As we rapidly approach 2024, the world of procurement is evolving rapidly, driven by a combination of technological advancements, regulatory changes, and shifting market dynamics.
In this article, Keith explores eight key procurement trends for 2024 across four categories; Data Standards, ESG and Sustainability, Collaboration and Leveraging AI, and Agility in a Challenging Market.
Data Standards
Product Data Standardisation
Standardising product data within your procurement processes can offer significant advantages, including efficiency, consistency, cost benefits, and speed. By streamlining product data and specifications, organisations can simplify their workflows and reduce the risk of errors. Imagine a procurement process where everyone speaks the same language, and information flows seamlessly – this is the power of product data standardisation.
The Code for Construction Product Information (CCPI)
The Code for Construction Product Information (CCPI) represents a significant step towards improving transparency and safety in the construction industry. By prioritising clear, accurate, and up-to-date product information, the CCPI will help organisations make more informed decisions about specifying and installing construction products. The opportunities here lie in compliance and differentiation. Organisations that adhere to the CCPI will stand out in the market as reliable and responsible suppliers, attracting clients, specifiers, and users who demand CCPI-compliant products.
ESG and Sustainability
Increase in Sustainable Products
Sustainability remains a key challenge across industries, and procurement is no exception. In 2024, there will be a surge in demand for sustainable products that meet increasingly stringent specifications. Organisations should seize the opportunity to source and promote eco-friendly products, aligning themselves with the sustainability goals of their clients and stakeholders.
The ESG and EEDI Agenda
Environmental, Social, and Governance (ESG) factors are becoming increasingly important in procurement decisions. In 2024, organisations will have the opportunity to demonstrate their commitment to ESG principles, including equity, equality, diversity, and inclusion (EEDI), in their supply tenders and supply chain practices. By integrating ESG and EEDI considerations into their procurement strategies, companies can enhance their reputation, reduce risks, and attract socially conscious partners and customers.
Collaboration and Leveraging AI
Supply Chain Collaboration
Collaboration in the supply chain is no longer an option; it’s a necessity. In 2024, organisations should explore opportunities to share resources and pool data and insights with their supply chain partners. This collaborative approach can lead to improved efficiency, reduced costs, and better risk management. The key is to foster strong, transparent relationships with suppliers and leverage technology to facilitate information sharing and coordination.
Harnessing AI for Procurement
Artificial Intelligence (AI) is revolutionising procurement by automating routine tasks, providing data-driven insights, and enhancing decision-making processes. In 2024, organisations should explore AI solutions to drive efficiency, solve complex problems, and improve the overall procurement workflow. Leveraging AI can free up procurement teams to focus on strategic activities, while AI-powered analytics can identify cost-saving opportunities and trends.
Agility in a Challenging Market
Dealing with Excess Supply and Deflation Trends
Excess supply and deflationary pressures on prices can squeeze profit margins – weakening both your P&L and balance sheet. In 2024, procurement professionals will need to develop strategies to navigate this challenging landscape. Opportunities include negotiating favourable contracts, exploring alternative sourcing options, and optimising inventory management to align with changing market conditions.
Inventory Flexibility and Cash Flow Focus
Balancing inventory levels to align with deflationary market conditions will be crucial in 2024. Organisations must optimise their inventory management to ensure they have the right stock levels while conserving cash flow. This includes adjusting procurement practices to match demand fluctuations and utilising data-driven forecasting to make informed inventory decisions.
Conclusion
The procurement landscape for 2024 presents a multitude of opportunities for organisations to enhance their processes, improve sustainability, and establish themselves as responsible and forward-thinking partners in their respective industries. By embracing these trends and proactively adapting to them, organisations can position themselves for success in a dynamic and evolving procurement environment.
About Keith
Keith Wright is a seasoned entrepreneur and commercial leader with 30+ years expertise in the building industry. Renowned for his strategic approach, he has saved millions of pounds throughout his career as a procurement expert. With an unwavering focus on value creation, he continuously seeks growth opportunities and operational efficiency for his clients.
As a trusted business consultant, he has collaborated with numerous market-leading companies, developing tailor-made procurement solutions aligned with their unique needs and goals.
In 2021, Keith founded K Wright Consultancy after a successful corporate career, aiming to share his procurement knowledge and expertise with business owners, leaders, entrepreneurs, and investors to accelerate their growth. Within 2.5 years, his consultancy firm has collaborated with 25 organisations creating value in the multiple millions.
To connect more with Keith visitwww.kwrightconsultancy.co.uk or you can follow him on LinkedIn at linkedin.com/in/keith-wright-4aa823a8 or TikTok @theprocurementexpert
