Procurement is getting its digitized act together

This is an excerpt of the original article. It was written for the January-February 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2018

If you frequent supply chain conferences, as I do, you’ve probably noticed that some of the best-attended sessions are the ones that focus on emerging technologies—or what we’re calling the NextGen Supply Chain. You may have noticed something else: While topics like Big Data, artificial intelligence, augmented reality, blockchain and robotics play to standing room audiences, there’s a lot of confusion about what to do with the information. At the 2016 APICS conference, one member of the audience asked a direct question at the end of an excellent session on Big Data by Hannah Kain, the CEO of Alom: “This sounds great. But there’s not a…

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“The Future of Digital Procurement,” a new report released by Accenture, maintains that many supply chain managers are seeking to modernize this function, but may not have the tools to get started.

“The digital revolution has largely overlooked procurement,” the consulting firm declares. In its report, analysts examine how artificial
intelligence (AI) and analytics add to the equation, thereby expediting digital procurement to produce better informed buying decisions, open new channels for engaging suppliers and drive new efficiencies through smart automation.

Art Nourot, vice president of Carrier Procurement, at UNYSON, notes that as the industry becomes increasingly digitized, new demands are being made on the suppliers and service providers, such as 3PLs in North America, that interact with the procurement function. “More transparency leads to greater efficiencies,” he says. “But at the same time, we must all be building better firewalls and find ways to keep our data secure.”

Stepping up

In today’s economy, many companies are racing to embrace digital to transform key areas of their businesses. These include “customer-facing” functions such as marketing, sales and service. To date, procurement hasn’t commanded the same kind of attention or investment, according to Accenture. “True, companies have enthusiastically embraced eProcurement systems and even cloud-based procurement tools,” writes Managing Director Kristin Ruehle. “But it’s time to move beyond simply replicating the same tedious procurement processes with new software. Leading companies are taking the next step to create a true digital procurement organization.”

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