Procurement Trends That Would Transform Businesses in 2023

Supply Management rounds up the significant procurement themes and key supply chain predictions for 2023.

FREMONT, CA: By developing more sustainable supply chains, organisations may significantly contribute to the fight against climate change. The first step in putting words into action is to evaluate suppliers and increase visibility into tier-one and sub-tier suppliers to ensure that unsustainable practices do not evade detection. This is important for outlining an organisation's green future in 2023 and beyond, as well as for preventing organisations from being caught off-guard in the short and long term.

Customers are demanding more environmentally friendly solutions for their online purchases, and this trend is likely to continue beyond 2023. Customers want to choose their delivery and observe the effects of their deliveries. As a result, businesses will make sure that customers at the checkout have access to more environmentally friendly delivery options in 2023 by offering information on how their delivery decisions will affect the environment.

In the past twelve months, 36 per cent of businesses have extended payment terms for suppliers due to the impending recession and the inflationary climate. Thus paying suppliers late disrupts cash flow and liquidity, which leads to additional late payments in the future and creates a vicious cycle for businesses and their supply chains. Businesses will have a stronger obligation to pay suppliers promptly.

Organisations will need to use payment more wisely rather than disrupt supply chains. For instance, employing finance, flexible next-day payments, and dynamic discounting. This enables them to negotiate cheaper prices for products and encourages suppliers to meet delivery deadlines. The outcome will be stronger supplier ties and a more resilient supply chain, which will put organisations ahead of opportunistic rivals. This change will lessen the likelihood of a worldwide cash flow crisis, but it will also have long-term strategic benefits, such as making companions with significant suppliers, bringing down the cost of goods and services, and securing them during a period of low supply. Importantly, it will encourage much-needed innovation through supplier cooperation.

Companies will progressively want more consumer-like, user-friendly, and agile procurement technology solutions to increase productivity, better collaborate with their business stakeholders, and do more with a smaller team. The visibility of an organisation's entire end-to-end supply chain is one area that will surely continue to expand. Increased visibility not only enables organisations to more effectively predict and respond to supply-related issues like disruptions or excess demand, but it can also assist them in achieving broader business objectives like ESG and sustainability targets.