No one would claim 2022 hasn’t been eventful, and as the year comes to an end SM looks back on the key trends to emerge.
UK Procurement Bill
The law set to change the public procurement landscape in the UK passed through the House of Lords.
The Procurement Bill, made possible due to Brexit, consolidates 350 current EU procurement regulations and replaces them with three “simple, modern procecures”.
Emphasis has been placed on key elements of the bill: the National Procurement Policy Statement, which sets goals in areas such as social value; the Procurement Review Unit, which has powers to oversee and improve compliance; and the debarment list, which widens the criteria on which firms can be barred from contracts.
During debates in the Lords, it was said that improving practices and implementation was more important than the legal framework.
Lord Francis Maude (Con), who led an overhaul of government procurement from 2010, said: ‘I submit that the professionalisation of the procurement function is more important than the precise letter of the law that we are debating.”
Questions were also raised about the amount of freedom the bill would provide, such as to favour UK firms, given the UK was still bound by WTO procurement rules and international trade agreements.
Lord William Wallace (LibDem) said: “There is an awful lot of windy Brexiteer rhetoric about ‘taking back control’ and replacing ‘the current bureaucratic and process-driven EU regime for public procurement’, but here we have an unavoidably bureaucratic and process-driven bill to replace the EU regime.”
Lord Vernon Coaker (Lab) said the bill was an opportunity to modernise procurement.
“The bill is a huge opportunity and the government have grasped it, but many of us are going to push them further for a change to how procurement works – to rework it and remake is in a way that reflects modern business practice, the modern economy and the modern society that people want.”
It emerged Scotland will not be subject to the bill because procurement is a devolved matter and the region has instead transposed the EU directives into law.
The NHS was criticised for a “culture of exceptionalism” because the Health and Care Act removed it from EU procurement rules and peers questioned why health procurement is treated differently from the rest of the public sector.
Malcolm Harrison, group CEO, CIPS, responded to the bill by saying: “The Procurement Bill provides a strong framework and guidance, but procurement is not a narrow, linear activity.
“It has been recognised we need more talented and creatvie professionals to take on the challenges in the years ahead, which include any onshoring decisions. These are professionals who continue to develop their skills and keep up to date through their training.”
The bill has now passed to the House of Commons.
Recruitment
Stress and burnout hit the procurement profession with people switching roles more often and reports that many were leaving the profession entirely.
Tough operating environments were expected until 2024 “or beyond” amid ongoing supply chain disruption, the war in Ukraine, and rising inflation.
Surveys found a third of procurement teams “cutting corners” with sourcing criteria to secure supply and “frustrated or burnt-out employees moving between jobs and industries, leaving many companies in the lurch”.
Teams said retention was getting more difficult, with roughly a fifth of buyers saying they were planning to leave roles.
Shortages
One of the most popular SM articles of the year concerned the decision by McDonald’s to remove a slice of tomato from its Big Tasty burger due to a shortage of tomatoes. In 2021 UK tomato producers warned of a shortage due to the high cost of heating greenhouses with gas.
Unfortunately shortages did not stop there. Concerns were raised about helium supplies after the US Federal Helium Reserve, the major global supplier, announced it would stop selling to the public. After China cut magnesium production in late 2021 due to the cost of energy, ripples were felt through industries dependent on the mineral, including automotive, packaging, and construction.
However, the single most impactful shortage was semiconductors, which continues to hit car production across the globe.
Paper and packaging
Strikes at paper mills in northern Europe led to warnings of packaging shortages early in the year, while a fire at Smurfit Kappa’s Birmingham paper mill in June destroyed 8,000 tonnes of paper and cardboard, squeezing supplies further.
Meanwhile, new UK packaging rules came into force that are designed to reduce the use of plastics – the Plastic Packaging Tax – and Extended Producer Responsibility, which makes businesses responsible for the full costs of packaging, including collection, information to consumers, litter clean-up, and data collection.
Ukraine
The war in Ukraine following Russia’s invasion has sent energy costs through the roof and put commodity markets into turmoil. In February, when Russia was amassing troops on the border, it was predicted a conflict would put thousands of companies at risk due to links with suppliers in Russia.
At the time it was forecast that prices for gas and food would skyrocket as a result of the war, and so it came to pass, with the world still now coming to terms with inflation rates not seen for decades.
The conflict has increased geopolitical tensions everywhere, particularly concerning China and the west, and organisations continue to wrestle with onshoring and nearshoring to reduce supply chain risk and increase resilience.
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