CIPS: Procurement and Supply Chain Influence Ever Increasing

CIPS, in partnership with GEP, has published the Global State of Procurement and Supply 2024 report.

The document collected valuable insight from Chief Procurement Officers operating in today’s landscape, alongside Procurement Directors and Heads of Procurement and Supply, within 122 organisations with a combined turnover of US$73bn, uncovering how the environment is currently evolving for procurement and supply chain leaders.

The state of procurement

The study shows just how procurement and supply chain management is ever increasing as a vital instrument for modern businesses – with 69% of those asked highlighting the positive impact it is having on spend efficacy, although it was noted that sometimes it can impede implementation.

This influence is being driven by geopolitical volatility and inflation concerns, emphasising cost management. However, the report found there was some misalignment between procurement and supply with the boardroom, with an equal split between organisations where procurement and supply is well aligned or very close to the board (38% of respondents) and those where the relationship is indirect or remote (35%).

Sustainability is still an ever-increasing topic of importance to leaders, with many knowing not only the importance of sustainability but their role in driving it. 78% of leaders believe that environmental, social and governance (ESG) issues are growing in importance in their organisations, while 49% of procurement and supply leaders want to improve on their ability to enhance sustainability in the next 12 months.

69% of respondents said their organisation planned to invest in sustainability measures in the coming 12 months – this is higher than talk about investing in digital technology (65%) and staff development and training (60%).

Matt Howell, CIPS Chief Executive, introduced the report, saying: “Procurement and supply is at the heart of a modern economy. Our profession is a pivotal business function, the fulcrum for the growth and success of organisations, economies and societies around the world.

“But with this growing influence comes intense pressures and workload strains. The external factors impacting procurement and supply professionals are highly volatile.

"Procurement and supply teams are accountable to multiple stakeholders who don’t always share the same outlook and there is no standard position in the org chart for procurement and supply.”

Areas for investment

Procurement leaders, particularly those at larger companies (more than 5,000 staff), are particularly likely to believe their organisation is investing in technology and AI, as well as embracing automation.

The report states that few procurement functions (2%) are fully automated, though more than half are driving for greater or even full automation. However, the automation of procurement may enhance the human dimension already embedded throughout procurement and supply. One respondent said: “Although automation is growing, it is only making the relationship element more important to procurement success.”

The report looks ahead and finds that 35% of respondents believe their organisations plan to invest more in AI in the coming 12 months, with 30% investing in cyber security measures.

As mentioned, sustainability is a key area for investment and personal development. Away from AI, many cite improved supplier relationship management systems as a way of delivering better results but said that greater company investment was required.

Binayak Shrestha, Global Head of Services Delivery at GEP, adds: “Today, procurement and supply chain professionals find themselves at the centre of a rapidly evolving economic landscape.

"Procurement is no longer just about cost savings; it is a pivotal business function that drives innovation, strategic growth and compliance.”

You can download a copy of the report here

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