At what level do executives expect procurement to operate?

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Thumbnail image for Thumbnail image for Molefe Mokgatle_cropped.jpgWhat must procurement do for the board and CEO, now and in the future?  Molefe Mokgatle, Executive Director at Aveng Grinaker-LTA told delegates at SmartProcurement World that a problem procurement must face is outdated legacies: in the past the only real skill required of procurement was negotiation.

Supply chain optimisation is a key enabler of the corporate objectives, yet, ironically, while procurement has proven itself to be a strategic function, many organisations still keep it at an administrative and functional level, little realising that procurement can deliver substantial growth in shareholder value.

Today, forward thinking organisations are asking for an innovative and strategic skill set, but there is a conflict between the ideal skill set and the reality, said Mokgatle.

Mokgatle advises that to be world class, the procurement and supply management function must be staffed by highly qualified people, supported by a high degree of automation.

To be a service to internal stakeholders procurement must excel in three main aspects, he said:
• Achieving cost reduction on a sustainable basis.
• Being a source of continuous innovation in internal processes.
• Playing the role of principle driver of risk management in the organisation.

Do South African companies have the competencies to achieve world class standards in procurement? Generally speaking, we still have a long way to go on this road and there is a dire need to develop a new breed of strategic procurement leaders, which we can only achieve through professional development at the highest level, said Mokgatle.

He advised that organisations and professional bodies should:
• partner with universities;
• provide competitive remuneration packages;
• adopt quality and ongoing training programmes for personnel; and
• the corporate environment must adapt to support the drive to excellence and provide the vision and resources to achieve the goals.

Ultimately the true test of procurement’s value, is whether it delivers shareholder value, he concluded.

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