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What’s on Your 2024 Procurement Wish List?

Dec. 19, 2023
Here are some things electronics buyers can add to their 2024 wish lists as they reflect on the last 12 months and start planning ahead for the coming year.

End-of-year planning is an annual ritual that most organizations use to both review the events of the past 12 months and to prepare for what’s coming next during the year ahead. It’s a time for reflection, but also a great time to think about the opportunities and challenges that may present themselves in 2024.

“When the end of the year approaches, there are many loose ends to tie up. You may be reviewing the goals you established for the year, those financial objectives, and trying to squeeze in your holiday shopping too,” Signature Analytics points out. “Alongside all of this, it is also time to start year-end planning.”

That planning should include developing practical goals based on what happened in 2023; reviewing any pertinent financial and performance data; creating a budget (if you haven’t done so already); and reviewing any informative industry metrics (e.g., business margins, inventory turn, AP/AR turn, etc.).

“Look at the investments required in equipment, staffing, or expansion plans that may require additional cash or financing,” Nick Brooks writes in “Top 5 Year-End Planning Tips for Businesses.”

“This not only helps document the expectations, but it may also identify areas of additional opportunity or areas that require additional resources.”

Semiconductor-Specific

In the semiconductor market, the current contrast between the heightened inventory of common parts and persistent supply constraints on some series creates a unique challenge of managing both oversupply and shortage sourcing.

“The excess inventory increases financial liability, while shortages impact production,” says Gerard Magnarelli, sales manager, Americas at Fusion Worldwide. “On the computer hardware side, for example, the likelihood of storage and memory pricing rising along with supply constraints, is driving some companies to pause production and bookings to see how developments materialize.”

To electronics buyers filling out their year-end wish lists right now, Magnarelli says three good starting points are to: establish relationships with strategic sourcing partners like Fusion; enact a strategic approach to sourcing decisions, considering numerous options and contingency plans; and use market intelligence to your advantage. “Keep your ear to the ground on supply disruptions and pricing trends,” he adds. 

Five Additions for Your Own 2024 Wish List

The end of the year is also a great time to develop a “wish list”—those things that you’d like to do, accomplish or acquire during the coming year. As 2023 draws to a close, buyers in the electronics industry are working in an environment that has mostly stabilized post the disruptions of the COVID years. However, this apparent stability is nuanced, with ongoing challenges in sourcing specific components and materials.

“The capacity to reliably and consistently procure materials and components for critical projects continues to be a central concern for procurement professionals,” says Fernando Spada, chief marketing and revenue officer at Orbweaver. “Furthermore, the industry's supply chains are adapting to new import and export regulations for many vital components and materials, directly impacting the strategic planning and tactical execution of procurement teams.”

Here are five things you’ll want to consider adding to your 2024 procurement wish list:

  1. Advanced data integration tools. Embracing advanced data integration tools is critical. “These tools offer real-time insights and predictive analytics, enabling buyers to make informed decisions, anticipate market trends and efficiently manage inventories,” Spada says.
  2. Enhanced Supplier Relationship Management (SRM) systems. Sophisticated SRM systems can help streamline communication, foster collaborative innovation and mitigate risks associated with supplier dependencies.
  3. Effective and efficient risk management frameworks. In the post-COVID world, and with new export/import regulations now in place, procurement teams need robust and efficient contingency plans. These plans will help them manage supply chain disruptions and respond swiftly and effectively to unforeseen circumstances.
  4. Sensible investment in artificial intelligence (AI) and machine learning. Knowing how to leverage AI and machine learning technologies can revolutionize procurement processes. “AI and Machine Learning are tools that, if sensibly used, can help optimize inventory management, forecast demand more accurately, and enhance decision-making processes,” Spada points out. 
  5. Solutions that support flexible sourcing strategies. Adopting flexible sourcing strategies is key in an industry where markets fluctuate rapidly. “This involves diversifying supplier bases, exploring alternative material and component options, and establishing agile procurement processes,” Spada adds.

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