Purchase and services wishes 2022

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As we near the end of our series of New Year’s greetings (rather than “predictions”) for the purchasing, supply and service market for the coming year (read more about this here ), we hear today Chetan Rangaswamy, Head of practice in the United States and partner in a multinational management and technology consultancy Fulcrum.

My wishes / expectations 2022:

As we have all experienced, 2021 looked like a year of resetting (but exciting) after a tough economic climate in 2000. We believe 2022 will continue to be an exciting year, full of exciting challenges and opportunities for practitioners. supply chain and purchasing. For BearingPoint and our manufacturing industry customers, we see two important predictions:

1. Find each organization’s CO2e benchmark and the path to net zero

With the exit of COP26 and 2021, “the year of the reset”, companies will take full responsibility for finding their way to Net-Zero. Of course, to be responsible, these companies will need to know what they account for in the area of ​​CO2e emissions. The demand to account for this comes, whether it is from the investment community, consumer demands and / or the responsibility of the CFO. Many of my contemporaries believe that this will come slowly over the next decade; however, I believe it will hit businesses in the face. The demand for CO2 emissions accounting will look a lot like how Sarbanes-Oxley compliance took over from US companies in 2002. The simple fact is that deadlines are being set for reducing CO2 emissions with important doors set for 2030 and 2050. Keep this in mind, you can’t act without knowing what to act on – you can’t manage what you don’t measure. For the world of Production Industry, energy intensive sectors, such as steel and cement, Scopes 1 and 2 will be a priority. For the rest of the production industry, the Scope 3 will be in the foreground. CPOs and CSCOs will immediately be challenged to account for their companies’ CO2e contribution – Scope 3 – Value chain emissions. We’ll see low-key manufacturers, process makers, consumer goods, food and apparel companies all needing to create a plethora of transparency reports – from issue labels to products or various disclosures. It will be an exciting topic in 2022 and a unique opportunity for CPOs and CSCOs to continue to shine in their organizations.

2. Continued shift of attention to Mexico (a North American perspective)

Over the past decade, Mexico has been one of the top three exporters of goods to the US market. After 2021, the year of reset, in 2022 we will see Mexico’s exports increase dramatically to the United States. We have already started to see changes within the low-profile manufacturing segment with efforts to reduce reliance on China. This effort has taken the form of sanctions against China and tariffs on goods. We’re also seeing pandemic-induced closures and rising freight costs with China. And finally, we are seeing a significant push for shorter supply chains. Mexico has many manufacturing advantages over China, especially with a common border that stretches 2,000 miles with the United States. Other perks include lower manufacturing wages than in China and proven industrial skills in cities like Tijuana, Monterrey, Juarez, and Saltillo, to name a few. What does this mean for CPOs and CSCOs? First, there will be a need to focus on the identification, qualification and development of suppliers / sources south of the border. Another topic, along with proximity and access, will be the reconfiguration of supply chains, which will remove costs with speed to market and fewer days in transit. Finally, focus on logistics costs versus manufacturing costs, especially logistics capacity being a challenge for the foreseeable future.

If you’re looking for technology to help you meet your 2022 sourcing goals, try Spend Matters TechMatch℠ to compare and shortlist vendors.

Today we also hear Hemanth puttaswamy, CEO and co-founder of the AI ​​contract lifecycle management specialist Malbek, a Spend account Future 5.

My 3 wishes for 2022:

1. Shift from a just-in-time supply chain strategy to a just-in-case supply chain strategy

Over the past three decades, the supply chain has followed a “just in time” model for inventory management. But the new era that has been ushered in by the Covid-19 pandemic has shown very clearly that “just in time” is ineffective and unsustainable. Today, we are witnessing a movement towards a new trend: “just in case” inventory management. My wish for 2022 is to see this trend grow even further with technology helping solve some of the more difficult questions, like how much inventory is too much? Software solutions can help the supply chain remain resilient enough to withstand the pandemic or other unforeseen disruption, while remaining cost effective for buyers. I think in 2022 we will see more solutions optimized for unknown “what-if scenarios” to ensure there is enough inventory buffering without sacrificing costs.

2. Smart contracts / blockchain

I believe that in 2022, we will continue to see smart contracts and blockchain increasingly become a reality for purchases. Whether it’s placing the order, tracking obligations on multi-year agreements, or ensuring that every vendor is equipped to handle the obligations in question and can report issues in advance, blockchain will likely be a important driver of efficiency in supply.

3. Universally accepted contractual conditions

One of my biggest wishes for the coming year is to see an increased movement towards the establishment of universally accepted contractual conditions. Many have asked procurement professionals and suppliers to come up with standard terms that are beneficial to the entire industry as well as to buyers and suppliers. For each part of the contract equation, there must be a balance. Standard terms that can be reused in a plug-and-play fashion could help promote fairness which produces winners on both sides and reduces overall negotiation time.

Thanks to BearingPoint and Malbek, and look for our end service and solution provider wishes / predictions tomorrow with a holistic view of our upcoming analyst series. See more vendor predictions and wishes here.

And if you’re looking for procurement service providers to help you with your 2022 decisions, look no further than our procurement services market landscape. Phone book.

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