World Procurement Congress: What is the next frontier for procurement?

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Procurement Leaders CEO Nandini Basuthakur opens the World Procurement Congress 2019

“Velocity is all about direction,” said Procurement Leaders CEO Nandini Basuthakur as she opened the World Procurement Congress 2019.

 

“What direction is procurement headed in and at what speed is it headed there?”

 

It was the perfect question to ask at the beginning of this two-day event, which is focused on finding ways the function can provide a competitive advantage in a fast-paced world. Held in the heart of London, this two-day event brought CPOs from across the board together to answer Basuthakur’s question.

 

CPOs from the likes of Unilever, Heineken, Johnson & Johnson and Nokia took to the stage to provide insights around the direction in which they are taking their functions and reveal the direction in which procurement is moving, the projects it will be working on and the value it will deliver. So, what have we learned?

It will be about sustainability

Although sustainability has long been on procurement’s agenda, it now is driving that agenda. Sitting where it does between the business, customers and suppliers, the function occupies a unique position to be able to truly influence sustainable performance.

 

But, where many procurement professionals once saw sustainability as something they had take account of to avoid being fined, they now see it as an opportunity to find new innovations. Every speaker mentioned how ‘sustainability’ or ‘social responsibility’ was a vital part of their businesses strategy and explained procurement plugs into that.

 

David Ingram, Unilever’s new CPO, told attendees that “sustainability and acting responsibly was a massive driver” for the business.

 

He outlined some of the projects his team is working on: It is collaborating with small-hold palm oil farmers who produce around half the oil that Unilever sources to help them improve yields and improve visibility within the supply chain.

 

Ingram said that the team is working towards full traceability by the end of the year.

 

Herve Le Faou, procurement chief at Heineken, echoed Ingram’s view that sustainability provides an opportunity.

 

“We need to see the glass as half full when it comes to sustainability. Don’t look at it as a punishment, because it is an opportunity to find new solutions and new technologies,” he enthused.

 

While the team has worked to reduce the amount of water the company uses to produce its beer, it is starting to think of initiatives outside of the norm.

 

For example, Le Faou said Heineken is looking at how it can work with microbreweries to remove the packaging the company currently uses as it gets its beer to market.

 

Those brands that are focused on sustainability are enjoying strong growth. If procurement teams can tap into that their businesses will reap the rewards – and so will society.

Ecosystems are the future

It is no longer about managing relationships on a one-on-one basis. The vast majority of speakers focused on how they are developing ecosystems of stakeholders to uncover new innovations and solve challenges.

 

These ecosystems are popping up at the likes of Siemens. The company’s CPO, Klaus Staubitzer, outlined how his function is trying to reverse-engineer its digitalisation journey by inviting staff throughout the business to join a digital development network so they can share ideas and develop pilots. This has helped his function embed the journey into the culture of the organisation and gain support internally.

 

Nokia has a widely publicised ecosystem that it has developed, too. Here it has brought suppliers, academics and other stakeholders together in an online platform and shared information about the company and its goals. This platform is used to find solutions to those challenges and the company has already enjoyed a lot of success.

Be on the search for the next disruption

The next disruption will come. You won’t know when and you don’t know how, but it will come. Those who aren’t ready will be negatively affected by such changes. However, procurement professionals who leverage both their internal and external relationships and listen to the advances coming out of the market will be able to spot them and find opportunities.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Tim Burt
Posted by Tim Burt

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