It’s fair to say that 2020 through 2022 has been a period of unprecedented disruption to supply chains. Inevitably, a global pandemic unequaled since 1918 has caused knock-on effects in procurement, supply and demand, and recruitment practices worldwide.
Even as the effects of the COVID-19 pandemic begin to ease, political instability and environmental factors remain in play, making this an incredibly challenging time for businesses of all sizes. Here are just some of the factors contributing to the disruption:
- Downstream effects of COVID-19 supply chain shortages.
- Labor shortages were prompted by “The Great Resignation” and changes to working practices.
- ESG Regulations like Carbon Zero commitments and labor reforms.
- Geopolitical instability and war, with new alliances, forming, and old ones being severed.
- Extreme weather events exacerbated by global warming create additional risks.
It’s unsurprising that a “perfect storm” of catastrophe has had a significant impact on corporate profits and service continuity. How then should businesses change and adapt, to better future-proof their operations when faced with potential disruption?
The Ultimate Guide to Advancing Procurement & Supply Chain with AI
Four Procurement & Supply Chain Trends to Watch
1. Get Smart with AI
Businesses will increasingly use AI for trend prediction, competitive intelligence, procurement insight, patent landscaping, and other activities which lend a competitive edge. Data analytics is one of the fastest-growing tools at your disposal, as well as one offering the best ROI.
2. Be Sustainable
Reports show that consumers are pivoting towards businesses that place sustainability front and center. While ESG regulations are mandating such an approach, it’s a good idea, both ethically and financially, to follow this trend even before mandates bite. You’ll future-proof your business and minimize risk by no longer being tied to problematic territories or providers.
3. Be Visible and Agile
Companies who get ahead of trends and are seen to make a stand, benefit from both established PR and consumer-led social media support. Be ready to change your supplier if they are found to engage in unethical working practices; have an alternative distribution method to hand if a tropical storm hits a community in need. Ethical Plan Bs and Cs will be vital in the coming years.
4. Center Talent
People-focused businesses which reward staff with more than financial incentives will triumph. Work-life balance is no longer something people are embarrassed to admit is important. Meanwhile, jobs for life have been relegated to history. Employee retention requires the creation of talent-focused workplaces that employees are proud to champion.
All four of these trends combine to make procurement (of raw materials, services, and talent) a key strategic playground for gaining a competitive advantage. Any insight you gather into how to procure more ethically and sustainably, while minimizing risk, put you ahead.
It’s not just about minimizing risk exposure, it’s also about creating a business that’s aligned with the big challenges of the 21st century – and beyond.
AI and data analytics can help keep you at the forefront of your industry, despite disruption and calamities yet unforeseen.