Fall 2022 Reshape Summary

Purchasing professionals gathered at Amazon Reshape to discuss trends, challenges, and new technologies impacting supply chains and the procurement industry. These conversations illuminated a growing need for intelligent procurement solutions to help with data-driven decision making, managing tail spend, compliance, consolidating costs, and engaging in responsible purchasing.

Managing the increased responsibilities of procurement requires a hybrid approach of a strategic business partner and reliable supplier. Organizational leaders seek collaboration with strategic partners to meet business objectives, while buyers seek convenient and reliable access to supplies with a customizable delivery experience.

“We’ve heard from customers that they want a one-stop e-procurement experience,” said Todd Heimes, Amazon Business Worldwide Director and General Manager. “Smart Business Buying makes this possible using agile purchasing processes that enable you to manage spend and incorporate data-driven decision-making, all while promoting responsible and sustainable practices.”

Smart Business Buying allows procurement teams to maximize business impact with intelligent procure-to-pay solutions, turn data into actionable insights, and create an intuitive buying experience across a built-for-business selection of products and sellers.

“Smart Business Buying is exactly what it sounds like: a procurement strategy that’s smart from both a bottom-line perspective and a social responsibility perspective,” Heimes said.

Buyers can improve spend visibility and see a customized summary of practical insights on pre-built dashboards that transform purchase data into growth opportunities.

“With Smart Business Buying, Uber can see purchasing data in real time to make faster decisions when they need to. They can answer questions, like ‘what procurement policies do we need to implement and modify in order to achieve our procurement goals’. This was why Uber ultimately decided to work with Amazon Business,” said Alex Gagnon, Amazon Business Vice President.

Making the buying process smooth and simple

Purchasing teams across the procurement industry shared that they struggle to adopt new technologies and integrate them with current entrenched systems. For example, one major tech company approached Amazon Business and shared that they had been using the same legacy procurement software and buying methods for years, but ran into challenges when the company needed to rapidly pivot to a remote and hybrid work model during the COVID-19 pandemic.

This pivot to a remote and hybrid work model required an easy-to-learn buying experience that the company could scale rapidly. Amazon Business helped accelerate and simplify this process with an intuitive and familiar buying experience for customers, both online and in-app.

“What is impressive is that within a few weeks, they were able to onboard everyone into Amazon Business,” Gagnon said. “Because it was an intuitive buying experience for all employees, they could do their own procurement and return to full productivity quickly.”

Smart Business Buying reflects customer obsession at Amazon Business, which is delivered with constant innovation and work to build solutions that not only meet, but exceed customer expectations. “We’ve worked to make it as easy to shop for business as it is for your home, so your teams can save time,” Gagnon said. “Now and in the future, our collective goal will be the same: to help our customers simplify their procurement process so that they have more time to focus on the future.”

For more on this topic, watch the following sessions on-demand:

• Smart Business Buying. Delivered.
• Tech Premiere: An Exclusive Look Under the Hood of Amazon Business   

Improving compliance with Guided Buying

With the rise of distributed work forces across multiple sites and locations, maintaining compliance while managing procurement for multiple groups has become a complex challenge for procurement leaders. With Smart Business Buying, procurement leaders can set out-of-the-box buying policies to direct spend to products and sellers that both satisfy organizational purchasing goals and maintain compliance. Purchasing teams can use Guided Buying, a paid Business Prime feature, to direct teams to prefer or avoid certain products or sellers, making compliance easy for all team members.

Guided buying also supports Amazon Business's commitment to responsible purchasing. “Since last year, Amazon Business customers who are using buying policies for small, diverse and local suppliers have increased by more than 10-fold,” said Gagon. “Amazon Business currently offers more than 300,000 Climate Pledge-friendly products and we work with almost eight thousand diverse-certified suppliers.”

For more on this topic, watch the following sessions on-demand:

• CPOs Unplugged: How DEI and Sustainability Can Propel Topline Performance
• The Essential Role of Procurement in ESG Performance
• Unpacking Supplier Diversity Culture

Data-driven decision making

“Unless you have clear and consistent insights into your purchasing patterns, it's tough to find opportunities to cut back on spending and scale your business purchasing,” said Gagnon. That's why Amazon Business offers pre-built dashboards that transform purchase data into growth opportunities, giving organizations a customized summary of practical insights on their purchasing trends. Organizations can easily turn purchasing data into actionable insights to improve spend visibility and gain a holistic view of business spend to help identify savings, consolidate costs, and realize new efficiencies.

With the growth of these intelligent digital procurement solutions, buyers and organizational leaders can easily pinpoint new opportunities for savings within a seamless purchasing experience. “We make it really easy for access and get insights from information. There’s a series of standard and customized dashboards to access your data, so you can see what’s happening with your purchasing activities,” said Gagnon.

This visibility is essential to managing tail spend. Procurement leaders have a few different names for this spend category — maverick spend, rogue spend, and yes, tail spend. This is the unplanned spend happening across every purchase category, where 80% of spend goes to 20% of suppliers, which means 80% of suppliers are tail-spend suppliers.

“Tail spend can be the root of the problem”, said Gagnon. “Sometimes processing tail spend purchases can cost more than the purchase is worth, let alone your team’s time.”

For more on this topic, watch the following sessions on-demand:

• Tech Premiere: An Exclusive Look Under the Hood of Amazon Business
• Private Brands: Better Outcomes Through Data Science[CA6]

Responsible purchasing

According to a recent McKinsey report, organizations with strong environmental, social, and corporate governance (ESG) are proven to be less wasteful and more prepared in the face of changing conditions, consumer preferences and regulations. These organizations also have stronger relationships with their customers and a healthier bottom line.

Smart Business Buying is designed to drive progress specifically related to ESG, by enabling purchasing teams to direct spend towards certified diverse and sustainable products and sellers, while tracking and reporting spend toward responsible purchasing goals.

Currently, responsible purchasing and ESG represent a critical agenda for procurement leaders. According to the 2022 State of Business Procurement Report:

• 84% of business buyers say their organization plans to increase procurement budget directed to Black or other diverse-owned businesses.
• 63% of business buyers say one of their top goals is improving sustainability in their purchasing practices.
• Three out of the four most important priorities for procurement are now related to responsible buying.

Amazon Business empowers organizations achieve these goals by filtering search results by sustainability and diversity criteria to easily locate products with sustainable suppliers and certified minority-owned businesses.

Further, Amazon, and by extension Amazon Business, is pursuing their own set of sustainability goals. “Amazon is also pursuing a goal to become carbon net neutral by 2040, and we’re in the process of converting our delivery fleet to be entirely electric-powered in the coming years,” revealed Gagnon. Organizations with sustainability in mind can rest assured that Amazon Business will continue to drive progress toward these important social responsibility goals.

For more on this topic, watch the following sessions on-demand:

• Sustainable Road Trip: Transport Logistics Past, Present, and Future
• The Essential Role of Procurement in ESG Performance