CIPS Global State of Procurement and Supply 2024 report: A comprehensive insight into the future of procurement

DUBAI: The Chartered Institute of Procurement & Supply (CIPS) recently published the highly anticipated Global State of Procurement and Supply 2024 report, in partnership with GEP.

The survey, which gathered insights from chief procurement officers (CPOs), procurement directors, and heads of procurement and supply across 122 organisations with a combined turnover of $73 billion, sheds light on the evolving landscape of the procurement and supply function.

The report highlights the increasing influence of the procurement and supply function within organisations. An impressive 68% of respondents noted that the influence of procurement and supply is on the rise. In over two-thirds of the surveyed organisations, procurement and supply manage or influence 60% of spend on direct goods. Despite small team sizes (51% of which have fewer than 20 members), CPOs are making significant impact and commonly report to CFOs.

“Sustainability is a key focus for procurement leaders. The report reveals that 69% of organisations plan to invest in sustainability measures, and 77% have an ethical sourcing policy. Respondents believe that procurement has significant power to influence environmental, social, and governance (ESG) issues. The challenge now is to build skills in managing sustainability effectively,” said Sam Achampong, Regional Managing Director, CIPS MENA.

 

Top 5 areas where procurement and supply will invest in the next 12 months:

• Sustainability 69%
• Digital technology 65%
• Staff development and training 60%
• Strategic sourcing 39%
• Supply chain visibility 39%

Technological Advancements in AI and Automation

The role of technology and AI in procurement is another crucial finding. While automation is increasing, with 2% of procurement functions fully automated and 27% partly automated, the human element remains vital. A UK procurement leader noted, “Although automation is growing, it’s only making the relationship element more important to procurement success.”

Investment in digital technology is a priority, with 65% focusing on this area in the next 12 months.

Addressing Supply Chain Shortages and Ensuring Continuity

Geopolitical factors are a major concern, cited by 69% of procurement leaders as a cause of potential supply chain disruptions. The report underscores the growing concern over supply chain shortages due to inflation, geopolitical uncertainty, and logistical disruptions. To ensure continuity of supply in a volatile world, strategies such as diversifying suppliers, insourcing, and holding more stock are critical.

To manage volatility and ensure continuity, procurement leaders are focusing on several strategies. Diversifying suppliers reduces dependency on any single source, insourcing critical components increases control, and holding more stock provides a buffer against disruptions. Leveraging data and technology also plays a crucial role in monitoring supply chains and predicting potential issues before they escalate.

“We’re incredibly excited about the year-one findings. It really is a treasure trove of insight into procurement and supply chain issues. It’s also a very senior-level insight,” Achampong added. “Our aim over time is to enable procurement and supply leaders to benchmark their function – and the pressures they’re facing – against other global professionals.”

The CIPS Global State of Procurement and Supply 2024 report provides invaluable insights for procurement professionals worldwide. As the function continues to evolve, the data and trends highlighted in this report will help leaders navigate the challenges and opportunities ahead.