Procurement professionals should use lessons from their experience of managing supply chain disruptions as a result of Covid-19 to inform Brexit preparations.
Ian Thompson, UK general manager at Ivalua, told SM many people found their lives were on hold due to the crisis, but as a result there may be a misapprehension that Brexit would also be paused.
“Quite naturally Brexit, and the possibility of a no-deal Brexit, has been pushed down the priority list by businesses in general and those people who are involved in procurement and supply chain. It’s not only as an agenda item, but things like inventory levels that were built up for Brexit have been burned into by the Covid-19 situation,” Thompson said.
“It's the same for resources of cash and also people. The people who can really perform in high pressure situations and adapt to change and get businesses ready for what's coming, they're the same people that you would want on your Brexit challenge and they have been heavily involved in Covid.”
Despite the impact the pandemic may have had on availability of resources, Thompson said there were valuable lessons the profession had learned from Covid-19 that could be applied to planning for the end of the Brexit transition period on 1 January 2021.
1. Procurement at the top table
Thompson said procurement and supply chain had historically not been viewed as the most glamorous profession, but Covid-19 had drastically altered the way it is viewed.
“There was always this discussion at conferences about how we get to the top table, how do we get people to take notice of us more than 'Can we find a few points of margin savings this year?' It's gone from that to now – you could be watching TV and a guy will come on to be interviewed who is actually a procurement professional.
“It has put people in the spotlight. It's given them top table access. Those relationships and the prioritisation around supply chain is a good thing, ready for Brexit,” he said.
2. Capability over products
Covid has demonstrated the importance of having agility and diversity in supply chains, but bringing all suppliers onshore isn’t necessarily the right move, Thompson said.
“The sheer unpredictability and global nature of this is showing that what you need is an ecosystem of suppliers and you need to be able to move amongst those suppliers quickly in terms of your decisions and your contracting. You need to be able to measure in a very agile way.”
Thompson explained that examples shown throughout Covid of manufacturers using their expertise to build essential medical equipment had demonstrated the need to be able to measure suppliers' capabilities, rather than simply products.
“Historically, suppliers have been viewed as an organisation that provides a catalogue of line items and products, which are selected by procurement, whether that's automatically or through category managers.
“What we need to do is to measure suppliers and conceive of suppliers as a trading partner that has a set of capabilities and against those capabilities, has a set of risks that you can understand,” Thompson said.
3. Reprioritising technology
Despite many firms facing cost reductions as a result of the pandemic, Thompson said there wasn’t likely to be a decrease in procurement technology investment, but a reprioritisation of what was really necessary.
“There might be a little bit of regression away from very high-end, high-tech projects and a bit more focus on putting the underpinning technology building blocks in place to make sure that supply chains are robustly within a technology platform,” Thompson said.
“Some firms may decide to move a little bit away from the sexy, visionary projects and a bit more towards the need to understand all of their suppliers properly, the need to be able to map risk in their supply chain and have something in place that will work for everybody, wherever they are in the world.”
“Businesses are smart enough and adaptable enough that they know they just have to focus on the right projects. You can't run before you can walk. You need to get the building blocks in place and supply chains are absolutely critical to a company.”
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