Procurement in Asia: Current Trends and Future Outlook for 2024

The procurement landscape in Asia is undergoing significant changes as economies across the region adapt to global challenges and new market dynamics. With Asia continuing to be a major hub for global supply chains and manufacturing, businesses must stay abreast of evolving procurement strategies to remain competitive and resilient.

Key Procurement Trends in Asia

Digital Transformation and IoT Adoption: Digital transformation remains at the forefront of procurement trends in Asia, with the adoption of Internet of Things (IoT) technology playing a pivotal role in revolutionising procurement processes. IoT enables real-time tracking and monitoring of goods across the supply chain, improving visibility, enhancing demand forecasting, and reducing costs linked to excess inventory and stockouts. According to Gartner, around 47% of organisations plan to increase their investment in IoT over the coming years. The value of IoT technology is projected to rise significantly, from an estimated ￡28.14 billion today to ￡177.9 billion by 2031.

Resilience and Risk Mitigation: Supply chain resilience has become a critical focus for businesses across Asia, particularly in light of recent disruptions caused by the COVID-19 pandemic, geopolitical tensions, and economic fluctuations. Companies are increasingly conducting regular audits of their logistics practices to ensure they can respond swiftly to emerging challenges. Strengthening relationships with suppliers, adopting digital solutions, and advancing sustainability initiatives are key strategies being employed to foster growth in these uncertain times.

Sustainability and Ethical Sourcing: Sustainability is no longer a buzzword in procurement, it has become a strategic imperative. Businesses across Asia are increasingly embedding sustainability into their procurement strategies to meet regulatory demands and growing consumer expectations for environmentally friendly and ethically sourced products. The use of AI and data analytics is enabling organisations to assess environmental impacts, identify sustainable sourcing opportunities, and optimise resource allocation.

Cybersecurity and Data Protection: As the digitalisation of procurement processes accelerates, so does the risk of cyberattacks and data breaches. Businesses across Asia are investing in cybersecurity solutions such as redundancies, firewalls, and advanced anti-hacking technologies to safeguard their systems and networks. With the growing reliance on automated processes and AI, ensuring robust cybersecurity measures is essential to protect the integrity of the supply chain and ensure data security.

Talent Management and Workforce Development: The digital transformation of procurement is driving demand for new skill sets, creating a significant talent gap across the region. A recent Gartner survey revealed that only 14% of procurement leaders are confident their current workforce is adequately equipped to meet future demands. To address this challenge, businesses are adopting strategic hiring practices, offering internal training programmes, and fostering a “T-shaped” procurement team structure, where employees develop both specialised expertise and a broad knowledge base across multiple domains.

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As Asia continues to adapt to global shifts, the procurement sector is embracing digital transformation, enhancing supply chain resilience, and prioritising sustainability. For businesses operating in this dynamic region, staying informed of these trends and strategically investing in technology and workforce development will be crucial for maintaining a competitive edge in 2024 and beyond.

Sources:

Maersk - Ready your supply chain for the new challenges in 2024

MeRLIN Sourcing - Key Procurement Trends & Predictions for 2024