The Covid-19 crisis has meant that business leaders and procurement teams have had to make decisions quickly and under exceptional pressure – to meet customer need, protect staff and even to save lives in some instances.
I am sure that in this rush to secure the best outcomes there will have been many mistakes made. But, I am also sure that buyers took decisions mostly with good intentions at heart.
In such extreme circumstances what was really required was a cool level head, good procurement skills, adherence to the principles of good sourcing, with more haste, and less speed.
The horrific labour abuses that have occurred in London and Leicester over recent months are no doubt not isolated incidents and have probably been replicated all across the globe. No doubt they have arisen because exploiters have seen an opportunity and made the most of buyers being over-stretched and under incredible strain to deliver, and perhaps were off guard and distracted. I have heard of endless counts of fraud such as payment fraud or counterfeit products, with unfortunately the most common and the one attracting the most headlines being PPE.
This has undoubtedly thrown many buyers off balance, particularly when they have had to focus elsewhere, were understaffed or had the additional burden of getting goods out as quickly as possible to keep factories going or their staff and customers safe.
So it’s no surprise that many governments around the world have come under criticism in the media on some of the decisions they have made during the pandemic and in particular around the provision and availability of PPE.
During the height of the Covid-19 crisis with the immediacy of an instantaneous explosion in demand, and when availability of supply was at its worst, thousands of governments and organisations globally were all competing for the same materials in a supply chain that was close to collapsing.
A rapid increase in supply was needed but evidently not planned for. Indeed many organisations switched their production to manufacture gowns and masks, and community groups dusted off their sewing machines to all help bridge the gap.
In the UK, the National Audit Office has begun an investigation regarding a contract awarded for PPE during the crisis, apparently without going through the official tendering process and opening up to competition. We will wait to hear the full detail of what actually occurred as the investigation unfolds and there are further updates, but what is clear is there should always be full transparency on public sector contracts regardless of the pressure teams are under. Any procurement decision should follow good practices, competitive bidding and undertaking thorough due diligence on the supplier base, no matter what the circumstance because as any professional will know, poor procurement decisions can have consequences anywhere down the supply chain.
There are many lessons to be learned from the pandemic to tighten up good governance in organisations, to improve the capabilities of our IT systems and processes and business continuity plans. We expect to see supply chains and sourcing strategies being redesigned with more of a focus on resilience and not just on achieving the lowest prices. We anticipate that organisations will start to shorten supply chains to build in more agility, perhaps hold more stock, spread their demand across multiple suppliers and even perhaps move to in-source some critical items or services. All this must of course be balanced with what looks to be a global economic downturn and a focus on value must continue.
Procurement teams are at the heart of the solutions to many of the issues that organisations have faced during the Covid-19 crisis and the capabilities of procurement professionals have been hugely valued. We must ensure that we continue to uphold the highest ethical standards and implement, and use, the most robust procurement processes along the way. It is sad that there are people who have chosen to exploit the situation created by the pandemic; it is vital that all organisations are alive to these exploiters and that procurement professionals undertake the right due diligence on all suppliers so they don’t become part of that story.
This is a great time for procurement teams to shine, to have greater influence on business decisions and to be listened to – particularly within the boardroom. We must seize this opportunity and demonstrate that procurement is not only able to weather the storm, but should be enabling organisations to be more resilient to future challenges and drive success. And “it takes two to tango”, so just as procurement professionals need to step up, to use their capabilities, to be transparent and ethical in all they do, so we also need organisational leaders to ensure they have the right procurement people in the right roles and then allow these professionals to do the job they are trained for – ensuring their organisations make robust and responsible sourcing decisions.
☛ Malcom Harrison is group CEO, CIPS.