Tag Archives: supply chain leaders

From The Backroom To The Boardroom: Procurement & Supply Chain Leaders Step Up

Procurement and supply chain leaders are experiencing newfound appreciation and opportunity following their response to COVID-19.


COVID-19 hit supply networks hard. So hard, in fact, that 97% of organisations experienced a related disruption. Still, there’s more to the story than disruption and chaos.  

Insights shared by over 600 procurement and supply chain professionals actually paints a positive and inspiring picture: supply chain and procurement leaders were prepared – and responded brilliantly – when faced with a global pandemic that literally brought the whole world to a sudden halt. Now they have an opportunity to reset the procurement agenda.

A Look Beneath the Surface

Consider the data beyond headlines. While nearly every organisation was impacted, only 17% said the supply chain disruption was severe. On the other hand, almost half agreed the impact was minimal or moderate.

Similarly, despite the macro economic turmoil, the impact on supplier payments has been relatively modest. Most contracts and supplier relationships survived the chaos, showing the strength of existing relationships and strategies. According to our research:

  • 58% of organisations are still operating and paying their suppliers per contract,
  • 14% are speeding up payments to suppliers,
  • 6% are providing direct financial support.

When the pandemic affected supply chains directly, procurement responded quickly and effectively. The majority of organisations (65%) were forced to source alternative suppliers for affected categories. As of early June, 79% of those surveyed had already found alternative suppliers for affected categories, with 53% locking down new suppliers in less than three weeks. Amazingly, 18% were able to find new suppliers in only a weeks’ time. This response has not gone unnoticed.

The Spotlight Shines Bright

The agility shown by procurement and supply chain leaders, along with their ongoing criticality in managing the crisis, has been a boon for the function with executives and board members. 

“The crisis has put procurement in the spotlight,” commented Ian Thompson, Regional Director, UK and Nordics at Ivalua, a source-to-pay technology provider. “There are a lot of talented executives now getting the attention of the c-suite for the first time.”

When we asked how leadership leveraged procurement and supply chains teams during the crisis, only 16% of survey respondents said they were still being viewed tactically. On the other hand, 40% said their recommendations are solicited more than usual and 22% said they now have a seat at the executive table with input on key decisions.

“For as long as I remember, the question has always been how do we make the C in CPO a real part of the c-suite?” said Thompson. “It’s finally happening, and procurement needs to capitalise.”

According to Thompson, the key is taking advantage of the new platform. “Now that you have the attention of the c-suite, you need to have an agenda, and use the platform to properly set the record straight for what procurement is all about, and what’s possible. When called upon, you can fix the problem, or, you can fix the problem and reframe the conversation internally.”

The heightened attention has also led to renewed interest in procurement and supply chain careers. As a result of the crisis, nearly 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased.

“The interest is very high. Procurement has become an essential function during the crisis, especially on the direct side. We have procurement teams that are fueling the food supply chain, sanitising the country and ensuring the flow of essential services across the globe. More people are recognising the importance of procurement and supply chain,” said Thompson.

The current dynamic should lead to fresh career opportunities for Generation Next. The function’s performance during the crisis sets the stage for increased investments in talent development and technology, a bigger seat at the executive table, and new opportunities for ambitious practitioners to make their mark.

Supply Chain Globalisation: Is this Seismic Strategy Shift Possible?

59% of procurement and supply chain professionals say the Fortune 500 should reduce globalisation by bringing manufacturing back home. But is it practical?


The best way to describe the supply chain disruptions caused by COVID-19: pervasive and severe.

Our research found that 97% of the organisations experienced a supply chain disruption. Let that sink in for a second. We knew the supply chain impact of COVID-19 was extensive. This finding takes it up another level – indicating the disruption was near ubiquitous.

So what’s next? The majority of procurement and supply chain professionals (73%) are planning seismic strategy shifts post-pandemic – and rightfully so. Changes under consideration include expanding supply bases, adjusting inventory strategies, increasing financing for key suppliers and localising supply chains. The latter is the most ambitious, and will be the hardest.

Obstacles to Bringing Manufacturing Back Home

The idea of reducing globalisation in response to COVID-19 is both popular and logical.  Nearly 60% of those surveyed believe the Fortune 500 should reduce globalisation by localising supply chains and bringing manufacturing back home.

But as every industry veteran knows, doing so is easier said than done. Modern supply networks and production strategies were built to be global. Reversing this will require fundamental strategy, technology and financial changes.

Consider the core drivers of supply chain globalisation. First and foremost: it’s about costs. The never-ending race to the bottom has made low-cost country sourcing the norm for procurement. At the same time, products – especially smart technologies – are getting more innovative, complex, personalised and sophisticated by the day. This forces manufacturers to outsource critical components to other manufacturers, who outsource to sub-suppliers, and so-on. The sheer expertise and technical capabilities needed to produce smart and connected products (consumer electronics, cars, healthcare equipment, etc.) goes well beyond what one manufacturer could reasonably provide on their own.

As Harvard Business School professor Willy Shih puts it: “A consequence of these complex interdependencies is a deep tiering of supply chains, with manufacturers dependent on their first-tier suppliers, which, in turn, are dependent on a second tier, which are themselves dependent on a third tier, and so on. Visibility into third, fourth, and more distant tiers is challenging, making wholesale replacement of anyone in the chain, let alone the entire chain, extremely difficult.”

In other words: reversing decades’ worth of low-country sourcing strategies, supplier specialization and network expansion will be complex, time-consuming and costly.

While organisations will take the necessary time to evaluate the brand, supply chain and product ramifications of such a change, the national implications are more urgent. Nations across the world – including Australia, the UK and the U.S. – are making big investments to bring manufacturing, especially for critical healthcare supplies, back home. This problem erupted early in the COVID cycle due to global shortages of masks and ventilators, and has become more pronounced as countries prepare to develop vaccines, once approved.

The issue: According to the Financial Times, World Bank data shows “manufacturing’s share of the economy in the US, UK and Australia has shrunk to its lowest level in more than 30 years to 11 percent, 9 percent and 6 percent respectively.” In a time of crisis, where life-saving equipment is needed as soon as possible, the delays creating by strained, outsourced supply chains are highly limiting, to say the least.

What’s Next for Procurement and Supply Chain Leaders?

The pandemic was a wakeup call. But what happens next remains uncertain. Will enterprises invest to reconstruct supply chains, or decide to make more targeted strategy and resource tweaks? Will they see this pandemic as a black swan event or a fundamental course-changer? Only time will tell.

We want to hear what you’re planning. Share your thoughts below.

For more insight, download the How, Now: Supply Chain Confidence Index today.