In the business world, procurement is an essential function that involves the process of acquiring goods and services from external suppliers. It plays a crucial role in the success of any organization, as it determines the quality and cost of the products or services it delivers. With the ever-changing business landscape, the procurement industry is also evolving, and organizations must keep up with the emerging trends to stay ahead of the competition. In this article, we will explore three emerging trends in procurement that are shaping the industry today.

1. Digital Procurement
The digital revolution has had a significant impact on various industries, and procurement is no exception. In today’s world, where technology is continuously evolving, organizations are increasingly adopting digital procurement solutions to streamline their processes and improve efficiency. This trend is driven by the need to reduce manual tasks and paperwork, minimize errors, and enhance visibility in the supply chain.

One of the key components of digital procurement is e-procurement, which allows organizations to automate their purchasing processes. By leveraging e-procurement tools, organizations can track orders, manage supplier information, and generate reports in real-time. This not only saves time and resources but also facilitates better decision-making by providing accurate data and insights.

For example, a multinational corporation like Unilever has implemented a digital procurement solution to streamline its procurement process. By digitizing their procurement operations, the company was able to reduce its procurement costs by 3% and improve process efficiency by 15%.

2. Sustainable Procurement
Sustainability has become a critical factor in procurement decisions today. With growing concerns about climate change and the impact of businesses on the environment, customers and stakeholders are demanding more sustainable practices from organizations. As a result, sustainable procurement has emerged as a significant trend in the industry.

Sustainable procurement involves considering the environmental, social, and economic impacts of purchasing decisions. Organizations are now shifting towards procuring goods and services from suppliers who adhere to ethical and environmental standards. This includes using sustainable materials, reducing carbon footprint, and promoting fair labor practices.

For example, global retail giant Walmart has committed to sourcing 100% of its energy from renewable sources and aims to achieve zero waste to landfill in its operations by 2025. As a result, the company has not only reduced its environmental impact but also improved its brand reputation and customer loyalty.

3. Supplier Relationship Management
In the past, procurement was solely focused on finding the best price from suppliers. However, with the evolution of the industry, the focus has shifted towards building strong and long-term relationships with suppliers. This is known as supplier relationship management (SRM).

SRM involves developing a collaborative and strategic partnership with suppliers, wherein both parties work together to achieve common goals. This approach enables organizations to reduce costs, improve quality, and drive innovation. SRM also helps in mitigating risks by identifying and addressing potential issues with suppliers before they become major problems.

One company that has effectively implemented SRM is Apple. The tech giant has a close relationship with its suppliers and works with them to improve product quality and reduce lead times. This has enabled Apple to maintain high-quality standards while minimizing costs and risks.

In conclusion, the procurement industry is constantly evolving to keep up with the changing business environment. The above-mentioned trends – digital procurement, sustainable procurement, and supplier relationship management – are reshaping the industry and helping organizations achieve their goals. By staying current and adapting to these trends, organizations can gain a competitive advantage and create a more efficient and sustainable procurement process.