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The Evolution of Procurement: Past, Present, Future Part 2 Of 2

As we have seen in the first part of the blog, procurement strategies and
challenges have evolved over the years and hence it becomes essential for
organizations to rethink their procurement structure. Organizations have to
look for certain key enablers with regards to technology, process and people
that can help them drive exponential changes in procurement. Successful
businesses are also rethinking the traditional viewpoint of evaluating
procurement metrics in silos and instead adopt an end-to-end approach of
evaluating supply chain metrics.
Technology
Big data has been a key buzz word in terms of technological developments in
the procurement and supply chain world, but there have also been other
exciting technological developments that can significantly change the way
procurement operates in the future such as:
3D Printing:
3D Printing, or additive
manufacturing, is a
process by which a 3-
dimensional object can be
constructed from a
computer model through
successive layering of
various materials with the
use of a specialized
computer-controlled
machine. This can
eliminate the need for
procurement to buy
products externally that can be 3D printed. Suppliers would only need to
send data for 3D printing creating new challengers for procurement in the
form of increased data security and patents.
Cognitive Procurement:
Cognitive procurement is the application of self-learning systems that use
data mining, pattern recognition and natural language process to mimic the
human brain function around the processes of buying goods, services or
works from an external source. (source: cognitiveprocurement.com) Using
cognitive platform like IBM Watson, cognitive analytics can transform
procurement significantly. News sources can be brought in real time that will
help buyers prepare for supplier meetings and in negotiations, allowing for
better risk negotiation with vendors across the globe.
Behavioral analytics:
Behavioral analysis focuses on understanding how consumers act and why,
enabling accurate predictions about how they are likely to act in the future.
Behavioral analytics can be used to track customer behavior by tracking
online spend data or instore preference data. This can help procurement
place orders in anticipation of spike in demand.
Internet of Things:
Internet of things is a system of interrelated computing devices that has the
capability to transfer data without requiring human interaction. Use of IoT in
maintenance to sense failure of equipment to alert maintenance teams can
provide insightful data to procurement professionals into supplier
performance for parts that are outsourced. IoT is also being used to monitor
stock levels and trigger automatic replenishment orders which can help
procurement stay ahead of stock out situations.
Process
Process is often overlooked when people talk about trends, but It is
imperative that we look into how changes in technology will eventually result
in a process overhaul for procurement and supply chain organizations.
End-to-End Supply Chain Metrics:
Managers require metrics to demonstrate performance improvements and
the value created across the entire supply chain. One example is combining
logistics and procurement to look at TCO of components can enable
organizations to make better sourcing decisions. Another example is to
combine finance and procurement metrics that can make spend
management and analysis easier.
Supplier collaboration:
Supplier Collaboration is a disciplined approach for any business to establish
and sustain relationships with key suppliers in an effort to move from a price-
driven (win/lose) transactional level to a value-driven (win/win) collaborative
level at every touch-point throughout the product or service life cycle. In
todays rapidly changing business environment buyers are becoming more
reliant on suppliers as not just providers of material but as extended partners
to create competitive differentiation.
Crowdsourcing:
Crowdsourcing is another concept that can cause tectonic shifts on how we
see procurement today. For example, a U.S. company sources its entire
product development--in the form of designs for T-shirts--from the crowd,
with artists submitting concepts and then everyone voting on which ones
continue to production. This form of procurement is becoming more apparent
in numerous organizations, because it allows companies the ability to gain
access to thousands of new suppliers from all over the world and encourages
them to submit bids for specific pieces of work. (source:
mypurchasingcenter.com)
People
By 2020, millennials are expected to represent 50% of global workforce. The
footprint of people involved in procurement will completely change along
with technology and process in the future. Hence it is important for
organizations to develop strategies that will help them retain millennials.
Creativity
One of the main things that motivate millennials is opportunity to be creative
at work. Procurement organizations should look to tap into this desire by
encouraging professionals to think outside the box, address ways to improve
supplier innovation & collaboration as well as work cross functionally to gain
a broader perspective of supply chain problems.
Technology
Millennials are naturally adaptive to technology and procurement
organizations should tap into this by making big data technologies available
to analyze supply chain data instead of using large spreadsheets/ traditional
systems.
Corporate Social Responsibility
Another motivation for millennials is to be involved in work that promotes
corporate social responsibility programs. This gives an incentive for
organizations to promote supply chain responsibility as a key element in day-
to-day jobs.

TADA
At CGN Global, we have structured our offerings with an eye to the future
and have developed game changing capabilities from technology and
process standpoints that also tap into creativity of the workforce.
One such platform, called TADA, is
premised on the use of a synaptic
network which connects the terms,
words, and phrases of an
organization to build connections
within organizational data. The core
concept is to build, house, and
connect intelligence similar to the
way the human brain functions.
TADA is intuitive, fast, collaborative,
and elastic. This platform allows
users to solve existing problems, but more importantly anticipate future
needs and opportunities.
TADA provides an executive
operating system (EOS) that brings
resolution to information and fosters
quick and effective decision making
processes. It allows leaders to be
present in each silo of their
organization such that they can
make strategic, informed decisions
by harnessing the language of their
business. TADA is a disruptive
executive operating system which
rapidly interconnects the extended enterprise for visual thinking, advanced
reasoning, and collaboration.
It extends your expertise across the entire organization. TADA connects and
compacts organizational thinking to turn business complexity and change
into an advantage. You can aggregate existing information quickly and
assimilate new information easily then manipulate and analyze it in ways
that enhance your natural decision making processes. TADA allows you to
interact with information, immerse yourself in it, and make it available to
others.
You can learn more about TADA here.