© Oliver WymanINTRODUCTIONAcross industries, companies are facing constantly increasing and evolving supply chainchallenges. Procurement professionals are under considerable pressure to alleviateshort‑term sourcing difficulties while also preparing for any new conditions that arisein the future. As they are well aware, virtually every decision they make now can havefar‑reaching consequences for their organizations.In our new survey, we sought detailed perspective on the most important issues for theseprofessionals and the tactics they’re employing to tackle them effectively. Drawing ontheir insights, this survey provides a comprehensive analysis of priorities and trends inprocurement. The findings are structured around the four major themes that emerged:the leaders’ strategic priorities, the utilization of generative artificial intelligence (AI) inprocurement, nearshoring, and riskresilience.The survey comprised top procurement executives, from divisional directors and managersall the way up to the C‑suite level. The respondents represented a range of industries,with the largest proportion coming from financial and professional services.Their organizations varied in size from less than $1 million in annual revenue to morethan $1 billion. Exhibit1 offers a breakdown of themix.Exhibit 1: Demographic breakdown of the procurement leaders surveyedRespondentsby Industry9%Financial & Professional ServicesHealthConsumer GoodsProcess & Manufacturing industriesTransportation & LogisticsOther27%13%9%9%33%Source: Oliver Wyman Value Sourcing Survey $%#Respondentsby CompanyRevenueRespondentsby Position78%30%13%8%14%4%11%More than $1BN$100MM–$1BN$10MM–$100MM$1MM–$10MM<$1MMDivisional Director/DirectorEVP/SVP/Vice PresidentSr Manager/ManagerC-Suite Corporate Officer(CEO, COO, CPO, etc.)Consultant/Advisor/AuditorOther0%2%2% 38% © Oliver WymanSTRATEGIC PRIORITIES FOR PROCUREMENT LEADERSSurvey respondents reported focusing on multiple value sourcing priorities in 2024,including talent retention, refinement of their processes, and strategy adjustments(Exhibit2). Mitigating the impact of inflation also remains a significant priority; however,77% said their organizations have sufficient measures to address it, so they are looking toother levers to build resilience.Exhibit 2: Survey respondents’ value sourcing prioritiesUnlocking supplier relationship valueStrategy adjustmentsMitigating inflation impactRefinement of existing processesTalent retention & team buildingOtherCriticalImportantSupporting50%34%16%42%30%28%36%40%24%36%36%28%22%58%20%23%20%57%Source: Oliver Wyman Value Sourcing SurveyAbove all, respondents are prioritizing unlocking value in strategic supplier relationships,which half of them cited as critical. Under pressure to be more competitive, leaders viewthe strategy as particularly important to create sustainable resilience, limit customer priceincreases, and protect margins. It also serves to extract value beyond contracts, creatingcompetitive advantages through joint innovation, new technologies, shared expertise,and preferred pricing and terms.Further maturing and developing strategic supplier relationshipswith our top manufacturers is one of our top priorities.Manufacturers want to be closer to their design customers,while we want better commercial arrangements with supplyresilience — it’s a win-win.Paul DeLaRosa, CPO, Teledyne © Oliver WymanPriorities varied by the respondents’ positions (Exhibit3). For example, leaders (defined asC‑suite executives and executive vice presidents) tended to view unlocking value in strategicrelationships as a foundational element for long‑term value creation, while director‑levelrespondents were primarily focused on short‑term operational efficiencies. Meanwhile,leaders were largely unconcerned with mitigating the impact of inflation, reflectinggrowing confidence that directors are managing it effectively even amid fluctuatingeconomic conditions.Exhibit 3:Differences in priorities by survey respondents’positionsUnlocking supplier relationship valueStrategy adjustmentsMitigating inflation impactLeadersDirectors56%5%38%11%0%6%Source: Oliver Wyman Value Sourcing SurveySTRATEGIC PRIORITIES — ACTIONS TO TAKEImprove price competitiveness and protect bottom‑line margins by unlockingvalue in strategic supplier relationships through joint innovation, new technologies,and preferred pricing and terms. © Oliver WymanUSE AND CHALLENGES OF AI IN PROCUREMENTIn its recent report “The New Growth Agenda,” the Oliver WymanForum found that 96%of CEOs view AI as an opportunity, not a risk. The executives in our survey seem similarlyoptimistic and are especially focused on generative AI. More than 90% of those questionedare either already using the technology in procurement or have plans to do so in the future.However, they also report encountering a host of challenges with its adoption — dataquality, integration with existing systems, and getting buy‑in from company stakeholders,among others (Ex