COVID-19: Transforming the Procurement Landscape

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Working From Home memes have gone to a new level since the COVID-19 pandemic. Most of them focus on the lack of work being done when the boss isn’t around to look over our shoulder, which is one reason why companies have been loath to embrace the work from home culture. Another reason is that many employers are under the false impression that current digital infrastructure can’t support it.

Enter COVID-19, the kick-to-the-backside that many organisations needed to embrace change and the future. Because of it, many of us have had no choice but to have employees working in their pjs on their living room couch.

Massive transformation has not only occurred in the workplace, but also in the supply chaintransformation that was unthinkable in January. But, as a meme floating around illustrates with brevity, March 2020 was a decade-long month.

COVID-19: Short-Term Changes

As I’ve said, COVID-19 has forced a massive “working from home” revolution on us all, which means IT systems and support have to align to make all this feasible. As procurement professionals, we need to quickly ensure that the right IT infrastructure is in place, while keeping cashflow in mind; the only way we’ll make it out the other side of the coronavirus tunnel is with a frugal touch.

In the short term, we also have to manage supplier risks and, inevitably in some cases, source alternate suppliers where possible. With alternate suppliers, it may prove to be that local manufacturers will retool to meet new demands brought about by the pandemic. We’ve already seen this with brewers turning their hands to sanitisers and apparel manufacturers churning out face masks.

As we keep one eye on survival in the age of COVID-19, we must keep the other eye on rebounding on the other side. After all, the Spanish Flu pandemic of 1918-20 was followed by the roaring ‘20s. The last thing anyone wants is to be caught napping.

While these are obviously short-term demands, there will no doubt be long-term ramifications in the manufacturing front caused by COVID-19.

COVID-19: Long-Term Changes

If there’s one big lesson out of the pandemic for those in procurement, it’s that we need to breed more resilience into our supply chains and workplaces. It’s highly unlikely that things will return to the way they were before COVID-19. There will be a sizeable group of people who find themselves more productive, happier, and leading a better quality of life when they skip the daily commute and work from home. So it’s very likely that the short-term measures enacted by companies to allow staff to work from home will become permanent fixtures in the future.

In terms of more resilient procurement, the alternative suppliers we’ve had to source in order to survive COVID-19 may well become a permanent part of our supply chains. More importantly, it’s likely that many local manufacturing facilities currently closed will come back to life to support the demand for a more diverse supply chain.

Obviously, we cannot put the globalisation genie back in the bottle. Nor would we want to. We are likely to diversify even further our global supply chains and develop multiple factory hubs in addition to China. Australia and other developed countries have a lot of dormant manufacturing capabilities that can be modernised and resurrected. That means retooling and integrating with AI-powered modern machines while offering a reduced logistical risk on account of being local. Incorporating local SME manufacturing is what will make our supply chains more resilient. And resilience is what will allow us to make it out the other side of COVID-19 and flourish.

Looking at procurement with fresh eyes

At the time of writing, COVID-19 stats are as follows. Worldwide, there are 3,116,398 cases, 217,153 deaths and 928,658 recovered. While 217,153 is a shocking and horrifying number to contemplate, imagining what it might be without the lockdown measures embraced by many countries doesn’t bear thinking about. While the lockdowns have caused economic turmoil that some businesses simply won’t recover from, the lives it has saved justify it again and again.

However, there are some agitating for an ease in lockdown measures ASAP. It’s worth keeping in mind, though, that the Spanish Flu had a second wave because many places ended quarantine too early. Like it or not, the lockdowns are here for the short-term, and they’re forcing us to look at the procurement industry with fresh eyes. There’s pain now and in the future, but there’s also opportunity.

This article was originally posted on www.comprara.com.au.

About Author

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Ben is the Founder & Joint CEO of Comprara & Purchasing Index – his vision is to support clients to ‘gain more ground’. Ben leads the Comprara & Purchasing Index teams who deliver services, tools, training and technologies to organisations in both the public and private sector. Every service accelerates clients efforts to deliver more with the same, or the same with less. Ben is a Fellow of CIPS and was rated in the top 35 of under 35’s by ‘Supply Management Magazine’ and ranked as one of UK’s rising stars (2005). Comprara is a leading Australian procurement consultancy headquartered in Melbourne. Specialising in generating insights that help Chief Procurement Officers to make the right choice. Selecting the right goals is one thing, realising them is another! We help turn good choices into business benefits by supporting you with a practical road-map to accelerate the journey toward your goals. https://comprara.com.au/ Purchasing Index is a leading Australian procurement spend analysis, analytics & e auction provider headquartered in Melbourne. https://www.p-i.com.au/

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