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What’s top of mind for CPOs: 15 key learnings

Finding and retaining procurement staff is one of the hardest challenges top Chief Purchasing Officers are grappling with. 

Teams are even tapping internal employees on the shoulder to take on career changes and fill gaps in procurement.

PASA’s recent Connect Round Table, the Annual Lessons from CPOs, focused on learnings from the pandemic and a forward look at immediate challenges.

On the topic of staffing, the consensus from CPOs was on the difficulty to attract and retain staff. The message among most: work hard to retain your current staff to avoid costs and recruitment delays.

“You’ve got to look after the team,” one CPO said.  

“Finding procurement staff and retaining them is quite hard,” another commented after reflecting from building a team from the ground up in the last six months.

“We had to really think outside of the box and even approach people who want a career change to take on a role in procurement.”

“Retaining talent has been hard, we’re looking everywhere.” another commented. 

Procurement teams are increasingly looking to the market to find resources to meet short falls with staff. 

It’s been particularly challenging in Perth and Adelaide with anecdotal reports of procurement talent heading north to take up positions with defence projects offering bumper packages at least 10 percent higher than capital city salaries. 

One CPO even said they had to “lower the bar” to fill vacancies. 

“Trying to recruit certain roles was really difficult,” he said. “If anything we had to lower the bar or try to match salaries compared to what the market was offering.”

PASA reported earlier this year the procurement skills most sought after were contract administrators, procurement specialists, category managers, contract managers and procurement managers.

Workloads increasing 

The word from CPOs correlated somewhat with Hackett’s workload increase prediction from its annual Key Issues Study, a benchmark report for procurement globally. The study suggested an 11% increase in workloads for procurement was predicted for 2022 reflecting a broadening of priorities, but with no increase in headcount and even a reduction in operating budget. 

However 90 per cent of CPOs who spoke to PASA say, workload has increased beyond 11 per cent and it’s not slowing down. 

The PASA Connect CPO Roundtable puts a full-stop on the year with an annual reflection on the Top lessons for procurement from 2022.

Attendees also shared some predictions for what to look out for in 2023. 

15 Lessons from the last two years

What CPOs told PASA:

  1. Supply assurance became the most important facet for many – including onshore inventory safety-stock.
  2. Stronger Business continuity Planning planning in future is essential.
  3. Decarbonisation (and ESG) becoming major issues not minor – and rising up the priority listing.
  4. Acceptance in C-suite and amongst stakeholders that prices do, and will, rise – savings not always a given.
  5. How difficult it is to replace good team members – try and keep them if you can to avoid cost/delays replacing.
  6. Opportunities to work more across the business – and in new areas of the organisation.
  7. The chance to work up the supply chain more – getting to the origin of our inbound supplies.
  8. Numerous issues allowed business casing to grow the procurement team and full time employment positions and work closer with other departments.
  9. The business case for systemisation, automation and digitisation appear to be strengthening.
  10. The power of major suppliers has grown exponentially.
  11. The new importance of expediting and progress chasing a critical task operationally.
  12. Internal relations and communications are critical.
  13. Inflation driving the case for procurement.
  14. New tools and ways of working demanded faster change, digitalisation and responsiveness to organisational needs
  15. Good outputs of attending PASA events helped very much over the last two years.

Reducing spend cost ‘back with a vengeance’

Reducing spend cost came in a number two in Hackett’s Key Issue Study and it looms as a top of mind issue for the CPOs who spoke to us.

Reducing costs of mitigating effects of the current inflationary environment were raised as an issue. 

The Reserve Bank of Australia expects inflation to peak around 8 per cent by the end of 2022. 

“Cost management is back with a vengeance, with costs rising,” one CPO said when referring to forecasted energy price increases of more than 50 per cent in the next two years for the market Down Under.

“How businesses are going to survive that I don’t know,” he continued.  

Keeping in close contact with suppliers 

As supply chain continuity issues continue, another CPO said they are having to take a much “more interventionist” approach with “checking and rechecking” interactions with the supply chain. 

“This will drive automation and digitization around stock levels,” he said. 

Another said there was enormous focus with top suppliers with regard to business continuity. 

“We are the mercy of big global suppliers and have limited ability to influence their production schedule and timelines,” another CPO told the group. “A lot of products we buy we can’t buy directly. We’re really maintaining super strong links with the supply chain and acknowledging the difficulties in their supply chain.”

Growing relationships 

The growing profile of procurement and strong internal relationships being forged was raised several times during the session. 

A government CPO said stronger collaboration across its departments during COVID had positive on-going effects.

“Each department tended to be siloed, but it (Covid pandemic response) brought us together as we had commonalities with the need for PPE and responding to covid. It re-emphasised collaboration,” he said. 

“Communication internally is key with stakeholders,” another CPO said. “Not only on cost but general items such as ESG, market intelligence and letting stakeholders know about cutting edge technology.” 

There’s a focus on digital procurement and growing the opportunities for flexibility and real-time visibility of data. 

Decarbonising waste and modern slavery were raised as other focus areas as was maintaining mental health and wellbeing programmes among procurement staff. 

“There’s been an Importance on mental health, it was big on the agenda,” said the government CPO. “We’re now holding more wellbeing sessions and check-ins across the department.

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