Procurement Strategy

What is affecting procurement? Where is the profession going?

 

DuncanBrock_SPW.jpgThere’s a lot going on. The changing and challenging times we currently face are probably greater than they’ve ever been. What is the implication for procurement? What do we need to keep abreast of and continually work on?

Duncan Brock, Director of the Chartered Institute of Procurement and Supply, offered his insights during his opening address at the SmartProcurement World Gauteng conference in September.

How to train your CEO to get what procurement needs

 

EnricoRizzon.jpgThe majority of CPOs are still reporting three levels down from the CEO. Enrico Rizzon, Partner, Procurement & Analytics, A.T. Kearney Australia outlines how procurement can build a strong business case!

Procurement leaders in large corporations face a tough business environment. Facing low growth, disruption, increased competitive pressures from well-funded private equity firms and nimble technology-focused innovators, the demand is growing for creative procurement services to deliver not only on cost improvements but also create new solutions that help the overall business strategy.

Influence of procurement departments on marketers

 

JohannaMcDowell.jpgAgencies working – or hoping to work – on major corporate accounts in the advertising, marketing and communications industry can no longer ignore or misunderstand procurement departments and their importance in winning both government and corporate clients.

Johanna McDowell, Independent Agency Search & Selection Company (IAS) managing director, warns that the B-BBEE Amended Codes of Good Practice released by the Minister of Trade and Industry in mid 2016 are designed to ensure that procurement is taken seriously by companies that intend to survive, in this month’s SmartProcurement.

Six tips to create a world-class procurement strategy

 

Idea.jpgCorporates that adopt a silo approach and view the procurement process merely as a method of obtaining goods and services to fulfil an internal need, have missed a trick. An effective procurement strategy can create considerable business value through process optimisation across each department, and achieve better cost reductions.

According to research from global consultancy, The Hackett Group, world-class procurement departments operate about 20% more economically than the average company, and they have 27% fewer employees.

Short-term focus on long-duration procurement

 

Stephen_Bauld.jpgThe problem of short-term focus is especially serious when dealing with long-duration procurement, for instance, in the case of a building. Stephen Bauld, a government procurement expert, unpacks the need for long-term thinking in the public sector.

Gauteng uplifting SMMEs through procurement

 

MEC_BarbaraCreecy_SPW.jpgRecent studies by Stats SA indicate that the face of poverty in South Africa remains black, female and that of children below the age of 17. Furthermore, more than one in every two SA citizens can be officially classified as poor, said Gauteng Finance MEC Barbara Creecy at the Smart Procurement World conference in Johannesburg.

“[Stats SA’s] Poverty Trends Report shows that by 2015, approximately 33% of Gauteng’s citizens were living in poverty. Although this is lower than most of the country, it is not a cause for celebration. One in three Gautengers go to bed without a meal. The situation was further worsened by the province losing 146 000 jobs during the last financial quarter,” said MEC Creecy.

The most direct and effective route to address these socio-economic challenges is a programme of transformation, modernisation and re-industrialisation. Gauteng’s provincial government is currently implementing such a programme in partnership with the private sector, organised labour and civil society, said MEC Creecy.

9 success factors for implementing a procurement transformation project

 

Implement_procurement_transformation.jpgMore South African organisations are starting to recognise the value that procurement transformation initiatives bring to the bottom line. Successful procurement transformation projects reposition the source-to-pay process for success, across the entire organisation. The entire source-to-pay process is made efficient and highly collaborative, providing organisations with a competitive advantage.

Procurement transformation can be defined as a process - with an element of flexibility - in which an organisation’s capability and procurement behaviour is altered to attain desired results (such as the achievement of maximum value through the procurement function) and attain long-term sustainability.

Supply Chain Partner, a specialist supply chain service provider, discusses 9 critical success factors (or pitfalls if not considered…) that can make or break your procurement transformation success, in this month’s SmartProcurement.

Procurement models ineffective, say 51% of executives

 

Hands_raised_survey.jpgA survey conducted by the Ayming Consulting Group, found that more than half of the procurement executives (51%) interviewed do not think their current procurement model is effective. The survey involved a number of executives from different size businesses, across a range of sectors.

The survey of 200 executives - including CEOs, CFOs and CPOs - found that only 17% of respondents thought their business's procurement function was "entirely strategically focused". Fewer than one in five, thought the function had driven significant value for their organisation in recent years.

Procurement's value will be judged on its alignment with the organisation's strategy

 

ShirazSarang.jpgIs your procurement division a purchasing or a procurement function? More importantly, into which category does your CEO and other key executives place your function? Shiraz Sarang, CPO at Nedbank discusses how procurement professionals can elevate the importance of the procurement function within an organisation, in this month’s SmartProcurement.

Raising procurement's image - one person at a time

 

Meerkat.jpgWho’s willing to stand up and bear the flag of procurement pride and improve our image? Elaine Porteous wants reinforcements to help raise the function’s status up to where it belongs.

Five ways to streamline your procurement

 

IanHendry2.jpgRunning a successful business is stressful. Very stressful, in fact. Arguably the biggest challenge facing chief procurement officers and procurement managers is cashflow. Ensuring that you have the right stock levels without sacrificing pricing, or incurring wastage, will go a long way in alleviating month-end pressure. Open communication between the procurement- and finance departments will more than likely prevent crises of oversupply.

In this month’s SmartProcurement, Ian Hendry - Corporate Card Product Manager at Nedbank Corporate Card - explores five ways to help you streamline your procurement process, and improve your procurement function.

Procurement inefficiencies uphold poor intra-Africa trade

 

LindiweZulu.jpgThe impact of ineffective procurement in Africa has been estimated at US$31,5-billion - US$24,9-billion for sub-Saharan Africa alone - in terms of value leakage – by auditor KPMG.

The inefficiencies are caused by procurement organisations struggling with basic issues around delivering value, such as low use of technology, inadequate skills and non-compliance with procurement policies.

“It is difficult to separate this ineffective procurement from Africa’s trade - they are two intricately linked aspects, which link directly to intra-trade on the continent”, said Minister of Small Business Development Lindiwe Zulu, at Smart Procurement World Western Cape. Minister Zulu added that, “intra-trade accounts for only 10 - 12% of the continent’s trade, in comparison with high levels of inter-regional trade recorded in Europe (60%) and in Asia (40%)”.

Buy local or face audit findings!

 

RobDavies_ProudlySA.jpgUnder the World Trade Organisation’s agreement on Trade-Related Investment Measures, The South African government cannot prescribe to the business sector that they must follow localisation (75% local content in purchases) in the same way it prescribes to public entities.

“We don’t have that ability, and are challenged internationally [if the topic of localisation is broached with international organisations],” said Minister of Trade and Industry, Rob Davies.

However, some business organisations have embraced the spirit under which the Economic Development Department (EDD) negotiated the local content designations, to drive economic development in the country.

Minister Davies shared some of these corporate-level local procurement stories at Proudly SA’s Buy Local Summit, in early April.

The Future of Procurement - 5 challenges to the profession & strategic function

Jeremy_Kirsten.jpgJeremy Kirsten, MCIPS, puts pen to paper about where the procurement profession has come from, and where it is going.

Procurement as a profession is, I believe, in its infancy, as it only came into its own in the late 1980’s. Its growth from the mid 1990’s to date has been phenomenal. When I first started working, purchasing was not always carried out by professional purchasing officers, but by others that may have inherited the function. During this time, a new concept ‘Materials Management’ arose.

What does procurement agility mean in 2017?

Gordon_Donovan.jpg

Gordon Donovan, procurement and supply chain manager, discusses the term ‘procurement agility’, and the ways in which procurement organisations can become more agile in their activities. In this month’s SmartProcurement he gives some practical takeaways for procurement professionals to consider when applying in their own environments. 

Procurement fraud - why does it continue to thrive?

 

procurement-fraud-scandals.jpg“Procurement fraud happens within the entire value chain of organisations. Because decisions are made on every level, some procurement officials get a chance to manipulate the system, and accept bribes,” says Lebogang Letsoalo, Director at Sincpoint Pty Ltd.

 


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