2020 Chief Procurement Officer Flash Survey has been saved
2020 Chief Procurement Officer Flash Survey
Pandemic procurement: The stakes are raised and complexity grows
The COVID-19 pandemic has ushered in a time of great uncertainty, defined by volatility across the economy and supply chain. With complexity on the rise, how can leaders evolve their procurement strategy to manage risk and supply continuity issues in order to thrive? Deloitte’s 2020 Chief Procurement Officer (CPO) Flash Survey offers insight into preparing for the future of procurement.
The COVID-19 pandemic has provided a unique opportunity to gain insight into what the most effective procurement leaders do to respond during times of uncertainty and thrive in the long term. While many CPOs have not had much time to pause and reflect on which systemic, long-term changes they will need to make in order to adapt and thrive, top-performing organizations were better setup to manage the volatility, as they simultaneously learned from managing the challenges faced during the pandemic and adapted more rapidly and effectively to the changes taking place.
Our survey findings suggest that these top-performing organizations were able to invest more time in thinking strategically, identifying opportunities, and executing against priorities during these volatile times. They turned their supply chains into a competitive advantage and were characterized by:
- Having higher visibility into both tier 1 and tier 2 suppliers
- Being twice as likely to prioritize digitization and a day-to-day focus
- Being seven times more likely to slightly expand their overall supply base in response to supply-side vulnerabilities
So, the question becomes: How can your organization unlock value during unprecedented times, where challenges differ across state, country, and industry lines and where suppliers are, in many cases, struggling to survive?
In a world in which uncertainty and disruption will likely remain a constant, CPOs will need to be even more resourceful to help their organizations manage cash, while limiting supply disruptions. A focus on the following areas will be critical for success:
- Developing smarter ways to illuminate and act on risk intelligence regarding suppliers (at all tier levels)
- Rethinking sourcing strategies based on risk and building more robust mitigation plans
- Increasing risk-sharing and/or performance-based contracting
- Enhancing value delivery from strategic partners through collaboration and supplier development programs
- Building a flexible and connected digital infrastructure supported by clean and accurate data
- Establishing scenario modelling capabilities to enhance planning and resiliency
Your organization’s ability to reallocate resources as and where necessary, maximize supply chain visibility, and establish robust yet adaptable supplier relationships allows you to drive effective and rapid decision-making and not only manage disruption as it arises, but thrive in it.