Riding the Waves of Supply Chain Uncertainties : How can Procurement take the lead to drive competitive advantage ?

by Jinky Gen — October 19, 2021

Without a doubt, covid 19 in the last 18 months or so, has subjected organizations and the global supply chain to an extreme test of resilience and, almost to a quasi-game of survival.

And as organizations slowly emerge from the aftermath of this worldwide pandemic, it is predicted that the tides of uncertainties and it’s rippling effect will continue to pose challenges to the full recovery of global trade and national economies. Persistent volatility in the supply chain will continue to test every organization’s bottomline profitability, if the cost to react to these disruptions and uncertainties are, not only brought under control, but also managed strategically.

With the challenges to supply chain expected to continue to persevere, Procurement, more than ever, is being challenged to work with speed and agility while not losing the focus to deliver and protecting the enterprise from risks.

In the last decade, long before COVID has struck, the agile methodology has gained popularity in the tech industry. This has since then been adopted in other fields including Procurement to deliver business needs with speed.

But what does it truly mean to be agile and what makes it work ?

Further to above, we can also add having (a) sophisticated tools and (b) best in class practices, however I do find that these things require a major investment and and an abrupt change management and organizations may not have the faculty to roll out these very quickly. And even so, whether a company has the cash to invest in advanced systems and roll out best in class practices or not, if the very foundation as detailed above is not present, an agile procurement is nothing more than just an empty aspirations.

A well-capable procurement team with the skills and right mentality – pragmatic and adaptable, data-driven, collaborative and result-oriented. This goes along with the correct team structure that leverages individual and overall team expertise to develop and execute procurement strategies.
Economies of skills enabled by the company with various aspects of the project spread across multiple functions to deliver and execute. For example, in the contracting process, although an overall process owner is identified, the operational and technical aspects are the responsibilities of the function, commercial matters are owned of Procurement, Legal terms and conditions negotiations are owned by Legal. Some companies fall into a pitfall thinking that because contract is a legal document, the overall owner of the contracting process is the legal team and claws its engagement in all areas of the contract negotiation process.
Delegation of decision-making and spend authority based on levels of responsibility within the company. Clear authority is awarded to relevant employees and employees are truly empowered to make decisions.
And for employees with spend authority, they must have the confident to execute their authority. What’s both amusing and disappointing sometimes is when a person of authority passes on its decision-making to the next level, rather than use facts, data analysis and the business case to be confident and quickly execute a decision.