Procurement and supply functions are gaining increasing influence within organisations, according to a new report from the Chartered Institute of Procurement & Supply (CIPS) and GEP. The Global State of Procurement and Supply 2024 survey found that 68% of respondents reported a rise in their department’s power.
The survey, which polled chief procurement officers (CPOs), procurement directors, and heads of procurement and supply across 122 organisations with combined revenue of $73 billion, provides a snapshot of the industry. Despite managing roughly 60% of direct goods spending in over two-thirds of companies, procurement teams remain relatively small, with 51% employing fewer than 20 people.
“Sustainability is a key focus for procurement leaders,” said Sam Achampong, Regional Managing Director, CIPS MENA. “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.”
Other areas of investment in the next 12 months include:
- Digital technology: 65%
- Staff development and training: 60%
- Strategic sourcing: 39%
- Supply chain visibility: 39%
Technology, particularly artificial intelligence (AI), is transforming the procurement landscape. While automation is on the rise, with 2% of functions fully automated and 27% partly so, human expertise remains crucial. “Although automation is growing, it’s only making the relationship element more important to procurement success,” noted a UK procurement leader.
Supply chain disruptions caused by inflation, geopolitical uncertainty, and logistical challenges are a major concern, with 69% of procurement leaders citing them as a potential risk. To mitigate these risks, organisations are diversifying suppliers, bringing production in-house, and increasing inventory levels.
“We’re incredibly excited about the year-one findings,” Achampong added. “It really is a treasure trove of insight into procurement and supply chain issues. It’s also a very senior-level insight. 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.”
