Dissecting the future of procurement, Dominique Lebigot, CPO of LVMH Wines and Spirits advocates for AI, supplier ecosystems and circular economies.
The procurement sector has recently navigated through turbulent times marked by the COVID-19 pandemic, geopolitical challenges, supply chain disruptions, escalating costs and stringent demands for ESG compliance, alongside heightened cybersecurity threats.
Despite the unprecedented challenges, Dominique Lebigot, the Chief Procurement Officer at LVMH Wines and Spirits, offers a different perspective.
Conversing with McKinsey, Dominique admits the unique circumstances brought by the pandemic but questions the novelty of the complexity we face today. He suggests that every decade brings its own challenges and indicates that procurement is a dynamic field, constantly evolving to meet changing complexities.
Strategising for Tomorrow’s Challenges
Looking towards the future, Dominique underscores the necessity for Chief Procurement Officers (CPOs) to gear up for the challenges of the next decade. He elucidates that procurement is heading towards a transformative era where the traditional barriers between market interfaces will vanish, encouraging a fluid market environment. Consequently, growth opportunities will emerge from all angles across what he describes as an “external market.”
Within companies, he sees a shift in perception towards the procurement function. Executives are beginning to view procurement not just as a cost-cutting tool, but as a pivotal element in driving business growth, increasing sales, profits and market share. This transition from purely negotiating prices to leveraging external partnerships signifies a strategic shift focusing on innovation and the development of a circular economy to reduce carbon footprints.
Over the next decade, Dominique envisions a significant transformation in buyers’ roles, from spending the majority of their time managing tenders and negotiating prices to orchestrating supplier ecosystems. This shift will emphasise strategic business relationships beyond the traditional tier-one supplier engagements, incorporating comprehensive upstream value chain management. He also highlights the potential of Artificial Intelligence (AI) to allow buyers to focus more on these strategic aspects by automating routine transactions.
Embracing Circular Economies and AI
Discussing the stringent regulatory environment surrounding ESG, Dominique accentuates the importance of adopting circular economy principles. He points out that with increasing regulatory demands, the only way businesses can thrive is by innovating in how they manage both their environmental impact and profitability. The role of procurement becomes crucial here as it is at the frontline of implementing strategies that align with these goals.
Additionally, Dominique comments on the profound impact AI is poised to have within procurement. He foresees AI enabling new capabilities that streamline transaction processes, thereby reshaping the role of buyers and enriching their profiles with new requisite skills for navigating the future business landscape.
Leadership and Recognition
In his concluding thoughts shared with Mauro Erriquez, a Senior Partner at McKinsey, Dominique addresses the perception of procurement within corporate leadership. He argues that procurement should not seek validation as a leader from the top executive levels but should instead assert its influence through its own strategic contributions. He believes that proactive leadership within the procurement function can drive significant changes independently, demonstrating its inherent value to the business.
