New decade, new thinking, greener agenda

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Malcolm_100.jpgBy Malcolm Harrison

Organisations should use the coming year as a chance to diversify - by engaging with digitisation, data and the environment.

A new year, let alone a new decade, always provokes thoughts of what lies ahead. It is a good reminder to be looking ahead at trends, technology, legislation or geopolitical shifts that might affect our organisations. Some will be known, others less so - and then there is always the odd curve ball that no one saw coming.

Japanese organisational theorist, Ikujiro Nonaka, said that "in an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge". Getting a handle on data and market intelligence in real-time will certainly help give procurement the profile it deserves. Our profession is in a prime position to feed business-critical insights into board decisions that could make or break an organisation.

The last decade saw blue-chip and high-street brands fold as they did not adapt to change. Nokia went from leading the mobile phone market to selling what was left of its mobile business to Microsoft in 2013. Blockbuster, Toys "R" Us and countless book and music stores lost their way because they failed to keep up with the online innovations that their competitors carved out.

Conversely, we have seen organisations rise as they innovate in line with market trends. Netflix set the trend for TV streaming subscriptions but has continued to diversify, moving into creating as well as streaming content, making history this year by being the studio with the most Oscar nominations in the Awards' history. From TV to music and books, on-demand streaming looks like it will continue to be a popular consumer choice.

For consumer-facing brands, investment in technology is critical as people want to order their goods with one click of a button, choosing when and where they want to collect it or have it delivered. But we don't just expect this as consumers. If Amazon can deliver this kind of service, why can't my procurement team offer the same service? And I want to be sure my procurement team is achieving the best value too. As consumers vote with their feet on the high street (or virtual high street), the best talent and suppliers will soon become frustrated with antiquated systems. The need for a customer- or supplier-focused approach to processes will be essential if you wish to innovate, grow and attract the best people.

The geopolitical environment will also continue to have an influence on the way we do business. As less free trade and more tariffs are introduced, global trade will become more costly and complicated. We are still to see what agreements will be in place following Brexit, but the removal of the frictionless border with the EU and revised legislation will all affect our sourcing decisions. Businesses are already doing what they can to stockpile non-perishable items, but storage space is limited and at a premium. For some the answer is to make rather than to buy, while others look to source locally, perhaps with multiple, smaller suppliers - not something all of us are geared up to cope with.

Firstly, where do I find SMEs and start-ups? And once I find them, will they want to do business with me? They are unlikely to put up with long, costly sourcing processes, and they won't accept practices such as failing to pay invoices on time. As competition for these suppliers may increase, it will be those customers who are willing to help develop their business and partner on innovative projects who are going to be the most attractive.

And, finally, how can any of us afford to ignore the sustainability agenda? From reducing single-use plastics to cutting our carbon footprint, making responsible decisions on the use of scarce resources right through to the influence on people and their human rights. Sir David Attenborough, Greta Thunberg and the devastating Australian bushfires have put sustainability on the agenda of every business - ignore it at your peril.

Whatever the next decade holds for you and your organisation, make sure you face it with your eyes open. These are exciting times for procurement professionals to be at the forefront of helping our organisations grow and flourish in the most responsible and ethical way.

Supply Management

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