We explain what a bill of materials is, what they are used for, the different variations of BOMs, and why they are useful records to have.
6 Procurement Trends for 2021
2020 was a time of significant disruption for supply chains, and procurement processes continue to be impacted. With no clear timeline on a return to normal, businesses are now focused on adaptation and are not only trying to survive but also push forward. With this in mind, here are six procurement trends we can expect to see in 2021.
Managing risk becomes a top priority
As businesses continue to learn from the many challenges brought about by the COVID-19 pandemic, the importance of risk management has become clear. As such, one procurement trend that we can expect to see in 2021 is prioritising risk in all stages of the procurement process. This should start with a thorough risk assessment of all procurement processes and creating contingency plans, such as establishing a list of reliable backup suppliers and optimising inventory.
Navigating the impact of Brexit
Whilst we have known for years that Brexit will be bringing significant changes to the way we do business and particularly procurement activities, it is only very recently that we have had any real information about what those changes are. As businesses strike new deals with overseas partners and the UK negotiates new trade deals with non-EU countries, we can expect some teething problems as businesses adapt to new ways of working.
Communication and transparency between suppliers to ensure businesses can stay afloat
With the mass disruption caused by the pandemic coupled with the long-standing uncertainty surrounding Brexit, many businesses are in uncharted waters. As such, one procurement trend that we can hopefully look forward to in 2021 is more open communication and transparency between suppliers so that more businesses can stay afloat and make it through this strange period.
Focus on sustainability and environmentalism
Sustainability and environmentalism have taken on much more significance over recent years as the consequences of our industrial and transportation processes have become impossible to ignore or deny. Because of this, another procurement trend likely coming in 2021 is the overhaul of processes that have a negative environmental impact and the implementation of new solutions that are more eco-friendly, such as more considerate shipping processes and more local sourcing where possible.
Focus on social impact
As well as developing a broader understanding of environmentalism, more businesses are under pressure to be more socially-conscious. This could mean being more focused on ethical practices such as a fair wage and labour conditions for all workers involved in the supply chain, not just procurement. This could also result in sourcing more local labour where possible to provide opportunities for the community.
Flexibility and adaptability remain key
Even though firm risk management procedures will need to be planned, businesses will need to remain flexible and adaptable, especially as restrictions such as lockdowns and travel bans continue. This means businesses will likely have to make use of trusted backup suppliers throughout the year in their procurement processes and diversify their supply options globally in order to work around restrictions.
We are still in the midst of the coronavirus pandemic and it is uncertain whether there will be any kind of return to normal in 2021, though we can certainly hope conditions will improve. What we can expect to see in a procurement sense is a continued adaptation to the ongoing challenges, whilst also looking towards long-term issues such as the environment and social consciousness.