Globally recognized German software enterprise SAP SE recently released the findings of a research conducted with insights firm Regina Corso, revealing that procurement plays an integral role in managing supply chain disruptions.
The study found that 90% of US supply chain workers feel that procurement has taken on a stronger role when facing supply chain and sustainability challenges.
Furthermore, the research also indicated that 49% of supply chain professionals lose sleep over shortages and disruptions, highlighting the need to harness procurement functions in order to address this, and the other challenges respondents said keep them up at night such as sustainability (28%), cost reduction (27%), consumer feedback (21%), digital transformation (20%), and regulatory compliance (18%).
Additionally, even though less than 30% of professionals worry about sustainability, 91% stated that their company set certain sustainability objectives while 95% believe that procurement is essential to meeting these objectives.
Survey respondents also agreed upon procurement playing a vital role in addressing challenges brought about by the Covid-19 pandemic, and enumerated some of the ways procurement has provided invaluable aid:
- Improving supply chain transparency (50%)
- Supports developing stronger relationships with suppliers (48%)
- Aids in the diversification of suppliers for greater resiliency (45%)
- Helps adapt payment terms for better trading partner liquidity (33%)
- Furthers talent reskilling for higher-tier business priorities (21%)
According to the data, procurement has been a powerful asset for enterprises aiming to achieve visibility, transparency, and accountability with suppliers, allowing them to immediately shift to new suppliers in the event of a disruption.
On the other hand, supply chain professionals surveyed also stated that consumers are a key factor in reducing supply chain disruption challenges, and made recommendations that consumer should:
- Allow more time for fulfillment (54%)
- Support local goods more often and place orders earlier (46%)
- Be willing to pay higher prices in line with higher supply chain costs (33%)
- Be more empathetic and understanding in instances of delay (32%)
SAP’s Intelligent Spend and Business Network Chief Marketing and Solutions Officer Etosha Thurman explained that while supply chain disruptions are old news, the global pandemic has “drastically compounded” and extended them because of continued shortages and delays.
“To navigate these unpredictable circumstances, supply chain leaders must strategically leverage procurement to effectively manage supplier relationships, mitigate customer frustrations, control costs and ensure business resiliency,” Thurman said.
Meanwhile, International Data Corporation (IDC) Program VP Simon Ellis spoke of how post-pandemic supply chains must also be sustainable in order to be resilient, and how a shift in consumer mindset regarding “next day” deliveries is important for attaining sustainable fulfillment and reducing carbon footprints.
