Global healthcare demand, especially in deprived countries, will be a key challenge for procurement © Ute Grabowsky/Photothek via Getty Images
Global healthcare demand, especially in deprived countries, will be a key challenge for procurement © Ute Grabowsky/Photothek via Getty Images

What are the top procurement challenges for the next decade?

posted by Lucy Patchett
11 September 2020

The key challenges for procurement professionals in the decade ahead revolve around technology, social value, raising standards and healthcare demand, an event was told.

Speaking at Procurex National, Malcolm Harrison, group CEO at CIPS, procurement professionals must be “agile and fleet of foot” as well as agents for social change.

He said: “Looking ahead we need to look at consumer trends, technology, legislation or geopolitical shifts that are impacting on our environment and see these as opportunities rather than problems. 

“Procurement and supply management needs to remain agile and fleet of foot to adapt to change, and increasingly professionals will need to prioritise sustainability, innovation in supplier base, and developing that base, especially SMEs that are the life-blood of every economy.

“Above all, what’s become apparent is that the supply chain is a priority and that it is about agility not just cost, and ensuring the supply chain is taking part in those business critical decisions in a way that wasn’t always the case before.”

Digital transformation

Harrison referred to Vodafone’s “Happy PO” procurement digital transformation as an example of how “real-time data can help inform business critical decisions and improve the function’s effectiveness and efficiency”, emphasising the use of AI and machine-learning to catalogue stock components and understand price trends and geographical vulnerabilities in the supply chain. 

Also speaking at Procurex, Malcolm Harbour, chair of the Local Government Association's Task and Finish Group on Public Procurement of Innovation, said procurement could increase innovation in the supplier base.

“The crucial lesson is that procurement professionals need to be around the table when those strategy decisions are made. We need to choose innovative suppliers and get over risk aversion. Innovation is not optional in today’s world,” he added.

Harbour also highlighted the importance of getting policymakers to recognise public procurement as a key tool to tackle government challenges and encourage supplier competitiveness. 

He said: “We need more innovative providers in the door to help us in delivering solutions to resolve such challenges as sustainability and the ageing population. Tools like competitive dialogue enable public procurement professionals to push for innovative suppliers. Public bodies need better platforms that provide innovators with a way to pitch ideas for public procurement.”

Drive for social change 

Harrison said: “Procurement is an agent for social change, both on a global scale but just as importantly addressing issues closer to home.”

Cutting costs needed to be balanced with other values such as social change, he said. Procurement plays a vital role in boosting economic regeneration, improving community wealth and social mobility, as well as addressing equal pay issues, and supporting the most deprived people in society. 

“There are real benefits in using local suppliers; they tend to be more agile and responsive to sourcing demands. Social value truly impacts people’s lives and I think it’s something that we see the procurement function increasingly focusing on,” he added.

Harrison highlighted projects that showed social levers in public contracts could make a difference, such as the Indigenous Employment and Supplier-use Infrastructure Framework in Australia and UK legislation around environmental due diligence.

Raising Standards

“Standards are really at the centre of what CIPS stands for,” said Harrison. 

The issue has been at the forefront of the procurement profession since the Grenfell Tower disaster, which resulted in the loss of 72 lives. 

“CIPS has been involved in a working group which has identified deficiencies in practices in design, construction and operation,” he said.

“We’re now working with the industry and other professional bodies to ensure we can create a new procurement competency framework which will be applied both in construction and in infrastructure.”

Global healthcare demand

Procurement will play a role improving healthcare globally, highlighted by the pandemic. 

CIPS has been working to tackle healthcare supply chain challenges in Africa, including Kenya, South Africa and Nigeria, said Harrison.

It has partnered with the Bill & Melinda Gates Foundation to “find ways of improving standards and practices for the supply of drugs, medicines and healthcare for some of the most deprived people in Africa”, he said.

This has been about increasing procurement activity on the ground and implementing best practices, “but always in a way that is aware of local context”. 

“Ultimately, it’s always about ensuring we have the right supply chains and storage conditions to be able to have the correct quality of drugs, availability and costs in order to save lives in those deprived parts of the world,” Harrison said. 

As part of the programme, CIPS is piloting a knowledge platform to share best practices, relevant case studies and webinars.

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