RS releases 2024 Indirect Procurement Report

The report, produced in association with The Chartered Institute of Procurement and Supply (CIPS), shines a light on the current state of the sector for those responsible for supplies supporting maintenance, repair and operations (MRO).

It is the seventh annual survey of its kind and those surveyed were global participants from the procurement profession from sectors including manufacturing, public sector, energy, logistics and retail, transport and defence and technology. Job roles ranged from operational to senior and director level.

This years survey drew a record number of responses from UK and Ireland respondents, at 323, and from a larger number of younger individuals than would normally contribute. There was also a significant number of first-time participants and a higher-than-usual percentage of smaller and medium-sized companies took part.

Some of the main themes emerging from this years survey included the impact of ongoing challenges like attracting talent, difficult macro conditions, environmental, social and governance (ESG) and technology. The top three challenges were cited as the need to ensure sustainable and ethical procurement (32 per cent), improve asset performance (32 per cent) and cope with reduced operational budgets (30 per cent). Pressure to reduce inventory costs (28 per cent) and the increased cost of indirect materials such as MRO (27 per cent) are also significant.

Emma Botfield, managing director for the UK&I at RS, said: With a record number of UK&I responses, with more representation from younger age groups and small and medium-sized businesses, were heartened by this evidence that procurement professionals are more engaged and active than ever in key business issues. This offers reassurance that the future of procurement is in safe hands.

We were not surprised about the range of challenges facing procurement professionals in the current climate. However, it was great to see that even in times of financial pressures, the ESG agenda is still firmly rooted and a high priority for many firms. Procurement teams recognise their hugely important role in this and we are certainly poised to ensure their intentions are translated into effective actions, she added.

Encouragingly, 82 per cent of respondents to the survey stated they would be happy to pay a premium for more sustainable products. Helen Alder, head of knowledge and learning development at CIPS, said: This is an indicator of a greater willingness to think about things differently and take a longer-term view. However, the pressure to deliver cost savings is still great, and with inflation and other challenges such as security of supply and geopolitical tensions, thats causing a slight dichotomy. The drive to become more ethical and sustainable should be part of a long-term plan, but theres been a bit of short-term upheaval.

Botfield concluded: Those in procurement must do their bit to keep everything running smoothly and in the indirect space, this means tackling ageing assets while contending with risks presented from issues like counterfeit products. Building strong relationships with the rest of the business will be vital, both in liaising with engineering teams to identify what needs updating, when, and making the case for investment.

It is also clear that effective supplier management is essential if procurement is to meet its dual aims of securing supply and reducing risk. For some organisations, this will require a close look at the number of suppliers and improving communication with key providers. None of these are easy issues, and having a trusted partner to help in the navigation of them can be invaluable.