Although the reporting from the economic and business press has been largely dispiriting of late, progressive CPOs have been using the volatility created by these current exceptional conditions to lead transformation in their businesses. For those more opportunistic leaders, the current disruptions have created an environment highly receptive to change, growth and innovation.
We explored these issues in the first day of our virtual Australian Forum. We drew together over 60 regional functional heads to explore the positive pathways they are walking towards a recovery. The challenges of the first half of this year have tested the function to its limits, with procurement scrambling to source diminishing supplies of PPE, develop new suppliers or secure continuity of supply in the most demanding of circumstances.
70% of the attending delegates believed that procurement’s role in the business has been elevated by the crisis. The remainder thought that their status was unchanged. None believed the pandemic diminished their role or that of the function. This was despite the overwhelming majority of our participants facing either slight or significant disruptions following the recent lockdown of the state of Victoria.
Despite the testing times they have faced, procurement must maintain this momentum for the remainder of 2020.
In that respect, three insights really stood out in terms of how CPOs could do that. These were:
The gloomy economic outlook of key economies and high-profile losses of major companies has fuelled a mindset within organisations that consumes the thinking of executives.
Yet, during a downturn, the first place that CEOs turn is procurement. Previously, leaders had encouraged buyers to wield a cost-cutting axe. In this crisis, we are seeing procurement collaborate, partner and innovate with suppliers. And now, more than any other previous crisis, we are seeing the rest of the business take notice of procurement for what it can bring outside of that.
Nowhere was this better summed up than from our partners for the event - Greensill and Scout - both of who highlighted the ways in which their customers were delivering value across their operations and finding opportunities for growth in their supply chains.
It has taken time to get to this position, but it is a position of strength from which the function can build to take it on to better things but also seize the opportunities that are out there.