Calling suppliers every day to check on their wellbeing and extensive contingency planning exercises are some of the tools CPOs are using to weather the coronavirus crisis.
A webinar panel hosted by Sam Achampong, head of CIPS MENA, featured CPOs who spoke of the impact of the pandemic and ways to mitigate it.
Maha Bouzeid, vice president and head of sourcing at Ericsson Middle East and Africa, said the pandemic had created a sense that everybody was “in this together”, which was in some cases creating a sense of unity with suppliers.
“Everyone is affected equally so we’re all in the same boat which creates more unity in some ways,” she said.
“One thing that brings us closer is daily support for suppliers. That might mean calling them every day and maybe even checking that they’re feeling okay and that they’re feeling motivated. It’s not just about work being delivered.”
Mariam Al Dhaheri, advisor for supply chain at Mubadala Healthcare, said that five years ago the company had carried out contingency planning and risk management exercises based on a similar scenario to that seen today.
“Contingency plans and planning measures have been tested big time. I didn’t think the time would come when we had to activate these plans but the dramatic events that are happening now are surprising us,” she said.
Al Dhaheri said while elements such as managing stocks virtually had been covered in the exercises, the planning had assumed that more managers would be able to interact with clinical staff than was possible in reality due to fears of cross-contamination.
She said that if there was one thing that she wished planning had taken more into account it would be paying extra attention to relationships with suppliers in a lockdown situation.
“We’ve seen suppliers claiming that they do not have enough stock. We've seen them favouring cash payers. We’ve seen them dividing the available stock in a way to favour certain payers over others regardless of quantities,” she said.
“So these kind of things have made us reconsider our situation over single sourcing or having multiple suppliers for these items.”
She said it now appeared significant that these items could have been manufactured in Abu Dhabi or in the UAE or even in the MENA region.”
Ayan Chakraborty, director of network value engineering, SAP Ariba EMEA, said one of the lessons of the current emergency would be the importance of liquidity.
“The guys who are winners here will be the ones with cash, so the cash conversion cycle will be extremely important in the future,” he said.
He also said the lockdown had raised questions over how to manage subcontractors remotely, in situations where most were suppliers of services rather than goods.
“So if you are sitting in your remote offices like myself, how do you maintain relationships with your subcontractors? How can you oversee the work that they’re doing? I think technology can be a big enabler in those areas.”
Hariharan Laxminarayan, associate manager – procurement at Emirates Global Aluminium, said the pandemic had forced the company to revaluate its sourcing strategy.
“Over the last two or three years we going to tier two and tier three suppliers in a big way as a procurement initiative, looking at delivery and cost initiatives. But as a result of this [coronavirus] we have had to go back to our main suppliers and that’s been a setback,” he said.
Hani AlSaigh, head of technology procurement at Saudi Telecom Company (STC), said the outbreak had shown the importance of crisis management and the company was already evaluating how the situation might evolve.
STC’s best-case scenario would see a relative return to normality this July while the worst case would not see this happen until well into 2021.
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