1、7 Leadership Themes for Procurement&Supply Chain Leaders in 2024Unified Supply Chain&Procurement Solutions:Helping Leading Enterprises Worldwide Achieve Extraordinary Results!Copyright 2023 GEP.All rights reserved.2TABLE OF CONTENTSEXECUTIVE SUMMARY 3 Macroeconomic Factors Affecting Procurement and

2、the Supply Chain 3 Inflation:A Gradual Rollback 4 GDP:Sluggish Growth Persists 4 Interest Rates:A Cause for Concern 5 Labor:Markets Still Tight but Easing 5 Energy:Continuing On a High 6 Seven Leadership Themes for 2024 7 Supply Chain Reinvented:Crafting a Resilient Future Strategy 8 The Intriguing

3、Potential of Artificial Intelligence 9 Investing in a Digital,AI-First Future10 The Future of Supplier Relationship Management in the Digital Era 11 Procurement and Finance:Partners in Cost Management 12 Sustainable Success:ESG Back in the Spotlight13 Talent Crunch:Overcoming the People Crisis14 Key

4、 Suggestions15 About the AuthorsThe Outlook Report is one of GEPs flagship publications,which clients and partners look forward to each year.GEP conducts a significant amount of research to generate the results of the report,surveying supply chain and procurement leaders to reveal the key trends tha

5、t inform and influence decision-making each year.The following post-webinar report is based on an analysis of the GEP Outlook Report for 2024,as presented by senior director of consulting,Pramod Sethumadhavan,in a recent webinar.The report below provides a summary of findings from the Outlook Report

6、 as well as predictions that readers can use to inform their procurement and supply chain decision-making.ABOUT THE CONTRIBUTORPramod SethumadhavanSenior Director,ConsultingGEP3INFLATION:A GRADUAL ROLLBACKMACROECONOMIC FACTORS AFFECTING PROCUREMENT AND THE SUPPLY CHAINNavigating the supply chain ove

7、r the past few years has been challenging on a global scale,with businesses experiencing varying degrees of impact.The tech industry managed to leverage opportunities that came with these challenges,whereas others struggled to maintain operations amidst pandemic-induced instability,supply chain disr

8、uptions,inflationary pressures,labor shortages,and geopolitical tensions.The current year unfolds with a sense of optimism,providing an opportunity to reset and analyze lessons from the recent tumultuous period.Key macroeconomic factors such as monetary policies by central banks worldwide seem to be

9、 effectively tapering inflation,which is a welcome relief from the soaring rates witnessed in 2022.The supply chain and procurement sectors,despite these hurdles,maintained their resilience,contributing significantly to the distribution of essential goods like vaccines and PPE during critical times.

10、Nevertheless,geopolitical risks persist,and caution is advised before claiming a full recovery.While inflation is on a downward trend globally,with core inflation mirroring this trajectory,regional variances remain.The US,for instance,is grappling with strong demand keeping inflationary concerns in

11、check,while China faces deflationary forces compounded by its real estate crisis and a dip in consumer confidence.Global inflation down from 6.88%to 5.79%in 2024.U.S.dips to 2.76%and Euro Area to 3.25%,both still above pre-pandemic levels.China combats deflation with counter-cyclical measures to sti

12、mulate economic growth.FAST FACTS4GDP:SLUGGISH GROWTH PERSISTSINTEREST RATES:A CAUSE FOR CONCERNAs we look at GDP growth,the narrative we encounter is less encouraging.Despite the subdued optimism caused by the lowest global growth rates in decades,hovering around 3%,this must be framed within the c

13、ontext of deliberate policy measures.Central banks have engaged in monetary tightening with the primary aim of curbing inflation,a necessary trade-off that has,in effect,tempered growth projections.Yet,its important to recognize that without such interventions,economic conditions could have potentia

14、lly deteriorated further,underscoring a cautious balance between inflation control and growth stimulation.The global economic landscape is nuanced,demonstrated by the varying impacts of interest rate hikes across different regions.In the United States,consumer spending and sentiment have surprisingl

15、y remained resilient,offering a cushion against the threats of a severe recession.Even with the economic disruptions caused by the Russia-Ukraine conflict and ongoing energy crises,Europe has managed to post growth,although it has not met initial expectations.India faces an election year,which intro

16、duces an additional layer of complexity to its economic forecast,which nonetheless remains promising.Chinas fiscal management,particularly the central banks recent move to cut reserve requirements,is critical to watch,as the country grapples with the fallout from its real estate crisis.Meanwhile,per

17、sistent tensions in the Middle East,particularly those affecting the Red Sea shipping routes,threaten to introduce inflationary pressures through increased shipping costs and times.However,some relief may come from the shipping industrys excess capacity.In terms of monetary policy,theres cautious op

18、timism as major economies signal a pause in interest rate hikes,with the prospect of rolling back some of these increases later in the year,barring any unexpected inflationary surges.Global growth projected to fall to 2.94%,impacted by interest rates and geopolitical tensions.Euro Area expected to r

19、ebound to 1.23%from 0.66%.U.S.growth eases to 1.47%,while domestic demand drives growth in India.After record hikes,central banks likely to lower interest rates.The Bank of England may start reducing rates down from 5.25%in the second half of 2024.Expected gradual decreases by the U.S.Federal Reserv

20、e in 2024.FAST FACTSFAST FACTS5LABOR:MARKETS STILL TIGHT BUT EASINGENERGY:CONTINUING ON A HIGHThe current robustness of the US labor market remains a pivotal factor causing the Federal Reserve to approach the idea of policy rollbacks with caution.Despite anticipations of potential softening due to i

21、ncreasing interest rates potentially inhibiting growth,as of now,the situation warrants a wait and see approach,especially given that many metrics are reverting to their pre-pandemic standards.While wage growth is hovering around 4%still above the Federal Reserves preferred 3%unemployment rates are

22、below the Feds threshold at 3.7%,indicating a tightened labor market that could influence economic decisions later in the year.The labor market continues to buzz with discussions about artificial intelligence(AI)and its integration into corporate operations.While immediate changes are not projected

23、for 2024,it is expected that AI will dramatically reshape the required skill sets in the long term.This technological revolution will necessitate a workforce that is adaptable and adept at collaborating with increasingly sophisticated AI systems.The energy sector remains under the influence of contr

24、adicting dynamics.OPEC nations have implemented production cuts,asserting downward pressure on supply.This is in conjunction with geopolitical tensions,particularly the ongoing Russia-Ukraine conflict,which contributes to the upward drive of oil prices.In contrast,the United States reports historica

25、lly high production levels,securing its position as the top oil producer worldwide.Moreover,slowing economic growth,especially in China,the leading oil importer,alongside the expansion of renewable energy resources and the advent of more efficient electric vehicles,provides a counterweight to these

26、pressures.Yet,despite these multifaceted factors,the forecast implies that oil prices are likely to remain elevated compared to the pre-pandemic levels seen in 2019.Crude oil prices remain high due to OPEC+cuts and Middle East tensions.Natural gas prices stabilize as consumption habits shift and gre

27、en energy rises.INFLUENCING FACTORS FOR 2024 Further OPEC+production cuts Finland-Estonia gas pipeline leak Geopolitical tensions in Middle East Demand-supply variations due to changing weather patterns U.S.employment growth remains strong with declining unemployment.The Euro Area sees the lowest un

28、employment levels since mid-2021.AIs influence in the labor market is complex,with potential job creation and displacement.FAST FACTSFAST FACTSUnified Supply Chain&Procurement Solutions:Helping Leading Enterprises Worldwide Achieve Extraordinary Results!Copyright 2023 GEP.All rights reserved.6As pro

29、curement and supply chain leaders continue to enact their strategies for 2024,they must keep in mind some of the most critical leadership themes for the year.Seven specific themes should be top of mind.They are:1 Crafting a resilient supply chain strategy for the future2 Harnessing the potential of

30、artificial intelligence3 Investing in a digital,AI-first future4 Developing a supplier relationship management strategy for the digital era5 Joining procurement and finance as partners in cost management6 Putting ESG and sustainability back in the spotlight7 Overcoming the ongoing talent crisis SEVE

31、N LEADERSHIP THEMES FOR 20247SUPPLY CHAIN REINVENTED:CRAFTING A RESILIENT FUTURE STRATEGYAs we witness the thawing of recent supply chain volatilities,leaders are presented with a pivotal moment to reformulate their strategies with an eye toward robustness and agility.GEPs supply chain volatility in

32、dex,a collaborative effort with S&P Global,shows signs of improvement across various metrics,signaling an end to the era of relentless crisis management.Supply chain leaders now the opportunity to leave behind reactionary tactics in favor of forward-thinking approaches aimed at bolstering resilience

33、 and profitability.A departure from the old playbooks,this new phase calls for a reinvigorated focus on business continuity planning,specifically redesigned for the intricacies of a post-pandemic economy.Meanwhile,the push for deglobalization persists as companies seek to diversify their operations

34、through strategies like China Plus One,adapting them at a relentless pace in response to the ever-present geopolitical tensions.In addition to operational restructuring,the inclusion of Environmental,Social,and Governance(ESG)considerations into supply chain strategies has become a non-negotiable as

35、pect in an ever more conscientious marketplace.Consumers today demand transparency and ethical practices,urging supply chain protagonists to develop unified,actionable plans that integrate cost efficiency with a commitment to ESG and resilience.As companies edge toward stability,the persistent focus

36、 on cost optimization is now expected to incorporate these broader considerations into everyday business decisions,a trend that is increasingly reflected in the mandates our clients set forth for their transformation trajectories.Supply chain volatility decreases,opening doors for reinvention.Global

37、 supply chain capacity increases,especially in Europe,with a focus on sustainable growth.New models like“China Plus One”and“Friendshoring“rise as ESG and geopolitics shift the map.Balancing cost,resilience,and ESG in a high-cost world reshapes supply chain investment strategies.*The State of Supply

38、Chain Sustainability 20231 Logistics disruptions2 Sustainability3 Optimize working capitalFAST FACTSTOP 3 FOCUS AREAS FOR SUPPLY CHAIN LEADERS*8THE INTRIGUING POTENTIAL OF ARTIFICIAL INTELLIGENCEArtificial intelligence(AI)has progressed from a specialized tech topic to a pervasive influence,catalyze

39、d by platforms like ChatGPT.The technology is no longer an abstract concept but has become an accessible,practical tool.As AI steadily becomes intrinsic to future strategies,with machine learning poised at the crest of big data,industries are recognizing its potential.Corporate leaders,those at the

40、helm of our client companies included,are particularly eager to adopt AI for its promise of escalating productivity and adapting to rapidly evolving conditions.The approach to integrating AI,however,isnt monolithic;it demands agility due to the dynamic nature of the field.Leaders are strategizing ar

41、ound three key initiatives.First,they aim to design new technology roadmaps that shift from traditional,large-scale ERP systems,which frequently suffer delays and do not fully align with supply chain and procurement needs.New tech roadmaps are increasingly incorporating low-code and no-code platform

42、s for their simplicity and quicker implementation,seen as a stepping stone to embracing AI.Second,they are focusing on generating time savings.Teams in procurement and supply chain strategy are encouraged to adopt a macro perspective,to strategize beyond day-to-day tasks.Heres where AI can make a su

43、bstantial impact,especially by streamlining activities such as analytics in procurement processes,thus freeing users to concentrate on decision-making and long-term strategizing.Third,the predictive capabilities of AI tools are expected to significantly benefit supply chain management,setting a new

44、precedent in proactive planning.AI will help companies study innumerable variables,including financial,geopolitical,and trade route risk data,as well as early warnings,so they can generate mitigation actions.Tools like ChatGPT accelerate AIs potential in procurement and supply chain.Business leaders

45、 focus on AI will require new tech roadmaps beyond traditional ERP systems.AI saves time in procurement processes and supply chain management.AI will enhance supply chain resilience,mitigate risks,and accelerate ESG initiatives.FAST FACTSINTEGRATING AI CHATBOTS INTO SUPPLY CHAIN OPERATIONS65%35%With

46、in 6 monthsWithin 12 monthsWithin 2 yearsNo plans to integrate an AI chatbotHave already integrated an AI chatbotExpect their organizations will integrate an AI chatbot into supply chain operation over the next 12 months.30%22%9%4%9INVESTING IN A DIGITAL,AI-FIRST FUTURECIOs are recognizing that negl

47、ecting the quality of their data can lead to costly long-term implications,given that AI technologies largely draw upon the quality and accessibility of data.Additionally,the rise of low-code and no-code platforms is altering the technology ecosystem,presenting more agile and user-friendly solutions

48、 that cater to the rapid pace of innovation.Such platforms are quickly becoming preferred over traditional approaches due to their flexibility,which is vital for companies that can no longer rely on rigid,extensive technology roadmaps.Moreover,the successful implementation of AI-driven tools extends

49、 beyond their selection.Companies are facing the challenge of skilling their workforce with digital-first competencies that are unfamiliar to many,such as managing data analytics and AI infrastructures.As an interim solution,some are opting for third-party support to maintain the momentum of their d

50、igital transformation.In parallel,there is an emphasis on delivering a strong return on investment(ROI),which propels a narrower focus on precise AI use cases that add real value.Concerns surrounding data security and handling further complicate tool selection,as companies strive for a balance betwe

51、en innovation and data protection.Lastly,inherently tied to the adoption of new AI technology is the organizations ability to manage change effectively,ensuring the narrative around AI fosters acceptance rather than fears of job displacement.Companies must prioritize a people-and talent-centric appr

52、oach for long-term success.Key considerations for investments in data and AI tools in 2024 Data engineering is crucial Rise of low-code platforms Team capabilities enhancement Effective change management Choosing AI toolsFAST FACTSWORLD ECONOMIC FORUM&GEP GUIDELINES FOR PROCUREMENT OF AI IN PRIVATE

53、SECTOR10THE FUTURE OF SUPPLIER RELATIONSHIP MANAGEMENT IN THE DIGITAL ERAThe pandemic has transformed Supplier Relationship Management(SRM),highlighting the necessity for a revised approach post-crisis.Contracts and commitments were frequently overridden by force majeure clauses,and some suppliers o

54、ptimized this situation to their advantage,showcasing a polarized outcome of partners and non-cooperators.The resulting“great resignation”further disrupted established supplier relationships,emphasizing the need to reassess the SRM roadmap in the context of these seismic shifts in the landscape.Movi

55、ng forward,resilience,visibility,cost optimization,and collaboration surface as top priorities in reconstructing SRM strategies.Additionally,there is a push towards embracing AI and digital tools within the supply chain to maintain pace with modern technology,while those who contribute valuably thro

56、ugh data sharing and analytics are poised to be recognized.Environmental,Social,and Governance(ESG)considerations are predicted to become integral facets of supplier partnerships.Consequently,the SRM strategy redevelopment demands a clear vision aligned with both the lessons of the pandemic and the

57、evolving demands of a rapidly changing market.Recent supply challenges tested supplier relationships,with both failures and successes.Basic delivery failures by“strategic”partners exposes cracks in trusted partnerships.AI and digital technologies are reshaping Supplier Relationship Management(SRM),p

58、rompting a reevaluation of partner selection.1 Resiliency:Ensuring uninterrupted and adaptable supply chains.2 Cost:Structuring SRM to lower expenses and improve working capital.3 AI and Digital Adoption:Expecting suppliers to align with digital advancements.4 ESG Partnerships:Driving ESG priorities

59、,especially in supplier development.FAST FACTSKEY FOCUS AREAS FOR SRM IN 2024:11PROCUREMENT AND FINANCE:PARTNERS IN COST MANAGEMENTThe relationship between procurement and finance is pivotal in managing costs,especially when price flexibility is constrained by a market slowdown.With supply chain sta

60、bilization and increasing competition,except in logistics due to Middle East unrest,procurement leaders are encouraged to take decisive actions to impact the bottom line positively.A collaborative effort with finance is key,aiding in initiative prioritization and ensuring procurement has the support

61、 to achieve objectives.Amid high-interest rates,emphasizing free cash flow has become a top CFO priority,suggesting procurement should prepare a supply chain financing strategy adaptable to potential rate declines.Post-pandemic,a reassessment of supplier relationships is necessary,focusing on those

62、who have shown growth and profitability to renegotiate terms effectively.Lastly,understanding the financial stability of key suppliers is crucial,marking another area for finance and procurement synergy.Constant Pressure for Cost Savings:The need for procurement and finance to collaborate closely to

63、 manage costs.Stability and Opportunity:A chance to take risks and implement aggressive cost-saving measures.Prioritize Bottom-Line Impact Projects:Focus on initiatives that drive significant financial value,with early planning and execution.Re-evaluate Supply Chain Financing:Opportunity to renegoti

64、ate financing terms,leveraging improved financial conditions.Strategic Supplier Assessment:Shift in pricing power back to buyers necessitates a re-evaluation of suppliers for financial health and cost negotiation opportunities.FAST FACTS12SUSTAINABLE SUCCESS:ESG BACK IN THE SPOTLIGHTThe recent focus

65、 back on Environmental,Social,and Governance(ESG)priorities in 2024 marks a resurgence of pre-pandemic levels.This shift is particularly due to legislative impetus and customer demands in Europe and the U.S.manufacturing sectors.These sectors are also increasingly supporting the ESG goals of their s

66、ervice industry customers.This interdependence is creating a complex framework for goal-setting and accountability across companies.Key strategies include focusing on reducing carbon emissions as an underleveraged tactic for cost savings and brand enhancement,investing in supply chain traceability t

67、o meet consumer demands for product transparency and risk management,and diversifying suppliers to foster innovation,flexibility,and resilience.Supplier forums are ablaze with discussions about this shift,indicating a strong drive for companies to rise to billion-dollar stature and make bold ESG-rel

68、ated commitments.Finally,clients are actively integrating ESG objectives into their category strategies and considering them during the development of digitization roadmaps.Re-emergence of ESG Focus:ESGs renewed importance due to its interconnectedness with other business pressures.Expanded ESG Mand

69、ates and Budgets:More resources for chief sustainability officers.FAST FACTS*The State of Supply Chain Sustainability 20231 Responsible business2 Brand,trust and reputation building3 Operational improvement and cost reductionTOP 3 DRIVERS FOR SUPPLY CHAIN SUSTAINABILITY INITIATIVES*13TALENT CRUNCH:O

70、VERCOMING THE PEOPLE CRISISThe talent crunch continues to challenge the supply chain and procurement sectors,especially post-pandemic,with a market still recovering from a labor slump.A shift in role expectations,driven by aggressive digitization and environmental,social,and governance(ESG)goals,req

71、uires a highly skilled workforce adept in new technologies and data analytics.However,such specialized talent is scarce and difficult to retain,pushing companies to temporarily rely on external resources.Building internal capabilities is seen as essential,and the anticipation is that by 2024 organiz

72、ations will deliberately strategize to enhance procurement and supply chains.Heightened investment and bold steps towards integrating advanced technology into core business processes are expected trends as companies strive to develop their competencies.Plan a career pipeline Create a progression pat

73、h and establish mentoring programs for employees internal career growth.Reimage procurement Change the negative perception about procurement.Build an image of a fast-paced,data-led function that plays a strategic role in business growth.Reskill and restructure Firms need traditional procurement as w

74、ell as more diverse capabilities.Retrain talent;deploy people in roles that utilize their strengths.Ensure stakeholder collaboration Engage with your team,involve them in decision-making and create an environment that values inputs and contributions.Highlight the sustainability agenda The young work

75、force is eco-conscious and more inclined to work in a firm whose values align with their own.STRATEGIES TO ATTRACT AND RETAIN PROCUREMENT TALENTUnified Supply Chain&Procurement Solutions:Helping Leading Enterprises Worldwide Achieve Extraordinary Results!Copyright 2023 GEP.All rights reserved.14KEY

76、SUGGESTIONS Prioritize AI and digital tool integration within your supply chain to boost efficiency and resilience:Leveraging AI can streamline operations and provide predictive insights,which are crucial in navigating the complexities of modern supply chains.By adopting advanced analytics,procureme

77、nt leaders can enhance decision-making and foster a proactive approach to challenges.Reassess and strengthen Supplier Relationship Management(SRM)practices to mitigate risks and improve collaboration:Post-pandemic SRM requires a focus on building relationships that can withstand market volatility an

78、d support mutual growth.Procurement leaders should seek to create partnerships that are both strategic and adaptable,ensuring a robust supply chain.Align procurement objectives with financial goals to optimize cost management and maintain financial stability:Collaboration between procurement and fin

79、ance departments can uncover synergies that drive savings and support strategic spending.Proactive management of cash flow and supplier financing options will be essential in a high-interest economic landscape.Place a renewed emphasis on Environmental,Social,and Governance(ESG)factors in both procur

80、ement strategies and supplier evaluations:With ESG factors increasingly influencing customer choices and legislative requirements,procurement leaders need to integrate these considerations into their decision-making processes.This commitment not only reflects corporate responsibility but can also of

81、fer competitive advantages and support long-term sustainability achievements.15ABOUT THE SPONSORABOUT THE AUTHORSGEP delivers AI-powered procurement and supply chain solutions that help global enterprises become more agile and resilient,operate more efficiently and effectively,gain competitive advan

82、tage,boost profitability and increase shareholder value.Fresh thinking,innovative products,unrivaled domain expertise,smart,passionate people this is how GEP SOFTWARE,GEP STRATEGY and GEP MANAGED SERVICES together deliver procurement and supply chain solutions of unprecedented scale,power and effect

83、iveness.Our customers are the worlds best companies,including more than 550 Fortune 500 and Global 2000 industry leaders who rely on GEP to meet ambitious strategic,financial and operational goals.WBR Insights is the custom research division of Worldwide Business Research(WBR),the world leader in in

84、dustry-driven thought-leadership conferences.Our mission is to help inform and educate key stakeholders with research-based whitepapers,webinars,digital For over 20 years,ProcureCon has helped companies develop and implement world-class sourcing programs through interactive workshops,innovative keyn

85、otes and intimate networking sessions.All designed to take you beyond cost savings.ProcureCon is built for practitioners,by practitioners-Whether youre a A leader in multiple Gartner Magic Quadrants,GEPs cloud-native software and digital business platforms consistently win awards and recognition fro

86、m industry analysts,research firms and media outlets,including Gartner,Forrester,IDC,ISG,and Spend Matters.GEP is also regularly ranked a top procurement and supply chain consulting and strategy firm,and a leading managed services provider by ALM,Everest Group,NelsonHall,IDC,ISG and HFS,among others

87、.Headquartered in Clark,New Jersey,GEP has offices and operations centers across Europe,Asia,Africa and the Americas.To learn more,visit .summits,and other thought-leadership assets while achieving our clients strategic goals.For more information,please visit .CPO or a rising star,a large or small spend company,ProcureCon has content and built-in connections to ensure your long-term sourcing success.For more information,please visit .