What are the trends and priorities for procurement in 2020?

procurement department
January 28th, 2020
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At the start of every year, consulting firm AgileBuyer, in partnership with the French National Procurement Council (CNA), publishes its annual study into the trends and priorities of procurement departments. This year, the study focuses on the development of customer-supplier relationships, as well as the rise of Made In France products and essential soft skills. Here is an overview of the trends and priorities for procurement in 2020…

Cost reduction is becoming less of a priority for procurement departments

Reducing costs has always been the main objective for procurement departments. However, this year "only" 68% of procurement departments list it as a priority (-7 points in 2019). This is the lowest rate since this study was first published in 2011. It should be noted that this objective is still more important in the private sector (especially in the industrial sector) than in the public sector.

This highlights a real revival in the role of procurement departments, which are now being challenged in areas other than cost reduction. These areas include risk, securing supplies and supplier collaboration, among others.

Supplier relationship management: A popular strategy in procurement departments

In order to reduce costs, procurement departments rely on negotiating, adjusting specifications, re-evaluating requirements and changing suppliers. At the same time, the focus on supplier integration/co-development has increased significantly (+11 points) compared to last year. The message is clear: Procurement departments are increasingly turning to their supplier relationships in order to achieve their objectives.

Soft skills are in high demand in procurement departments

Soft skills are becoming increasingly sought after in procurement departments. The top three desirable skills are supplier collaboration, leadership and project management. Negotiation, traditionally a buyer's key skill, has been knocked off the podium!

Made In France: An increasingly important consideration for procurement departments

The vast majority of those surveyed from procurement departments stated that they consider Made In France to be one of their business award criteria. This result, which has been steadily increasing since it was first calculated, demonstrates a real willingness from procurement departments to prioritise local purchases, whether this is to support the CSR strategy, reduce risk or improve their company's image.

However, buying Made In France products does have some limitations, especially in relation to cost, product availability or the requirements of overseas customers for example.

CSR: In the background but not a priority for procurement departments

Half of procurement departments will have set objectives related to sustainable development or CSR for the coming year. In particular, the number of public sector organisations and large companies (> 5000 employees) with these types of objective are on the rise. However, the figures have been stagnant for seven years now — a reminder that CSR is still not a priority for procurement.

If you want to learn more about procurement in low-cost countries, relocation, business ethics training, a reduced number of suppliers or the digitalisation of procurement, we would encourage you to take a look this study, which is full of valuable information.

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