Overview

Out of the shadows – procurement as a driver of innovation

“Alexa, add a toothbrush to my shopping list! Also body lotion and sunscreen.” This is how shopping Saturdays could start in the future. Or rather: in the very near future. Because in Germany, customers have been able to order selected products via the Amazon voice assistant Alexa since this year. Amazon’s Dash Button was launched back in 2016 – a small, Wi-Fi connected button that sticks to the fridge, for example, and orders frequently used products such as detergent, coffee or dog food when pressed. Consumers can now buy over 1,000 items in this way.

B2B purchasing becomes Amazonized

The first steps towards automation in purchasing have also long since been taken in the B2B environment: Standardized goods can be ordered via self-service portals with just a few clicks, just as easily as in the private sector. Simply enter the size, color and quantity, check the price and delivery time and buy. So it’s no wonder that people are now talking about the Amazonization of B2B purchasing. And: So far, we have only scratched the surface of the possibilities that arise in the course of digitalization. We can therefore expect a lot more in the coming years.
This raises the question of how increasing automation will affect procurement as a specialist area. The study “Digitalization of Purchasing – Purchasing 4.0” by the Fraunhofer IML and the German Association for Materials Management, Purchasing and Logistics has also addressed this issue. According to the study, the range of tasks in purchasing will change considerably: operational activities will gradually disappear, while strategic importance will increase.

Complex products are procured by purchasers

In principle, this is also our assessment of the development – but we also see a certain limitation. After all, the procurement of C-parts and consumables can certainly be automated or at least partially automated so that purchasing staff are hardly involved in this process. However, complex, non-standardized products with a high investment volume – such as machines and systems – are usually critical to a company’s success. Without well-trained employees, it will not be possible to procure such goods in the coming years. However, new technologies can support and relieve colleagues in the purchasing process. Product configurators on suppliers’ websites, for example, make it possible to put together a machine according to specific requirements and run through different variants. Even more important – and above all to be implemented independently – is IT support for the internal steps in the purchasing process. This is because a lot of communication is required between the purchasing department and other specialist departments before an offer is even requested. As a rule, this is still rather unsystematic today. Important documents are then not available to everyone or the current status has to be actively queried. This all leads to an unnecessarily high level of effort and sometimes unsatisfactory results.

Innovation sourcing instead of routine

By reducing the workload in the procurement of simple, standardized and complex, non-standardized products, purchasing employees save time in any case. And they can use this time to devote themselves more intensively to strategic tasks. A key area of action here is consistent cost optimization for product groups where there are several suppliers to choose from – in other words, where competition is fierce. It is also important to establish and maintain long-term partnerships with suppliers – especially for scarce or highly specialized goods. And: Purchasing is required to discover digitalization expertise and new technologies on the market at an early stage, evaluate their value for the company’s own offering and then possibly bring them into the company. The importance of this innovation sourcing will increase considerably in the coming years. Purchasing can thus become an innovation driver for the entire company.