Procurement chiefs have limited supply chain visibility

Date Posted: 02/03/2018 Category:
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Procurement chiefs have limited supply chain visibility

Date Posted: 02/03/2018 Category:

A new study suggests that 65% of Chief Procurement Officers (CPOs) worldwide have limited to zero visibility beyond their companies’ first tier suppliers.

Just 6% have full transparency across their entire supply chain, according to the Global Chief Procurement Officer survey published annually by Deloitte. Full visibility is necessary for effective risk planning and compliance with legal and industry regulations.

Despite this, 54% of procurement leaders said that managing risks was a priority. 33% described uncertainty or consequences from trade negotiations like Brexit or NAFTA as significant risk factors.

78% said that cost reduction was their top priority, while 58% selected the introduction of new products and services or expanding into new markets.

Deloitte Global Head of Sourcing and Procurement Brian Umbenhauer commented: “It’s both a worrying and opportunistic finding that two in three procurement leaders have limited visibility beyond their tier one suppliers. This has major implications for organisations across all industries, particularly for meeting regulatory and corporate social responsibility requirements and for the identification and mitigation of supply chain risks.”

He went on to say that enhanced transparency when it comes to supplier locations, pricing and critical dependencies is helpful in assisting procurement leaders in delivering increased value, while it can also avoid risk.

The survey also suggested that adoption of modern tools and applications for procurement strategy was lagging behind the desire for innovation and progress. 17% of procurement chiefs said that they had not implemented a digital procurement strategy, and 51% said they didn’t believe their teams had the skills to deliver on their strategy.

Just 3% believed their staff had the skills to maximise the benefits of digital capabilities, but only 16% were focusing on improving digital skills within their teams.

“In order to see the real impact of digital transformation and benefit from it, procurement leaders need to review and refine their digital vision and strategy to make it more action-oriented, agile and scalable,” said Deloitte’s EMA Head of Sourcing and Procurement, Lance Younger.

Nick Ford

Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.

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