Procurement 4.0 – Next Level Procurement
Digitalization might be enabler and driver of Procurement 4.0, but it is far too short-sighted seeing Procurement 4.0 as just a digitalized function. Even though the 4.0-echo within the Procurement community is excitingly high, no clear vision has been developed yet describing meaning and impact of Procurement 4.0.
Dynamic and interconnected value chains are a key factor of sustainable success – managed and steered by strategic purchasers in their new role as value chain managers. This evolved environment will be influenced by drivers of digitalization, e.g. Industry 4.0 & Internet of Things, Smart Data & Clouds, Enterprise 2.0 & Social Media or Mobile Computing.
In order to identify related opportunities and challenges, h&z developed a Procurement 4.0 framework. It integrates all network levels of a procurement function, i.e. intra-company as well as inter-company relationships and global connectivity along value chains.
Four dimensions show how procurement should be set up to meet the needs of the future: network competition, network co-creation, network enablers and network leadership
Competing value chains … design competitive value chains
Buyers are increasingly assuming the role of a Value Chain Manager with a holistic view of the supply chain. The design of the total supplier structure beyond tier 1 is crucial for the success and competitiveness of companies. It determines their own competitiveness towards competitors and their suppliers.
Co-creation … leverage supplier innovations
Innovation is important in order to achieve a unique positioning and differentiation. Procurement identifies innovative suppliers and integrates them into the product development process. The aim of strategic networking is to be the "preferred customer" and, as the favorite customer, to have an exclusive claim to supplier innovations. Organizational structures need to be adopted accordingly.
Digital transformation … deploy advanced technologies
Technical possibilities of data use, with keywords such as Big Data and Internet of Things, go far beyond the previous functionalities of eCatalog, eRfx and eAuction. New applications with standards for user-friendly interfaces from the B2C environment turn procurement into an user experience.
Leadership … actively manage your global Team
Procurement networks are becoming more and more global. This increases the challenges for category managers. They need to be able to collaborate crossfunctionally and to control cross-border teams when creating and implementing category strategies.