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Top challenges Procurement/SCM organizations face with suppliers that affect achieving cost savings include, limited leverage due to sole-source or single-supplier situations, limited supplier competition in key categories and market volatility affecting prices and supply. By proactively addressing these challenges organizations can strengthen their negotiating power, stabilize supply and pricing, and unlock meaningful cost savings, ultimately boosting resilience and competitiveness.

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Procurement/SCM leaders report top obstacles that impact their ability to effectively execute their roles are access to data that can drive decision-making (37%), a shortage of talent, skills, and/or frequent turnover (37%), and outdated technology/software (31%). Removing these obstacles improve operational efficiency, enhance competitiveness, and sustain long-term growth.

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Procurement/SCM leaders consider enhancing supplier collaboration and partnerships, along with refining category management strategies to be strategically important for future cost savings. These are closely followed by adoption of emerging technologies and expanding cross-functional collaboration within the organization. Using these strategies can unlock significant cost-saving opportunities, boost operational efficiency, and contribute to overall organizational success.

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While Generative AI use is increasing in supply chain, it is not without its challenges. The biggest challenges include data security/privacy; workforce training/skill gaps; integration challenges with existing systems/processes; and data quality/compatibility. As solutions to these challenges are discovered, the use of Generative AI is expected to increase.

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According to a recent CAPS quick poll, the top 3 ways a procurement/SCM team gathers market intelligence is through industry events and networks; free resources; and from paid third-party tools and subscriptions. Effective market intelligence is a key tool for reducing supply chain costs and risks.