Focus on Procurement

Establishing resilient procurement channels – The current hot topic in procurement

The procurement function has long played a key role in many industries. In the course of the current deglobalization tendencies, the corresponding tasks are becoming increasingly complex and dynamic – and supply chain resilience is emerging as a strategic factor. In this interview, Michael Reinisch, partner and procurement expert at Horváth, explains what is important for companies now.

What has changed in procurement in the wake of raw material shortages, supply bottlenecks, geopolitical crises – what is currently in focus?

REINISCH Right now, the focus is primarily on the availability of materials. The pressure on the procurement functions to secure their supply chains has increased enormously in recent years. Restructuring is being considered and carried out where necessary – but it's important to remember that switching strategically important suppliers is usually a highly complex affair that can involve significant costs. In addition, the cost structure must remain competitive. Although some attempts are being made to establish targeted supplier partnerships within specific global regions, we are not seeing systematic deglobalization. In addition to availability, procurement functions are currently dealing with issues such as supply chain resilience, end-to-end transparency on prices from procurement to distribution, and sustainability.

In which industries is deglobalization having the greatest impact on procurement – and to what extent?

REINISCH Particularly in manufacturing industries, a rethink is taking place in certain cases. While globalization has been a very good lever for cost reduction in recent decades, high transport costs and long delivery times are now leading to additional costs that are making more regional procurement much more attractive. Procurement teams are increasingly being tasked with developing regional suppliers into strategic partners. In this context, the corresponding technical expertise and cross-functional collaboration with the development, production, and quality management functions are of fundamental importance.