What do early-career professionals see as the key challenges and growth opportunities for procurement in the future? Supply Management spoke with:
- Jacinta Taliauli, senior procurement adviser at Ministry for Pacific Peoples in New Zealand
- Majid AlKhulaify, business development analyst at Saudi Aramco in the Middle East
- Luka Brown, commodity buyer at Volvo Group, Australia
- Titus Kuhora, operations development graduate at Hermes UK
- Christian Lund, platform product owner for products related to mathematical modelling at Maersk, UK
What challenges are you facing in your role and region?
JT: One of the biggest challenges in my role is communicating the value procurement can bring to stakeholders. Internal stakeholders may ask why they have to go through a procurement process and external stakeholders can see the procurement process as an entry barrier to working with organisations. Influencing, collaboration and communication skills are key to addressing these challenges. As procurement professionals, we must be open to hearing what outcomes are important to internal stakeholders while also addressing the pain points for external suppliers. This creates an exciting opportunity for procurement professionals to be the bridge between internal and external stakeholders and to deliver value beyond monetary means.
MA: In the wake of a growing global digital transformation market, organisations should consider reinventing themselves to adapt to change and remain competitive. This reinvention comes with the cost of training, along with the likelihood of the need to implement new technologies and enterprise resource planning systems. Consequently, organisations need to reduce cost without compromising quality when meeting customer demands, which is a significant challenge. Moreover, as business priorities and collaborations are established, the need to improve analytical and reporting capabilities is a challenging process in the region and globally, although automation will most likely lead to massive improvements in this area.
LB: Australia is a unique region of opportunity and procurement has been a hidden gem. Covid has accelerated the value proposition that the procurement function can bring to the greater business and, in some instances, has enabled stakeholders to understand more about what we do. Working in indirect procurement across the professional services, travel and IT categories, I think there are specific challenges around flexibility. We have had to adapt to new ways of working but, also, challenges more frequently surround the cancellation of events, travel and the ebbs and flows of workforce flexibility in both the blue- and white-collar contingent workforce.
TK: As a young professional working in the logistics industry, I have seen how Brexit has affected the pool of warehouse staff willing to work on a consistent basis. This means warehouses constantly have fewer workers than required and employee numbers per shift are becoming increasingly uncertain. This is affecting the volume processed and pushing up labour costs because surrounding warehouses offer increased hourly rates and incentives. For example, some are offering a £1,000 friend/family referral bonus to attract workers. That said, this challenge has led to us focusing more on improving employee wellbeing, such as through improved training schemes, which is a positive outcome.
CL: Learning the technical aspects of procurement has not been so difficult. I think a background in mathematics enables you to step into many areas of work. The two biggest challenges have been structure and communication. It is hard to create the structure – in relation to both data and processes – needed for the mathematical models to realise their full potential. Communication is also important. Business and tech speak different languages and they think in different ways. Being able to explain the strengths and weaknesses of mathematical models and algorithms to business stakeholders can be a daunting task but also a fun challenge that forces you to reflect on your own field of expertise and how it can be used to create value.
Where do you see the profession developing in the next five-to-10 years?
JT: Organisations will begin to realise that procurement is able to deliver beyond the dollar value and through social impact as well. Procurement professionals are well placed in their organisations to support the need for a more inclusive supplier base, getting local people into employment and using small businesses, including indigenous enterprises. This is especially important to address as the wealth gap expands for some of our communities. Our relationships with internal stakeholders, leadership teams and suppliers will be important as we bring them on the social procurement journey and show them the value we can add through procurement.
MA: Concerns about sustainability have been gaining increasing recognition in recent years, bringing changes in the way organisations produce and procure materials. With economic, social and corporate governance serving as principles, this is reshaping supply chain strategies from the bottom line to the top, so we can expect to have a more mature and sustainable procurement process and supply chains in the Middle East within the next five to 10 years. Moreover, as evidenced by what the pandemic has brought forward – the broader use of internal technological communications (such as Skype and Zoom) – the digital transformation will likely lead to major enhancements in inventory management, sourcing, logistics and supplier management.
TK: I see the logistics industry focusing more on robotics and automation. As firms continue to struggle to attract warehouse workers and staff demand higher wages, this may push firms to manage their labour costs through automation. In the parcel industry, for example, a focus on using robotics to unload inbound trailers may become more common. To move towards increased automation, however, there needs to be better machinery to justify using it instead of hiring people.
LB: I believe the profession will move away from cost-structured KPIs and towards a more value-orientated approach. Sustainability, circular economy, continuous improvement and new business models can bring far more achievements while also influencing the bottom line. They say “partnership is the new leadership” and I couldn’t agree more.
CL: Procurement will be accelerating the integration of tech as a way of working over the coming years. Things like automation, forecasting, early error detection and spotting changes to trend patterns all hold the potential for great leaps forward. The challenge is creating structure without losing flexibility. Formalising work processes and setting up the data generation can either lock you into how you used to work or be the first step towards how you should be working. Which one it will be depends on how much energy and concentration you put into it.
What are your priorities for procurement?
JT: The Pacific population is one of the fastest growing ethnic groups in New Zealand but, unfortunately, Pacific people’s income is, on average, much lower than that of other ethnicities. My priority as a procurement professional is to support supplier diversity and the work being done to level the playing field for all suppliers, including Pasifika. I see this being achieved by collaborating with stakeholders to remove the barriers and inequities that make it difficult for Pasifika suppliers to get access to a wider range of customers and markets. It will definitely take the work of many to achieve, but this work is important because there is so much opportunity to deliver high social impact to Pasifika communities.
MA: Among the essential components of an effective supply chain are its agility, which defines how a business reacts proactively to consumer demand and market changes, and its adaptability, which defines its ability to respond to these changes. These remain priorities for business as many of the world economies face challenges with potential shortages and unpredictable markets. Ensuring the supply chain is consistently agile and adaptable is a challenging responsibility that requires efficient systems and distribution, and a more streamlined inbound supply chain. Another big priority in today’s procurement is risk management.
TK: As deliveries have become ever more disrupted, we have focused more on ensuring assets arrive before the peak period, which is November to early January. This means we purchased assets, such as collars and cages, at a higher price to ensure warehouses around the country had sufficient capacity.
LB: Three key priorities for procurement are in stakeholder engagement and business acumen – listening, understanding and emphasising with the stakeholder groups and understanding their role in the greater business (I may be biased, however, working in indirects); communication skills; and value proposition – presenting business cases in a way that captures the holistic value, not just a bottom-line saving. This may achieve reductions in emissions from a logistics flow, a change in supplier allowing localisation or a stronger partnership with a strategic supplier.
CL: The priorities of procurement are getting more diversified. In addition to the classical priorities of procurement, we should also accelerate our support for the Maersk integrator logistics vision, build ESG solutions and improve the vendor experience. The key to doing this, in my view, is to strengthen our data and scale our ability to build tech solutions that can support these priorities. I think all business units have become used to collecting data, but have they taken data seriously enough? If the quality of your data is not high enough for you to trust blindly, you will also hesitate to take the leap of faith and start fully relying on solutions that use that data.
Do you have any words of wisdom or lessons you’d like to share?
MA: It is important for organisations now to focus their efforts on strengthening their supply chain resilience. An effective supply chain should have the capacity to endure challenges, adapt to reality, transform in the face of change, and recover swiftly from any disruptions. To achieve a high level of supply chain resilience, organisations must remain strategically driven and agile. As Stephen Hawking put it: “Intelligence is the ability to adapt to change.”
TK: I’d encourage supply chain leaders to recognise the importance of training. From workers to managers and suppliers, it is crucial for firms to train their people and those across the wider industry effectively to ensure supply chain efficiency. Moreover, training workers effectively can reduce employee dissatisfaction, which is increasingly important as employee retention is becoming ever more challenging.
LB: Procurement in Australia is seeing a young and eager cohort with core values that we would typically align with an “evaluation criteria scorecard”. They are enthusiastic about change; they live and breathe sustainability. They see the value that indigenous business engagement, social enterprise and regional business can bring and they engage with topics such as modern slavery and CSR. I see the next step for procurement in Australia being their engagement and mentoring. Building these opportunities is opening the door to these bright, young and eager professionals.
CL: Tech is here to stay. Soon it will be a fully integrated part of all business units and most work will involve some level of interaction with tech. Having a good understanding of the opportunities and limitations of tech is probably the best advice I can give.