At the start of 2020, businesses confronted an economic climate infused with volatility and uncertainty. In the U.K., the Brexit deadline loomed, and companies were trying to plan for how the split would affect their supply chains in the event of a “no-deal” conclusion. In the U.S., businesses braced for a turbulent election season and an outcome that, regardless of winning party, would significantly impact business regulations and practices for the next four years.
These were layered on top of other existing pressures on procurement and supply chain operations, such as the increasing threats from climate change and cyberattacks. And THEN came COVID-19.
With so many significant, yet varied impacts on the business world, we wanted a better understanding of the challenges supply chain and procurement professionals were facing — how they were handling them and what they thought was in store for the year ahead.
So we reached out to more than a thousand procurement and supply chain leaders across a range of industries in the U.K. and U.S. We asked: What plans do you have to improve your operations in 2021? How high of a priority is recovery from business impacts of COVID-19? How concerned are you about cybersecurity threats? And what are you doing to create a more stable and secure supply chain that can withstand future disruptions?
Priority One: Digital Transformation
A full 99% of survey respondents indicated that COVID-19-related economic disruption had had an impact on their procurement operations. The nature of these impacts varied; respondents reported that they have increased their collaboration with other business functions (40%), have had to make their operations leaner (37%), or have renegotiated agreements with suppliers (36%). But in many cases, supply management organizations have reacted by pursuing digital transformation initiatives.
In particular, leaders are looking to greater levels of supply chain automation to help improve their operational efficiency and achieve better insights to bring to bear against uncertainty and disruption.
At least 37% of survey respondents noted that they had automated certain tasks or invested in technology to support supplier engagement or distributed workforces as a consequence of pandemic-related economic disruption.
And yet, operational efficiency is still an area of struggle for a whopping 98% of the leaders responding to the survey. As we head into the post-pandemic period, the pursuit of greater efficiency in procurement and supply chain organizations means that digital transformation takes on even greater importance.
Many businesses are now preparing for a more digital future, with 30% of survey respondents — the largest percentage — indicating that digital transformation would be their organization’s highest priority in 2021.
It All Starts with the Data
Respondents also signalled strongly that, along with digital transformation, data — particularly supplier data — will be key to how well their organizations adapt to a post-COVID business environment. Improving data quality is a top 2021 initiative for 40% of survey respondents. Not surprising, since the main challenges procurement and supply chain leaders face are dictated by data and how to benefit from it.
First among these challenges for survey respondents is being able to maintain useful and timely cross-system supplier profiles (cited by 40%). Others include sharing data across the organization to inform decision-making (38%) and obtaining actionable insights from data already in hand (37%).
Businesses also plan to use data to increase visibility into their supply chains. These efforts are to help lower reliance on specific vendors, and to uncover valuable linkage details to better understand how their suppliers are connected.
But despite the critical priority of improving operational efficiency, instead of primarily relying on cost-saving activities, businesses are taking a hybrid approach to help them reach one overarching goal: greater supply chain resilience. To achieve this goal, they are focusing on leveraging a combination of technology that will create two key capabilities: 1) reduce expenses, and 2) uncover new data that will help them source, onboard and do business with suppliers more effectively.
This report explores the priorities for procurement leaders as well as offering rich analysis of the processes and plans in place for risk management, operational efficiency and supplier visibility — and why the need to center operations around accurate data is more important than ever.
Download the Survey Report: The Resilient Supply Chain — What Procurement Leaders Are Prioritizing in 2021
The past year was a tumultuous one for supply chain and procurement professionals around the world, and businesses have had to digitally transform and improve the risk management function at pace in order to maintain their equilibrium.
Our survey reinforced the conviction that technology and data will be central to most solutions — whether they use automation to better handle supplier risk assessment or improve master data quality to speed up supplier onboarding.
- Procurement and Supply Leaders’ Key Priorities for 2021
- Short-Term Plans and Longer-Term Concerns
- Organizational Maturity and Processes
- Challenges with Supplier Visibility and Operational Efficiency
- Automation in 2021 and Beyond
- Risk Management: Assessment and Compliance
- Cybersecurity Preparedness