2023 – an opportunity for change

19 December 2022

There has been a lot of interest in a new AI chatbot called ChatGPT. Its understanding of natural language and ability to produce written texts is so sophisticated that those who make a living putting pen to paper fear their days could be numbered.

Having said that, students are reported to be rubbing their hands at the prospect of never again having to write essays or dissertations. Even I could find my writing days numbered. I guess every cloud has a silver lining!

Across all sectors of life and business our understanding of the world, and the way in which we do things, is being disrupted.

The sheer scale of disruption we have seen in 2022 has been daunting. But, it has also made this one of the most exciting times for the procurement and supply profession that I can remember. 

As we slide into 2023, you can be certain that the disruption will continue. Geopolitical issues will lead to further prices increase, economies will shrink, consumer demand will wane, industrial action will interrupt supply chains and we will see shortages across certain sectors.

Hopefully, the ending of China’s zero-Covid policy will ease some of the issues of getting goods out of the country.

But, in such unsettled times, we have an opportunity to ask questions of ourselves and those we do business with. And, if we get the right answers, 2023 could be the start of an exciting period of change, growth and innovation.

For those of us old enough to have lived and worked through the 1970s and 80s we remember dealing with rising inflation, rising demand and shortages.

The knowledge, skills and talent that we built dealing with wholesale disruption back then has largely disappeared from the workforce and, with it, the knowledge of how to deal with disruption today. So, it is vital that companies invest in the talent and skills they will need to navigate stormy waters.

But, it is as important that procurement leaders empower their teams to be innovative, to find the best long-term value solutions rather than simply opt for the cheapest. By doing this, companies will build resilience and stability for the future.

A few areas I want to draw particular attention to that must be a focus for procurement teams in 2023 are sustainability, ethics and modern slavery, and late payment. 

On sustainability, we know that the vast majority of a company’s emissions lie within the supply chain – so called scope three emissions. If organisations are serious about making net zero pledges a reality (which they must be), then fully mapping and collating emissions data across their entire supply chain must happen in 2023.

On ethics and human rights too many examples of poor practice continue to come to light. In the UK, some big-brand fashion companies have been exposed for poor working conditions, while a recent report into the automotive sector found that major car makers have supply chain exposure to goods made with forced labour.

I am sure that similar issues exist across other sectors too. But they should not. 2023 is an opportunity for organisations to implement a zero-tolerance approach to these issues. Our ethics test, which is available for anyone to take each year, is part of the story.

Governments too have a role to play and with the UK due to review modern slavery legislation in 2023, I would like to see it reinstate the role of the anti-slavery commissioner to send a clear message that tackling this issue is a priority.

One of the most important and easy things companies can do to demonstrate the value of their suppliers is to pay them on time. But, according to the Good Business Pays campaign, just 5% of the UK’s largest companies qualify as “fast payers.”

As I write this article, the government has announced a review of payment practices. Hopefully 2023 can be the year when we end the unacceptable culture of late payment. 

After several years that have been characterised by procurement teams dealing with one crisis or another, I am heartened to know that the profession is building a resilient future. Our work with Deloitte has shown that despite the “perma-crisis” of the last few years, procurement leaders feel better prepared for future shocks.

The role of procurement has become more prominent within organisations too. The reason is simple. Procurement teams are on the frontline of sourcing the solutions organisations need to make them fit for the future.

With 2023 starting on an uncertain economic footing my hope is that we don’t simply end up in a race to the bottom, cutting costs. Rather, I hope 2023 will give us the opportunity for the procurement profession to be a key driver of the changes that will ensure we establish the supply chains which will be the backbone of a more sustainable and ethical society.

 Malcolm Harrison is group CEO of CIPS.

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National Grid
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