In a fast-changing world, speed to market is everything.
Procurement must contribute to speed to market, which is “critical and feeds everything”, according to Primark director of procurement Eavan O’Halloran.
“If we can help get things into stores faster, that drives sales,” she said, citing signage as an example. “If we can take two weeks off print, that contributes to sales as it makes things faster and more agile. And you have to constantly be agile. In the world of fast fashion, things change fast.”
Speaking at ProcureCon Indirect, O’Halloran added that as the retail lifecycle gets shorter, store makeovers and refreshers happen more regularly, something that procurement needs to be prepared to support.
Gavin Long, head of indirect procurement for Carnival UK, shared how his procurement team was embracing a more agile approach.
“For me, agile has three parts to it,” he explained. “There are the methods around contracting and engaging with suppliers in a more agile environment, typically within IT. There’s the IT [project management] delivery technique, and there’s staying one step ahead and being agile in the market.”
He used the example of building a cruise liner, which takes five years with the IT infrastructure installed in year three. “By year five, it’s already out of date,” he said.
“I’m trying to say, ‘There’s updating that could be done when the ship is at sea, without a high level of risk’. It’s a mindset first of all, and it’s about finding the right business partner and supplier to go on that journey with you.”
He added that IT specs often require procurement to be more agile, given technology teams often don’t know exactly what it is they want to buy.
However, he warned procurement professionals to pick suppliers wisely when working in a more agile manner, such as choosing a smaller supplier who will have more “skin in the game”.
Tom Lewers, head of global supply chain for insurance firm Royal London, added that with IT functions often working in an agile manner, “they expect the same of their support functions”.
He added that achieving innovation and agility often meant working with organisations that “wouldn’t get through the typical procurement gateway”.
In a previous role he said he managed to onboard a start-up supplier which was loss making and weaker on risk, but which had “an extraordinary product”. His firm was then able to get a new product to market in three months, giving them considerable competitive advantage over other firms.
“There are few existing organisations that fit that agile and innovation potential, so we are reaching out to the market and smaller companies,” he said. “We are being much more sharing and open as regards our business challenges.”
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