Procurement and Supply Chain Trends for 2024

The global supply chain, if anything, is incredibly compelling. There’s always something to talk about. Disruptions, shortages, emerging technology, ESG – the sheer number of supply chain trends, issues and storylines that tech providers could leverage as part of their communication strategy is daunting. 

For tech marketers, reaching and resonating with your audience in a noisy market like supply chain requires a targeted, buyer-centric approach to public relations. What supply chain trends, challenges and opportunities are top of mind for your buyers, and how do you help them capitalize? Generating broad air cover simply won’t cut it. The best PR programs demonstrate how a brand adds value and solves pain on the issues buyers care about. 

Here are five key supply chain trends and developments that supply chain and procurement leaders have on their radar for 2024. 

1. ESG’s Out – Sustainability’s In.

Last year, we highlighted ESG’s evolution from tangential importance to business criticality and said that 2023 was going to be a big year. It was a big year for ESG, but not necessarily for the right reasons. 

We saw a backlash against ESG practices based largely on partisan views, and as a result, the rise of the anti-ESG movement. We saw this mostly in the form of ESG-based investing, or companies making investment decisions based on how a fund performs on environmental, social, or governance metrics. Headlines like this, ‘ESG funds faced their worst year on record in 2023‘, seem to give ammo to ESG’s detractors. 

However, sustainability as a concept and a business mindset is as strong as it’s ever been – especially as it relates to procurement and supply chain management. A large body of evidence shows that sustainable business practices are good for business, too. What’s more: supply chain sustainability, ESG, and due diligence regulations continue to pop up globally, necessitating that companies continue to create positive change – for people, the planet, and profit. 

Call it what you’d like – but the arc of the sustainable universe is long and bends towards progress. Sustainability will be one of the top supply chain trends in 2024. Whether touted publicly or not, expect enterprises to continue their investments in business sustainability, which will add more fire to the red-hot market for ESG, procurement, and supply chain technologies. 

2. Generative AI Shakes Up the Supply Chain and Procurement Tech Space.

Last year, businesses and employees experienced the deep business value and potential that generative AI offers. As consumers, we couldn’t get enough. Turns out, we were literally getting started. 

Generative AI platforms have been helping end users do things previously not possible for nearly 18 months now. Like every other industry, the procurement and supply chain tech space has taken notice and has been investing big money to integrate large language models (LLMs) and GenAI features into solutions. We’re seeing everything from source-to-pay suite providers and supply chain risk solutions to native AI startups bringing new capabilities to the market.

The tech is changing and advancing faster than most can keep up – which creates challenges for marketers. Our clients constantly get asked three things about GenAI from prospects: What do I need to know, what are you developing, and how do I decipher what’s real and applicable to my job (can I trust this technology or claim?) versus what’s fluff and marketing (and there’s a lot of it out there).

Supply chain and procurement tech providers can’t afford to ignore the generative AI wave. But they need to be smart about how they communicate around their solutions and capitalize. The demand for AI is real, but there’s still a lot of uncertainty across the market. Our advice for tech providers looking to communicate their generative AI vision: Focus on showing (not telling), communicate real expertise (go beyond surface level AI messaging), and build credibility and validation through PR and customer marketing. 

3. Cost Control Remains Procurement’s Top Priority, Despite Strong Economy and Consumer Confidence.

Economists are in agreement: the U.S. economy made a soft landing in 2023 and we avoided a recession that many said was inevitable. The U.S. Federal Reserve halted hikes on interest rates in September amid falling inflation, now 2%. The Fed may actually begin cutting interest rates in June this year – which would provide much-needed relief for many businesses, especially tech startups looking for their next raise. Other economic indicators are strong: unemployment remains historically low (3.7%), stock market indices continue to reach historic highs, and consumer confidence has hit a two-year high. 

Despite these improvements, enterprises remain laser-focused on cost control and profitable growth. According to the Hackett Group, procurement’s number one priority for 2024 is spend cost reduction. Procurement’s number three priority: combating inflationary price increases.

“Spend cost reduction is perennially a high priority for procurement,” said Chris Sawchuk, principal and global procurement advisory practice leader at Hackett. “But economic concerns have propelled it back into the top spot this year. In addition to the array of global economic challenges, companies are concerned about their ability to grow revenue, so cost focus and margin expansion are key. Many companies are even hoping to claw back some of the inflationary cost increases to support margin growth.”

What’s old – procurement’s obsession with cost savings – always becomes new again. This serves as an important reminder for procurement and supply chain tech marketers: Yes, you need to communicate a strong narrative around macro issues and timely supply chain trends like generative AI, ESG, and supply chain disruption. But don’t forget what’s truly important to your audience: Cost savings. 

4. Shipping Disruptions Persist Globally, Putting Markets at Risk.

A few months into the year and 2024 is already fraught with international crises. Shipping disruptions, in particular, pose high risks to global trade. 

The War in Ukraine enters its third year; Iran-backed Houthi rebels conduct daily drone and missile strikes on commercial shipping transiting the Red Sea and Bab al-Mandab Strait, striking several ships and causing more than 500 to reroute. And drought conditions in Panama have forced operators at the Panama Canal to restrict daily passage from 36-38 ships to just 22 ships in January. 

Unfortunately, we don’t expect any of these supply chain trends to slow or reverse any time soon. Expect these disruptions to continue to stress global supply chain and logistics networks throughout the year, likely increasing costs and lead times.   

5. Reshoring Continues Vis-a-Vis Supply Chain Disruptions.

Reshoring is a long-term trend which will continue through 2024 and beyond. It fell from the headlines a bit in 2023, even as companies and industries continued their long march home to more stable markets. In the U.S., new government investment in domestic manufacturing capacity has been helping companies make good on promises to return business operations to U.S. shores. And it can’t happen fast enough. 

A resilient supply chain is a supply chain you can control – or at least one that your potential adversaries cannot. Wars in the Middle East, Europe, and the threat of war in East Asia underscore the strategic necessity of producing critical goods, materials, and products, especially those in the public’s interest (e.g., national security, public health), closer to home. 

Global, economic, and domestic conditions will continue to motivate companies to invest in risk management technologies and bring more of their operations and manufacturing closer to their domestic markets; but reshoring is a marathon – not a sprint.

Are you a supply chain or procurement tech provider looking to scale your business and stand out in a crowded and highly-competitive market? Let’s talk – we have some great ideas to elevate your PR strategy.