Is Procurement Complexity at an All-Time High?

A couple of months ago, CIPS and RS released the 2024 Indirect Procurement Report ‘Maintaining Focus’ that focussed on the state of the sector for those responsible for supplies supporting maintenance, repair, & operations (MRO). The survey, which drew a record number of responses, including a large number of younger individuals contributing compared to prior years, like many other, provided a lot of data points and statistics, but unlike other surveys, was pretty surprising.

Why?

Usually, when a report asks about business pressures, challenges, top areas of focus, etc., there are typically 2 or 3 responses that the majority of respondents agree on. But in this survey, the top business pressure received 32% agreement, the top challenge 37% agreement, the top day-to-day challenge 33%, and top activity to drive efficiency 27%, the top strategy 26%, the largest challenge to delivery ESG 39%, the biggest driver of downtime 19%, the top indicator for supplier performance management 44% (which is as close as we get to 50%), the top reason to adopt new tech 32%, the top benefits of a digital procurement service 29%, etc. It would have been really useful if CIPS did a study as to why (especially when we are so used to Deloitte, McKinsey, and Accenture studies with so much agreement), but they didn’t. So we have to hypothesize.

And the hypothesis that the doctor is coming to is that complexity is at an all time high and, because of this, most procurement professionals, especially newer professionals, just don’t know where to focus. There are too many challenges, too many demands, too many conflicting goals and pressures within the organization, and too many possibilities to address them, and with all the meaningless marketing mayhem and Gen-AI garbage, there’s no real guidance out there.

All-in-all, for all but the most die-hard seasoned professionals who remember the last time Procurement was this challenging (which was decades ago, since the 2000s and 2010s saw the constant introduction of newer, greater, technology; steady, stable, globalization; affordable (if not cheap) logistics; lots of sustainability talk, but no real regulations (beyond RoHS, WEEE, and their ilk); etc.), most Procurement professionals have never had so many challenges, demands, regulations, and technology options to deal with.

And if the doctor‘s right, then what is the solution? (He’ll tell you one thing — it’s not intake to orchestrate, but that’s a different rant [but see point 11 of the market madness].) It’s a very good question, and, right now, even the doctor doesn’t have the complete answer. But while technology will obviously be part of the answer, the full answer will require clarity and Human Intelligence (HI). So get ready to wake up and use your brain. There’s no big red easy button for the mess McKinsey and their ilk have (helped to) put us in (with excessive outsourcing and an utter lack of clarity on tech)!