7 Procurement Trend of 2023

When it comes to the overall assessment of the economic mood of 2023, "dysfunctional" won't be the wrong word to use to describe it as the world witnessed diverse disruptive events such as wars, protests, natural disasters, and political volatility, all while battling issues such as supply chain disruptions and increasing compliance requirements and all these have gone a long way to influence trends either as a result of the occurrences or as a result of human response to these occurrences.

In 2023, procurement experts focused on digitisation, sustainability, strategic sourcing, the role of vendor relationships, and vendor risk management to reduce the impact of the global trends on their business to, save cost and maximise profit, improve their business's reputation and remain afloat and competitive even amid all the global chaos.

Let's explore 7 procurement trends that gained prominence in 2023.

As businesses adopt digitalisation and gradually gear their operations towards the digital space, procurement officers embrace more innovative working systems by incorporating digital processes into their operational procedures. Companies no longer travel or go long distances to procure what they need; instead, they will be ordered right from the comfort of their offices as communication with manufacturers and suppliers has been simplified by technology. The ability to return items and get a refund or have the item changed gave more credence and trust to this new trend. Digital procurement platforms streamline procurement processes by automating the cumbersome manual tasks associated with sourcing and procuring goods and services.

The use of technology in procurement management and processes has been on the rise for several years, and 2023 is included. Procurement teams relied extensively on software and other technological tools, such as e-sourcing, e-procurement, and contract management, to streamline and manage their processes. Also, artificial intelligence (AI) is gaining popularity as procurement experts utilise it to work smarter and make their systems effective. With these technologies, it is now easy to identify patterns and anomalies in procurement data, giving procurement teams room to make informed decisions. 

Sustainability has become a frontline issue and growing concern for businesses, and it is only going to become more critical because of the growing impact of environmental degradation like floods, and global warming and the clamour for organisations to be held responsible for the effect of their activities to the environment. As a result, considering the impact of their activities, products, and services before sourcing for them is now a trend in 2023, and businesses are limiting their usage of products that are harmful to the environment and their association with companies that manufacture such products. 

With the emergence and rise of digital procurement and the use of technology in supply chain management, procurement experts have adopted strategic sourcing to formalise the way information is gathered and used. It enables businesses to consolidate their purchasing power to find the best possible values in the marketplace and align purchasing strategy to business goals. It requires analysis of what a business buys, from whom, at what price, and volume, and the good thing is that it goes beyond the initial purchase price to optimise the sourcing process through ongoing market research and building relationships with suppliers.

Supplier relationship management (SRM) became increasingly efficient and functional in 2023 because of the need to establish strong relationships between procurement teams and their suppliers to adequately meet needs, demands, and expectations. Procurement teams have realised the need to work with their suppliers to identify and maximise opportunities for innovation in service offerings and product and service improvement. 

Over time, there has been much risk to businesses emanating from their vendors, ranging from cyber risks to data breaches, product defects, delays in meeting deadlines, and inefficiency. All these have gone a long way to have adverse effects on businesses.

With this, vendor risk management has become an area of focus among procurement experts in 2023 because it helps to protect their organisation against potential risks and threats from vendors. Vendor risk management programs can now be used to identify and evaluate risks posed by vendors and develop strategies for mitigation.

Aside from risks from vendors, there are other risks faced by the procurement industry. The effect of the disruption on the supply chain by the COVID-19 pandemic is still evident, and there are other significant disruptions to the supply chain, like natural disasters, geopolitical crises, and economic pitfalls.

To protect their businesses from possible disruption to the supply chain, procurement teams are focused on risk mitigation in 2023 by monitoring and researching potential disruptions and developing plans to address such.

Planning is necessary to understand better and align your business to these trends to remain competitive in the coming year, including making an informed partnership decision. Partnering with an experienced procurement company like SARA PROCUREMENT SERVICES LIMITED will help you avoid these trends.

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