Jabil: The Demand for Procurement’s Digital Transformation

As digital tools utilise the entire procurement process, more and more procurement teams are moving to digitise their entire supply chain in order to drive continual success.

At the heart of those transformations is Michael Long, Director of Procurement Technology at Jabil. He has a diverse background that spans 20-plus years in procurement, operations and engineering. 

He is responsible for leading the procurement technology team, which has global responsibility for Jabil’s procurement tech stack. The highly skilled team of procurement technology professionals run and maintain the day-to-day operation of various software tools for over 50,000 of it's users around the world. 

Michael also manages the external client engagements for Jabil's advisory services business, where it brings the company's expertise to bear for some of the world’s top companies, thus helping ensure their digital transformation journeys are successful.

Jabil provides manufacturing, engineering and supply chain solutions to more than 400 of the world’s leading brands across almost every industry. The company's 140,000 employees, including more than 3,000 supply chain and procurement professionals, span 100 facilities in over 25 countries.

Jabil's strategic supply chain and procurement organisation supports customer-specific, tailored solutions for local, regional and global execution — from assurance of supply, on-time delivery and inventory management solutions to distribution and logistics infrastructure, sourcing and supplier management and overall risk mitigation solutions.

The company prioritises and continually invests in digital supply chain and procurement capabilities, keeping it at the forefront of evolving technologies and helping the customers navigate inevitable disruptions.

Why is there such a demand for accelerated digital transformation?

There are a few reasons we see high demand for an accelerated digital transformation.

First, there’s been a change in expectations at both the employer and employee level. Companies have a high expectation of their employees to drive continuous improvement and constantly do more with less. In return, modern employees expect seamless digital experiences across all touchpoints in their daily work.  

Second, the pandemic forced a digital leap. Lockdowns and office closures during COVID-19 outbreaks pushed many businesses to rapidly adopt digital tools and processes just to survive. This rapid shift showed the potential of digital transformations. Businesses are now looking to capitalise on this demand and are rapidly accelerating the development of new tools.

Finally, organisations have realised that technology is crucial for recruiting and retaining top talent. A modern, digitally enabled workplace is attractive to skilled professionals. Companies that embrace digital transformation can build a strong employer brand and use it to attract top talent.

What could happen to companies who do not embrace this digital transformation?

First and foremost, digital transformation is a competitive advantage. Businesses that can't keep up with the evolving technology landscape risk falling behind competitors and losing customers. 

Companies are realising that digital transformation isn't just a nice-to-have. It's a necessity for staying competitive and relevant in the eyes of their customers and employees.

Today's employees expect business processes and tools to be frictionless and efficient. Without digital transformation, companies may struggle to meet these expectations. This can result in frustration, churn and loss of productivity.

Delaying or neglecting digitization may also lead to processes that are not just inefficient but also expensive due to the increasing costs of labour and sunsetting of outdated systems. In addition, many countries are moving away from antiquated regulatory and financial reporting methods toward more digital, standardised formats.

This will force many companies to make a change whether they are ready or not. While there is an initial investment in digital transformation, it should lead to cost savings in the long run if executed properly. 

Digital transformation allows businesses to analyse data and gain insights that can fuel innovation and growth. Companies that choose not to adapt to the digital age in their procurement organisations will find their employees’ time eaten away by tactical tasks and slow reaction times to market events, ultimately leading to money being left on the table.

The biggest win of a successful digital transformation is freeing up resources to focus on strategic work.

What is Jabil doing to help tackle this issue?

Jabil is helping our customers enable digital transformation of their procurement processes in a number of ways, such as investing in new technologies. This includes things like cloud computing, artificial intelligence and data analytics tools. These technologies help businesses automate tasks, improve efficiency and gain valuable insights from their data.

Internally, we are prioritising upskilling and reskilling. The digital transformation process requires a workforce with the skills to use these new technologies I just described, so we are investing in employee training programs to support their development. This in turn enables our team of skilled procurement professionals to provide the best advisory services to our clients, armed with a toolbox full of leading technology.

What technology are you harnessing to help?

A key first step in Jabil’s procurement digitization has been improving our data management. Ditching outdated processes and siloed data, we use cloud procurement systems as a centralised platform for automating tasks, managing supplier information and streamlining approvals. This enhances visibility, reduces errors and fosters collaboration across the supply chain with a system that is continuously being refined and updated to keep pace with technology advancements.

We are closely monitoring the developments in artificial intelligence (AI) and machine learning (ML) to integrate into our source-to-pay processes, although we have found most to be in the early stages of development. We firmly believe that once developed, AI will automate tasks like supplier selection, risk management and contract negotiation. 

AI can already be used to automate portions of the contract review process by scanning contracts and highlighting key terms and potential risks. We are utilising ML to analyse vast amounts of historical data to identify trends, optimise spend categories and predict future procurement needs.

A game-changer for increasing compliance, reducing maverick spend and improving change communication has been digital adoption technology. We use a best-in-class digital adoption platform to ensure that our culture of embracing the latest and greatest technology doesn’t fall short due to poor change management and user adoption.

Finally, we’ve found that tactical, repetitive tasks like purchase order processing and invoice reconciliation can be automated using robotic process automation (RPA) bots. This frees up procurement professionals to focus on more strategic work and supplier relationship management.

How do we eliminate this issue to safeguard the future of procurement? 

To fully get onboard with digital transformation, procurement organisations should embrace a culture of continuous improvement that thrives on innovation and experimentation.

Lead with robust data analytics practices to gain insights from purchasing data, track supplier performance and identify areas for improvement. Leverage data to make informed decisions about sourcing, negotiation and risk management.

Encourage your team to stay updated on emerging technologies and, in return, make this continuous investment in their digital fluency. Provide ongoing training to your procurement team on the latest procurement technologies, from AI and data analytics to cloud platforms.

This empowers them to leverage these tools for your organisation and on behalf of your customers. If you focus on these areas, you can transform your procurement function from a cost centre into a strategic driver of growth and resilience.

Digital transformation is a marathon, not a sprint, to keep up with a constantly evolving technological landscape. Be open-minded, agil and keep your eye on continuous adjustment.  

******

Make sure you check out the latest edition of Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE 2024

******

Procurement Magazine is a BizClik brand.