Proxima 2024 CPO Report : Opportunities and Challenges
Consultancy Proxima has released their 2024 CPO report with a focus on the primary challenges and opportunities of the remainder of the year.
The report includes contributions from Thomas Udesen, CPO at Bayer, Sandra Brummitt, CPO at NiSource, and Laura Cook, Director of Procurement at Primark.
The primary focus areas of the 2024 report include the importance of building robust risk strategies, procurement’s role in cost optimisation, addressing the rising regulation and prioritisation of sustainability.
Simon Geale, CPO at Proxima raises in the report how 2023 has been a year of touch decisions for CPOs, with post pandemic strategies, conflict across key global markets and supply disruption.
“As 2024 gets underway and we look to the year ahead, there are both glimmers of a new dawn and warning flags of what may lie ahead,” he says. “On one hand, rates of inflation are easing, pockets of capacity have been emerging in supply chains, and labour demand has been moderating; the optimistic among us will be hopeful that some form of equilibrium may be restored.”
Simplifying procurement
Thomas Udesen, CPO at Bayer, suggests there are three primary areas for procurement leaders to focus on. They are eliminating time consuming practices of limited value, the role of procurement is defined by ethical and eco-friendly practices, and evolving the profession to learn from the mistakes of the past.
“Procurement leaders need to reassess protocols that are hindering pragmatic action. While aiming for efficiency, we’ve created rules and processes that have slow lead times and do not add significant value,” he argues, looking at a ‘back to basics’ approach. “By overemphasising cost-saving measures, we’ve overlooked true markers of success: competitiveness, cost efficiency, and organisational discipline.”
Resilience in procurement
Sandra Brummitt, CPO at NiSource, picks resilience as a key focus to be high on the agenda for procurement leaders in 2024. It means balancing supplies in the face of continued cost and supply headwinds.
“Front of mind for many CPOs moving into 2024 is embedding resilience into supply chains, ensuring the capability to navigate ongoing crises and conflict and optimise costs in the face of inflation,” she says.
“To achieve resiliency, you must know who your suppliers are, and how key supply chains are structured to identify where you need to monitor and, or address deficiencies. Although this visibility is largely going to be enabled by better use of technology, achieving resilience is really about what you do with what you see.”
New technology in procurement
Laura Cook, Director of Procurement at fashion retailer Primark, identifies taking advantage of new technologies, saying it will help to drive visibility, efficiency, adoption, and compliance. She also feels delivering on ESG strategies will be high on agendas, alongside targeted risk management plans, and keeping cost management as a constant focus.
“Technology will enable our people to focus on the strategic, higher-value activities that optimise the impact we bring in delivery of business strategy and goals,” she says. “It will also enable us to be lean, agile, and dynamic, in response to continuing volatile market conditions and evolving business demands.
You can read the report in full here.
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