PROCUREMENT AGENT OF TRANSFORMATION ALASTAIR ROY

BY ALASTAIR ROY ARO PROCURMENT

PROCUREMENT - AGENT OF TRANSFORMATION

As the autumn leaves fall and leave space for new growth, we are reminded that everything around us is in a constant state of transformation. With a proliferation of external issues affecting businesses in the form of inflationary pressures, energy price hikes, interest rate increases and a restricted labour market, it can seem to many business owners and operators that they do not have their sorrows to seek. However, all is not lost and now is as good a time as any to look at Procurement as an Agent of Transformation.

Whether it is finding innovative ways to adapt supply chains to counteract the impact of price increases and scarcity of supply or solving supplier management and contractual problems, well executed Procurement is a valuable and vital tool in any company’s armoury to minimise disruption and maximise profitability.

In some instances maintaining the status quo can be beneficial but experience suggests that even in times of volatility, shaking things up can radically transform a business for the better and ensure the key supply partners are true collaborators with a shared interest in ensuring customer businesses thrive and expand.

Procurement can also help your business be on the front foot and help supply chain transformation in regard to Environmental, Social and Governance (ESG) matters. In the post pandemic world ESG is racing up the agenda once again and every company needs to articulate a clear message on where it stands on planet protection, sustainability, diversity, reputation management and how its processes and procedures provide appropriate levels of governance. Procurement is best placed to source partner suppliers with similar values to help all entities create a thoughtful, collective evolution on ESG.

Bringing Procurement in at the start of the journey of business transformation to set ambitious savings targets across the total cost base and build an agile mindset which spills into all areas of the business will yield results in managing and mitigating inflationary pressures. Forensically scrutinise spend and look for potential waste and remind team members that every £ spent irresponsibly is a £ less available to invest in and grow the business to create a sustainable future, despite the unpredictability of macroeconomics and geopolitical factors – which with some degree of predictability, will probably always be present.

Consider renegotiating existing supply contracts, plan ahead and look at how supply and demand will affect your business and how to counteract the effects of price increases, tender spend categories and select new suppliers to assist with reducing the cost base and contributing to ESG objectives by consolidating deliveries and reducing the carbon burden. Procurement will assist in transforming so much in your business in holistic and thoughtful ways.

For information on how you can make Procurement an Agent of Transformation contact alastair@ aroprocurement.com www. aroprocurement.com