Sunday, November 18, 2012

Purchasing Future Trends 2013 and Beyond

Traditional Purchasing organizations and jobs will transform more in the next 5 years than the previous 100 years The changes are beyond recent developments of:
  • Globalization,
  • LCC Sourcing,
  • Introduction of operational systems (SAP, Oracle),
  • Introduction of new tools (tablets, smart phones.
In fact it is arguable that any of the above items, which certainly have changed global business, have really changed how organizations purchase other than perhaps digitizing steps in the old process. (For example electronic requisition instead of paper ones)
However, even with the coming changes the is not necessarily an expensive implementation cost for software, consultants, hardware etc... As a result Fortune 100 companies do not have any real advantage in responding to changes to gain a competitive advantage over small to mid-sized companies. In fact because of the massive investment in enterprise solutions and processes they maybe at a disadvantage.
Before discussing the changes and what Purchasing and Supply people should do to prepare lets talk about what you should forget.
  • Being an expert with excel, access, worksheets etc.
  • Focus on cost savings.
  • Purchasing centric individual quantitative measures of how many transactions and how fast.
  • Blaming other departments for inability to deliver better results
  • You must sit at your desk and process transaction. (Better to get rid of your desk altogether)
The above skills and approaches were and still are common. Now they are not going to be relevant and will label you as not being ready for the changes.
So what will change in the next couple of years and what do you need to start thinking about?
  • Everything becomes a commodity
  • Syndicated Commerce World class tools and supply chains are available for all sizes of organizations at essential no cost Everyone is a Buyer and Seller Purchasing contributes directly to revenue generation as well as cost saving
  • Big Data will: Smooth planning cycles - end of "Bullwhip Effect" Create relevance to offers to Buyers that create more specific value
  • Creating a better Purchasing customer experience will be key to drive value
  • Procure to pay operations will be totally automated.
  • The word foreign is losing its meaning (Borrowed from United Airlines)
How can you prepare now to survive the transition? In every job whether operational or strategic be ready to, explain current process and present how to revolutionize it. Start to understand use of "Big Data" and 'Syndicated Commerce." Do not be afraid to be part of transformation of process - become process owner and manager
Becoming a deep subject matter expert Commodity Manager will be a high reward job. In fact better for 2 subject categories.
Once the transition is complete what will you then need to thrive?
  • Much more Strategic view with ability to contribute directly to revenue generation
  • Strong IT understanding on a systems level with ability to deliver systems that match "internal customers needs.
  • Truly global view and experience
  • Soft Skills more important
There is no question that young people graduating from undergraduate and masters courses in Purchasing and Supply will have these views. Also it is very likely that the function of Purchasing and Supply does not rest mainly in a single organization but rather is more dispersed across organizations. What will be more centralized is the development of tools, collection and use of Big Data and the recruitment,development and management of global purchasing and supply professionals. The end result for those with the right talent and motivation will be opportunities for wealth, growth and leadership that were unthinkable even 20 years ago. A glimpse of that potential is Tim Cook who leads Apple now and essentially worked his way to that position by his expertise developing the world-class supply chain of the most valuable company in the world.

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