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Observations on the State of Procurement

Posted 2/13/2023

There are many software applications to assist in the management of operational procurements including 

ERP and process management. These continue to be developed with AI technologies incorporated. The software applications are assistive to operational procurements and could reduce the need for personnel engaged in routine inventory management, expediting, document process management, and lower value routine procurements.

The takeaway for procurement professionals is elevate your training and experience with procurement strategies, legal and marketplace developments, high value complex procurements, risk management and above all else human relationships and organizational behaviour.

Supply chain challenges will be with us for the long term. The pandemic has raised awareness, however with an aging skilled demographic leaving the workforce supply of key materials and services will be constrained for years to come. Procurement planning must adapt to the changing marketplace.

Suppliers are getting litigious, treat with respect.

Owners are cutting costs, opportunities knocking.

Environmental and Social Governance (ESG) criteria are taking hold in the marketplace. According to the Globe and Mail most big Canadian companies are linking executive pay to ESG.

Procurement needs a context within which to implement ESG. This means a review and possible re-write of procurement policy and procedures. Follow through on ESG implementation requires inclusion of staff training and incorporation of ESG criteria in supply request documents. It is unlikely that the AI “bots” will be able to cope with social issue integration in procurement and human relationships in the organization and the marketplace.