Learning from the past, facing the future - sponsored content

20 December 2021

Procurement professionals look back on 2021 and discuss the issues that are likely to come to the fore in 2022, in a roundtable sponsored by GEP. 

What obstacles has the procurement industry faced in the past year, and what challenges will 2022 bring? These were the issues discussed by senior procurement and supply chain leaders at a roundtable at The Savoy, chaired by Supply Management editor Ceri Jones.

There have been unexpected upsides to the past year. Stephen Day, chief procurement officer at Kantar, said the pandemic gave him an opportunity to bring two organisations together without having to travel the world to do so. “I didn’t have to spend six months travelling and meeting,” he said.

It also allowed him to tackle social inclusion, something he describes as “miserable” in procurement. Rather than building a team in six months – “they’d all have looked like me” – Kantar took its time and built a more diverse team.

An uncertain year ahead

The pandemic brought procurement to the fore, but Luke Jarvis, group procurement and property director at Essentra, said the level of uncertainty was higher than ever, and procurement staff were “shattered”.

He said: “The profile is higher, but not for the right reasons. We are the expediting team, but we are not having conversations around things that matter, like environmental, social and governance (ESG). Our reports get read now, but it’s not a richer conversation and is not moving the conversation on.”

Recruitment is key

Julian Trent, VP of business development for Europe at GEP, admitted that the sector was facing an unnatural level of attrition and a shortage of good people.

The recruitment crisis has made companies think differently – being an ‘employer of choice’ now means something, said the chief procurement officer at Nationwide, Imran Rasul. “It’s not just about salaries and benefits. People ask: ‘Why should I work for you?’” he said.

Jarvis warned that people who comfort themselves that things will go back to ‘normal’ at some point could be in for a shock. “For those of us who remember the recession, life didn’t go back to how it was pre-recession,” he said.

But Melanie Heath, head of global SRM at National Grid, said that this continual change is one of the things that keeps the job interesting: “Yes, more is expected of us, and resilience is required, but there is opportunity, too. The top of the organisation wants to understand procurement thinking, and it is enabling us to drive the digital agenda.”

Why procurement needs to move with the times

The speakers felt that the changing role of procurement was reflected in the broader range of criteria now cropping up on procurement scorecards, such as ESG, SME suppliers, GDPR and diversity.

Sam Pickford, head of procurement at CDC Group, said: “Diversity and inclusion are now front and centre, and I’m judged more on my ability to deliver that in my supply chain than on savings.”

CDC provides finance in Africa and South Asia and tries to use more local players, which is not always easy, Pickford admitted. “When you’re looking for niche skills, there may only be one or two people in the market,” he said.

When it comes to attracting new talent to the sector, procurement needs to tell a better story about what it does, said Day: “There’s an argument that social inclusion leaves money on the table, but talent won’t come if it’s about price reduction.”

Rasul said it was time to redefine procurement. “Why not work in an organisation that has a balanced scorecard? If there’s a vacuum, then procurement can fill it. SMEs and diversity are important. Don’t talk about savings.”

Creating a more diverse workforce could also add skills in areas that have been traditionally overlooked. Many procurement managers have stories of people who are brilliant with data but can’t communicate.

“It’s easy to find smart technical people, but they can’t necessarily talk well and confidently,” said Pickford. “They struggle if it’s not text or instant messaging. You can’t do that when you’re dealing with a lawyer.”

Graham Copeland, senior director of business development at GEP, said that the sector had always over-indexed on negotiation but didn’t have the skillset on downside management. “We knew that there would be an HGV shortage but did nothing about it,” he said.

The procurement professional of the future needs to be a multi-talented individual, described as “ambidextrous” by Joe Bakowski, director of procurement and supplier risk at Metro. He added: “The problem is that, like ambidexterity, some things can’t be taught, but have to be selected for.”

How to raise our profile

Elevating the status of procurement has been a long-running issue, but with its key role in keeping the engines running over the past 18 months, it was felt that there was no better time to get procurement’s voice heard. A combination of ongoing business disruptions, alongside new regulatory challenges, such as Scope 3 carbon emissions, means that directors are certainly listening.

After all, 80% of an organisation’s footprint comes from the supply chain. Shabana Ahmad, senior commercial manager at Nest Corporation, said: “It’s still a challenge for the sector when we talk about reporting standards for ESG. It’s not owned by procurement, but we contribute to it, which creates an opportunity to raise the profile of procurement.”

But this requires a level of self-confidence that the industry sometimes lacks, said Jarvis: “Nobody in finance or legal will just ‘have a go’ or has doubts about their role. We relish the challenge, but it doesn’t always help the profession.”

Procurement has to be brave enough to break down doors and operate cross-functionally, said Rees Thomas, head of procurement at Graze. “We’ve got to persuade people to build relationships earlier and shift the preconceptions on procurement,” he said. “Then people will ask for our advice.”

What will the new year bring?

With 2022 almost upon us, what challenges will the industry face in the new year? Several participants mentioned the importance of taking mental health seriously, as frazzled procurement people risked running out of resilience.

Rasul added that embedding what had been instituted this year was a challenge: “It all happened so quickly that we need to get back to some basics, such as upskilling and connecting with suppliers.”

Cybersecurity is an area that all businesses see rising up their agenda. Another one for procurement? At the very least, 2022 looks set to be as interesting as its predecessor. And if Supply Management’s debate is anything to go by, there will be no shortage of ideas on how to tackle the challenges it presents.

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