Why Procurement-centric businesses have an advantage during times of uncertainty.

Supply chain professionals continue to face challenges in this economy. Recently, the CEO of JPMorgan Chase, Jamie Dimon, spread more uncertainty when he said he expected the US to "tip into recession" six to nine months from now.

Not only is recession and inflation a threat, but so are the lingering effects of COVID-19 disruptions. The supply chain has dealt with many obstacles, and procurement has been at the forefront.

Thanks to innovative solutions in the past couple of years, we have created more agile procurement procedures that can navigate shutdowns in different countries, shortages, wars, and more.

It's through these achievements that procurement has become the answer to a volatile economy.

Regarding a survey by ProcureTech and Globality, Supply Chain Quarterly stated , "Under pressure from an unpredictable global economic outlook, 90% of procurement leaders plan to transform their operating models to build resilience and agility…”

As procurement-centric businesses redefine procurement for the 2020s, we can expect a better, more resilient supply chain industry in the future.

The Resilience and Agility Advantage

Before the COVID-19 pandemic and the looming recession of the 2020s, resilient and agile procurement was part of the business. Leaders knew the advantage of shifting and pivoting processes when a new challenge arose.

But never before in this generation was something changed so drastically. Leaders had to learn how to make 180-degree changes from sudden challenges, sometimes days apart. This revolutionized the way we think of resilience and agility.

We can use data to gain insight into current challenges and forecasts and predict outcomes through simulations. For example, running multiple scenarios and choosing which ones would work best in a given situation. For instance, professionals can learn how long it may take to recover if suppliers cannot obtain goods through procurement.

Leaders and professionals can use data and experience to predict outcomes and create a resilient strategy when facing unprecedented crises.

Procurement-centric businesses have a unique advantage as they can lead when there is uncertainty.

For example, when a disruption introduces itself to the economy, agile procurement companies can find a solution quickly and help the entire supply chain mitigate the challenge.

Going Digital

If procurement-centric businesses invest in agile and resilient methods, they must be digital.

The more they can transition to digital operations and practices, the more efficient they will be at gathering data and interpreting it for unpredictable economic situations.

Procurement is at its strongest with the latest AI, automation, machine learning, efficient software, and other digital solutions powering operations and equipping decision-makers with the best data.

Companies that invest in better procurement resources can navigate uncertainty through proven and measurable methods. They also experience the following benefits of going digital:

Better Efficiency

With more digital operations and data, firms can easily track their progress. As a result, they can run scenarios and make the best decision, increasing efficiency. Also, with AI and other technologies, they'll experience a better margin of error and increase productivity.

Lower Costs

More digital solutions mean fewer labor costs, costs due to waste and error, and higher productivity (leading to additional lower expenses). While transiting to more digital resources will cost initially, it will serve as an effective long-term investment.

Transparency and Direct Influence

When professionals have access to data and better resources, they improve visibility on procurement and more control over the process.

Improved Decisions

All benefits of digital solutions lead to this point: leaders can make the best decisions with more information and better efficiency. When they combine digital resources with experience, they can make the right call during unprecedented times.

Better Relationships

When we think of digital resources for procurement and the whole supply chain, relationships are not the first to come to mind. But relationships are the most essential part of the supply chain. Without the right partnerships and team, we can't succeed.

Digital resources allow us to gather the data and information necessary to provide the best communication and decisions with our partners. For example, procurement professionals can adequately assess the situation and communicate with partners to make the best adjustments when something disturbs the supply chain.

The more procurement professionals and businesses adopt digital solutions, the better they are at handling economic and often global disruptions. Not only will they help everyone in the industry, but they can lead the industry with their innovative solutions.

Using this Time to Pivot for the Future

When faced with formidable challenges, we first think of survival. We must do it because if we can't survive today, we won't make it to tomorrow. But when we survive initial challenges, many of us stay in the same mode. So there needs to be a transition from survival to growth in a thriving environment.

We must consider long-term investments and strategies if we want to thrive during a disruption. As procurement-centric businesses conquer challenges, they have a unique advantage to overcome today's threat and use it to evolve for the future.

A predecessor to this belief, but didn't quite get to the finish line, was the phrase "a new normal." It referenced how COVID-19 changed life, and we should accept the changes it brought instead of fighting it.

But companies that thrived didn't accept a new normal.

They asked, "what could normal look like?"

Using the lessons they learned from the pandemic, they created better, more efficient processes-- methods not meant to fulfill a need today but for many more years to come. As a result, they became a better, stronger company.

Professionals in procurement can adopt the same strategy. This goes beyond reliance and agility. While adapting and pivoting are essential, professionals can learn how to use them to become stronger- like building muscle. They can design innovative processes and lead the industry.

Ways Procurement Can Build a Better Tomorrow

If procurement-centric businesses and leaders focus on the future, despite the initial threats of disruption, they can create a more robust business facing the toughest challenges.

1. Sustainability

As procurement experts evaluate strategies with partners and supplies, they can lead the way for sustainability. Consumers and markets are increasingly more aware of sustainable methods and buy based on their values.

Procurement professionals can take this into consideration, like environmental and social impacts. We are uniquely positioned to rebuild relationships based on today's challenges. Leaders can take advantage of this restructuring and think of more needs beyond the immediate.

2. Better Communication and Planning

With better procurement processes, professionals are more equipped to communicate with partners and create contingency plans for multiple scenarios. As a result, flexibility is no longer an internal policy but a multi-partnership and industry requirement during a disruption-prone economy.

Procurement-centric businesses and professionals should seek partnerships and team members willing to work quickly to resolve new and unpredictable problems. Communication is a priority; when procurement professionals embrace it, they can get more done timely and effective.

3. No-touch Procurement

During the COVID-19 pandemic, the supply chain industry adopted touchless processes wherever it could. It prevented the further spread of the virus, but it also created faster and more trackable methods. It's one step closer to modern digitalization and should continue to be a pillar in the supply chain industry.

Procurement professionals can continue adopting touchless technologies to combat future outbreaks and increase efficiency. Much of the touchless technology in procurement continues to focus on minimizing people-to-people contact and speeding up manual processes. For example., instead of signing papers or manual actions, it is digitalized to minimize physical touch.

4. Blockchain Technology

Blockchain continues to become accepted across industries for the innovative way it can keep track of education. Initially designed for cryptocurrencies, the blockchain acts as a live public ledger of transactions. As a result, it minimizes errors and fraud-- and industries are adopting it for their own processes.

Blockchain technology can be used to track data, actions, and an entire industry or company with better accuracy and permanency. Procurement professionals can continue to study the technology and find ways to implement it through their own jobs and the supply chain.

5. More Data Technology

Finally, procurement professionals can continue to invest in technology that helps collect and analyze data. The more information they can work with, the better equipped they will be to handle disruptions.

Out of anyone within the supply chain industry, procurement-focused businesses and departments are best positioned to lead during a disruption. They are on the front line and can make the best out of what appears to be an impossible situation.