Ethics is on the agenda, and palm oil suppliers are already moving to end deforestation in their supply chains ©Getty Images
Ethics is on the agenda, and palm oil suppliers are already moving to end deforestation in their supply chains ©Getty Images

Adaptability will be key in 2019

A round-up of what’s in store for procurement professionals in the year ahead

Global supply chains, new tariffs, renegotiated trade agreements and regional climate events can have “a ripple effect that paralyses an entire supply chain”, according to DHL Supply Chain.

“Designing supply chains with the ability to flex to circumvent natural disasters or quickly re-configure to accommodate shifts in costs or material availability resulting from tariffs has become critical to maintaining high service levels,” the company said.

Smart procurement systems will let firms “continually review risk and ensure the critical supply of goods can continue uninterrupted”, said Alex Saric, software firm Ivalua’s chief marketing officer.

Digitalisation

Immaturity has held back artificial intelligence (AI) but there will be advances in the technology and better integration with procurement platforms, according to Ivalua. Such developments will help procurement meet customer needs, create real-time efficiency, capture data networks, and manage improvement plans. Research from Forrester shows 55% of organisations are set to invest in AI before the end of 2019.

Saric said: “Integrating AI with smart procurement platforms will give procurement leaders better insights into opportunities and allow them to evaluate supplier risk.

“AI will help to automate tasks like ordering and invoice processing… and create quick access to information for stakeholders via chatbots.”

Gartner said by 2023 at least 50% of large global companies will be using AI, advanced analytics and the internet of things (IoT) in supply chain operations.

DHL Supply Chain said: “The biggest opportunity is in the emergence of digital freight platforms that create online marketplaces that quickly and efficiently connect shippers with carriers, streamlining processes, optimising costs and expanding the available options.”

The march of the robots

Robotic technology is expected to reach a “tipping point in 2019”, according to DHL Supply Chain. The company says order picking is the key focus of robotic development but the technology will have an impact beyond e-commerce fulfilment.

Gartner adds that by 2023 more than 30% of warehouse workers will be “supplemented” by “collaborative robots”. 

“Intelligent and aware” robots are best placed for moving goods around warehouse environments, enabling humans to “continue to do things they are better at, such as tasks requiring more complex motor control”, Gartner says.

Ethics and transparency 

Malcolm Harrison, group CEO, CIPS, has said ethics “needs to be incorporated into all day-to-day business decisions, almost without thinking”.

“In a world where everything is connected, understanding the impact of our sourcing and buying decisions has never been so important,” he said.

Among those firms making ethical pledges are food supplier Cargill and palm oil processor Wilmar International, which has pledged to end deforestation in its supply chain by 2020.

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