# Procurement 4.0: A Systematic Review of Its Technological Evolution

Robson Elias Bueno, Helton Almeida dos Santos, Moacir De Junior Freitas, Rodrigo Carlo Toloi, Rodrigo Franco Gonçalves

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Robson Elias Bueno, Helton Almeida dos Santos, Moacir De Junior Freitas, Rodrigo Carlo Toloi, Rodrigo Franco Gonçalves. Procurement 4.0: A Systematic Review of Its Technological Evolution. IFIP International Conference on Advances in Production Management Systems (APMS), Sep 2022, Gyeongju, South Korea. pp.148-156, 10.1007/978-3-031-16411-8_19. hal-04768919

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# Procurement 4.0: A systematic review of its technological evolution

Bueno, Robson Elias ¹[0000-0003-3633-8903]. Almeida dos Santos, H. ²[0000-0003-0828-9630]. Junior Freitas, Moacir de ³[0000-0002-0720-5522]. Toloi, Rodrigo Carlo ⁴[0000-0001-6320-8894]. Gonçalves, Rodrigo ⁵[0000-0003-2206-3136].

1. 2. 3. 4. 5 Graduate Studies in Production Engineering, University Paulista, Sao Paulo, Brazil
robsonebueno@gmail.com

**Abstract.** Industry 4.0 is significantly transforming the traditional way of managing supply chains. However, Industry 4.0 tools can be expensive and not affordable and can be implemented in a variety of ways. Therefore, the benefits of implementing these tools should be clarified before investing in digitizing the Procurement process. The objective of the work is to present the dimensions (Competencies, Management, Partnerships, Processes, Systems/Technologies, and Sustainability) and the tools of Ind4.0 motivating the trends of evolution in the procurement area in the face of these changes in technologies and digital transformation. Despite the importance of this issue, few studies have attempted to address the effects of Ind4.0, technologies, and intelligent systems in procurement. To fill this gap, in the applications of Ind4.0 tools a conceptual model was developed to classify different value propositions provided by the different applications of Ind4.0 tools in the internal and external processes of the area. Finally, the results conclude that the six dimensions proposed in the conceptual model can provide a better understanding of the Procurement area, demonstrating the trends of the implementation of Ind4.0 tools related to different activities, presented by the literature authors.

**Keywords:** Industry 4.0; Procurement 4.0; value proposition; supply chain; digitization

## 1 Introdution

The new industrial revolution is beginning and is changing the way we live, work and relate to each other [1]. To meet this new requirement, manufacturing and all processes of companies will need to adapt [2]. The importance of developing and managing innovative procurement strategies is clear [3]. From a historical perspective, procurement has undergone major transitions, especially in recent decades, in the sense that organizations have had to deal with pressures related to cost reduction and increased profits [4].

According to Batran et al. (2017) [5], the reality is that the pace of change and the scale of challenges we face require a new approach to how we do business. Change is continuous: Procurement 4.0 must be able to easily adapt and take advantage of emerging opportunities. It is also an integral and essential component of a larger system within a given organization. Procurement 4.0 can improve supply chain performance by adding values and improving visibility and resiliency. The idea of Procurement 4.0 and the values aggregated by this concept is a new subject that is rarely addressed and suffers from great uncertainty due to the involvement of complex supply chain activities and multicriteria decision-making [6]. In terms of processes, problems, and solutions in defining how procurement can add value to customers, inside and outside an organization;
and how it can help manage relationships, improve processes, and better resource man-
agement, both internally and with partners [7]. In this sense, the research questions are:
How will the process be different from the current Procurement system to Procurement
4.0? What technologies can be used? What is the tendency of Procurement evolution?
The paper is conceptual to achieve the goal of organizing the literature through a sys-
tematic review and evaluating the process, technologies, and trends of the evolution
of Procurement to Procurement 4.0.

For this, we carried out a systematic review of the literature and established a concep-
tual frame (table 1) of Procurement evolution, technologies, and tendencies of Pro-
curement 4.0.

The paper is organized as follows: Section 2 presents the background of the review of Industry 4.0 and Procurement concepts; section 3 presents the systematic review method, used to organize and classify the literature into six dimensions; Section 4 presents the results of literature research on Procurement, technologies of industry 4.0 and the respective references; Section 5 presents the discussion and conclusions about the evolution of Procurement to Procurement 4.0, emphasizing process improvements.

## 2 Theoretical Review

2.1 Industry 4.0

As a way to contextualize the *Procurement 4.0 scenario*, we raise information about
industry 4.0, digital technologies, and the structure of procurement. Germany brings a
new paradigm of industrial production to the world, with the appropriation of digital
technology disseminated on the Internet and executed by the Elements Internet of
Things [8]. Bonilla et al., (2018) [9], common that due to its unique characteristics, the
goal of Industry 4.0 is to increase productivity and customization that are achieved
through the flexibilization of manufacturing and decentralization through the
digitization and integration of the information network, allowing the real-time
monitoring and control.

## 2.2 Procurement and Procurement 4.0

Procurement can be defined as the "business management function that ensures the
identification, supply, access, and management of external resources that an organiza-
tion needs or may need to meet its strategic objectives" [10]. Procurement is a function
of procurement of products and services, especially for commercial purposes. Among
them are supplier selection, payment terms, contract negotiation, regulatory compli-
ance, analysis, and outsourcing [11]. This is possible because Procurement has strategic
know-how about suppliers and their markets, deep expertise in the products and ser-
vices purchased, and the alternatives on offer, including emerging innovations [12].

Procurement 4.0 connects the organization with its suppliers and enables dynamic co-
operation and coordination of the procurement process [13]. Procurement 4.0 includes
a range of processes and changes within a company as they work to develop new pro-
curement value propositions and incorporate supplier management into purchasing
software [14]. According to current literature, Procurement 4.0 can be understood as an
intelligent system capable of autonomously detecting material demand, generating your
order, and even transmitting the order to the supplier without the need for human in-
volvement [15]. Procurement 4.0 aims to optimize the value provided by the purchasing
function [3].

3 Method

First, we selected the Google Scholar, Scopus, and Web of Science databases. In the second step, we select the keyword applied to collect related articles. The keyword "procurement 4.0" is new to academic literature and the resulting terminology for the new synonym for I4.0 and Supply Chain 4.0. The illustration presents the methodology in figure 1.

<figure><img src="image_3.png" /><figcaption>Fig. 1. Illustration of the methodology used in this article.</figcaption></figure>

Instead of covering a rigid systematic review, we conducted a review at different levels,
looking for text representative of technologies within the Procurement approach, show-
ing a current or potential use in the construction of Procurement 4.0. After the analysis
of the articles, a gap was presented in the literature presented, of the term Procurement
4.0 for still being reduced publications, to repair it was used an approach in the gray
literature [36], specialized scientific journals and management reports were used to ex-
tract technologies applied in various forms and levels of intervention that help to man-
age this change. Public Procurement cases were discarded because they did not belong
to the scope of the search.

For example, Henke and Schulte [16] argue that the acquisition of partners and the
interface layer of production solutions offer the opportunity to position itself as a key
factor for the development of industry 4.0, postulating several opportunities. Contrib-
uting to this reasoning, Bueno et al. [17] present six essential dimensions for the imple-
mentation of Procurement 4.0 that will require a mutation in companies, and their Stra-
tegic, Tactical, and Operational planning: Competencies, Management, Partnerships,
Processes, Systems / Technologies, and Sustainability. Figure 2: Illustrates the established dimensions of Procurement 4.0.

<figure><img src="image_4.png" /><figcaption>Fig. 2: Dimensions for Procurement 4.0, based on Bueno et al. [17]</figcaption></figure>

## 4 Results

The intention advocated in this article was to address the six dimensions and technologies of industry 4.0, to present the due rupture[3] of Procurement for Procurement 4.0. The introduction of 4.0 technologies will mean developing new value propositions, meeting new business needs, and integrating data between roles and value chains. Procurement 4.0 include forming service level agreements with suppliers, maintaining the procurement intranet site, frequent design reviews and stakeholder satisfaction surveys, and identifying and implementing opportunities for improvement [15]. Table 1 presents the procurement break for version 4.0.

<table><caption>Table 1: Evolution of Procurement technologies</caption><thead><tr><th>Dimensions</th><th>Industry 4.0 Technologies</th><th>Transition in Procurement Operations</th><th>Tendences</th><th>Authors</th></tr></thead><tbody><tr><td rowspan="4">Skills</td><td rowspan="4">Cloud Computing, Internet of Things (IoT), Blockchain Technology, Cybersecurity, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, and Additive Manufacturing.</td><td>Reduced team workload</td><td>Multi talent profiles.</td><td>[18]</td></tr><tr><td rowspan="2">Creating synergies</td><td>Consultants</td><td>[19]</td></tr><tr><td>Data Analysts (Descriptive analytics to cognitive analytics).</td><td>[20]</td></tr><tr><td>Communication</td><td>Strategic with the business.</td><td>[21]</td></tr><tr><td rowspan="4">Management</td><td rowspan="4">Cloud Computing, Internet of Things (IoT), Blockchain Technology, Cybersecurity, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, and Additive Manufacturing.</td><td>Strategic Positioning</td><td>Mastery of proprietary technology.</td><td>[18]</td></tr><tr><td>Creation of new business networks</td><td>Third party independence.</td><td>[19]</td></tr><tr><td rowspan="2">Cost reduction</td><td>Process and data integration.</td><td>[5]</td></tr><tr><td>Cost of acquisition and supplier selection.</td><td>[24]</td></tr><tr><td rowspan="2">Partner ships</td><td rowspan="2">Cloud Computing, Internet of Things (IoT), Internet of Services (Ios),</td><td rowspan="2">More customer-oriented business models</td><td>Higher Profits.</td><td>[20]</td></tr><tr><td>Greater Autonomy.</td><td>[21]</td></tr><tr><td></td><td></td><td>Supplier Administration</td><td>Creation of new business networks. Use of blockchains for contract validation.</td><td>[18]</td></tr></tbody></table>
<table><tbody><tr><td></td><td>Blockchain Technology, Cybersecurity, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, and Additive Manufacturing</td><td>More transparency in the supply chain<br>Proactive Response<br>Risk management</td><td>More agile communication with customers and suppliers.<br>Increased transparency of data and information.<br>Early issuance of outage notices.<br>Strategic Partners.<br>Improved evaluation of customer and supplier data.</td><td>[19]<br>[20]<br>[23]<br>[5]<br>[21]</td></tr><tr><td rowspan="5">Processes</td><td rowspan="5">Cloud Computing, Internet of Things (IoT), Internet of Services (Ios), Artificial Intelligence, Simulation, Blockchain Technology, Cybersecurity, Cyber Physical Systems, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, and Additive Manufacturing.</td><td>Demand analysis</td><td>Digitization of processes and procedures.</td><td>[18]</td></tr><tr><td>Information flow</td><td>Greater efficiency, flexibility and fast reaction time.<br>Automated allows perfect coordination, saving coordination costs.</td><td>[19]<br>[13]</td></tr><tr><td>Process standardization</td><td>Decreased travel costs and increased speed in decision making.</td><td>[20]</td></tr><tr><td>Fast reaction times</td><td>Better connections with global supplier network.</td><td>[21]</td></tr><tr><td>Improved data quality (greater significance due to information and not just data).</td><td>Real-time availability of data and information.</td><td>[18]</td></tr><tr><td rowspan="5">Systems and Technologies</td><td rowspan="5">Cloud Computing, Internet of Things (IoT), Internet of Services (Ios), Blockchain Technology, Simulation, Cyber Security, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, Additive Manufacturing, and Artificial Intelligence.</td><td>Real-time availability of data and information.</td><td>Improved data availability, fully computerized.</td><td>[19]</td></tr><tr><td>Intelligent behavior</td><td>Increased transparency of data and information.<br>Autonomous Vehicle Routing, Locating Potential Suppliers, Order Scaling, and Lot Storage.</td><td>[25], [26]</td></tr><tr><td>Database security</td><td>Data sharing, visibility and transparency promotes trust.</td><td>[15]</td></tr><tr><td>Fully automated information flow.</td><td>Improved evaluation of customer and supplier data.</td><td>[21]</td></tr><tr><td>Reduction of costs associated with waste management.</td><td>Socially responsible shopping.</td><td>[27]</td></tr><tr><td rowspan="3">Sustainability</td><td rowspan="3">Cloud Computing, Internet of Things (IoT), Blockchain Technology, Cybersecurity, Big Data Analytics, Advanced Robotics, Virtual/Augmented Reality, 3D Printing, and Additive Manufacturing.</td><td>Sustainable shopping</td><td>Cloud data associated with sustainability, such as carbon footprint (environmental) and waste disposal costs (economic) and social aspects.</td><td>[28]</td></tr><tr><td>Corporative image</td><td>Economic, environmental and social behavior depends heavily on your supply chain.</td><td>[30]</td></tr></tbody></table>
<table><tr><td>Sustainable Production</td><td>Flexibility in production volumes.</td><td>[19]</td></tr><tr><td>Facilitates compliance with legal requirements.</td><td>Acquisitions covering environmental, economic and social (TBL) elements.</td><td>[30]</td></tr><tr><td>It demonstrates the organization's commitment to a sustainability and social responsibility policy.</td><td>Incorporation of new technologies.</td><td>[20]</td></tr><tr><td></td><td>Perceived Costs/Benefits: Sustainable products play a prominent role in sustainable procurement.</td><td>[31]</td></tr></table>

## 5 Discussion and Conclusions

Despite the emerging literature on this subject, it is notorious that there is a lack of comprehensive and systematic structures, strategies, and approaches for the implementation of Industry 4.0 concepts in the Procurement processes. The literature has in common that the described procurement process was initiated not by a single technology, but by the interaction of various technologies and solutions whose effects created new modes of production, but also influenced organizations, the environment, and social functions, in accordance with [32].

Procurement is no longer a personality-centered function, where professionals in the area manage everything on their own, using only the knowledge they have acquired over time. Based on the research of the literature presented, the table presented how Industry 4.0 technologies will change the way the Procurement process works and what are the trends of this evolution. Procurement 4.0 will transform the operation of the Supply Chain. Applicable technologies represented substantial values and aggregated values consist of improving performance in operations associated with purchasing management in supply chains, such as pricing, supplier selection, evaluation, cost-benefit, data collection, and analysis. The presence of digital integration is transforming business processes, both internal and external, with the implementation of Ind.4.0 technologies. Processes and data are increasingly transparent and accessible, intelligence in Procurement 4.0 requires a transformation in the organization in the six dimensions presented.

The adoption of Procurement 4.0 results in autonomy, flexibility, and transparency of operations associated with purchasing management to optimize pricing decisions, supplier management, and purchasing management, or to develop sustainability and data sharing security [33,34]. Given the issues related to the application of Industry 4.0 technologies in Procurement and compared with the existing literature in the area, this article focuses not only on technological trends but proposes a vision of Procurement evolution and tendencies. However, our reviewed literature does not find a clear concept of Procurement 4.0. Future studies can focus on a conceptual model of Procurement 4.0.

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