The Future of Procurement – What Lies Ahead?
October 16, 2020
Posted by Home (ENG)
The future of procurement – what lies ahead?
By Lauren Webster
The unexpected Covid-19 pandemic launched the world into a time of panic, uncertainty and fear. It has forced almost every industry to re-consider the productivity of their processes. Procurement teams in particular, have had to make significant adjustments in order to remain successful in terms of meeting expectations, maintaining profitability and supporting suppliers to preserve relationships that often have taken years to build.
I recently attended Winmark’s first virtual network meeting, chaired by Dan Cameron, CPO at Quilter, and presented by Warrick Matthews, CPO at Rolls Royce. It offered some really valuable insights into challenges and opportunities in a post Covid-19 economy.
With the pandemic affecting every aspect of life as we previously knew it, supply chains were, and still are, a huge part in keeping businesses successfully running and ultimately, in profit.
Many businesses, as a result of the pandemic, have noticed a significant drop in profits. In order to remain afloat many have looked to reduce expenditure by negotiating discounts from their supply chain. The resilience of the supply-chain is imperative to maintaining a long-lasting relationship between the supplier and the business; naturally if the suppliers have the ability to be flexible during a time of crisis, this will allow the business to maintain the relationship in the future when profitability goes back to ‘normal’. With several types of equipment being required at varying levels, each requires a different level of relationship which determines the importance of flexibility during a challenging time.
When Warrick spoke about the immediate impact the Covid-19 pandemic had on Rolls Royce, his, and the companies immediate reaction, was to protect the business. There was still a customer demand to sustain, as well as supporting supplier moves to preserve liquidity whilst ensuring commitments continue to be met.
According to Sammeli Sammalkorpi, CEO of Sievo, there is a significant change in Procurement during and following the Covid-19 pandemic, whereby processes were broken down and simplified. The future of procurement success lies in making processes simpler, cheaper and with more flexibility to deal with unexpected situations, whilst managing risk and maintaining customer expectations and meeting demand.
It’s no secret that the world has turned completely upside down since February 2020, with business trips, meetings and office work becoming almost entirely digitalised, what does that mean for the future of procurement?
Sustainability is arguably the most prevalent factor when considering the future, how can we overcome the issues we are currently facing and maintain it so that processes remain effective and simplistic enough without compromising on quality?