What Is The Role Of Procurement In The New Age

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The coronavirus pandemic has led to major disruptions for businesses and supply chains across the world. As a result, business as usual has been forced to take a backseat as organisations fight to stay afloat, respond to increased risk, protect their employees and manage global supply chains on the brink of collapse.

It is because supply chains are so heavily affected that much of the burden of managing the business impact of the pandemic has unwittingly fallen on procurement professionals.

Traditionally, the role of procurement has centred around cost savings and contributing value to the bottom line. Of course, while the perceptions and expectations surrounding procurement’s role have evolved considerably in recent years, this crisis has truly given the profession the time to shine. 

What has procurement learned from the coronavirus pandemic?

Throughout the coronavirus pandemic, procurement professionals have been compelled to own and resolve their organisation’s risk.

Many organisations have been confronted with the harsh reality that their supply chain network is not quite as robust as they had hoped. With minimal or easily managed disruption, operations have tended to tick along seamlessly, allowing procurement to focus on the short-sighted issues, including cost savings.

Unsurprisingly, the pandemic has been a much-needed wake-up call, reminding businesses everywhere that preparation and contingency planning are key. But it has also demanded that procurement professionals address challenging questions including:

  • Who should we be buying from in the future?
  • How can we better manage our supply chain?
  • How can we develop more meaningful supplier relationships?
  • Do our safety stock and reorder point policies need reviewing?
  • How do we measure risk in our business?
  • Does the wider organisation understand the role of procurement and who to consult for buying-related queries, particularly in times of crisis?
  • How vulnerable are our critical suppliers?

In the past few months, procurement teams have proven themselves to be business-critical, adapting efficiently to rapid, and unprecedented, changes, supporting increased customer demand, managing supply chain delays and implementing contingency plans, all in the midst of a global crisis. With business priorities expected to shift permanently in a post-coronavirus world, so too will procurement’s role.

What will be procurement’s role in the new age?

It’s probable that risk mitigation and supply chain visibility will be considered all the more important by businesses eager to prep for future pandemics and black swan events. This means that procurement’s top priorities will shift to include risk mitigation, business continuity planning and disaster recovery planning. This will include identifying the most vulnerable links within the supply chain and finding ways to address those vulnerabilities.

Of course, risk mitigation won’t be procurement’s only focus. The coronavirus pandemic has resulted in lasting changes in consumer behaviour, which is just one factor guaranteed to impact business spending and budgeting. No doubt 2020 budgets and priorities have already been deemed irrelevant, but disruption is likely to last into 2021 and beyond. One of the greatest challenges this poses for procurement is how to maintain and advance sustainability initiatives, which could take a back seat in favour of fast economic recovery.

As the profession takes on additional responsibilities and its position within the business is further redefined, it is fundamental that procurement leaders are well-placed to rise to the occasion. The post-coronavirus world will require a new procurement skill-set, which means hiring top talent and upskilling existing team members to ensure they can think strategically, embrace digitalisation, and effectively analyse data.

Procurement teams that are actively readying themselves for this new normal will make themselves indispensable to the business in the long-term.

About Author

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PASA (Procurement and Supply Australasia) is the leading provider of information, education and networking opportunities to procurement professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, training, awards and PASA CONNECT membership network. PASA is a trading name of BTTB Marketing Pty Ltd. BTTB Marketing has operated under the BTTB, CIPSA Conferences and PASA names for over twenty years. https://procurementandsupply.com/

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