Keelvar, the leading global provider of autonomous sourcing and sourcing optimization solutions, recently released the results of its 2023 Voices of Sourcing report. The survey represents feedback from procurement leaders in industries including retail, consumer goods, pharmaceutical products, industrial manufacturing, automotive manufacturing, shipping, transportation/warehousing and more. Nearly all of the respondents work for supply chain-driven companies, and over 60% for large enterprises. It dives deeper into a number of critical topics affecting procurement and sourcing leaders, including disruption, automation, sustainability, and risk.
Keelvar’s research found that 91% of supply chains have been impacted by inflation, which has increased pressure on procurement teams to cut costs. Despite the urgency to control spending, only 12% of procurement and sourcing teams plan to cut budgets for technology and innovation, which shows the criticality of enabling technology in uncertain markets.
The data presented by Keelvar comes on the heels of a year filled with record disruption, inflation, headcount cuts and more for procurement teams. The wake up call warns businesses that employees are down manpower and resources, and are unable to operate supply chains safely without the implementation of AI-powered automation.
Key findings include:
- 91% of supply chains have been impacted by inflation, which has increased pressure on procurement teams to cut costs.
- Sourcing teams are only getting smaller. 72% of respondents reported overcoming a declining (or flat) workforce as any important priority in 2022. 51% reported having to do more with less.
- Workers are forced to make risky decisions. With heavy workloads throughout heightened disruption, nearly 40% of respondents are onboarding suppliers they wouldn’t have previously, and 25% are cutting corners to ensure supply.
- Increase in workload and lack of workers have created a massive need for tech. Automation is listed as the solution needed to reduce time spent on manual tasks (88%), create extra time for more strategic initiatives (86%), remove the risk of human error in sourcing events (72%) and improve visibility for better market insights (70%).
- Even with a looming recession, tech budgets remain a priority. While 36% of sourcing leaders are cutting their budget for capital expenses, only 12% are cutting their budget for tech and innovation – demonstrating the value of tech in uncertain markets.
Automation and artificial intelligence will be key drivers for procurement teams in 2023, given many organizations are operating with reduced manpower. The combination of heavy workloads and fewer resources is leading to an increase in risky behavior. According to the research:
- 86% of procurement and sourcing teams saw an increase in their workload last year despite headcount remaining mostly stagnant.
- 72% said overcoming a declining or flat workforce remains a top priority.
- 55% reported higher levels of stress and/or burnout from doing more with less.
- 89% are banking on automation to reduce time spent on manual tasks.
- 24% of procurement teams are cutting corners to ensure supply, and
- 22% are purchasing outside of approved supplier lists.
“Global volatility and inflation have placed procurement teams in the center of volatility. Something needs to give – organisations can’t keep cutting headcount and resources and expect their supply chains and bottom lines to remain intact. Instead of cutting back, leading organisations are investing in AI, workflow automation and other emerging technologies to enable existing teams to navigate the unexpected and be more productive.”Alan Holland, founder and CEO of Keelvar
Additional highlights from Keelvar’ s research include:
- Implementing solutions to manage rogue spend will be critical to combat rising costs. Almost half of all respondents saw their supplier costs increase by 10% or more, and over 62% are putting pressure on suppliers to reduce costs. Forty percent cite automation as key to eliminating rogue spend and getting costs under control.
- Automation remains central to navigating today’s market. Procurement and sourcing professionals say automation reduces time spent on manual tasks (88%), creates extra time for more strategic initiatives (86%), removes the risk of human error in sourcing events (72%), and improves visibility for better market insights (70%).
- Geopolitical and worldly challenges are spiking disruption. Over 65% felt financial and operational impacts from China’s COVID-19 lockdowns, while over 40% felt a financial and operational impact from the Russia-Ukraine war. Over 71% of respondents listed managing geopolitical risk as an important priority.
“Procurement and sourcing teams were short staffed before the market chaos. Leaders must invest in their people and equip their teams with technology to automate tasks and drive better outcomes,” said Holland. “The future of work will be enabled by automation and driven by investment in people, and organizations that can’t see this will lose talent and get hit hard when the market abruptly changes.”
To read Keelvar’ s 2023 Voices of Sourcing report, visit: http://www.keelvar.com/resources/2023-the-year-of-autonomous-sourcing