SAP SE has released research findings that highlight the elevated role of procurement in navigating global supply chain disruptions.
The study of U.S. supply chain professionals conducted with Regina Corso Consulting found that 90% say procurement has taken on greater responsibilities to address both supply chain and sustainability challenges. With nearly half (49%) of supply chain professionals saying shortages and disruptions are keeping them up at night, this is a pivotal time to lean on the procurement function to alleviate these challenges.
“Supply chain disruptions aren’t a new challenge, but they’ve been dramatically compounded and lasting due to ongoing shortages and delays caused by the pandemic,” said Etosha Thurman, Chief Marketing and Solutions Officer, Intelligent Spend and Business Network, SAP. “To navigate these unpredictable circumstances, supply chain leaders must strategically leverage procurement to effectively manage supplier relationships, mitigate customer frustrations, control costs and ensure business resiliency.”
Top Challenges Keeping Supply Chain Professionals Awake at Night
Supply shortages and disruptions are not the only issues that the surveyed supply chain professionals say they face today. Other areas include:
Reducing costs and/or saving money (27%)
Consumer feedback (21%)
Digital transformation (20%)
Regulatory compliance (18%)
Despite only 28% of respondents saying sustainability keeps them up at night, 91% say their company has specific sustainability goals or objectives, and 95% say procurement plays a significant role in achieving those sustainability goals.
The Elevation of Procurement in Mitigating the Impacts of Ongoing Supply Chain Problems
Between the global pandemic, labor and supply shortages and increasing consumer demands for sustainability, the supply chain professionals surveyed agree that procurement has taken on a more strategic role to help mitigate key challenges:
50% say procurement is helping alleviate supply chain challenges by improving supply chain transparency.
48% say it is helping develop better relationships with suppliers.
45% say it is helping diversify suppliers for greater resiliency.
33% say it is helping adapt payment terms to improve trading partner liquidity.
21% say it is helping reskill talent to address higher-level business priorities.
The study shows that procurement is helping businesses achieve visibility, transparency and accountability with their suppliers, especially when it comes to potential disruptions, enabling them to pivot quickly to new suppliers and ensure continuity.
The Consumers’ Role in Easing Supply Chain Shortages
Supply chain professionals surveyed say consumers have a part to play as well in easing the challenge of supply chain disruptions:
54% say consumers should allow more time for fulfillment.
46% say consumers should buy more local goods and order items earlier.
33% say consumers should be willing to pay more to account for higher supply chain costs.
32% say consumers should have more empathy and understanding for the delays.
The research study was conducted between October 15 and 25, 2021, on a sample of 210 U.S.-based employees who work in the supply chain at companies with at least 500 employees.
“If postpandemic supply chains are to be resilient, they must be sustainable. It’s not enough to just track and extoll green virtues, sustainability must become part of the way that supply chains are run,” said Simon Ellis, Program VP, IDC. “On the other end, the growth of e-commerce and consumer expectations for ‘next day’ delivery often runs counter to sustainable fulfillment and carbon footprint. There will have to be a rebalancing or rationalization about the way that people consume: ‘do I really need the product the next day?”