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The World Procurement Conference in London has been giving an interesting insight into unique world purchasing: humanitarian relief.
Andrew Parkes, head of logistics, Save the Children, explained how sourcing and logistics operates in some of the world’s most challenging environments.
Some of the difficulties that the non-governmental organisation faces are surprising similar to those found in a corporate, albeit in more demanding circumstances. By its nature, the organisation delivers goods to some of the poorest countries in the world. More specifically, it focuses attention on ‘fragile states’, those countries whose basic governance infrastructure is close to collapse.
The issue of local versus global sourcing, for instance, became more important. Although the ability to leverage the scale of large suppliers is tempting, the benefits of using local suppliers has the potential to assist the development of the local economy. 90% of the organisation’s spend is aimed at local suppliers and, indeed, the central drive of the operations is to build a system of sourcing which helps generates the local economy,
The downside of this is to increase the risk of corruption within such countries. Dealing with corruption is a combination of installing a culture opposed to malfeasance (by engaging local leaders and advocating clean sourcing). A second strand looks to build robust processes within transactions, through ensuring as much transparency as possible, and enforcing penalties for suppliers that do not comply.
Another challenge relates to technology as 80% of where the aid is delivered has no internet. It is proposing to link warehouses with an enterprise resource planning system which is linked to a satellite system. Local warehouse managers are trained in the use of purchase-to-pay processes.
The central purpose of the function is to minimise the administrative impact on the running of the charity. As Parkes noted: “This isn’t our main job. Our job is to help people.”
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