Mandatory enforcement of human rights, environmental due diligence and even data privacy are a few examples of the regulatory challenges procurement faces in managing complex global supply networks.

I could also talk about the negative impact that a failure to address these regulatory conditions can have on an organization's brand as a company and employer. Of course, it's not exactly a revelation that negative press regarding regulatory violations will certainly impact your image with the public, e.g., your customers. However, did you realize that in a highly competitive job market, "58% of candidates surveyed said they consider a company's social and environmental commitments when deciding where to work." This mindset isn't just a checkbox sentiment: "55% said they would choose to work for a socially responsible company, even if the salary was less."

While employee attraction and retention are not often discussed in the same breath as ESG regulatory compliance – at least not enough, it is yet another indication of the expanded importance and impact of getting ESG right. In other words, people are taking this seriously.

Learning How To Get It Right

Given ESG's recognized importance, I will be part of the panel discussion on preparing For Ever-Changing Supply Chain Regulations at the upcoming SIG Procurement Technology Summit.

We will specifically get into the critical aspects of identifying and managing compliance risks in your supply network, focusing on the following four Learning Objectives:

“The Grocery Code of Conduct is a significant step toward improving the resiliency and efficiency of the grocery supply chain. The primary objective is not to directly rebalance market power, regulate fair dealing, or set the level of retail fees, but rather to improve supply chain relationships through principles of predictability, transparency and fair dealing.” – DH Canada (January 17, 2023)

It wasn't that long ago that I wrote an article regarding the largest Canadian grocer – Loblaws, and their headline-grabbing stare-down price dispute with the global brand Frito-Lay. Here is the link to that post titled The Inflated Supply Chain: How To Navigate The Complexity Of Doing Business During A Period Of Rising Inflation.

The primary focus of the piece was – as the article’s title suggests, understanding the impact of inflation on supply chains. However, beyond the big picture story in which inflation takes center stage, there is an underlying theme. The theme I refer to is how buyer-supplier relationships affect inflation and other supply chain disruptions.

The buyer-supplier relationship's impact on inflation, not the other way around, is not a typo. As the age-old saying goes, it is not what happens to you but how you react to it that matters.

High-Level Overview

For the sake of expedience, the following high-level bullet points should provide a solid understanding of the Loblaws and Frito-Lay situation at the time and the government’s intervention to resolve the dispute. This overview will help you better understand why the government is introducing the grocery conduct code.

Whenever we face a crisis, our attention is understandably focused on finding a solution as quickly as possible. We, in essence, become "locked in the moment" because the fallout of inaction is usually significant.

However, in our hasted energy to resolve a problem, we tend to lose sight of why we are in this situation in the first place. In other words, there is a bigger picture beyond our narrow scope of immediate impact, and we need to recognize its importance.

I like to think of it as the slow-leak tire syndrome. You have a tire with a slow leak and must repeatedly pull into a service station to fill it to the proper inflation rate. Is it an inconvenience-absolutely, but is our frequent station stops enough of a hassle to prompt us to either repair or replace the tire?

When I was originally asked to write this article on the disruptive impact a potential West Coast port workers' strike would have on supply chains, the slow-leak tire analogy immediately came to mind.

A Long Time in The Making

The contentious situation we are now facing at this and other ports in North America has been brewing for some time, pre-dating the COVID-19 pandemic.

ProcureAbility is pleased to publish its Bold Procurement Predictions for 2030 Insights Series to help Chief Procurement Officers make sense of it all, highlighting the new practices likely to become common by decade’s end including advanced crowdsourcing, procurement technology acceleration, cognitive computing, hyper cybersecurity, and virtual organization design.

In This edition, ProcureAbility continues its ‘Bold Procurement Predictions' Insights Series – the product of extensive research and input from a think tank of experts in the supply chain field – with a look at the rapid technology acceleration expected in the procurement practice by decade’s end. Chief Procurement Officers are already re-evaluating processes, with nearly one in four reporting that digital transformation is a strategic initiative in 2022.¹ The majority of mid- to large-size organizations report using e-procurement and e-sourcing software, and we predict use will grow exponentially in the coming years. Artificial intelligence, machine learning (ML), and predictive analytics will replace human efforts for most administrative tasks. These seismic shifts in procurement technology stack will have a significant impact on how teams conduct business. Here are a few of the emerging technologies we expect to gain mainstream acceptance by 2030: 

Procurement Teams are Expanding Their Tech Footprint¹

30% are using new technologies

If you've been to the grocery store in the last couple of months, you may have noticed that your total costs are far higher than before. Prices on items like food, housing, gasoline, and utilities have risen by over 9.1% over the last 12 months – a 40-year record, according to the U.S. Consumer Price Index.

Why is everything so expensive?

A lot is working against the global economy: 

• Covid-19 continues to affect manufacturing and logistics around the world. 
• The war in Ukraine continues to have an impact, especially on grain production for much of Europe. 
• The U.K. is facing unprecedented increases in energy price caps.

These combined events are the perfect recipe for supply chain shortages and drastic price increases.

All eyes on procurement

Businesses are facing uncertainties unlike ever before, causing CEOs to look closely at what is happening behind the scenes. Procurement is under scrutiny with central purchasing being pushed into organizations' spotlight.

One such question being asked of procurement is, "Do we have approved alternative sources of supply in place?" Building a diverse supply chain is key but not always easy. 

You might source goods or ingredients from various vendors for a product you manufacture. Still, all it takes is one ingredient to be delayed because of rigorous testing, approval processes, or even that supplier's supply chain for the whole operation to halt.