25 January 2011 | Nick Martindale
The procurement profession in
southern Africa is maturing but still has some way to go before it can deliver
maximum value, a leading practitioner has said.
In an exclusive interview with SM,
Meshern Govender, director of procurement and logistics at Standard Bank of South Africa, said:
“The function has grown but there’s still room for improvement.
“People in our environment are not commercially astute
as yet, they still come with the mindset of buying and as a result costs can
spiral out of control and they can produce unnecessary portfolios in their
supply chains and elements of inflexibility.
“The way to go is education; people need to admit that
in some cases they are out of their depth and need to pursue a higher learning
in terms of procurement,” he said.
The economic downturn has been beneficial in raising the
profile of procurement at Standard Bank, said Govender.
“Previously it was a very transactional function so all
it focused on was best-buying and order fulfilment,” he said. “Now it’s deemed
to be a value-enabler for business units within the franchise.”
This mindset change has created more pressures on the
function to generate cost savings, one of a number of priorities for the
organisation in 2011, he said.
“Some of the key considerations are reconfiguring our
supply chain so we can get better value in terms of cost management and demand‑managing the
various business units,” said Govender.
The focus on cost reduction has required working closely
with suppliers in core categories such as consultancy, logistics and IT.
“We’ve segmented our supply base to the point that the
relationships we believe to be key and strategic have been the solution to a
lot of the cost initiatives we’ve embarked on.
“In some cases it’s been win-win and in others we’ve had
to sever the relationship because we felt the vendor was not at the forefront.
There were a lot of legacy-related processes built around some suppliers. We
exited some of those relationships, which was for the better of the company,”
Other core priorities for procurement are demonstrating
a commitment to sustainability and broad-based black economic empowerment,
while cutting costs, attracting and developing procurement talent and managing
the risk posed by currency fluctuations when sourcing internationally, he said.
Based in Johannesburg, Standard Bank also operates in
Zimbabwe, Mozambique, Namibia, Botswana, Lesotho and Swaziland.