The 9 challenges keeping you awake at night

 

In August 2023 we asked CIPS members about the business and professional challenges keeping them awake at night. More than 1,500 of you shared views. We had fascinating insights from every continent. Respondents ranged from chief procurement officers and CIPS Fellows to early-career students.

Many CIPS members told us that you sleep well at night 😀 but many of you do carry workplace challenges with you. Here are the key challenges that emerged*:

1. Input price inflation and volatility. Over the past three years, procurement and supply professionals have been at the frontline managing soaring prices across almost all categories. In Q2 2023 inflation hit its highest rates in many countries for 20 years. According to CIPS chief economist John Glen’s recent analysis of global inflation rate trends, as of September 2023, inflation was under control in most economies.
2. Supply chain security, disruption and delays. Geopolitical volatility continues to feed through into procurement and supply realities. The continuing war in Ukraine, the conflict in Gaza, tensions over Taiwan in the South China Sea, all have the potential to disrupt global supply chains and reduce global trade at a time when the world is still recovering from the disruption caused by the Covid-19 pandemic. Many respondents mentioned shortages as a challenge keeping them awake at night. All these are severe tests, and in a recent discussion procurement and supply leaders look at why, in a volatile world, it’s important to refocus on the micro-fundamentals of the profession.
3. Regulatory and legislative change and compliance. Around the world, procurement and supply professionals are grappling with regulatory change. From South Africa to the UK (where the Procurement Reform Bill is working its way through Parliament), governments are looking at how public contracts are awarded. As one survey respondent puts it: “it’s difficult to keep compliant with public procurement regulations when so many tenders need to be run” We feel your pain.
4. Artificial intelligence and new technology. If we’d asked this question a year ago, how many people would have mentioned AI, let alone ChatGPT? Now artificial intelligence is front of mind for procurement and supply professionals everywhere. We’d love to hear your experiences of integrating AI into your operations – please email us at cips@thinkpublishing.co.uk. And we’ll be sharing stories of digitilisation best practice at CIPS’ Procurement Futures conference in 2024.
5. Sustainability, climate change, net zero and environmental impacts. Sustainability issues affect procurement and supply professionals in countless ways. Global warming affects harvests. Climate change induces supply chain shocks. Organisations must retool operations and rethink supply chains to deliver net zero targets. Sustainability was a key theme at CIPS Risk & Resilience event in October 2023 and will continue to be for the foreseeable future.
6. Workload. Procurement and supply chain professionals work hard. If your organisation’s supply chains are global, the demands can be 24/7. With rising inflation, senior management and the C-suite are looking to procurement and supply departments to manage costs and minimise price rises. Then there are the “business as usual” challenges of team and supplier management, implementing technological change, and keeping up your skills. It’s tough, we know, but we’re with you all the way!
7. Career opportunities, progression, security. In a low-growth economy, many CIPS members will be feeling uncertain about the future. This came through strongly in the member survey. “My manager doesn’t agree to progress my career,” says one frustrated respondent. Another asked this great question: “How do we educate schools into making procurement a career choice?” At CIPS we hear these issues loud and clear, and encourage our members to keep upskilling themselves and develop the behaviours and technical skills that are relevant in a fast-changing world.
8. Supplier relationships, relationship management. Yes, prices and contracts are vital but, in a world of shortages and supply chain shocks, relationships matter just as much. It was reassuring to see so many CIPS members focused on supplier relationship management in our survey. And, as one respondent reminded us, don’t forget to nurture your internal relationships, too.
9. Contract management, negotiating contracts. Procurement and supply professionals exercise huge influence in contract negotiations and in ongoing contract management. Some of the skills required here are technical; others are more nuanced. In the coming weeks, via the new CIPS Connect community platform, we’ll be asking CIPS members to share their most instructive negotiations – what they learned, any mistakes, what advice they’d share. We can’t wait to hear your views.

*Some manual clustering applied. 

We discussed these nine points during a CIPS Download webinar in December 2023. To close, panellists highlighted four essential strategies for success to manage these challenges you’re facing.

Adopt agile procurement strategies

You never know what’s around the corner, so focus on controlling the controllable. Be nimble, be resilient, and be pragmatic. Don’t feel like you’re on your own, either. Collaboration is a key part of building an agile mindset and there is a world out there to support you if you talk openly to your customers, supply chain and organisation.

Leverage technology for efficiency and compliance

Embrace new technology such as Artificial Intelligence. This doesn’t mean you need to use it for everything in your business, but get familiar with it, as it’s here to stay. Understand how tools such as ChatGPT can streamline processes to help you be more efficient. And invest in data compliance, because good data serves you well in all areas of procurement.

Integrate ESG into procurement decisions

Procurement can be the difference to drive ESG initiatives within an organisation. Ensure ESG has a consideration or weighting in some way in all transactions – even if it’s just 10%. Take personal accountability and be the changemaker in your business. Don’t wait for regulations and legislation to tell you, embrace your role and use it to your advantage to create change.

Focus on supplier relationship management

Business is a team sport, so nurture both internal and external relationships. There are multiple levers you can pull to improve your supply chain and make an impact on your organisation. What else can you do to support your suppliers? Can you take new products into the market? Don’t just think about volume – make everyone feel like they’re part of the same team. Build your networks and create collaborative, team-orientated goals.

The full webinar is now available to watch on demand – Procurement in 2024: four essential strategies to manage these challenges.