How smarter procurement can tackle supply chain concerns

Procurement teams are under pressure as never before, having to cope with unpredictable economic and political circumstances that have seen inflation rising and supply chains threatened by wars and tariffs.

 

Amazon Business’s 2025 State of Procurement Report provides some insight into the factors senior procurement leaders see as most likely to cause organisational risks or challenges in the next 12 months: 

• 34 per cent see inflation as a concern
• 34 per cent identify cyber-security threats as the biggest issue
• 33 per cent are worried about supply chain disruption or delays 

Alongside these issues, procurement functions report various challenges which are impacting their ability to do their job effectively. Almost half (44 per cent) of senior leaders say they face operational challenges in efficiency and complexity, while one in five (21 per cent) feel under pressure to meet cost and budget targets.

 

One way in which procurement can balance the dual targets of controlling costs while also improving efficiency is to enable those outside the procurement function to purchase items, within agreed spend parameters and from approved suppliers.

 

This is a growing focus: 62 per cent of decision-makers see streamlining processes as an increasing priority for the next year or two, while 32 per cent are looking at decentralising so others can easily buy for teams.

 

Externally, frustrations with suppliers are becoming increasingly common, and much of this comes down to an inability to provide them with reliable information.

 

Almost one in five (19 per cent) identify a lack of clear communication and support from suppliers as a challenge, while 17 per cent highlight supplier inability to support digital procurement as an issue. This has increased by 11 per cent in the past year. Ensuring visibility of supplier inventory is a concern for 10 per cent of senior procurement leaders.

 

If procurement is to effectively manage risks and make inroads into bringing more spend under management and reducing costs, having accurate information from suppliers is essential.

 

More than a third (34 per cent) of senior leaders selected improving reporting and analysis as an area they want to see teams focus on in the next year, while 73 per cent say this is a top priority for the next year or two.

 

This means having the right technology in place, which can help extract vital information around how much is spent with suppliers and in which categories. A finance procurement leader agrees: “To be effective in managing today’s supply chains, you need transparency across suppliers, and that’s only possible with the right data integration.”

 

Many procurement teams are already making use of technology to help analyse spend information. Around two thirds (65 per cent) deploy analytics or tools to understand performance, trends, data and insights, and 55 per cent use digital or online invoices.

 

Artificial intelligence (AI) is also starting to have an impact. Currently 42 per cent use this to help make purchasing decisions, while 38 per cent plan to invest in AI demand forecasting, AI-driven spend analysis and AI automated procurement processes over the next two or three years. A similar number (37 per cent) also plan to invest in AI-powered supplier risk management.

 

This is encouraging news for those in procurement teams as they seek to overcome the challenges they face. As one government procurement senior leader says: “The key to modern procurement is not just having data but generating actionable insights that drive smarter, faster decisions at every level.” In the current climate, this is not just desirable, but essential. 

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To find out more about how Amazon Business can help your business gain more control over spend through smarter procurement, visit business.amazon.co.uk