Logistical upgrades such as automated delivery services are expected to be important for the coming year © Photo by Leon Neal/Getty Images
Logistical upgrades such as automated delivery services are expected to be important for the coming year © Photo by Leon Neal/Getty Images

What are the key procurement trends for 2023?

Supply Management rounds up the significant procurement themes and key supply chain predictions for 2023.

1. Improving on sustainability

Alex Saric, chief marketing officer at procurement software provider Ivalua, emphasised the need to back up green claims with real action.

He said: “2023 is the year that words must turn to action on sustainability. Organisations have a vital part to play in combating climate change by creating more sustainable supply chains.

“Turning words into action starts with assessing suppliers and improving visibility into tier one and sub-tier suppliers to ensure unsustainable practices do not slip through the net. Not only will this prevent organisations being caught off-guard in the short and long term, but is significant for laying out an organisation’s green future in 2023 and beyond. 

“Failure to do so could see businesses alienate customers increasingly sensitive to ‘greenwashing’, fall foul of regulations and become irrelevant in an eco-driven world.”

Danny Hudson, director of UK & Europe at logistics platform provider FarEye, added: “Consumers are increasingly demanding more sustainable options for their e-commerce deliveries and this sentiment will only strengthen in 2023. Consumers want to see the impact of their deliveries and be able to make choices about their deliveries.”

“Therefore, companies in 2023 will ensure they have more sustainable delivery options available for the consumer at the checkout, providing visibility on the consequences of their delivery choices on the environment.”

2. Paying suppliers on time

A looming recession and the inflationary environment have led to 36% of businesses extending payment terms for suppliers in the last 12 months. This is contributing to a “vicious cycle”, said Stephen Carter, director of payments strategy at Ivalua.

He added: “Paying suppliers late negatively impacts cashflow and liquidity, creating further late payments down the line and contributing to a vicious cycle for organisations and their supply chains. Next year, businesses will have a greater responsibility to pay suppliers on time.

“Rather than breaking supply chains, organisations will need to use payment more strategically. For example, using dynamic discounting, financing and flexible next-day payments. This allows organisations to secure better rates for goods and motivate suppliers to deliver on time. The result will be improved supplier relationships and supply chain resilience that puts organisations ahead of short-sighted competitors. 

“This shift will reduce the risk of a global cashflow crisis, but also bring long-term strategic benefit, including helping to gain favour with key suppliers, lowering the cost of goods and services, and securing them at a time of short supply. Critically, it will attract much needed innovation through collaboration with suppliers.” 

UK businesses are owed over £23.4bn in outstanding invoices, the government said earlier this month. It has launched a review into the “exploitative practice” of late payments.

3. Investing in technology

Keith Hausmann, chief revenue officer at procurement platform provider Globality, said automation and technology would have a profound impact across businesses.

“Enterprises will increasingly require procurement technology solutions to be more consumer-like, intuitively designed, and agile to improve efficiencies, better work with their business stakeholders, and help to do more with a leaner staff,” he said.

Mark Holmes, senior adviser for global supply chain at software provider InterSystems, added: “One thing organisations will undoubtedly continue to develop throughout 2023 is increasing the visibility of their whole end-to-end supply chain. Having increased visibility allows organisations to better anticipate and respond to the challenges of a turbulent supply environment, such as supply disruption or excess demand, but also can help them meet wider business objectives, such as ESG and sustainability goals.”

4. Greater need to win the talent war

The predicted economic environment will place new urgency on fostering company culture, according to Sarah Patterson, CMO at Samsara.

“Great leaders will recognise that culture is one of the best efficiency levers to pull,” she said. “It helps improve employee engagement, retention, and attracts talent to organisations. All of which can boost the bottom line and improve the customer experience.

“We all want to understand the value we bring so leaders who communicate how an individual’s work moves the needle and fuels a greater purpose will have a more engaged workforce. Those who infuse mission into their culture and way of operating will be better equipped to support their employees through what may be another unpredictable year.”

Hausmann added the priority skills for new talent would be much more focused on strategic problem-solving and relationship management.

“Effective procurement teams will have the ability to leverage insights derived from technology,” he said. “Chief procurement officers will face a war on procurement talent and expertise. As the focus increases on indirect spend optimisation, many organisations will realise that their talent pool in areas like marketing or technology buying are not up to the task. 

“For too long procurement has played a mostly transactional role in these areas and expertise has become rare. CPOs will realise that there aren’t enough deep experts in the indirect procurement space to fill every vacancy at every major corporation.”

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