Procurement professionals need to convince stakeholders of the value of sometimes paying more to use local suppliers to develop the market in the long term.
That's the view of Jason Brown, head of procurement and commercial management at NBAD (formerly known as National Bank of Abu Dhabi), who was speaking as part of a panel session on supplier development at the CIPS Middle East Conference earlier this week.
Brown said: “You need to work with other parts of the business, and sometimes you need to pay that little bit extra short term to develop the supply chain market in the long term locally.”
He said as budget holders, the business could push back if you are buying from a slightly more expensive supplier, so they must understand the value this can provide later on.
As NBAD is a semi-government organisation, Brown said he recently had to give a presentation about what the bank spends with local vendors, and how many it works with.
The panel highlighted that in some supply markets, such as software, it was nearly impossible to source a competitive local supplier against multinationals.
But Waleed Al Saeedi, director of procurement services at Abu Dhabi Tourism and Culture Authority, said there was always an alternative approach.
“If you cannot get local suppliers at least get Emirati people, “ he said. “You can put your own terms on how you want to them to support local services, companies, Emiratisation or jobs.”
Both Brown and Al Saeedi said having a dedicated team to work on supplier development was a “really good starting point”.
Nurlan Aliyev, team leader – contracts at the Abu Dhabi Gas Development Company said feedback was one of the most powerful ways to develop a supplier.
“The way we are developing suppliers is to use scorecards to identify gaps where the supplier needs to improve. It’s a time-consuming exercise, and requires more resources, but it is possible,” he said.