The document discusses the evolution of procurement in the context of Industry 4.0, highlighting the shift from traditional cost-focused practices to embracing innovation and supplier collaboration. It emphasizes the importance of digital technologies, data analysis, and automation in enhancing efficiency, flexibility, and procurement value within complex supply chains. The document suggests that procurement teams must leverage these advancements to become key drivers of innovation and improve relationships with suppliers and customers.

1. Procurement 4.0:
from cost-killer to innovation
driver

2. INDUSTRY 4.0 AND PROCUREMENT
In a increasingly digital world,
traditional organizational boundaries
in the supply chain are becoming
blurred. The surge of digital
technologies has led to reshaping the
procurement organization as well as
finding new value propositions.

3. PROCUREMENT 4.0: ANOTHER BUZZ WORD?
Procurement’s priority used to be the delivery of industrial goods and services at best life-
cycle costs. However, this will not suffice in the next few years to guarantee an
organization’s competitive advantage.
Procurement teams will need to shift their focus in order to increase enterprise value.
Suppliers relationships, continuous improvement or innovation are just a few of
Procurement’s development perspectives.

4. THE QUESTION IS:
How can industries generate procurement value within complex
value chains?

5. INTRODUCING PROCUREMENT 4.0
As the supply chain evolves
toward an agile, ecosystem, so is the
Procurement department.
Step by step, organizations are
integrating smart solutions or predictive
analytics, and automating procurement
processes to reduce costs while
increasing their efficiency.

6. LISTEN TO THE MARKET
In the last few years, the market
has been characterized by a volatile
demand. Customers’ needs evolve
rapidly, as their interest for tailor-
made goods and services increases.
Organizations have to show greater
flexibility and rethink their
purchasing models.

7. OVERCOME UNCERTAINTY
Thanks to Industry 4.0 and the IoT (Internet of Things), Procurement
can collect and analyze data from the entire value chain to better
anticipate needs and demand.
Big data and predictive analytics are major change drivers for
Procurement 4.0: from demand forecasting to capacity planning,
should-cost analysis or routing optimization.

8. IIOT AND PROCUREMENT
With sensors, Procurement teams can assess
inventory levels in real-time or geolocate goods at
any time across the supply chain.
Robotics ease loading and unloading processes.
Operators can automate picking or packaging.
Operators are able to quickly react to any unplanned activity

9. IMPROVE SUPPLIER RELATIONSHIPS
Supplier Relationship Management is an
important part of Procurement’s activities.
Procurement teams may want to leverage
innovative tools to rationalize operations with
low added-value:
- Predictive costing (should-cost analysis)
- Automated processes (contract drafting and
validation, invoicing…)
- Real-time communication

10. BECOME AN INNOVATION CATALYST
Procurement acts as an interface between external
actors and internal functions (R&D, Product
Development, Support…). As such, they are becoming a
major innovation driver within the supply chain:
- Leverage data collected across the SC (e.g.: customers’
feedbacks) to improve the accuracy of strategic
decisions
- Support co-innovation by integrating suppliers’
innovation processes

11. IN A NUTSHELL
Increased flexibility and real-time monitoring of
purchasing activities
Greater control over procurement activities
thanks to Big Data and IoT
Costs reduction and greater reactivity through
automated processes
Improved contract negotiations through better
suppliers & end-customers relationships
Driver for innovation thanks to output and
demand forecasting

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