While the procurement industry is consistently evolving and shifting, 2021 begins after a truly unprecedented year. In 2020, Chief Procurement Officers and their teams were forced to face massive disruptions, extreme threats, and entirely new challenges brought on by the COVID-19 pandemic. By and large, procurement leaders worked valiantly to ensure business continuity, build supply chain resilience, and prepare their enterprises for the next economic phase. Against this backdrop, procurement has never been more important to business operations and business results. We continue with some key procurement predictions for the year.
Prediction: The U.S. and Global Economies, Overall, Hold Steady
This is not a financial recommendation, but rather, a prediction from Ardent Partners that the economies of the world, including the United States, do not drop into a deep, deep recession. Ardent expects volatility but not a massive and deep drop. While the underlying unemployment rates as well as the financial health of many industries (and local businesses) are all not positive, the impact has not been directly felt in the stock market or overall economy. This is because, in part, many governments are flooding their economies with cash and keeping interest rates unnaturally low.
As long as those federal government policies continue, there is a reasonably high floor for each economy (and their related stock markets). If these policies remain in place, Ardent predicts that interest rates will remain very low and housing prices will rise somewhat, before stabilizing.
The U.S. stock market will be volatile until things revert to normal and will most-likely stay below its recent highs. But, as countries begin to gain control over COVID-19, employment numbers will slowly rise and the likelihood of a huge market crash becomes less likely.
Prediction: CPOs Begin to Push Control to the “Regions”
Procurement’s momentum over the past decade was not thwarted by the global pandemic. Instead, the Coronavirus has provided yet another example of how critical the procurement function is to many enterprises, particularly those with global supply chains.
One new strategy being discussed by some CPOs is the need to push more control to the regions. More often than not, it is typical for a procurement department to drive for greater control and centralized policies and management of categories (where possible and appropriate). Ardent Partners predicts that as a means to diversify operational risk, CPOs will start to push autonomy back to their regional teams. This action will also help accelerate making supply chains more regional and less global in nature.
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