'Machines could take on many procurement functions'

11 July 2013

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11 July 2013 | Will Green

Procurement professionals have been urged to embrace change in the face of challenges presented by a burgeoning global population, economic power shifts and the rise of technology.

David Smith, a strategic futurist, told an audience of buyers that routine procurement work could be carried out by technology in the future, “leaving higher functions to people”.

Automated systems could take on sourcing “based on market dynamics and predefined negotiation strategies”, ordering based on minimum and maximum levels and the work of invoicing, reconciliation and payment.

Smith said technology would enable a level of personalisation that would mean supply chains and procurement processes could be tailored to meet unique customer and product requirements.

He also suggested functions including transactions processing, non-critical spend category management and some data work could be outsourced, while roles around the management of risk, complexity and ethics would grow.

The conference, organised by supply management firm BravoSolution, was also told the world’s population was expected to reach 9.6 billion in 2050, when a third of people in mature economies would be over 60.

“This is tilting the world dramatically,” Smith said. “Hands up anyone who knows how to run a world with nine billion people in it?” 

He added: “There’s a lot of change around and a lot of things happening. Change is constant.” 

Smith said by 2030, air passenger traffic will double, air freight could triple and port handling could quadruple, requiring $70 trillion (£47 trillion) in infrastructure investment.

He said the world’s GDP was expected to double within two decades, and much of this growth would be in China and other developing economies.

By 2020, China would knock the US off the top spot as the country with the biggest share of global GDP and the UK would drop from fourth place to seventh.

Smith, with an eye on the rows over airport capacity in the UK, said: “If you want to go into decline you stop building airports.”

He also said a third of people in the world would live in an Islamic country by 2050, when the market – including banking, food, transport and warehousing – would be worth $30 trillion (£20 trillion).

Smith, chief executive at research firm Global Futures and Foresight, said: “Today a product issue – tomorrow a supply chain issue.”

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