Four barriers to innovative public procurement

Will_Green_100.jpgBy Will Green

Barriers to the use of public procurement as means to spark innovation have been highlighted in a UN report.

In the report the UN Economic Commission for Europe (ECE) said public procurement accounted for 10-15% of GDP on average in most countries and "innovation-enhancing procurement" - or IEP - "should be considered as a strategic policy tool".

The report defined IEP in two ways. Firstly, as "buying the process of innovation - R&D with (partial) outcomes", in which procurement buys R&D services for products, services or processes that do not yet exist to meet a specified need.

PMI Q2 average higher than Q1 - manufacturing on track to record quarterly expansion

PMI_May2021_200.jpgThe seasonally adjusted Absa Purchasing Managers' Index (PMI) rose to a solid 57.8 points in May 2021 from 56.2 in April. Four of the five subcomponents remained well above the neutral 50-point mark with only the employment index dipping back into negative terrain. In all, the average level of the PMI recorded in the first two months of Q2 2021 (57 points) is well above Q1's average (53.8), which suggests that the sector is on track to record another quarterly expansion. A significant annual expansion is effectively guaranteed given the extremely low base set in Q2 2020.

SA procurement is going digital, but for many their processes are not ready for it

DigitalProcurement_200.jpgA good number of South African organisations find themselves in precarious positions when it comes to procurement because they have yet to properly integrate their basic processes and their weaknesses have become more evident during a time that limits peoples' movements and physical contact.

The global COVID-19 pandemic has changed almost every business process and for procurement, it has exposed the need to improve existing processes and pressured organisations to incorporate digital solutions as remote working has become a norm for the foreseeable future.

In a recent survey conducted by software development company Oxalys South Africa, in partnership with the Chartered Institute of Procurement and Supply (CIPS) and Smart Procurement, entitled: Post Covid-19: Procurement Key Priorities and Challenges in the Digital Era in South Africa, it was established that although there might be a lack of maturity in the South African procurement space, there is a real will to make it a strategic function, especially in the wake of the challenges brought on by the pandemic.

In fact, many South African organisations have not shied away from adopting digital solutions to streamline their business processes. It is a trend procurement must follow because current and future circumstances continue to demand automation for improved processes.

However, South African organisations must adopt the right path and a practical solution to digital procurement.

PhD research: the relationship between project success and entrepreneurial performance

AletSnyman_100.jpgA senior buyer for the natural sciences portfolio at the University of Pretoria (UP) who is conducting research for her Doctoral thesis is calling for participants to complete a survey.

Alet Snyman, a seasoned procurement practitioner of 20 years, is completing research investigating the relationship between project success and entrepreneurial performance.

Alet is a registered Doctoral student (1285025) with the Department of Business Management at UP.

Purchasing and supply management: the important difference that you must know

MosesManuel_100.jpgBy Moses Manuel, Lecturer in Business, Legal and Development Studies, and Founder of Zerite Network

Purchasing and supply management is not an entirely new concept to most people. Take a look at the first part, purchasing: we all undertake purchasing, be it data for your mobile phone, food, clothes, etc. Purchasing and supply management is one of those things you know, hence, you do not give it much thought. In business, however, it is another thing. There is a huge difference between doing something on a daily basis and doing it professionally.

Let us look at purchasing and supply management from a professional perspective.

Procurement perspectives: change management in procurement is essential to survival

StephenBauld_100.jpgBy Stephen Bauld

The COVID-19 pandemic is a perfect example that change is an ever-present feature of life.

Organisational change may be difficult, but as the conditions of the environment within which an organisation operates change, it becomes essential for survival.

Furthermore, the need for change reflects that every organisation is, in some respect, imperfect. Change forces people to make choices. Given the disruptive effects of change, it is critical to make the right choices.

Should procurement report to finance?

GordonReid_100.jpgIn this article we unpack some of the comments posted during a recent poll on this topic.

Smart Procurement World (SPW) recently ran a straw poll on LinkedIn. The question that was asked was simply "Should procurement report to finance?". The poll garnered an impressive 669 votes with 66% saying 'No' and 34% saying 'Yes'.

Although the outcome of this survey is heavily weighted in favour of the 'No' vote, the results are far from conclusive, says Gordon Reid, Lead of the Transparent Procurement Advisory Programme. He unpacks the survey responses in this month's SmartProcurement.

PMI slightly down after 3-month improvement: remains above Quarter 1 average

PMI_April2021_200.jpgFollowing three consecutive months of improvement, the seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined slightly to 56.2 index points in April 2021, from 57.4 in March. Despite the modest pullback, the index is now about 2.5 points above the average recorded in Quarter 1 of 2021 and about 26 points above the April 2020 reading recorded during the strictest phase of South Africa's COVID-19 lockdown.

3 experts share how to strengthen supply chain defences

Navigating_100.jpgThree procurement experts share their strategies for mitigating supply chain risk after 2020.

The Economist put it best in July 2020: "You may have lost interest in the pandemic. It has not lost interest in you. COVID-19 is here to stay. People will have to adapt. The world is not experiencing a second wave: it never got over the first."

This reminder rings true for procurement and supply chain leaders.

February PMI builds on January's increase

PMI_Feb2021_200.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) increased to 53 index points in February 2021 from 50.9 in the previous month. The further increase (January 2021 was 0.6 points up from December 2020) was supported by three of the five sub-components gaining relative to January. Only the Employment Index moved lower, while the Supplier Deliveries Index also ticked down but remained well above the neutral 50-point mark and thus supported the headline figure.

Procurement needs less processes - as they are slow, boring and self-centred

Sammeli_Sammalkorpi.jpgBy Sammeli Sammalkorpi

During the past few months, I have discussed with a number of chief procurement officers (CPOs) how they have managed procurement during COVID-19. One recurring answer was along the lines of 'we broke all of our processes and went into wild-west-mode'. Now, many said this with an interesting combination of sadness and pride. Sadness that they had to give away great processes perceived to be the basis of any professional procurement organisation. Pride and excitement at how procurement teams were able to improvise, work hard and survive.

New International SCM qualifications launched

IMM_100.jpgAs an unprecedented 2020 trickled into 2021, it has become abundantly clear that competent and proficient supply chain management is a major catalyst when it comes to sustainable economic growth.

With this in mind, the IMM Graduate School has added two new, cutting-edge supply chain management qualifications to their offering: a Higher Certificate in Supply Chain Management (NQF5) and the BCom Honours in Supply Chain Management (NQF8).

Sales trends for 2021: procurement needs to be solutions salespeople too


"One of the sales trends for 2021 is procurement needs to be solutions salespeople too," says By Sue Barrett, Founder and CEO of and

Times are, indeed, changing with the procurement function becoming increasingly important as a conduit, an orchestrator if you will, for the co-creation of value with suppliers and internal stakeholders as well as right down the value chain to end-consumers and back again.

Procurement can no longer rest its case on 'lowest cost', 'cheapest price' or 'supply of goods and services'; it must assume responsibility for the creation and delivery of real value beyond price and general supply.

This sales trend highlights how the skills, knowledge and mindset of procurement professionals are being expanded to include the capabilities of highly-competent solutions sales professionals.

Perfect delivery: the new rules for survival, innovation and growth

SteveBanker_100.jpgBy Steve Banker, Vice President: SCM, ARC Advisory Group

Customer loyalty begins with excellent service and timely delivery. Companies have come under pressure to unify their buying experience across channels, capture orders easily, and deliver them rapidly and accurately.

When it comes to gauging the loyalty of an organisation's customer relationships, the net promoter score (NPS) survey typically represents best practice. The NPS is correlated with revenue growth and calculated based on responses to a single, simple question: how likely is it that you would recommend this company/product/service to a friend or colleague?

PMI: December decline suggests manufacturing growth/recovery levelling off

PMI_pandemic_levels_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined further to 50.3 index points in December 2020, down from 52.6 in November. This is the lowest level since July 2020.

The reading just above 50 index points suggests that growth is levelling off in the manufacturing sector after solid month-on-month gains were recorded in the wake of April 2020's lockdown-induced plunge in activity.

"Despite a strong start in October 2020, the average reading for Quarter 4 is basically unchanged from Quarter 3, which suggests that while another quarter-on-quarter uptick in manufacturing output is likely, the pace of the recovery momentum has slowed", noted the Bureau for Economic Research (BER) in a statement.

PMI push eases in November - manufacturing recovering, but needs greater demand

PMI_Dec2020.jpgThe Absa Purchasing Managers' Index (PMI) declined to 52.6 index points in November from the solid 60.9 points recorded in October. The decline comes after three consecutive upward moves and brings the index to the lowest level since July 2020.

While still signalling an improvement in business conditions, the drop suggests that the manufacturing sector's recovery is starting to lose momentum. This was to be expected as output levels for many subsectors are nearing pre-pandemic levels and will need sustained growth in demand to fuel a further output expansion, noted the Bureau for Economic Research (BER) in statement.

Procurement perspectives: leadership in procurement is vital to organisations

StephenBauld_100.jpgBy Stephen Bauld

The COVID-19 pandemic looks like it is entering the next phase. We could be looking at a long time before we get back to the new normal and leadership in procurement will help to shape the wellbeing of organisations moving forward.

The argument that organisations need to begin now to train their next generation of leaders is not intended to suggest that a programme of study will produce leaders that are great. Although it can be stated with some confidence that the systematic study of leadership will produce leaders who are better than they would be without it, great leadership is a very difficult thing.

PMI climbing, but manufacturing levels still below pre-pandemic levels

PMI_pandemic_levels_100.jpgFollowing a robust increase in August 2020, the Absa Purchasing Managers' Index (PMI) ticked up further to 58.3 index points in September. The shift to a lower lockdown level mid-month likely drove the further improvement in business conditions in the local manufacturing sector.

However, the Bureau for Economic Research (BER) cautioned that the fact that the level of the PMI is now above pre-pandemic levels does not directly translate to official manufacturing activity being back to pre-pandemic levels.

"Owing to the month-on-month comparison asked for in the PMI questionnaire, the high level merely means that conditions continue to improve (with more respondents reporting an increase in output, for example, instead of no change or a decline compared to the previous month). This can still be entirely consistent with the level of output remaining well below that recorded prior to the lockdown", said the BER.



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