5 procurement trends for 2024

Last year, the pandemic and significant political and social upheavals in the U.S. and around the world sent many procurement departments into crisis mode. 

Recovering from these crises will, in some ways, mean a return to normalcy. At the same time, it’s inevitable that organizations will have to reimagine procurement to some degree in an effort   to help companies adapt to what amounts to a new playing field.    

With an eye toward building a more resilient and agile supply chain, below are five procurement trends that forward-thinking businesses should watch for in 2024. 

5 procurement trends that are shaping the future

E-procurement solutions and systems

Increasingly, procurement teams are turning to technology to help solve problems. 

Luckily, there’s an online solution for everything in procurement, from contract creation and inventory tracking to auditing and supplier sourcing. Using e-signature solutions, online ordering, digital invoices, and more gives companies greater control over their spending and reduces cycle times and costs. 

Technology also simplifies the collection and tracking of meaningful data points in the procurement process, which promotes better decision-making. Most of today’s online systems are relatively inexpensive and straightforward to implement — and they deliver a huge bang for your buck.

Online marketplaces

According to Digital Commerce 360, e-commerce sales are currently exploding, a fact that’s changing the conversation in corporate procurement departments. 

Previous concerns about the quality and reliability of online purchasing — factors that have typically made executives hesitant to change their long-standing supplier relationships — are diminishing. And the benefits of buying online (e-procurement) are becoming more obvious — in particular, the greater access provided by a larger selection of products and services.

As e-procurement flourishes, so will the use of online marketplaces that bring purchasers and suppliers together. Using an online form, companies simply enter various criteria — like location, items required, quality metrics, and so on — and the marketplace presents appropriate suppliers. 

These marketplaces are uniquely positioned to help businesses make emergency purchases when a primary supplier can’t meet their needs.

Social and civic responsibility

As social justice movements have raised awareness of inequality around the world, many businesses have started to evaluate their unconscious biases. From government agencies to small companies, more executives are focusing on choosing suppliers and vendors that are mindful of their impact on society. 

Thanks to e-procurement, companies can find like-minded suppliers that are capable of meeting their needs much more easily.

Eco-friendly and carbon-neutral procurement systems

A greater number of companies across all industries are eco-conscious. These companies are increasingly sensitive to their carbon footprints and their impact on climate change, and they’ve developed specific requirements for their suppliers to ensure ongoing sustainable procurement. 

It will no doubt be challenging for procurement to promote business growth while implementing more stringent requirements for local sourcing, recycled materials, fair employment, and more. E-procurement will help meet these demands as well.

Supply chain diversity

Another vulnerability the pandemic highlighted in 2020 was a heavy dependency on single sourcing from suppliers and countries. Within weeks of the pandemic’s onset, many companies were unable to meet purchase demands, as suppliers shut down or significantly reduced staff and throughput. 

This forced businesses of all sizes to take a close look at their current suppliers and reevaluate. Add to that the current social pressure around inclusivity, and you have another procurement trend for 2024: the implementation of more robust diversification programs to ensure uninterrupted delivery of products and level the playing field. 

To build and maintain a strong and resilient supply chain, businesses are opening the door to a greater number of suppliers — including small and medium-sized companies, local vendors, and women- and minority-owned organizations. Diversification benefits procurement by offering greater flexibility and opportunities for innovation. It also brings economic benefits to local communities.