Chief Procurement Officers (CPOs) have missed an opportunity to steer the global economy’s rescue boat, alluded Institute of Purchasing and Supply South Africa’s (IPSA’s) President, Karen van Vuuren, at the institute’s Annual Pan African Conference held at Emperor’s Palace in partnership with the Chartered institute of Purchasing and Supply (CIPS).
CIPS Director of International Development Chris Gallagher, CIPS President Dr Bola Afolabi, IPSA President Karen van Vuuren
“Chief Financial Officers (CFOs) have been leading the world’s response to the economic crisis during 2008 and into 2009, a position that CPOs could well have held. They have missed the boat”, Van Vuuren said in her opening address to the ‘Procurement in the Global Marketplace’ conference, which SmartProcurement attended on 26 and 27 May.
Van Vuuren called for courageous leadership from procurement professionals and supply chain management divisions to take a more prominent role in guiding the world’s economy to recovery.
Cash is king in the current credit climate and supply chain management has the potential to lead companies to greater savings, said CIPS Director of International Development, Chris Gallagher.
“2009 has the potential to become the year of the CPO, if it does then the world will be getting ready for the economic recovery’s massive success”, said Gallagher in his presentation aptly entitled ‘CPOs, the heros of the economic downturn – how procurement can save the day!’
2009 is the time to rethink the procurement profession and demonstrate that supply chain managers and procurement professionals are in a prime position to cut costs dramatically and help companies survive the crisis, said CIPS President Dr. Bola Afolabi.
The thinking that surrounds Procurement in Africa needs to change, said Afolabi.
“West and East Africa are plagued by pride and stupidity because professionals in these regions think that collaboration with Europe is colonial, when in fact it is indicative of progress, which is key for Africa’s procurement education and recognition in the global economy” he said.
Conference popularity
“The IPSA/CIPS Annual Pan African Conference is the only event to my knowledge of this kind in Africa” said Chris Gallagher.
More than 155 guests and delegates represented 13 African countries, including Botswana’s 4 delegates, Kenya’s 13, Malawi’s 6, Nigeria’s 10, Swaziland’s 4, Uganda’s 6 and Zambia’s 7. South Africa’s contingent was 84 delegates. In addition to numerous invited speakers, the United Kingdom had 3 delegates in attendance.
Conference exhibitors included SmartProcurement’s sister company Commerce Edge, Volition, Quadrem, University of South Africa and the Universtiy of Pretoria.
Commerce Edge’s Margaret Richings with Themba Shezi, the winner of the Commerce Edge luckydraw. Mr. Shezi has won a Commerce Edge 2-day training course of his choice
Volition’s David Long, at the organisation’s exhibition
Conference speakers
New goals have entered the procurement environment, it is a changed world, said Managing Director of CIPS Australia & New Zealand, Jonathan Dutton, in his presentation, ‘The evolution of SCM’.
Procurement is no longer solely concerned with cost; there are new priorities, which must be balanced against cost reduction. The perception of what constitutes true value for money has changed in a world where consumers are rewarding ‘green’ or socially responsible supply chains and punishing bad procurement practices, said Dutton.
The question of outsourcing, its strategies towards cost reduction and allowing organisations to focus on core business activities, was broached by University of South Africa Professor in Purchasing and Supply Hannie Badenhorst in her presentation ‘Outsourcing: is this the magic solution for the problems in public and private institutions’.
The need for significant development in South Africa’s Human Resources in all sphere’s of government to meet the high demand that exists for services in areas such as housing, water and electricity, was discussed by University of Fort Hare’s Executive Dean for the Faculty of Management and Commerce, Professor Dovhani Thakhathi, in her presentation ‘Developing human capital for excellent service delivery in SCM’.
She spoke about the role that Human resources development (HRD) practitioners play in supply chain management. Fundamental to this is HRD strategy, which should facilitate learning and teaching within a department or company. She reminded us all that the Vision of South Africa remains: “… a nation at work for a better life for all!”
CIPS Africa Chair and Purchasing Manager of Ghana Ports Harbour Authority, Alex Akrofi, discussed the need for attitude changes and education to the highest levels of supply chain management groups in his paper, ‘The importance of institutional reform and capacity development in supply chain management’.
David Smith, Commercial Director for the UK Department for works and Pensions, presented the enormous responsibilities of procurement and supply in the public sector, in his paper entitled ‘What has globalisation got to do with public sector procurement’. He quoted Margaret Thatcher, former Prime Minister of Great Britain, when he said that “the procurement of goods and services in the public sector is ‘BIG BUSINESS!”
“The future of Procurement is positive”, said Smith, whilst discussing how purchasing and supply management departments can achieve board-level recognition.
In a discussion on fraud in procurement, Managing Director of Nexus Forensic Services, Andre Bouwer, emphasised that procurement specialists are held accountab
le for fraud in their departments under anti-corruption laws.
“Kick-backs are not in bank statements,” said Bouwer, whilst highlighting methods of flagging fraud and corruption in supply chain environments in his frank presentation ‘A practical approach to beat procurement fraud and corruption – don’t get mad – get even’.
The growing share that China has in the global economy, and other developing countries, was highlighted by The Beijing Axis’ Group Managing Director, Kobus van der Wath, in his paper entitled ‘Low cost countries sourcing opportunities – with specific reference to China’s sourcing advantages and challenges’.
Van der Wath discussed the benefits and methods of extracting value from Chinese supply chains and how collaboration opportunities have increased dramatically over the last five years and why most industries cannot ignore China, as a threat or an opportunity.
Siemens presented its South African procurement strategy, which focuses on local suppliers. Siemens South Africa’s Director of Government Affairs, Marvin Benjamin, discussed the multinational’s BEE rating, its R1,5-billion expenditure in the local market and how the organisation benefits from having a great number of local preferred suppliers, in his address ‘Procurement excellence – a local context’.
“Eskom has shifted its focus from price to total cost of ownership”, said the state-owned enterprise’s CPO, Vule Nemukula in his paper entitled ‘Challenges and success in strategic sourcing – Eskom case study’.
Nemukula discussed the energy provider’s approach to strategic sourcing, it results, successes and challenges, and its supplier management techniques.
National Treasury’s Director of Supply Chain Training, Kevin Naik, and the Chief Director of Supply Chain Policy, Henry Malinga, took questions on National Treasury’s presentation ‘Government’s supply chain management initiatives’, in which they highlighted their collaboration with South African education accreditation bodies to assess supply management and procurement training providers.
The “cultural sensitivity” afforded by merging locally developed procurement teams with international best practice was entertainingly presented by ABSA’s Chief Administration Officer, Ian Russel, in his case study entitled ‘Developing local capability by leveraging international best practice’.
ABSA’s procurement team is acknowledged as the best sourcing team in the Barlclay’s Group, said Russel. He described the process that ABSA used to develop a newly formed procurement team with no experience into a structured and accountable group of procurement professionals who deconstruct and engineer end-to-end supply chains.
The complexities of managing a global supply chain were discussed by Sony Computer Entertainment Europe’s Senior Vice President of Operations, Patrick Inskip, in his video presentation ‘Delivering Playstation to Europe’.
Online software purchases and game code developed by Playstation’s millions of users is the future of the gaming console, said Inskip. And therefore, Playstation’s supply chain will focus less on the retailer and more on delivering key products to, and supporting, Playstation’s end-users.
Editors note. In July, Smartprocurement will highlight some of the awards that where handed out at the ceremony that preceded the conference on May 25th.
