Covid-19 has given the function access to boardrooms ©  Klaus Vedfelt
Covid-19 has given the function access to boardrooms © Klaus Vedfelt

Procurement's critical business role 'finally being recognised'

Will Green is news editor of Supply Management
29 May 2020

Covid-19 is speeding up change in procurement and public buyers must step forward and make the most of these difficult times, according to a consultant.

Dan Gibson, consultant at Procurement for Housing, said coronavirus has put huge stress on public services and “all eyes are on procurement to help preserve the bottom line”.

But in a blog for SM Gibson said it was not enough to consider cost savings and public buyers had to contend with managing unprecedented sourcing demands, dealing with at-risk suppliers, and supporting communities.

“The coronavirus health emergency has put huge stress on public services and this, combined with rapidly rising unemployment, has meant that all eyes are on procurement to help preserve the bottom line,” he said.

“But the pressure doesn’t stop at cost savings. Public buyers are managing unprecedented sourcing demands as well as the cash flow woes of at-risk suppliers, many of whom need payment and performance relief.

“As the scale of the economic slump becomes clear, there will also be an expectation that public sector procurement can lend a hand in supporting communities, alleviating poverty and creating social value.”

Gibson said he had “never known procurement to have such a high profile across the media and in boardrooms” and the function’s “critical business role is finally being recognised”.

Gibson said with a global recession looming the “focus on savings won’t abate” but buyers should emphasise maintaining value for money rather then “reverting to lowest-cost procurement”.

He said communication and relationship building with the supply chain must be a priority to “ensure your organisation is first in the queue as the economy opens up”.

“Being seen as an important customer will become an art form and many of the skills that have been honed during this crisis – innovation, collaboration and data handling – will help,” he said.

“In the public sector, procurement people are often seen as pen pushers on the periphery, sourcing products, policing spend and trimming prices. But this crisis has shone a spotlight on just how central the procurement function is to business longevity.”

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