Nearly every area of the business world is being ushered into the age of technology, and the field of procurement is no different. Procurement trends show a marked shift towards utilizing software and automation to streamline the procurement process and, hopefully, cut much needed costs for businesses still suffering after the losses caused by the Covid-19 supply disruptions.
This article will dive into 5 of the most important procurement trends in 2022 so that you can understand more about where the industry is headed.
What Is the Importance of Procurement?
Your business cannot properly operate without effective procurement. Whether you’re a retailer acquiring stock or a service supplier ordering equipment, effective and affordable procurement can make or break your balance sheet and operations success.
The importance of streamlined procurement processes is one of the biggest factors that can help or hurt your business. Procuring products or supplies is a major expense for many companies, costing both time and money. With a clear system or software, the procurement process can be faster, more efficient, and cost effective.
5 Important Procurement Trends In 2022
Here are 5 of the most important procurement trends to know in 2022.
Sustainability in Procurement
Supply chains have previously been one of the most focused subjects of environmental pollution issues as they are known for producing greenhouse gasses, using large amounts of fuel, and burning high levels of energy.
In recent years, sustainability efforts of supply chains and procurement processes have grown in both the public and private sectors. Regulations have been implemented to help push supply chains toward more renewable fuel types and private companies have begun moving towards their own green initiatives in an effort to make supply and procurement a more sustainable area of business.
Purchasing power is now being used to help push these green initiatives as well. Many purchasers and companies are implementing policies that focus on obtaining green labeled products and creating relationships with eco-friendly manufacturers and shippers.
Establishing a Trusted Supplier Base
Now more than ever, businesses are leaning into relationship building to make their procurement process stronger and more reliable. As supply chains experienced snag after snag in the last few years, many were reminded just how important personal connections with manufacturers and suppliers could be.
One of the best ways you can make sure your procurement process will be running smoothly is to invest in establishing a trusted supplier base. Go beyond the transactionary email chains and build real relationships with your suppliers. Then when an issue arises or problems come up, you and your suppliers will have the report and willingness to work together in problem solving for both parties.
Value Beyond Cost Savings
In the procurement process, it can be easy to shift all focus on the necessity and importance of cost cutting. While putting an emphasis on your bottom line is highly valuable, many are looking towards other ways they can provide value to customers beyond the dollar signs.
When you procure a product or service, there are many factors that determine your perception of its value in addition to its cost. Factors like quality of the product, the speed and reliability with which it can be delivered, and the safety with which it is created also have a big impact on consumer satisfaction.
In 2022, suppliers and businesses alike are holding the magnifying glass over these additional factors of value to see where they can provide more for customers than simply a few extra dollars in their pocket. With a focus on total value, you can grow your business and gain an edge over others in your space.
Technology is here and it can help you up your procurement game from purchase to payment. When the world shut down and supply chain issues made the procurement process more challenging than ever, technology and software were thrust into the spotlight. Businesses needed to know they were bidding for goods and services in the most cost effective way and organizing their procurement process for optimal functionality.
Procurement software and technologies are what helped businesses pivot in an unprecedented time. These tech tools provide you with automatic bidding and analysis to ensure you’re spending the money that needs to be spent and nothing more. They digitize everything from contracts to supplier information to help keep your process in line, and they collect data across your procurement process to provide useful analysis for improvement.
Procurement Matters To Executives Now More Than Ever
Previously, procurement and supply was an afterthought for many higher level executives. Supply was a box that was checked off as opposed to a major portion of a company’s strategic plan for growth and development.
As Covid-19 thrust supply chains into a tailspin, procurement was suddenly brought to the forefront of many company’s views. This new spotlight allowed executives to dive into their procurement and supply departments for the first time and see how they could become a more important variable in their plans for the future.
Ready to Get Started With Digital Procurement?
You can use these procurement trends to your company’s advantage with an investment in digital procurement software from Procoto. Get started with a free trial today to see for yourself how digital procurement can help grow and streamline your source-to-contract process!