers will need in the near future. Procurement can also help by turning suppliers into partners that are part of their network. In addition to delivering relevant data, routine tasks such as placing orders can be more or less fully automated. Depending on the capacity freed up, further procurement tasks in data analysis or harnessing technical expertise can be arranged.<\/p>\n\n <\/div>\n\n \n <\/div>\n <\/div>\n\n\n
Procurement staff are aware of the importance of digital transformation, with 86% of study respondents citing this as a key trend. But that alone is not enough. Respondents also rightly consider collaborating with suppliers to drive innovation to be another important trend, since major innovations nowadays tend only to be possible with the support of key partners. For example, electrical vehicles have primarily been developed as a result of innovations that look beyond traditional vehicle architecture, completely rethinking the whole system. It is strategically crucial for the entire company to maintain close contact with suppliers throughout critical product groups and innovation
\nfields. And who better to do that than the procurement department?<\/strong><\/p><\/div><\/div><\/div>\n \n
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Steps towards the procurement department of the future<\/h2>\n
Before you can bring the procurement department into the future, you need to clarify several questions about the status quo: What\nposition is your procurement in right now? Which tasks are the result of changing your corporate objectives? And where is the department currently in the transformation process? The answers to these questions depend on the individual company, its culture,\nindustry, and starting point.<\/p>\n
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The key to success is involving everyone in the process, so internal communication is crucial. According to our study, this is also\nwhere the gap lies: procurement teams need to understand why the change makes sense for them personally, which opportunities it\nunlocks, and how they can prepare for their new tasks.<\/p>\n
How effective the change is will depend on how well you cooperate with other departments. As one of the company`s central\ninterfaces, procurement can also support many other departments with their strategic issues, for example, by getting involved early\non in the manufacturing process for new products and giving input. Working closely with supply chain management and logistics\nis also essential for the restructuring and risk management of supply chains.<\/p>\n
At the same time, procurement’s supporters are more focused on cost and closely networked with the operating business. The CFO\nis the most important contact person for 60% of those surveyed, along with COOs and the heads of the operating units.<\/p>\n
Procurement departments looking to improve their risk management need to work effectively with the head of the supply chain.\nClose coordination is also required within the company itself, not only to streamline entire supply processes, but also to make them more secure.<\/p>\n
Procurement needs staff who can make strategic decisions, even in a changing environment. Liaising closely with HR will help to identify the right talent and the proper training for existing employees.\nRecruiters must also expand their evaluation of new procurement talent; creativity, digital and analytical skills, teamwork, and change\nmanagement skills are vital skills, on top of specialist knowledge and practical procurement expertise.<\/p>\n\n <\/div>\n <\/div>\n