Has the future of procurement changed direction?

29 April 2021

A year of disruption has allowed the procurement function to demonstrate its leadership and critical value to organisations, a forum was told. 

Alex Jennings, CPO at DS Smith, said procurement had stepped up over the last 12 months to raise awareness of the function's importance.

Speaking at CIPS Supply Management Forum, Jennings said: “It's not just about savings, we bring a lot more to the business around continuity, supplier risk management and supply management,” he said. 

Procurement teams globally have been impacted by a huge amount of disruption in the last year, from Brexit, the Suez Canal blockage and the Covid-19 pandemic. 

“Much of the work that we've done over the last 10 years to change from tactical relationships to strategic relationships have enabled us to get through this period, because that connectivity that we had, and that understanding of each other and that closeness, meant we were able to solve problems together,” Jennings said. 

“You need to lead through a crisis. You don't manage through a crisis, you have to lead people and step up and procurement really did that.”

Jennings added for those entering and working in the profession now, procurement has been elevated to another level.

“If you're a category lead in an organisation, then it's the responsibility of the leadership team to make your sandpit and your parameters as big as possible,” he said. 

“You're there to create value for the business, you're not there to just get the lowest price. It's not about that. It's about driving sustainability. It's around thinking about circularity within your supply base. It's around ensuring that the activity that you do to select a supplier is done.”

Speaking as part of a panel Laura Hobbs, procurement programme lead at Royal BAM Group, explained the virus had prompted procurement leads at a number of major construction firms to collaborate to assess risks and support their largely-shared supply chain.

“The procurement leaders in the industry took this disruption and led what the solution was going to be. It wasn't the best version of how we could do it in the future because I think technology can help us a lot, but it really goes to show that this profession goes beyond procurement as well.”

Hobbs added the disruption had shone a light on procurement, giving those entering into the profession the ability to become thought leaders and “really disrupt what procurement looks like in the future”. 

“We don't just buy things, we actually influence business strategy. We can change business strategy. We have a massive impact in some of the government strategies around net zero carbon. We're at the forefront of that, we can influence that and we can help deliver some of those really key targets,” she said. 

“It's realising that procurement doesn't just end at procurement. What I want to see is procurement moving into running a business, because you have that skillset and you have that level of expertise that will take you to being able to lead a business.”

Lisa Day, director of account management at Egencia, added trends that had been seen in procurement such as sustainability and wellbeing were extending into what they are asking of suppliers.

“Part of what we're seeing when we're getting RFPs coming through from procurement professionals is how we can support their travellers and employee wellbeing as people are travelling. There's different focuses and it's not just around cost, it's definitely around value. It's definitely how we can support that individual to make the right choice in the procurement process.”

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