Across industries, companies are facing constantly increasing and evolving supply chain challenges. Procurement professionals are under considerable pressure to alleviate short-term sourcing difficulties while also preparing for any new conditions that arise in the future. As they are well aware, virtually every decision they make now can have far-reaching consequences for their organizations.
In our new survey, we sought detailed perspective on the most important issues for these professionals and the tactics they’re employing to tackle them effectively. Drawing on their insights, this survey provides a comprehensive analysis of priorities and trends in procurement. The findings are structured around the four major themes that emerged: the leaders’ strategic priorities, the utilization of generative artificial intelligence (AI) in procurement, nearshoring, and risk resilience.
The survey comprised top procurement executives, from divisional directors and managers all the way up to the C-suite level. The respondents represented a range of industries, with the largest proportion coming from financial and professional services. Their organizations varied in size from less than $1 million in annual revenue to more than $1 billion.
The four procurement strategy themes
Strategic priorities for procurement leaders
Survey respondents reported focusing on multiple value sourcing priorities in 2024. Above all, they are prioritizing unlocking value in strategic supplier relationships, which half of them cited as critical. Under pressure to be more competitive, leaders view the strategy as particularly important to create sustainable resilience, limit customer price increases, and protect margins. Other priorities include talent retention, refinement of their processes, and strategy adjustments.
Use and challenges of AI in procurement
In its recent report “The New Growth Agenda,” the Oliver Wyman Forum found that 96% of CEOs view AI as an opportunity, not a risk. The executives in our survey seem similarly optimistic and are especially focused on generative AI. Most of those questioned are either already using the technology in procurement or have plans to do so in the future. However, they also report encountering a host of challenges with the adoption of new tech and are seeking partners that can provide the right expertise to deploy it effectively.
Survey respondents reported making some early forays into a handful of generative AI use cases. By far the most common is contract management, where nearly 40% of organizations across industries have leveraged the technology’s language processing capabilities.
What to consider about strategic nearshoring
Nearshoring, or transferring procurement of direct and/or indirect material to a nearby country, is a major trend among the executives in our survey. Their aims in doing so are to reduce transportation costs, gain better control of manufacturing processes, and achieve greater resilience against disruptions such as trade tensions and the COVID-19 pandemic. Close to 60% of respondents said they have already implemented nearshoring activities or are at least considering them.
Risk resilience in procurement
Executives are continuing to lean on the measures they’ve already developed to mitigate supply chain risks and enhance resilience, but also plan to take new ones in certain areas. Foremost among these is contract management: 73% of survey respondents said they have prior contract management initiatives in place and plan to improve them in 2024, while another 20% expect to implement initiatives for the first time this year.
Leveraging the four procurement strategy themes
The four themes of our survey offer a useful road map for creating a winning procurement strategy. Organizations need to bear all of these in mind as they proceed in crafting and executing their plans. By following this advice diligently and skillfully — and enlisting the right guidance where needed — leaders will see tangible and even transformative results in their procurement functions.
