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2024 Key Events Notes and Actions to Take : A Guide for Procurement Category Managers and CPOs

Writer's picture: Gaurav SharmaGaurav Sharma

2024 is going to be the year of Elections! 


This will have an impact on Supply chains globally. Here is what 2024 looks like from a Procurement Perspective:


1) Commodity Price Slowdown:

- Basic metals have already declined YoY, but now the inventory levels are hitting new highs. The inventory of Aluminum, Nickel, and Steel are all running high in December!

- Combined with a slow demand outlook, this will put additional pressure on your suppliers for revenues.

- The Chinese PMI data, which was already below 50, decreased further in the month of December!

- US port volumes have also decreased! So, for Procurement folks, Volume is going to be the leverage in 2024! Also, restructure your Cost Models!


2) Consulting World Shakeup:

- A lot has been happening in the world of the Big 4s, and it has been quite a scandalous one for many. While they struggle with their compliance and PRs, the rise of short-term freelancers will see many chipping into the wallets of these Big 4s. Generic consulting vs Specialists will become more intense.

- Look for gain-pain share models!


3) Biggest of the Macroeconomic Events:

- More than 60 countries will hold their election, including the US, India, Taiwan, South Africa, the UK (technically on Jan-25), and the EU!

- Expect economically conservative geopolitics and, hence, de-risking of the supply chain to be at the center stage.

- In my view, we will see a rise in Safety stocks across the manufacturing organizations as a measure of de-risking, especially with the events at Red Sea. I have already spoken about higher transit times.


4) Significant slowdown of GenAI API-driven services:

- OpenAI Api has given access to "gimmick" services where startups/digital procurement companies are all claiming GenAI capabilities. All of these are singularly powered by a single OpenAI API and have zero Procurement intelligence behind their services.

- Without the specific Procurement insights and data, we will see a significant decrease in investment in these API-driven startups. Users of Chatgpt in Europe can now request the deletion of their data and opt out of having their data used to train its AIs.

- Without the security of enterprise data, I see little adoption of these API-driven startups into mainstream procurement problem statements.


5) Accelerated Supplier Developments:

- Many Procurement teams will now be required to accelerate their Supplier development programs by following Apple and Tesla's moves (they invested in India as a diversification from China). We will see an increase in shared services and satellite offices.


6) USD Depreciation:

- I think Global monetary policies are turning towards easing the money supply (As inflation cools off), and hence, broadly, USD depreciation is looking increasingly likely (towards H2).

- What it means for Procurement is to renegotiate the payment terms and delay your USD payment remittances. You'll save some money in your local currency terms


I will post Part 2 soon!


Part 2 will contain my predictions about Freight and Incoterms, Payment Terms, Procurement Digitization and Sustainability.

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