The job of procurement is quite complex and challenging in nature. In the upcoming times, procurement team will have to manage their complex work pressure and perform efficiently by fulfilling project requirements at the highest level.

Procurement executives must take care of business pressures to contain costs, legal pressures comply with regulations, social pressures and source ethically. It is difficult to imagine new challenges come up in near future due to fast growing economy. While a number of new product requirements will arise for procurement team due to innovation in products, globalisation, collaboration, sustainability, risk management, social transparency, government policies, etc., it will also bring new opportunities to cope with the new world.

In future, procurement functions will be asked to move beyond cost management and create economic and social value and employ sustainability as a lens with which to identify environmental and social risks. As a result of a more comprehensive and intense social focus, sustainability methodologies will be much more embedded into the procurement process in the coming year.

As bi-lateral trade arrangements between these new powers are signed (for example two countries like India and China), and go into effect, economic trade dynamics will also change, shifting tax, logistics, and sourcing strategies in ways and all these processes must be learned by procurement team.

Relationship with supplier
Procurement executives must have awareness of the exposure that supply acquisition and supplier relationships bring to the modern global enterprise. Today’s procurement risk management approaches are for the most part in their promising stages of development, as such, they tend to be comprised primarily of qualitative analyses (supplier audits, risk registries etc.) and they tend to focus on discrete, disruptive, and non-likely events.

Present portfolio of procurement executives is different with respect to their role in channeling information to and from the various parts of the enterprise. They are playing a critical role in moving information about internal and external costs throughout business leaders. Similarly, in other organisations, information about supply market innovations and even competitor strategies enter through the procurement channel.

Procurement team will serve as a central connecting point among all corporate commercial, financial and supply chain functions. As such, they will be the critical information hub for supplier and supply market information flowing into the enterprise and for enterprise demand and product data flowing out to collaboration partners. This inconsistency in the information hub role of procurement team will have changed dramatically.

To put it simply, procurement executives must have details of what external data should flow in/out to keep key business functions working optimally.

Value for money:
Value for money is the A of ABCD of procurement process and it is non-negotiable for every procurement team member.

“Pricing is the single greatest lever for improving profitability. Lack of systematic process to translate diverse inputs like customer value, costs, broad strategic objectives and competitor prices into the right price, makes pricing challenging for companies,” says Pankaj Udeshi, Assistant General Manager Procurement, Supreme Infrastructure India Ltd.

Finance Roll of Procurement professional
Procurement’s core mission is to acquire the goods and services needed to create the firm’s products and maintain ongoing operations. Purchase executive will be much more integrated with finance and the financial skills of the best procurement specialist will increasingly resemble finance professionals as much as traditional “buyers.”

Generally, in the process of procurement, the chief financial officer will help in smooth functioning of material procurement process to purchase team, the finance function has typically played a limited function in procurement within the large organisation. While most firms have teams of cost accountants and others who measure factors such as inventory and sourcing costs, these roles are often insufficient to deal with the complex challenges involved in managing today’s global supply chains.

The procurement team will work on a much broader and sophisticated financial toolset such as real options, hedging and insurance valuation models and real-time financial risk analytics. This change will drive procurement organisation to evolve in a number of key ways.

Innovation in products
Procurement as the source of operational skill and innovation will increase dramatically in the coming time, because the use of outsourcing and specialised partnering will continue to increase. The implication of this trend is that the best procurement teams will increasingly be seen as the experts in the leading technological and operational innovations in the global supplier community.

Procurement professional (his organisation) will have to continuously partner with outside specialists, and many procurement teams will have to transform their current role from passive buying agents to proactive innovation sourcing agents.

This transformation means procurement teams will have to increase their engineering, design and innovation skillsets in order to accomplish the role and they will have to help in manage the risk of adopting the most promising innovations ahead of competitors.

Collaboration
Increasingly, procurement professionals find themselves in the middle of complex outsourcing and service management arrangements with a wide variety of outside vendor firms. From contract manufacturing to IT infrastructure to analytics service providers, procurement teams are on the front line in selecting, contracting and managing these often critical outside entities. But as most CPOs will admit, the models that govern the selection and day-to-day working models in these arrangements are often based on thinking that is out-of-date at best and catastrophic at worst.

What will be most important in these new models in 2025 will not be “who beat whom” in the negotiation stage but what is the best structure and contract to drive service/operational success, regardless of who benefits financially at any given moment.

Transparency (“black box”)
Procurement managers will have to operate in a social environment that was almost unimaginable ten years ago. The rise of social media, and the increasing acceptance of information transparency as the social norm, will change the degree of scrutiny on procurement organizations. This disruptive change, coupled with the adoption of real-time social technologies such as Google Glass, will make procurement one of the most visible functions in corporations to the outside world.

Make in India
“The Make in India initiative is designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure in the country. It is an Invitation to the whole world to come and manufacture in India, since we have skill, talent, discipline and the desire to do something,” he said.

The initiative is built on four pillars – new process, new infrastructure, new sector and new mindset.

It is providing a slew of opportunities to manufacturing industries with new foreign technologies, idea with new innovative machineries and foreign investment. All the above process will lead to creating new world of technology and innovation. India is a populated country, so putting in place infrastructure and continuously adding to it, will be must.

Thanks to the initiative, many countries come to India for sharing technologies, ideas and investments which will help in faster growth rate, which requires skill/efficient people to carrying out the job. Procurement team will always attend the seminar; exhibitions etc for upgrading of knowledge about innovation in current product or new better product come in to the market. Many new product requirements will be arise for procurement team due to innovation in products, globalization, collaboration, sustainability, risk management, social transparency, government policies etc.

Pricing is the single greatest lever for improving profitability.
Pankaj Udeshi, Assistant General Manager Procurement, Supreme Infrastructure India Ltd.