Change

By Ian Holcroft

As you move forward with your career, remember that it is not just about the number of connections that you have - it is about the quality of your connections. As the old adage goes: it is not about what you know, but who you know.

As the majority of us spend more time working from home in the 'new normal', being connected is more important than ever.

Right now, as the COVID-19 pandemic takes its toll on jobs, consumer spending and the global economy, many businesses are scrambling to adjust to a new financial reality. They are also coming to terms with the fact that the path to recovery remains long and mostly uncertain. Experts, including Deloitte, predict that the United States (US) economy will not bounce back until mid-2021. The Bank of England is anticipating slower recovery, as late as the end of 2021, for the United Kingdom (UK).

Within organisations, the Chief Financial Officer's (CFO) voice is one of the most critical during a crisis. But contributing directly to a firm's financial resilience is the Chief Procurement Officer (CPO), who has a strategic role in leading a firm through the tough times ahead.

Spend Matters spoke with a CFO who has many years of experience across corporate finance and public accounting, and is currently the CFO of spend management firm Jaggaer. Spend Matters asked Jeff Laborde how he sees Procurement and Finance best working together to drive benefits across a business, given their natural overlap in priorities and responsibilities.

In late July, Digital Procurement World (DPW) brought together some of the world's most progressive chief procurement officers (CPOs) for a virtual roundtable discussion on how the ever-changing digital environment can help procurement challenge the status quo and design operating models that deliver both innovation and value.

Matthias Gutzmann, Founder of DPW, gives us the key takeaways from this discussion:

By Gordon Reid with input from Mieka Cleghorn, SA Managing Director, Transparent

As a semi-retired business executive, and after spending the past twenty plus years working for some of South Africa's leading companies, the COVID-19 lockdown has afforded me valuable time for some serious thinking.

Many businesses will need to change the way they operate to remain afloat. Useful insights and lessons from company closures will undoubtedly surface in time, but for now we should focus on the future and what can be done now to keep our businesses running.

The intention of this article is to stimulate discussion, thought and imagination with a view to developing a roadmap to traverse the rocky road to economic survival post-COVID-19.

The Absa Purchasing Managers' Index (PMI) for July 2020 declined slightly compared with June, but continued to signal a further month-on-month improvement for conditions in the manufacturing sector. The PMI declined to 51.2 index points in July, from 53.9 in June, thereby staying above the neutral 50-point mark for a third consecutive month. This suggests that official manufacturing output should still reflect a month-on-month improvement in activity, but that levels are stabilising and that July's increase is likely to be significantly less than those signalled by the PMI in May and June.

SmartProcurement has joined forces with SAPICS to offer Africa's largest-ever online event for supply chain and procurement professionals.

Africa Supply Chain in Action takes place on 19 and 20 August 2020. It is expected to bring together more than 1 000 supply chain and procurement professionals.

The Absa Purchasing Managers' Index (PMI) for June 2020 showed that conditions continued to improve in the South African manufacturing sector. This is after most of the sector came to a near standstill during the nationwide Level 5 lockdown in April 2020 and only partially returned to normal production levels in May 2020.

The headline PMI rose further to 53.9 index points in June, up from 50.2 in May.

Importantly, while the headline PMI rose to a multi-year high, this does not mean that the level of actual manufacturing production rose to a multi-year high. "Instead, the further rise in June merely means that a solid month-on-month increase was likely recorded", said the Bureau for Economic Research (BER).

Do we need to fundamentally re-imagine what our procurement eco-system looks like? Ian Thompson, Regional Head at Ivalua, thinks so and here is why...

The Business Activity Index of the Absa Purchasing Managers' Index (PMI) survey crashed to an all-time low of a mere 5.1 index points in April 2020. The decline means that manufacturing output came to a near standstill during the nationwide lockdown, with almost all respondents reporting a decline in activity compared to the previous month.

What kind of future-ready procurement leader is needed to survive a rapidly-changing business world? Only a few months ago, the stock market was looking strong and the ongoing trade war between China and the United States indicated future pressure on global supply chains. No one could have predicted that schools and universities would close, companies would tell their employees to work from home and people would be stockpiling toilet paper, of all things.

By Michael Healy, Supply Chain Partner

The outbreak of COVID-19 has forced companies to get creative about how they connect and meet with customers and teams.

Working with cloud applications allows us to workshop, design and configure systems remotely. With apps like Zoom and Microsoft Teams, working remotely can be easy and cost effective. But making it a positive and productive experience for everyone joining in does take some planning.

Here is a checklist from Supply Chain Partner to help you get the most out of your remote sessions:

To support supply chain professionals and to ensure that they have the resources they need to maintain supply chains during the coronavirus crisis, supply chain management professional body SAPICS has launched a number of special support initiatives to aid the profession. This includes a supply chain management toolkit, helpline and collaboration platform.

During Quarter 1 of 2020, the seasonally-adjusted Absa Purchasing Managers' Index (PMI) experienced its weakest quarterly performance since 2009. The PMI averaged at 45.9 index points, compared with 47.6 in Quarter 4 of 2019.

The weak quarterly outcome was despite the PMI improving to 48.1 index points in March 2020, from 44.3 index points in February. Nonetheless, the PMI still remained in contractionary terrain for the 14th consecutive month.

By Dr Marcell Vollmer, Chief Digital Officer, SAP Ariba

How does a Chief Procurement Officer measure success?
In the past, executives responsible for sourcing, contracting, purchasing and payment gauged success chiefly on their ability to wring savings out of the value chain. Without question, reducing costs remains as crucial today as ever. But, with the advent of digital networks, Chief Procurement Officers find that they now have an exponentially greater opportunity to create value. By linking together buyers and suppliers in real time, digital networks allow procurement leaders to foster collaboration, spur innovation and drive much of the strategic value that fuels growth.

These activities, of course, can benefit the balance sheet. But there are others, equally important, that a spreadsheet cannot easily capture.

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined for a fourth consecutive month to reach 44.3 points in February 2020. The 0.9-point decline brought the index to its lowest level since the second half of 2009 when the economy started to recover from a deep recession triggered by the global financial crisis.

"At four points below the average reading in 2019, the current level is only six points above the lowest point reached in 2009", noted the Bureau for Economic Research (BER) in a statement.

What key steps can you take to limit the potential effects of the coronavirus on your organisation?

On 9 February, the world received news from China that it didn't want to hear.

The number of confirmed deaths from the coronavirus had overtaken that of the 2003 Severe Acute Respiratory Syndrome (SARS), with more than 1 000 casualties.

In addition to that, the virus is spreading at an alarming rate. There are now more than 40 000 confirmed cases. And this number is increasing with as much as 20% every day.

While the virus is terrifying from a public health perspective, it is also alarming in terms of supply chain. Wuhan, China, the epicentre of the virus and now a city in total lockdown and complete disarray, is one of the world's largest industrial hubs.

Procurious Founder, Tania Seary, takes a look at how the coronavirus is affecting global supply chains - and what you can do about it.

By Stephen Bauld

One might wonder why, as a consultant for over a decade, I would write about overpriced consultants. Being in this industry, I often hear stories about the high costs incurred when securing consulting services; these stories are widespread and frequent.

Indeed, it is surprising how many consultants are so sensitive to this issue. So much so that they actually make a point of declaring in their advertising material that "we are not going to charge you outrageous fees". Much of the adverse newspaper commentary in relation to the cost of consultants to government is exaggerated.

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) started 2020 on the back foot and declined further in January. The PMI lost 1.9 points to reach 45.2 index points, the lowest level since September 2019.

The performance of the five major sub-components was mixed, with two indices recovering somewhat from multi-year lows reached in the previous month, and three declining in January.