It is 90 years since the founding of CIPS and the perfect time to celebrate, not only the growth of the organisation itself, but the achievements of CIPS members and the procurement community.
These achievements cannot be understated: 2020 put world supply chains on a rollercoaster, with many overlapping disruptions that were anything but fun for procurement, ranging from Brexit impacts, the Suez Canal blockage to Covid-19, the invasion of Ukraine, trade wars, shortages and rocketing inflation. “Procurement teams have always managed disruption in their supply chains, but the last couple of years have been really challenging,” says CIPS director Duncan Brock. And this is where the profession thrives. The challenges highlighted the interconnected, complex nature of global supply chains, and heads of companies and states turned to experts and trusted organisations such as CIPS to find solutions.
So, while two decades ago procurement may have been regarded as a function, these pressures have put procurement into the spotlight, highlighting the skill and strategic importance of a profession that underpins successful global operations. However, change has been on the horizon since long before 2020, requiring the profession to adapt at pace. And CIPS has been there throughout this journey, supporting the community with the skills, tools and guidance to embrace the next chapter of evolution, towards a socially, environmentally and digitally engaged supply chain landscape.
Here, CIPS managers from around the world share their thoughts on the path ahead over the next two decades.
Events such as last year’s COP26 would have made sustainability a top priority for organisations even if the pandemic had not happened. And it is likely to be a major issue for procurement teams over the next 20 years. “With an average 90% of an organisation’s emissions coming from its supply chain, and hidden human rights issues sitting in the lower tiers of supply chains, procurement teams will be central to tackling these issues,” says Brock. Sharon Morris, general manager, CIPS ANZ, agrees: “Procurement’s role in sustainability is going to be massive. Procurement professionals are uniquely placed to help lead on emissions reduction and renewable energy targets.”
Digitalisation is one of the key weapons in procurement’s armoury when it comes to managing ESG concerns, including emissions and human rights issues, which are often hidden deep in supply chains, says Brock. “The more information you can glean, and the greater transparency you can provide, will equip procurement teams with the insights to be the go-to place for faster and more informed advice,” he adds. The move towards digitalisation of procurement was well underway pre-pandemic, but the need for control during global disruption has accelerated the adoption and implementation of what may have been slower, long-term plans.
A McKinsey global survey of executives in late 2020 found that the pandemic encouraged companies to fast-track digitisation of their customer and supply chain interactions by three-to-four years. A follow-up survey in mid-2021 found that this rang true even for industries reluctant to commit to additional IT investments amid the uncertainty of early 2020.
Sam Achampong, general manager, CIPS MENA, says that as more digital tools emerge it will become even more essential for practitioners to be comfortable with technology. “Those who are able to utilise technology in the most effective way will be the most resilient to change,” he says. This will lend their organisations a competitive advantage. And Bill Michels, CIPS vice-president of operations, Americas, sees the transactional element of procurement disappearing in the face of automation. “Systems are currently being built that can help in searches to find suppliers, provide stakeholders with guided procurement solutions, create requisitions and purchase orders, and have supplier self-serve invoicing,” he says. As digitalisation changes the profession, future procurement jobs will increasingly be more about integrating technologies than processes.
Flexible skills for a changing world
Despite the challenges posed by these new trends and technologies, non-technical skills remain as important as ever. “Managing risk and building more resilient supply chains are core activities for procurement teams,” says Brock. One issue made evident in the wake of global upheaval is that the fundamentals of best practice in procurement are unchanged. Achampong notes that organisations with strong supplier relationships, credible risk management strategies and appropriate contractual arrangements in place were able to emerge from the pandemic far more successfully than those without them.
There will be an increasing premium on the ability to manage supplier relationships and internal consulting to stakeholders, Michels believes. “One of the areas where procurement is currently weak is in business acumen,” he says. “Procurement speaks its own language with RFP, RFIs and other terms, but does not speak the language of business. Growth, revenue, risk, innovation and value [are what] appeal to senior management,” he adds. Professionals will need to combine an ability to analyse data with the emotional intelligence to win over stakeholders. In the words of Sarie Homan, head of professional development for CIPS South Africa, it’s about “honing those soft skills to garner stronger relationships with suppliers and internal stakeholders”.
Taking the lead
In some respects, it seems procurement professionals will have to combine prodigious data-analysis skills with the emotional warmth of a good therapist. Unfortunately, these feats will have to be achieved alongside talent shortages the profession is currently facing the world over. “Getting the right people with the right capabilities has meant that organisations have needed to grow and develop their own talent,” Morris says. And this has also led to a greater focus on retention strategies.
As for procurement professionals considering the next step in their own careers, Brock advises the following: “Take the lead and drive initiatives that will deliver real benefits from the reshaped supply chains. Become the expert and go-to person on topics such as Scope 3 emissions, modern slavery, commodity inflation, and tackling fraud and corruption. Build great relationships with your suppliers to encourage innovation and collaboration and become a trusted advisor for all of your internal stakeholders.”
There is little chance that procurement will enter a period of calm any time soon, but the path ahead does promise opportunity for growth, and the chance to play a significant role in shaping the future of global supply chains, with CIPS ever-present as your long-standing, trusted business partner.