Procurian has recently released its first “Spend Trends Report” – a quarterly report based on market intelligence from more than 600 category specialists. The report covers many different areas within the procurement industry, but the area which stood out was that regarding “macro trends” in which the report’s editor, Jason Busch, identified a significant level of caution among executives, despite encouraging factors such as a favorable stock market and high-profit margins.
In the report, Busch commented that the focus of procurement executives appeared to be on effectively managing spend and protecting margins, and wrote that “this points to the critical nature of up-skilling procurement teams to engage with the business on strategic questions that go far beyond understanding supply market dynamics and setting contracts with suppliers.”
Four major trends were identified in Procurian’s Q2 “Spend Trends Report”:
• The rethinking of long-term supply chain strategies due to cheap North American energy and the flattening of global labor rates
• The reviewing of existing HR strategies due to rising healthcare insurance costs (the report states that healthcare costs are the number one concern of U.S. manufacturers)
• The examination of core logistics strategies such as whether to continue operating private fleets or outsource to 3PLs
• The opportunities provided by mobile technology and cloud computing, which are “radically changing forward-looking IT investment”
Busch observed that all four of the highlighted trends focus on changing demand patterns and why a particular supply base is used for a given purpose. He added that this is contrary to the more traditional sourcing strategies based on negotiation approaches.