Procurement must also influence the top-line


Mpume_Maphumulo.jpgProcurement professionals must challenge themselves to influence the top-line and to collaborate with suppliers to bring innovation into your supply chains, says Mpume Maphumulo, Head of Group Procurement at Pioneer Foods.

Maphumulo and other heads of supply chain were discussing the challenges and objectives they foresee over the next 12 months in the public and business sectors during a Smart Procurement World Western Cape panel discussion.

Her sentiments were shared by the rest of the panel.

“The procurement profession is exciting – and has become a key enabler, but we must use our voice and ability to drive profit and strategy,” said Lillian Magero, Head of Sourcing Professional Services at Barclays Africa.

It is therefore important that procurement professionals understand their own businesses – their key drivers, pain points and day-to-day objectives, said Magero.

“Consequently, procurement professionals’ reward structures must include measures to improve revenue generation.”

Isac_Smith.jpg“Within the public sector a business approach is missing from our procurement activities,” said Isac Smith, Chief Director: Asset Management, Western Cape Provincial Treasury.

Procurement officials are required to know the laws and regulations governing public sector supply chain and are consequently rule-driven, rather than business driven. This must change, said Smith, so that the regulations become a framework in which to make supply chain decisions that take a business approach.”

“Business skills create credibility,” said Annelien Herringer, Procurement Manager S&D/F&B, Shell South Africa. “Credibility enables an environment in which a joint procurement strategy can be formulated.”

“Procurement needs to introduce common sense into the organisation,” says Howard Stephens, former Chief Procurement Officer of Nedbank, “By common sense I mean having conversations about value for money with their organisations.”

Enterprise development?

The new codes require us to re-think our strategies and create meaningful relationships with B-BBEE suppliers, said Magero.

“Ask what can we do together? Then listen, plan and implement.”

“In Transnet’s experience,” notes Edward Thomas, Group Executive Manager for Supply Chain, Transnet, “supplier development, through correctly targeted, large contracts, does not cost money. The real challenge lies in encouraging suppliers to become sustainable for the time when your contract with them ends.”

Enterprise development is a balancing act, but it does not cost money if implemented correctly, said Herringer. She added that the BEE Charter is not a “spend responsibility” – rather the responsibility lies across all sectors to build important relationships with suppliers.

“We are in a period of marginal growth, all fighting for decreasing consumer spend. The way forward is through building relationships and managing performance, which requires transparency in both directions and reward and punitive measures to be included in contracts,” concluded Maphumulo.

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