Is procurement heading towards more creativity or more efficiency? At the 7th Mercateo Executive Summit hosted at AXICA in Berlin on 12 November 2019, the authors of the study ‘Future-Proof Procurement’ shed light on the current world of procurement. When the study was published in 2016, it described four possible futures. Two of them have since come to dominate procurement, namely maximising efficiency through automation and creative procurement.
Hannah Mareen Zühlke, one of the authors of the study and principal at the consultancy firm Roland Berger GmbH, explained to the audience that things often ruled themselves out in pairs. Procurement wasn’t heading for extremes, she continued, but towards combination of new approaches.
According to Dr Marcus Schüller, the other author of the study and a senior partner at Roland Berger GmbH, conflicting priorities were emerging with buyers facing two challenges: assessing their own role and their measurable contribution to value in the company, and ascertaining how digitalisation can best be harnessed. “These conflicting priorities in procurement won’t go away,” stated Dr Schüller to the purchasing executives and specialists gathered at the Mercateo Executive Summit. Therefore, procurement had to make up its mind more quickly when choosing which digital offerings to use. And with procurement departments (including strategic purchasers) in most companies devoting 70 to 80 percent of their resources to everyday operations, he continued, this was a big responsibility.
Oliver Elsner, Head of Global Category Management Commodities & Mobility at E.ON, described the interaction between algorithms as digital process helpers on the one hand and people as innovation and creativity drivers on the other as “art and facts”. His maxim at the Mercateo Executive Summit – “Use technology, but don’t let it control you” – touched on one of the study’s future scenarios. “Technology per se isn’t change – it’s just the enabler,” said Oliver in his talk. Beyond the realms of technology, he added, there was still room in procurement for ‘art’, for creative solutions. And ideally, they should be developed in response to concrete internal problems instead of succumbing to AI trends.
The evening’s speakers agreed that the much-vaunted ‘art’ and ‘creativity’ were chiefly expressed in various ways of being innovative. In fact, implementing innovations in concert with suppliers and talking to startups and people with different ideas are set to become vital tasks. Hannah Mareen Zühlke and Dr Bernd Schönwälder (Mercateo’s Director of Market and Sales) emphasised that the key to innovations in procurement was to speak personally to suppliers. Therefore, reducing the number of suppliers and creditors outside C-items would clearly be fatal. “In future, relations may well be required with far more with suppliers,” declared Schönwälder. The only reason for not having a portfolio which was as broad as possible, he added, was reduced administrative efficiency. And that’s a problem which can be solved with the right platform: Unite.
See the presentations by Oliver Elsner and Dr Bernd Schönwälder in full.
Photos
