Here’s to 2022 - by Jamie Siu

It’s now been two years since our team set out on a mission to share our thoughts on all things Procurement related.  As we navigate our way into the new hybrid world and continue to deal with the impacts of the pandemic, I expect 2022 to continue to be full of surprises - and trigger more advancements in the Procurement space.  Stay tuned, as our team will continue to share our front-row views of these emerging trends throughout this year.  

First off, I’m excited to share that I will take on the leadership of our thriving Procurement Advisory practice going forward.  It’s been an incredible journey of growth and support from our entire team.  I look forward to serving more clients as they navigate their Procurement growth journey.  

So, what are we anticipating in 2022?… here are my top 3 thoughts: 

1) Supply Chain Resilience - but what if you don’t know where the weakest link is?  

You cannot manage what you cannot see.  Romain from our team wrote a blog on ‘illuminating your supply chain’ back in October.  Procurement and Supply Chain executives will have to take on the challenge of understanding their supply network - not just their direct suppliers, but who’s behind them.  We expect many questions on the supply network to continue to be raised; and not many organizations can confidently answer these yet.  These may include: 

• Where are our products from?  What kind of labour practices are in place throughout my supply chain?  Recall this CBC Marketplace report unearthing forced labour used along large grocers’ supply chains 
• "Made in Canada" or not - After millions in government investment, how much manufacturing is back in Canada?  How is local manufacturing contributing to our country’s economic growth and post-pandemic recovery? 
• Speaking of localization, how prepared are organizations for international and interprovincial disruptions in the supply chain?  Remember the traffic jam in the Suez Canal last year causing worldwide shipping delays from Asia

None of these can begin to be answered if the supply network remains invisible to many!  

2) The year when everyone learned the acronym ESG

Many of last year’s supply chain headlines initiated from disruptive climate events - for example, the recent BC flood that led to isolation of the Lower Mainland from the rest of the country.  

In 2021,executives started to ask if they have done enough to advance ESG objectives beyond their own organizations’ four walls.  Many Procurement functions therefore started to pay attention to the environmental footprint of their suppliers.  A few began the journey to understand the impact - asking suppliers to provide information on their footprint and the specific ESG impacts of their goods and services.  While many started with data collection, what’s being collected and how it’s measured haven’t been consistent.  And at times, it’s proving to be difficult for the suppliers to provide ESG information.

In the coming twelve months, we plan to drive more collaboration across the industries to bring better ESG visibility in a way that’s much more manageable.  

According to CDP, supply chain emissions are on average 11.4 times higher than operational emissions, more than double previous estimates, due to suppliers improving their emissions accounting.  Achieving visibility into supply chain emissions sources will be critical in driving collaborative supplier efforts to improve them.  Efforts may be focused on implementing Procurement practices that embed ESG considerations across the lifecycle.  

3) Value - what is value anyway?  And depending on the answer to that, what talents are required to deliver this value?   

A Procurement executive said to me recently - “It used to be easy, I just had to measure and report on savings.”  The executive is right - it’s no longer that easy.  Procurement executives are now looked upon to solve a wider array of business challenges.  

A few seemingly competing priorities are common:

• How quickly can you source the goods and services?  How do you ensure they are of high quality, and are available when/where I need them? 

At times of transformation (and perhaps disruption), speed and pace seem to have taken priority.  This therefore requires talents to focus on streamlining the process and minimizing waste, while ensuring proper mitigating actions remain in place to assure quality of goods and services.  In many cases digitization and automation may also be required to realize the efficiencies. 

• How do you know the best overall value is achieved? 

To answer this question, one must first understand the customer’s point of view: What is value to them - and in what time horizon?  This requires talents with excellent relationship management skills, and perhaps a dose of financial acumen

These two examples illustrate the complexity of the talents required in today’s Procurement functions.  These well-rounded talents are not easy to come by - and they take a long time to develop.  In 2022, CPOs will need to continue to invest in the talents in their team to combat the ‘Great Resignation.’ 

In the fall, we spoke with 50+ procurement leaders across the country about their priorities.  We look forward to sharing those results with you very soon.  In the meantime, what other emerging trends do you predict for 2022 in the Procurement function? Share your thoughts in the comments below!