Last year’s campaigns on sea plastics made shoppers more aware of how different packaging can be recycled ©123RF
Last year’s campaigns on sea plastics made shoppers more aware of how different packaging can be recycled ©123RF

Procurement predictions for 2018

2 January 2018

As 2018 begins Supply Management rounds up some predictions for the year ahead.

Brexit’s questions will start to be answered:

While 2017 was the year of Brexit uncertainty, 2018 will be the year where things start to change. Procurement teams will need to start proactively helping their businesses deal with that change and minimise exposure to contract and legal risk, says Sam De Silva, partner at law firm CMS Cameron McKenna Nabarro Olswang.

Procurement will need to integrate its functions:

Procurement can no longer be a discrete and siloed function, says Shivani Govil, VP solutions management at SAP Ariba. “In the year ahead, companies will move away from niche offerings that address pieces of the procurement puzzle towards integrated platforms.”

Technology will continue to drive the profession:

Automation, machine learning and artificial intelligence will continue to be buzzwords for the year ahead. “In embracing them, procurement organisations can perform transactional activities at much greater speed,” says Marcell Vollmer, chief digital officer at SAP Ariba. More importantly, technology will allow buyers to make smarter, more informed decisions that drive value and go beyond cost savings.

But technology won’t be everything: 

CEOs will want speed and agility from procurement, and while technology will help achieve that, the real change has to come from CPOs. Things such as RFIs will become a thing of a past, says Guy Strafford, executive vice president market engagement at Proxima, as procurement will be “expected to stay attuned to market trends and opportunities” by leaning on market data and supplier intelligence. Strafford also expects firms will start replacing bigger suppliers with smaller, more agile ones.

The digital landscape will change:

GDPR takes effect in May and procurement teams will have to work with their IT departments to make sure suppliers are compliant, says De Silva. The year will also bring big changes to EU digital single market legislation, which companies will have to adapt to regardless of their nationality or location. De Silva also recommends buyers get to know blockchain and its value to procurement. 

Food and drink inflation will continue to fall:

After hitting a high of 9.3% in August last year, the Foodservice Price Index – a measure put together by Prestige Purchasing – is expected to drop to 3.4% by the end of 2018. “Looking to 2018, levels of volatility are falling,” said Shaun Allen, chief executive of Prestige. However, challenges are still expected in seafood, dairy, eggs and vegetable oils. 

Packaging will become a frontline in sustainability:

Humble packaging will play a pivotal role in reducing food and product waste, predicts Mintel, a market data firm. Consumers are realising the role packaging can play in extending or preserving food, while online shoppers are expecting more from the packaging in which their products are shipped. Last year’s campaigns on sea plastics have made shoppers more aware of how different types of packaging can be recycled.

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