Procurian’s Spend Trends Report: Changing Demand Patterns and Implications for Procurement

This summer, Procurian released its first ever Spend Trends Report, based on market intelligence from the company’s more than 600 category specialists. There are a few categories that we think would be of particular interest to our readers. We’ll summarize and discuss Procurian’s findings in these areas, starting today with macro trends.

Procurian’s report shows that executives are cautious despite encouraging factors such as high profit margins and a favorable stock market. Their “focus remains on effectively managing spend and protecting margins, putting Procurement at the fore.” The report picks out four major Q2 trends, and these are:

  • Re-examining of core logistics strategy, “such as how much to outsource to 3PL’s and whether to continue to operate private fleets”
  • Rethinking long-term supply chain strategy due to flattening global labor rates and cheap North American energy
  • Reviewing HR strategy in the wake of rising healthcare costs (“the number one concern of manufacturers in the U.S.”)
  • Mobility and cloud computing are “radically changing forward-looking IT investment”

“Curiously, all of these trends focus on changing demand patterns and the examination of how and why a particular supply base is used for a given purpose – rather than traditional or more creative sourcing strategies based on negotiation approaches,” Jason Busch observes. “This points to the critical nature of up-skilling procurement teams to engage with the business on strategic questions that go far beyond understanding supply market dynamics and setting contracts with suppliers.”

Check back over the next couple weeks for spend trends in the categories of IT/telecom, HR, Legal, and Travel, as well as Jason’s commentary on these trends.

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