The Growing Gap Between Advanced Technology and Increasing Procurement Demands

The growing gap between advanced technology and rising procurement demands can lead to reduced efficiency and hinder innovation.

  Procurement operations are facing a precarious situation. Hackett Group research released earlier this year shows that procurement budgets are shrinking while revenues continue to rise. This creates challenges in bridging the gap between increasing production pressures on executives, plant managers, and buyers. Reducing investment in tools, technology, and resources that staff can use to drive business growth only exacerbates the problem.

The widening disparity between advanced technology and increasingly complex demands results in reduced efficiency and obstructs future innovation.

It’s no surprise that over the past 25 years, we’ve seen a growing gap between factories and globally distributed facilities. Customer demands for faster delivery and customization continue to rise, alongside ever-expanding industrial data generated through technology adoption.

  Experts recommend focusing on improved analytics and enhancing agility in procurement operations. However, while these improved analytics and operational tools help organize data, they do little for the people who buy, sell, and manage inventory on a daily basis in factories. The reality is that many are still using outdated, cumbersome processes—like fighting a 21st-century war with Civil War-era tools—that slow down work, reduce focus, and hinder impact on business objectives.

Here are three ways manufacturers can equip their plant teams with advanced, cost-effective tools to tackle today’s inefficient procurement processes:

1. Automate Routine Data Analysis to Free Up Time for Strategic Work
   Over the past 25 years, AI has gradually been integrated into supply chain operations, initially for collecting and visualizing large amounts of data. Today, AI can automatically perform data analysis and root cause identification.
With data coming from multiple sources, buyers and managers cannot analyze it all manually. By leveraging technology to reduce time spent on routine tasks, buyers can uncover data anomalies, focus on orders, improve supplier relationships, and even reclaim time for personal life. For example, some clients report buyers spend 10–15 hours per week creating spreadsheets—time that could be redirected to high-impact work.

2. Use AI Tools to Help Buyers Prioritize Work
   For plant buyers, daily workflows can feel like a “Choose Your Own Adventure” game with massive amounts of data, mostly highlighting inefficiencies. Buyers must decide where to start, hoping to make the right impact. Without AI tools designed for them, this can take hours of manual effort.
Modern AI enables procurement teams to prioritize work and highlight high-impact actions. For example, AI can provide early insights into shipping schedules and potential cost savings, allowing buyers to act strategically. This prioritization not only improves cost efficiency but also adds unexpected satisfaction and engagement. By optimizing inventory, organizations can reduce stock levels by up to 36% in just three months.

3.  Facilitate Collaboration Across the Organization
   Manufacturing remains a people-centered business: people produce for people. Procurement, situated at the heart of complex supply chains, acts as a bridge between technology and operational gaps.
For effective operations, buyers must communicate and share best practices across teams, plants, and suppliers. Without this collaboration, each plant risks becoming a silo, increasing operational gaps.

Improving analytics, agility, and AI adoption in manufacturing is still in its early stages. Even with limited budgets, focusing on these three areas provides organizations with the tools to empower employees at the center of the gap between production and innovation, addressing inefficiencies across the supply chain.