Major Procurement Trends: Helping Your Office Move Forward

Major Procurement Trends: Helping Your Office Move Forward

In the past twelve months, what significant challenges has your procurement office faced? Have you had internal conversation about the struggle to replace a retirement-age workforce? Did you have to adjust in order to overcome a supply chain disruption caused by a major weather event? Chances are that you have- and you are not alone. For every qualified individual, there are six vacancies in the procurement sector, and we all have watched the news as natural and man-made disasters like devastating wildfires have affected millions of people. So, what should you and your fellow procurement officials do in the face of all of this uncertainty?

 

One of NASPO’s Top Ten Priorities for State Procurement in 2019 is to ensure that our state central procurement offices are seen as strategic leaders on a statewide scale. In order to fulfill that charge, you must always be one step ahead. And in order to do that – you must be educated and aware of the most recent problems and solutions available.

In an attempt to advance just this kind of awareness, ProcurementIQ, which provides a market research tool to NASPO members, put on a webinar to address some of the most concerning issues facing procurement in 2019. In this article, we will examine some of these issues and I will share with you the proactive tips from ProcurementIQ to stay ahead of these potential problems.

As I have mentioned, one of the issues that Procurement IQ addressed in their webinar was the labor shortage in the procurement field. There is an ever-widening gap between the supply and demand for procurement professionals and 30% of supply chain professionals are at or beyond retirement age, and there are some serious challenges to overcome in order to address these labor shortages. The modern procurement professional needs to promote a positive culture, market their department, and invest in training and development in order to attract needed employees.

Here are some ways  for your office to attract new employees:

  • When recruiting, focus on the positive impact of public procurement and the importance of the service you do for the state.
  • Consider implementing a flexible schedule in your office which also allows people to work from home.
  • Foster a positive workplace by arranging events that let your employees get to know one another better and feel appreciated.

Another way to increase the visibility of the public procurement profession is through outreach directed at college students entering the workforce.  A shortage of supply chain professionals teaching at the collegiate level has led to a lack of awareness about the procurement profession on the part of students and educators. Outreach can be a very powerful way to be proactive and address the current labor shortage in the procurement field. To address this lack of awareness and elevate the field of public procurement, NASPO partners with academic institutions, attends career fairs, and funds internship programs for state procurement offices. NASPO also encourages state procurement officials to partner with local colleges and implement their own internship programs. Learn more information about NASPO’s Higher Education Initiatives by clicking here. For ideas on how to implement an internship in your office read NASPO’s Internship Toolkit by clicking here.

ProcurementIQ also suggested that procurement offices should decentralize some of their spend and implement new technologies to help address the challenges associated with the lack of procurement professionals. Technology is a useful tool to make your office run more efficiently and frees up time for your employees to focus on more complex tasks that cannot be automated. The McKenzie Institute has estimated that nearly 60% of tasks involved in the “Source to Pay” procurement process can be automated, and this could provide overburdened procurement offices with tools to address the labor shortage moving forward.

Here are a few of the ways that automation can be utilized in the procurement here are a few of the ways that automation can be utilized in the procurement office:

  • Robotic Process Automation (RPA): RPA is software that is great for labor-intensive, rule-based processes such as purchase requests and approvals, email notifications, invoices, payments and receipts. Once the software is programmed it requires no more human intervention.
  • Machine Learning: Machine learning refers to a machine’s ability to continually improve performance without needing human intervention as opposed to RPA which does not improve over time. Machine learning can be used for processes such as contract compliance, negotiations and spend analysis reports.
  • Predictive Analysis: Predictive analysis uses data generated by the procurement process to make predictions such as forecasting revenue and market opportunities and mitigating disruptions. Predictive analysis can be used to facilitate the creation of logistic regressions, time series analysis, and decision trees.
  • Artificial Intelligence: AI can learn, understand and interpret data. True AI looks for and learns from discrepancies in data. Artificial intelligence can be used to identify unusual order frequencies, make supplier recommendations, and predict market prices. Learn about how the implementation of AI is changing work and daily life by clicking here.
  • Blockchain Technology: Blockchain creates an immutable and freely accessible ledger that records each transaction. This can be used to increase government transparency and remove the need for third-party intermediaries in transactions.

While some of these technologies are too advanced to implement immediately, it is good to familiarize yourself with them and their potential in the procurement field. Ultimately, implementing more technologies in your office can free up valuable staff time and allow them to address more complex tactical issues. Exploring new technologies can provide an opportunity to lead the way in the modernization of the procurement process.

Another trend for 2019 is the increasing risk within the supply chain. We are experiencing more frequent and intense natural disasters, and buyers must consider geography and an area’s likelihood to experience such an event. Amazon and the U.S. Post Office were both forced to shut down during the recent wildfires in California due to air quality concerns which caused significant disruptions.

Man-made disasters such as utility failure, terrorism, and cybersecurity attacks are also threats to normal supply chain operations. Cybersecurity attacks, in particular, are increasingly becoming more common with 66% of businesses reporting that they have come up against a supply chain cyberattack. One way to deal with this threat is to involve IT in the creation of your procurement protocols and limit your suppliers’ access to sensitive information in case they experience a data breach.

Implementing new technology can help your office address increasing workloads without the need to hire more staff. Being aware of the risks posed by both natural and manmade disasters can help procurement officers avoid potential supply chain disruptions and harmful cybersecurity attacks. As the procurement field continues to adapt and change during the coming year it is important to remember that these trends do not only pose challenges – but also present procurement offices with the opportunity to grow and take on their role as a strategic leader in their state. How do you plan to proactively address these challenges?

View the original ProcurementIQ webinar by clicking here.

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