Category Archives: Procurement News

How Can You Protect Your Procurement Career For The Future?

The pandemic has many people worried about job security. But you can take steps today to prepare for your future.


The pandemic has a lot of us on edge, especially about work.

In fact, 30% of us are feeling less secure in their job than a month ago, shows research from YouGov.

It’s hard not to feel stressed when employment decisions seem out of your control.

But you actually have more power over your next career move than you might think. 

We asked top procurement recruitment experts on preparing for a bright future, no matter what goes on in the world.

Here’s their advice on being proactive and influencing your procurement destiny.

Currently looking for a new job? You should check out this helpful advice.

Step 1. Take heart

First of all, take courage in the procurement profession’s future.

That’s the advice of Mark Holyoake, Managing Director of New York-based Holyoake Search.

“It’s never a nice feeling to have to worry about your job security, and my heart obviously goes out to those who have already been laid off, or furloughed, as a result of this pandemic,” Holyoake says.

“That all being said, my message for supply management professionals who are in the market for a new job right now is actually a positive one. Procurement hasn’t been nearly as badly hit as other areas within the business; and over the past few months, it’s actually taken on a more important role than ever at many companies.”

Holyoake says a shift in procurement strategy means companies will seek to reduce cost, increase working capital, better manage unpredictable supply & demand patterns, and protect against supplier risk. 

“That is going to require them to hire new talent into the company,” Holyoake says. “While some are undoubtedly still under a hiring freeze, our observation is that the job market is starting to turn a corner and job confidence over the next twelve months is relatively high.”

So if you haven’t found the right role yet, or even if you’re happy in your job for now but you’re concerned about the future, there are new opportunities on the horizon.

Step 2. Beef up your online reputation

You can’t control if your CV or resume lands on top of the recruiting pile. 

But you can stay top of mind with an active online presence – boosting your credibility.

Are you the kind of person that rarely engages with your online network? You’re missing out.

“Online presence is vital to get noticed in today’s digital world,” says Imelda Walsh, Manager at The Source – a boutique procurement recruitment firm in Melbourne.

So jump in and join the ranks of those who offer meaningful, regular contributions on social platforms. In return, you’ll build your network, keep up with industry developments, and you could even get headhunted.

Take LinkedIn for example.

“HR, hiring managers and recruiters are using LinkedIn to search for talent at all levels and have been for the past few years,” Walsh says.

That’s why Walsh suggests these steps:

  • Develop content and share it on LinkedIn to show you are a thought leader in your area. This will help you build a community, get noticed, and assist with building your personal brand.
  •  Contribute to your network by liking, sharing and posting relevant content.
  •  Be specific about the value you can bring to a role or organisation in your LinkedIn Profile.
  •  Treat your LinkedIn like an online resume; include your responsibilities and achievements on each recent role on your LinkedIn profile.

And the best time to start is now, says recruiter Mark Holyoake. 

“Just by being more active on LinkedIn, sharing relevant articles, and participating in discussions with others from the wider procurement community, candidates are raising their visibility among prospective employers and those who already work for them, long before they go to submit a resume,” Holyoake says. “This is the edge you will need to stand out among your competition.”

But LinkedIn is only one platform, of course. You should be active wherever your potential employers are, says Naseem Malik, Managing Partner at MRA Global Sourcing, a specialist procurement and logistics recruitment firm in Illinois, USA.

On top of that, Malik suggests starting a blog to demonstrate your area of expertise, or even finding relevant volunteering opportunities with non-profits or charities.

Likewise, you might consider taking leadership roles in professional associations, and seeking out speaking engagements. You never know where your next opportunity will come from. 

Step 3. Acquire in-demand ‘hard’ skills

Impressing potential employers and recruiters online is only one part of the equation, of course. You also need the practical skills to land a new gig or get promoted.

What skills do employers want right now? Risk management, says Malik.

“We have observed a keen focus from procurement executives on risk, both in regards to response and mitigation.”

These skills include:

Supply Chain Mapping

Many companies were caught off-guard when China went into lockdown, Malik explains.

“Procurement groups that had previously invested in obtaining deeper transparency across their supply chain, down to lower-tier suppliers, were able to quickly adapt and identify which suppliers, commodities, and facilities were affected early into the outbreak,” Malik says. 

“This skill is of critical importance, lest we encounter another unprecedented event in the future.”

Contract Management

During the pandemic, thousands of suppliers have claimed “force majeure” declarations as their businesses have grappled with crippling circumstances, says Malik. 

“Being able to collaborate with legal teams to build in contractual protections to mitigate future risk, and understanding nuances between different governing laws across the globe is the desired skill set for procurement employers moving forward,” Malik explains.

Supplier Risk Technology Aptitude

“As Deloitte’s 2019 CPO Survey reveals, “most CPOs are often not satisfied with the results of their digital technologies, especially when managing supply chain risk and supplier relationships,’” says Malik.

“This gap has surely been amplified in 2020, and additional investment in supplier risk technology is a certainty since companies need to have their hands on the pulse of the risk factors for their key vendors, especially from a business continuity and financial solvency perspective. Professionals who familiarise themselves with this technology will separate themselves from the pack.”

4. Keep learning

Malik also advises procurement professionals to learn about rapidly changing technologies that affect the industry, like AI, Blockchain, and big data.

Tech know-how also includes communication tools that are firmly part of office life – Zoom, Slack, Microsoft Teams, Google Meet, etc.

You likely won’t get any training on how to use these tools if you join a new company. You’ll be expected to know and use them, so now’s the time to practise.

Additionally, Malik says it’s wise to pursue industry certification and take the opportunity to continue your education.

“There are tonnes of free webinars to learn and hone skills, stay sharp, and develop new areas of expertise,” says Malik.

5. Sharpen your ‘soft’ skills

Right along those ‘hard’ skills, you should take the opportunity to work on your ‘soft’ skills, says recruiter Mark Holyoake.

Of course, your ability to negotiate a killer contract should not be dismissed, but having the soft skills needed to gauge a situation and read behavioural clues to determine your course of action, as well as communicate your ideas and strategies, is arguably more vital to success in the modern procurement function,” Holyoake says.

Some soft skills that naturally fit procurement are:

  • trading skills or street smarts
  • self-awareness 
  • empathy
  • self-confidence 
  • resilience 
  • appreciation of simplicity
  • boldness

And don’t worry if these don’t come naturally to you. With enough practise, you can master any of them. Google even has a free online course in soft skills, if you fancy it.

Despite the name ‘soft’, these skills are more important than you might realise.

85% of your job success comes from soft skills, with only 15% from hard skills, according to 2016 research from Harvard University, the Carnegie Foundation and Stanford Research Center.

6. Take care of you

Finally, take time to look after yourself, says Holyoake. And that’s doubly true in these strange times.

“Ensure you make time for your physical and mental health while you’re engaged in your job search,” Holyoake says. 

“Don’t forget to give time to your relationships and the people who are supporting you like family and friends, too. It might sound counterproductive, but by taking some time for yourself, you’ll have more energy and focus.”

Join Procurious to connect with 40,000 other ambitious procurement professionals and get free access to networking, industry news, training and much more. 

Your Supplier Made The News … For The Wrong Reasons. What Does This Mean For You?

What should you do if your supplier ends up in the news? Here’s what effect it could have on you and how you should mitigate the damage.


Let’s face it, 2020 has been the year that changed everything. Anytime you even go near a media website, you’re hit in the face with the latest pandemic disasters. 

Yet the domination of the news with COVID crisis has meant that there’s little room for much else, which, strangely, may have been a blessing in disguise for some of our organisation’s PR departments – and our own supply chain obligations. From whispers that much of the world’s current PPE is currently the product of modern day slavery to suppliers who have been caught out using substandard (and even contaminated) ingredients in food, there’s mounting evidence that while we’ve all been distracted this year, supplier standards may have been slipping. And while that may not have spelled disaster for us just yet, what do we do when the news catches up with them? 

It’s not good for them, and it’s not good for you. Here’s why … and what you should do about it. 

If your supplier makes the news, will your customers blame you? 

If you think that your customers are savvy enough to distance you from the reputation of your suppliers, think again. Ever since the Nike sweatshop scandal rocked organisations worldwide, it’s been clear that if your suppliers take a fall, you will too – and it can be highly damaging, if not deadly, to your reputation going forward. Businesses are just as – if not more – responsible for their suppliers than ever before. 

Concerningly, recent research has also found that even when a supplier mishap has, in essence, nothing to do with your product quality, consumers will still start to believe that your product is inferior. This means that if you were to have something like a COVID outbreak in your factory and it was widely publicized, even if you were able to maintain production, your reputation would still be tainted in your consumer’s eyes. Unfortunately, the reputational damage occurs no matter what the issue is: even if, for example, your supplier was caught polluting or even embezzling, your reputation would be the one to take the hit. 

If this sounds terrifying, it’s because it is. Even worse, conditions are currently ripe for it to happen. With our supply chains becoming more and more global and complex, it’s becoming harder and harder to track the activities of our suppliers, let alone our second and third tier ones. And with the rise of social media, the world is becoming more and more savvy – and any issues are becoming more likely to be exposed. Take, for example, Change.org’s famous campaign against Hersheys, which exposed, through social media, the continued use of child labour in its cocoa production in Africa, and forced the company to quickly change track. 

The conclusion? If your supplier has something to hide and the media finds out first, you need to be prepared to weather the reputational and financial hit. 

If it’s just slightly bad news, does it matter so much? 

As talented and thorough procurement and supply chain professionals, most of us already have an oversight of the worst risks and issues within our supply chain – and thankfully, we’ve mitigated them. So if something small slips through the cracks, will it really matter? 

Unfortunately, yes. Firstly, humans have a predilection towards bad news. Decades of psychological research have shown that we’re all naturally drawn towards bad news, so much so that even if nine out of the ten news stories we read are positive, we’ll always remember – and act on – the negative one. What this means is that we, as supply chain professionals, need to be extra cautious about what mishaps might slip through the cracks. 

Secondly, consumers don’t rationalise the ‘degree’ of bad news. In what psychologists call the ‘spillover effect,’ consumers were found to equally condemn companies for supply chain failures, even if the news wasn’t, technically, that bad. On every occasion, bad news in the supply chain meant that consumers were less willing to buy from the organisation for an extended period of time. 

How do you mitigate the damage? 

By now, you’re probably frantically checking and rechecking all of your suppliers, terrified that something may have gone wrong. And while the response is justified, and we should always aim to have as much insight as possible into our suppliers, know this: you can mitigate the damage done if your suppliers do end up in the news for the wrong reasons. 

And the best way to do this is to simply try to help find a solution, and communicate this to all involved. 

In positive news, research into the spillover effect has found that while damage can be done quickly, it can be undone at just the same speed. Organisations that act quickly to rectify issues, for example, those who instantly clean up environmental spills or put an end to labour issues, can rescue their reputation, if they take responsibility and put mechanisms in place to do better. And while consumer’s buying behaviour may not revert instantly, if you are able to win back the trust of your customers, the damage need not be long term.  

Managing risk and reputation 

Given the complexity of supply chains these days, maintaining accountability of your suppliers has long been an issue, especially when it comes to tier two or three suppliers. Yet just because this task is challenging, it doesn’t mean it isn’t important. Thankfully, if reputational damage does occur, it is possible to reverse it. But do we want to take the risk of finding out? 

Has your supplier ever ended up in the news? What did you do about it? Let us know below.

My Pay Has Been Cut. What Should I Do Next?

Has your pay been cut due to COVID? Here’s what to do if it has. 


There’s no doubt that the economic effects of the coronavirus have been significant, with job losses being so severe that many countries  are comparing this situation to the Great Depression.  But for those of us who have fortunately retained our jobs, the effects have still been felt. Namely, many of us in numerous industries from professional services to education may have had to have some uncomfortable conversations. And those conversations may have involved taking a pay cut. 

Right now, we may all just be grateful to have a job, and besides, with quasi-lockdowns and travel bans still in place for much of the world, we may simply not need as much disposable income. But looking into the future, how happy will we be that we’re now working for less? How long will it take for wages to revert to ‘normal?’ Should we ask for a raise anytime soon? 

To help answer all of your burning questions about pay, we spoke to Stella Voules, Director and Co-CEO of JOST&Co., a HR and change management consultancy. But before we bring you Stella’s insights, here’s a high-level rundown of the industrial relations set up in each of our major member countries that govern pay cuts: 

Can my organisation force me to take a pay cut? 

Is it even legal for your organisation to ask you to take a pay cut? It depends on where you live. Here’s the different laws for the US, UK and Australia. 

In the USA, can my organisation force me to take a pay cut? 

Legally, yes. Pay cuts are allowed, as long as they aren’t done on a discriminatory basis (for example, they haven’t your pay because of your gender). A pay cut due to COVID is legal, and all your employer needs to do is notify you of the same. If you do have an individual employment contract or union employment contract, you may be protected from pay cuts, depending on your conditions. 

After they cut your pay, your employer does not have any obligation to return it to its pre-COVID levels. 

In the UK, can my organisation force me to take a pay cut? 

No If your employer does want or need to reduce your pay, they need to obtain your consent. 

If they don’t first obtain your consent, you are entitled to resign, initiate a claim against your employer, or continue to work in your job while also initiating a claim for compensation. 

If your employer does ask you to take a pay cut, you are also entitled to refuse. But if you do this, your employer may be able to terminate your employment contract and try to offer you a new one with varied conditions and pay. 

If your employer is changing the pays of multiple people within your organisation, they are also legally obliged to consult with your relevant trade union. 

In Australia, can my organisation force me to take a pay cut? 

Usually, no. A reduction in pay is classified as a variation in your employment conditions, so you and your organisation must first agree on the changed terms before the change is made. You have the right to refuse a change in pay, and if your organisation terminates your employment on account, you can make a claim for unfair dismissal. 

Yet although your organisation can’t force you to take a pay cut, there may still be pressure to do so if you fear you will otherwise lose your job. 

If I’ve taken a pay cut due to COVID, when should I expect my pay to return to pre-pandemic levels? 

The legals of pay cuts are rather black and white. Yet as many of us know, employment is very much a relationship, and given the strain that coronavirus has put on so many businesses, many of us are feeling both empathetic towards our employer, and grateful to be in a job at all. These feelings may have encouraged us to agree to pay cuts – for now. But when can we expect our pays to go back to normal? 

Stella Voules says that that is a very big question, and the answer isn’t as simple as we’d like: 

‘Your pay cut “end date” may depend on the instrument used to change your pay in the first place, for example what was in your contract or what your union negotiated. In some cases, an end date may have been specified.’ 

‘But given that the pandemic has no end date, it’s likely that your pay cut may be ongoing.’ 

Stella says employees who have had their pay cut should have done so on certain conditions, and those conditions may have included entering into a new, temporary agreement. If you don’t think this has happened to you, though, Stella advises seeking legal advice from an employment lawyer and your union to understand in more detail what you’ve agreed to. 

If my pay cut was undefined in its length, what signs should I look out for from my employer’s perspective that might indicate my pay would be restored? 

If you’ve taken a pay cut with no defined end date, you might be worried about when your pay will be reinstated. Will it be when the pandemic is declared over? Or will it be when the economy has completely bounced back? 

Unfortunately, much like the pandemic end date, there may be no definite point in time or event which will signal that your pay should be restored. But if you are concerned, there’s a few things you can look out for, says Stella: 

‘Just like in “normal” times, knowing what you should be paid is about watching the market. Look at job ads, ask around, see what other people at other organisations like yours are being paid.’ 

‘Within your organisation, there’s also a few things you can do. For example, look at the revenues of your business, ask for their annual report, see how they’re performing financially.’ 

If an organisation is still in financial distress, says Stella, it will be difficult for them to reinstate pays. And even if they aren’t in distress, they may be taking a conservative approach as no one really knows how the pandemic will play out. But if, and only if, it’s clear that your organisation has returned to its previous level of profitability, then you may start asking questions about your pay. 

How do I go about asking for a pay rise, if my pay has been cut? 

Asking for a payrise is never easy. But in pandemic times, it’s even harder. How do you know if it’s appropriate to ask? How do you do so in a way that doesn’t seem greedy and selfish, especially if your organisation has suffered financially? 

Just like for any pay rise discussion, Stella says, you need to arm yourself with as much information as possible. Research what’s happening in your sector, and what’s happening within your specific category and job role. Understand whether there’s strong demand and have a good idea of pay benchmarks. Only then should you have any sort of pay conversation. 

Yet benchmarking your role in terms of pay is only the first step, Stella says. In order to have any type of pay conversation in COVID or even post-COVID times, you also need to know the  following: 

  1. How well your company is performing financially 
  2. How well you’ve performed in your role 
  3. What your unique skills and capabilities are, and value you personally bring to the company. 

Armed with this information (and assuming it’s all positive), Stella says that you can reasonably request a pay review. 

What should I do if my request for a pay rise is declined? 

Asking for a pay rise is one thing. But getting one is entirely another, especially at the moment. So if your pay has been cut, at what point should you consider looking elsewhere? 

Given the circumstances, Stella says, you should try to be fair to your employer by not looking elsewhere straight away, especially if they’ve been loyal and supportive throughout the pandemic. Beyond this, Stella believes that anyone concerned about pay right now should consider the bigger picture: 

‘If you don’t get your pay rise, remember that reward is so much bigger than pay. So perhaps you can’t get more money right now, but what about more flexibility? Or more opportunities, perhaps some different benefits?’ 

‘Give your employer a chance to find a way to keep you satisfied before looking elsewhere. Remember, the grass is not always greener.’ 

Have you taken a COVID-related pay cut? Has your pay been restored yet or do you know when it will? Let us know in the comments below.

CPO Digital Forum: Crown Resorts And IKON Services

A clean start: tips and tricks for corporates to create a COVID-safe workplace.


One of the biggest misconceptions out there right now is that cleaning is booming, says Estelle Lewis, who is the group executive general manager for partnerships at cleaning services and hygiene products company IKON Services.

The company, which provides cleaning services and hygiene products to a number of blue chip clients, including Crown Resorts, has been on a difficult journey.

A big challenge has been accessing accurate information and ensuring it’s disseminated to staff and clients, she says.

“People turn to cleaning companies as the experts about COVID-19, but the reality is that this has sort of hit us all very quickly and none of us have really had time to sort of take in what this virus actually means for all of these businesses.

“We’re learning while our clients are learning, but we need to be that one step ahead,” Lewis says.

The Group General Manager of Procurement and Supply Chains, Ben Briggs admits he’s had similar challenges at Crown Resorts, with approximately 16,000 staff and contractors regularly on site.

“Reopening a Casino will have its challenges. It’s probably one of the most difficult things to do because you don’t typically reopen, you’re always open,” Briggs says.

“So we have to understand how to create a safe working environment for people, staff and patrons as part of the reopening phase.

“There’s a lot of human elements that we’re going to have to work through over the next couple of months to make sure that we can create a safe working environment at Crown,” he says.

As people get back to work, there’s going to be a level of comfort around the fact that we’re getting back to normal. But we need to be reminded that it’s a ‘new normal’ and a complex space, the pair agree.

The pair opened up about some of the 7 biggest challenges for companies looking to create a Covid-safe work environment:

1. Public confidence

A key priority right now is looking for ways to make the public need to feel safe about returning, so a lot of work needs to go into messaging, Briggs says.

“It will be a different working environment and a different operating environment. You may see thermal scanners at entry points, limited access points into the casino, furniture removed so that we can create social distancing and all the communication that needs to go along with that so that people feel safe,” he says.

“It’s not going to be easy, but I’m pretty confident that with the measures we’re putting in place, people are going to feel safe to come back to the property and come back and enjoy our facilities again,” he says.

Briggs admits he’s been dubbed ‘The Sanitiser Guy’ and ‘The Sneeze Guard Man’ by his colleagues as he looks to overhaul Crown.

“Where practical be such as hotel reception desks, we’re putting sneeze guards up. There’s sanitisation stations everywhere you go. People are going to have access to masks and sanitisation,” he says.

2. Visual reminders

Visual reminders in the form of signs and messages are being erected throughout properties and visual reminders added to flooring to keep people apart.

Making sure that hand sanitisers and wipes are available to all for staff to clean down their environments when they come and go will be crucial, Briggs adds.

Remote working will also be crucial, because we are unlikely to get all the 15,000 people back to work in the same space. We’re going to have to be smart about it. “Assessing which roles can work remotely, how we structure the work environment to enable appropriate distancing and which roles are operational and are needed on the ground will require some finessing,” he adds.

Lewis adds that she’s looking at sourcing a piece of sophisticated technology with an LSD screen to allow customer communication that allows you to add COVID-19 messages and takes temperatures at reception points is on the cards for clients.

3. Communal kitchens

The communal kitchen was once a place where food, coffee and great conversation takes place in offices, but that looks set to be a thing of the past, Lewis says.

Communal plates, cutlery, glassware and the shared office fruit bowl is on the chopping block.

“Kitchens are also a tricky space from a cleaning perspective. It could be an area where fogging works really well, which is a mist spray that works well for tight spaces. The high grade chemical concentrate mist helps get into corners and edges where viruses can live, which I’d recommend doing on a regular basis,” Lewis says.

And while there a plethora of new cleaning companies entering the market offering fogging and sanitisation, businesses need to ensure they engage companies that stand for trust and integrity.

4. The boardroom

Board meetings will be a very different function within a business. The room will be transformed to adhere to social distancing, with every second chair removed, access to wipes and additional bins for wipes to prevent the spread of germs. Hand sanitiser will also be added to the room.

People will be expected to take responsibility for their own hygiene, and report any symptoms if they’re feeling unwell and stay home, Briggs says.

5. Vulnerable workers

Vulnerable workers who are considered high risk require special consideration in the workplace, Briggs says.

It’s about putting enough protections in place for them so they feel safe and willing to come back into the office. A perspex screen and floor markings to encourage social distancing perspective so that people have their own space will be crucial.

“Adapt our workplace policies and processes to ensure they are safe and their workspace is a safe haven will be crucial. Reporting and compliance is also important,” Briggs adds.

6. Response plan

Creating a rapid response process that provides specific measures for closing down in the event of an outbreak is crucial, Briggs says.

The rapid response plan ensures properties are closed down and reopened swiftly, which also needs to be part of a training regime for staff and enforced, he says.

7. Clean desks

The traditional desk station is being overhauled, while hot desking has been abandoned in corporate settings around the world.

While people will continue to be encouraging people so work from home, if they do need to come into work, each personal workspace will need to be kept tidy and minimalistic so surfaces can be cleaned is paramount, Briggs says.

“It’s about keeping those practices up so that we don’t get comfortable and lazy in the area that things have gone back to normal so that we can go back to our previous behaviours,” Briggs says.

Join Procurious to connect with 40,000 other ambitious procurement professionals and get free access to networking, industry news, training and much more. 

How To Set A Procurement Strategy Part 1: What You’re Currently Doing Wrong

How do you set a strategy for your procurement function? Discover what not to do. 


In 2020, we’re all au fait with the word ‘strategic.’ Procurement needs to be strategic, metaphorically yells every advice piece we read. What’s the strategy behind that, what’s your function’s strategy, what’s the strategy this year? Exclaim C-suite executives we run into; or perhaps a strategy consultant they’ve engaged. 

But when it comes to procurement – what does a strategy even mean? 

As an internal function, a procurement strategy is a complex idea. As procurement’s purpose is inherently to serve our stakeholders, should our strategy simply be to do just that? Or should we set a separate procurement strategy, based on best practice we observe in our particular function, elsewhere? Both approaches have their benefits, but also significant downsides. So which one is it, or is it neither? Here’s a detailed explanation of the two different ‘strategies’ that most procurement teams execute, and exactly why they may not be the best choice going forward: 

Bad strategy #1 – The ‘Your Wish is My Command’ Strategy

What is the ‘Your Wish is My Command’ strategy? 

Ken had not long been in his role as CPO at a utilities company when a meeting entitled ‘Procurement Strategy’ appeared in his diary. He hoped – and assumed – that the meeting would be about the business’s long-term strategy, which he would then translate into a roadmap for his team. 

But he was wrong. 

Alison, the company’s CEO, told him that he need not bother himself with strategy, because ‘that’s what I’m here for.’ She said, unapologetically, that the job of internal functions like procurement was to ‘keep all internal stakeholders happy’ and that she expected his team to ‘do whatever was required’ to do just that. 

‘That was the problem with the last CPO,’ she told Ken, ominously. ‘She was always on a different wavelength, always chasing her own version of success. But while she did that, no one here was happy. Don’t repeat that same mistake.’ 

Why is the ‘Your Wish is My Command’ strategy so appealing? 

The ‘Your Wish is My Command’ strategy, or the idea a procurement function exists to simply do whatever is required by stakeholders within the business, is frighteningly common. This is because the basic premise of this strategy – the idea that internal functions are created to serve the wider corporation – is in fact correct. Many CEOs believe that the business units that create products or support customers should be supported by internal functions. While this is true, it can also be deeply frustrating for functions that need – and deserve – to create their own strategy. 

But the problem with the ‘Your Wish is My Command’ strategy runs much deeper than just frustration. 

What’s the problem with the ‘Your Wish is My Command’ strategy? 

The ‘Your Wish is My Command’ strategy works in theory only; as many CPOs will have now no doubt learnt. By granting ‘wishes’ – so to speak – to a multitude of different commanders, without any regard for what to prioritise or how to allocate resources, staff quickly become overworked, resources get spread too thin, and stakeholders are often underwhelmed. All decisions become reactive and nothing is done well, meaning that the all-important procurement influence is lost, with little room to show value added. Business units start ‘insourcing’ – either doing part of procurement’s job themselves, or looking for cheaper, external resources to do it for them. 

Overworked staff, insourcing and little value perceived to be added leads the C-suite to fundamentally question whether procurement is ‘worth it,’ meaning ever-more pressure on cost savings, and eventually, redundancies. 

The ‘My Wish is Your Command’ strategy is something that Dave Pastore, Senior Director, Sourcing Operations at Corcentric, has seen too many times – but, in his opinion, it never works: 

‘Any strategy that reduces the procurement function to a shared service without providing it with the ability to challenge the organisation is a squandered opportunity at best, and a self-inflicted wound at worst.’

On the surface, the ‘Your Wish is My Command’ strategy seems to make sense. But dig deeper, and it’s a deeply fraught concept that deprives procurement as a function of fundamentally doing what they need to do – adding value. 

Bad strategy #2 – ‘Market Leader’ Strategy

It’s clear that the ‘Your Wish is My Command’ strategy is no way forward. So is the opposite strategy, one whereby procurement makes clear choices that set the company apart vis-a-vis other procurement functions externally, the better choice then? 

Not quite… 

What is the ‘Market Leader’ strategy? 

As a new CPO in one of the world’s fastest growing tech companies, Karen thought she’d secured her dream role. And in her first few months on the job, that seemed to be the truth. 

As someone who was quite entrepreneurial and strategic herself, Karen knew that to become a ‘market leader’ in procurement, the company needed to invest heavily in tech. The CEO, himself a young entrepreneur, gave Karen the green light to do whatever she needed. ‘Just make sure we’re the best,’ he said, while signing off on a budget that made Karen’s eyes water. 

But as time passed by, problems materialised for Karen. It turned out that being ‘the best’ wasn’t as easy as emulating best practice in the marketplace, for a number of reasons. 

Why is the ‘Market Leader’ strategy so appealing? 

For ambitious CPOs, the chance to implement the ‘Market Leader’ strategy can feel like a career-defining moment. Firstly, it treats procurement with the respect it deserves, and places it equally with the rest of the business in terms of power and importance. Secondly, it just seems like the right thing to do. If you’re trying to be ‘the best,’ why not look for an example of that and then try and do the same? 

Creating a ‘market leading’ procurement function may well look good on your CV. It may be the case study that nets you media coverage; that amplifies your personal brand and that makes you an authority in the space. But at the same time, there’s every chance it will fail within your organisation. 

Why? 

What is the problem with the ‘Market Leader’ strategy? 

The ‘Market Leader’ strategy seems perfect until you consider one thing: context. And given that procurement is not separate to an organisation, but an integral part of it, context is hugely important. 

Take the example of Karen detailed above. What evidence did she have, beyond the fact that she was working for a tech company, that investing heavily in tech was what was needed for her function? Precisely none. Many procurement leaders have chased ‘best practice’ before, only to discover that what might be best in the marketplace may not suit their organisation for a number of reasons. 

Jennifer Ulrich, Senior Directory, Advisory, at Corcentric, believes that the idea that you have to be a ‘market leader’ in all aspects of procurement is misguided: 

‘You don’t have to be a market leader on every aspect of procurement in order to generate a competitive advantage to the organisation. 

‘Doing what is right for the business will put you in a winning position more often.’

While market-leading strategies look externally focused, they actually function more like internal monopolies, where procurement serves themselves, rather than the needs of the business leaders around them. As a result, the function falls victim to the typical problems experienced by monopolies, including arrogance and overresoucring. Managers within the business complain that resources are being used for ‘show’ as opposed to invested in things that would actually give the company a competitive advantage. 

As a result, backlash ensues. The ‘value’ added by procurement is again called into question, and the function is seen as the exact thing it is trying to rebel against: burdensome cost. 

So how should you set a procurement strategy? 

If a ‘Your Wish is My Command’ strategy doesn’t work, and neither does a ‘Market Leader’ strategy, then how should procurement create a meaningful, long-term and effective strategy? 

Diego De la Garza, Senior Director, Global Services, at Corcentric, recommends you begin by doing the following: 

‘Start with defining what success should look like for procurement in your organisation, finding those answers early is a relatively easy way to build a strategy that will drive healthy support across the organisation.’ 

Want more detail? Discover exactly what to do in our next article: How to Set a Procurement Strategy Part 2: What to do. Join Procurious now to be notified immediately when it’s published.

How To Navigate Office Politics (Without Selling Your Soul To The Devil)

How do you play office politics to your advantage? Here’s four skills you’ll need to do so. 


Let’s face it, no one, bar perhaps a few actual psychopaths, goes to work because they love the politics of it. In fact, toxic office politics is often cited as one of the key reasons people quit, and is also associated with low levels of engagement and productivity, and on the more serious side, mental health issues and stress complaints. Does this mean that politics should be avoided altogether? 

Absolutely not. 

Whether you like it or not, office politics are unavoidable. Even worse, if you do choose to try and avoid them, there’s a lot at stake. In most offices, politics are akin to the workplace’s unwritten rules, and they have the power to dictate how people should act, who gets promoted, and ultimately who enjoys career success and who doesn’t. Many successful people will tell you that politics can be even more important than merit – so it’s important to understand how to play them to your advantage. 

Yet for many of us, politics and ‘playing the game’ feels like a dirty concept. Is there a way that we can advance our own interests without making our colleagues collateral damage? In other words, is there a way to play the game without selling our soul? 

Knowing the difference between good and bad politics 

Although many people inherently think of office politics as a bad thing, political scientist and cultural researcher Harold Laswell doesn’t believe they have to be. In fact, Laswell encourages all people to think about politics as simply ‘the way things are done around here’ in any particular environment, and as such, know the difference between what ‘good’ and ‘bad’ politics might entail. 

In any organisation, and in any role, a degree of self-promotion in order to advance interests is needed. Good politics, then, is where you do so, but not at the expense of others or your organisation’s legitimate interests. For example, good politics may involve strategically making connections with important stakeholders or deliberating making an effort to better engage C-suite executives. Good politics, otherwise known as being savvy, well-networked, influential, an intelligent communicator and even a little charismatic, serve a higher purpose in that they help you get ahead – but don’t sacrifice others in the meantime. 

Bad politics are the opposite of this, though, and something we’ve all been a victim of. Bad politics are when you backstab, create rumours, or do something that you’d otherwise consider sneaky and immoral in order to advance your position. In other words, you advance yourself by sacrificing someone else. Bad politics feels bad because it is – and no amount of telling yourself that it’s “worth it” or they “deserved it” should help you feel better. Unfortunately, bad politics can help you get ahead, but the success that ensues is often short-lived. 

In reality, bad politics co-exists alongside good politics in most organisations. But in the best organisations, bad politics are stamped out and only good politics remain. And if you’re able to hone your good political skills, success can easily be yours. 

Honing your political skills 

The politics of the office are a far-cry from the politics of Downing Street or the White House. Yet are the skills required to play office politics that different? Not really. Here’s what culture researcher Gerald Ferris recommends are the essential skills make office politics work for you: 

  1. Social astuteness: Social astuteness is the next step beyond one of the most essential workplace traits: self-awareness. When you’re socially astute, you’re not just aware of yourself and your own strengths and weaknesses, but you’re also aware of how others perceive you and how your behaviour impacts them. For example, if you’re socially astute you’ll understand that Karen from HR doesn’t think too highly of procurement, and you’ll be proactively working to change that. 
  1. Interpersonal influence: We’ve talked extensively here at Procurious about why influence is important and we’re not going to stop anytime soon because it’s so true – your interpersonal influence is everything. Influence, defined as your ability to affect how and what others think, is essential in managing politics. But before you dive in to influencing your own agenda at work, it’s important to understand others and specifically, what their preferences and goals are. This way, you can personalise your approach to exact the greatest level of influence. 
  1. Exceptional networking: Networking skills are another of Procurious’s favourite topics for good reason – they are essential to success. As we’ve always maintained though, networking within an organisation needs to be a two-way street, and you need to ensure that you’re creating mutually beneficial relationships with people with whom you expect support from. 
  1. Sincerity: Politics has received such a bad rap before because people think it’s inherently dishonest. But to the contrary, good politics requires sincerity, honestly, and openness (or at least the appearance thereof, where complete transparency isn’t possible). If people around you perceive you as sincere, they’re more likely to trust and believe in you, which can help with advancing your cause. 

Politics may well be a dirty word, yet the outcome of playing good politics certainly is not. A plethora of research shows that having the above mentioned skills enhances not only job performance and satisfaction, but influence, salary, opportunities and advancement. So even if politics has never been your game, it’s time to participate to the best of your ability – your career success depends on it. 

What has been your experience with office politics? Do you typically see more bad politics than good politics? Let us know in the comments below.

Buying The Cheapest – The Biggest Myth About Procurement

Writing off Procurement as the department that finds things for the cheapest price is to write off a complex and important decision-making mechanism that expertly considers several vital factors over “buying cheapest”.


It is saddening how some organisations still think the only idea of Procurement is to buy the cheapest. This leads to numerous erroneous opinions about Procurement function and profession in general. Because of this myth, other departments within organisations try to avoid Procurement department while making strategic decisions. Consequently, in many instances those departments face numerous problems, such as poor service, substandard deliverable, late performance and even disappearing vendors.

It is important to instruct our colleagues and duly inform them about the role and significance of Procurement function in any organisation. It is important to bust Procurement myths.

First, in Procurement profession we do not even use the words “cheap”, “cheaper” or “cheapest”. These are banned words. Because the word “cheap” reflects many attributes, including quality. We say “lower in price” or “lowest-priced” or “less expensive” or “least expensive”.

Second, we never look at the price of goods, works or services, if we are not satisfied with the quality. Even if the price is $0.00. We are simply not interested in seeing the price of a bad quality product.

Third, we do not consider price if delivery schedule and delivery conditions are not what we requested. I.e. if medicines or other vital products are going to be delivered long after they are needed – why do we bother about the price at all?

Forth, most often we give zero attention to price if the company offering products or services is not qualified and reliable. Some exceptions might apply for new technologies, know-hows and monopolies.

Fifth, we do not consider price if a bidder disagrees with terms of the contract we envisage.

Only after all these criteria are met, Procurement starts reviewing, comparing prices.

So, in practice, we might review the prices of only 4 offers out of 20 offers received. The remaining 16 would be filtered out because of the criteria above that come before price.

But, there is “one more thing” (© Steve Jobs). Even comparing the prices at this stage does not mean the contract will be awarded to the lowest-priced offer. Buying organisation might have several other preferences, for example awarding the contract to a greener or more sustainable enterprise, or giving a preference to an SMEs, or local business, or businesses run by women, etc.

In other words, price is just one of those numerous factors Procurement considers.

Additionally, it is vital to acknowledge that while sourcing best value for the organization, Procurement wears two hats:

The first hat is for dealing with the final recipient of the product or service. Procurement needs to listen carefully and understand all the details and peculiarities of the final deliverable. The price of a mistake here is too high. Any concerns or alternative solutions should be properly discussed before going to market.

The second hat is for dealing with vendors. Here procurement needs to obtain the maximum value for the organisation, while keeping the vendors interested and motivated.

Negotiating in two fronts is difficult, but no one said Procurement is easy. Procurement is a complex and important decision-making mechanism that evaluates risks and offers solutions to guarantee the best value for money. It is certainly more than just buying the cheapest.

This article is based on series of lectures by Levon Hovsepyan organised in 2008-2014

This article was originally published on June 9th, 2020. Source: Procurement.org and has been republished here with permission.

Do You Agree? 4 Supply Chain Influencers On What’s Changed Since COVID-19

In supply chain and procurement, what has changed since COVID-19? Find out what 4 influencers think here.


In every industry, there’s a few powerful individuals who drive the conversation. These fortunate few are the ones that propel industries forward; they are the ones who decide what’s trending, what’s next and what our future might look like. They’re influencers, and within the procurement professional, we’re blessed with many whom we all aspire to. 

And this year, with COVID ravaging our supply chains (and not to mention lives) as we know them, we’ve needed industry leaders and influencers more than ever to help guide us through and tell us what’s next. So that’s why, recently, we sought out the opinions of 30 of procurement’s top influencers. They shared some of their most profound and intriguing insights into what the COVID experience has been like for them, what they’ve learnt and what they expect to see in the future. 

Here’s what they told us: 

Inspiring supply chain stories 

There’s no doubt that the past few months have been challenging for procurement professionals worldwide, with many stories of interrupted supply chains, logistics issues and much more. Yet in among the mayhem has been some truly inspiring stories. Here at Procurious, almost daily, we heard of businesses, teams and people that were going above and beyond to help. 

This was something that our influencers noticed, too. One thing that caught the attention of Supply Chain Queen Sheri R. Hinish is the incredible generosity of suppliers. She explains: 

‘I was particularly impressed by Under Armour’s (clothing brand) sister company, Sagamore Spirits. They provided thousands of units of hand sanitizer for local businesses, communities, and residents.’ 

Indeed, there were hundreds of suppliers who, seemingly overnight, transformed their production from items such as high fashion to scrubs. But for Kelly Barner, Managing Director of Buyer’s Meeting Point, the inspiration came not from suppliers, but from the extraordinary efforts of procurement professionals who previously may not have been noticed: 

‘Businesses everywhere are sorting out tough problems. But behind those problems are armies of unlikely characters self-organising to make things happen.’ 

‘Business leaders should pay attention and notice who runs toward the fire. It might not be who they expected.’ 

Learning from COVID-19 

One quick Google search will reveal hundreds, if not thousands, of articles dedicated to what the supply chain profession should learn from the coronavirus pandemic. There’s been discussions of everything from the need to move manufacturing from China to Mexico, to better managing cash, dialling down just-in-time operations and everything in between. 

Dr. Marcell Vollmer, Chief Innovation Officer at Celonis, a process mining software company, believes that the pandemic has been a reminder of what we all already knew, but may yet to have embraced: 

‘The number one lesson I think we all need to learn from COVID is to prepare and leverage technology to get full transparency and control over your end to end processes.’ 

‘We all need to be using technology to prepare ourselves for unforeseeable events as much as possible.’ 

Marcell’s learning here is sound – for years, we’ve all known that Industry 4.0 is coming, yet COVID may have accelerated its onset. 

For another influencer, Diego De la Garza, Senior Director of Global Services at Corcentric, the COVID learnings were about the way we worked. Specifically, Diego thinks that the pandemic has made us more productive: 

‘Working from home, it has impacted productivity, for the better. My team has been able to dedicate more time to critical tasks, while at the same time balancing work with family.’ 

‘Still, it’s remained ultimately very possible for everyone to collaborate and perform efficiently.’ 

Aspirations for procurement post-COVID 

For seemingly as long as the procurement profession has existed, many of us have wanted more and better. We’ve wanted to be strategic, to have a voice and influence, and to finally add the value we know we’re capable of delivering. 

Will the pandemic represent the ultimate opportunity for us to do so? 

Sheri R. Hinish, Supply Chain Queen, thinks the answer is a big, fat resounding yes: 

‘Supply chain has never had as big a seat as the table as they do right now.’ 

‘My hope is that we embrace a paradigm shift from “lowest price” to shared value and responsibility. Everyone now sees that supply chains are the conduit that power the world.’ 

The performance of procurement throughout the crisis 

It may be true that we’ve never had as big a seat at the table as we do now. But how have we actually been using that seat. Kelly Barner, Managing Director of Buyer’s Meeting Point and one of the world’s most influential supply chain professionals, believes that procurement has done a great job: 

‘Procurement professionals have done an exceptional job of keeping the lights on, despite periods of great uncertainty and concern.’ 

‘Whether we were locating replacement suppliers with little to no notice, or identifying new suppliers so our operation could switch from clothing to PPE, we have been getting the job done.’ 

Do you think procurement has done a great job throughout the pandemic? Do you think a lot will change after the pandemic is over? Let us know in the comments below.

For more game-changing insights and inspiring stories from key players themselves, check out our COVID-19 Gamechangers whitepaper.

Want To Succeed As A Global CPO? Don’t Be A Procurement Butterfly!

This is no time for procurement professionals, let alone global CPOs, to float above the action or flit from minor issue to minor issue. It’s time to keep learning and get involved. 


Ian Holcroft’s careercurrently Procurement Director at Murphy, has given him a unique perspective on the situation currently facing procurement. Here, he offers some personal and professional tips on what we can learn from the current COVID-19 pandemic. 

You are never too old to learn something new. Even in the best of times, there is no excuse you can make to ever stop learning. The minute you think you have learned everything is the minute you are no longer relevant. 

My career in procurement has spanned 30 years and taken me all over the world. I consider myself extremely fortunate to have worked on some fantastic projects:  

  • the new EDF nuclear power station at Hinkley;  
  • the redevelopment of Liverpool City Centre, now known as Liverpool ONE; and 
  • the building of the Commonwealth Games Stadium in Manchester and its subsequent re-modelling to become the Etihad Stadium, the home of Manchester City Football Club, to name but a few. 

I’ve set up new manufacturing facilities and supply chains in India, experienced life on the other side as an interim HR Director for 9 months and set up Laing O’Rourke’s procurement and supply chain function in Australia. I met some extremely wonderful and inspirational people on the way, many of whom will be friends for life. 

The capacity to learn is a gift 

My four years in Australia were wonderful and it was there that I was lucky enough to meet Tania Seary, founder of Procurious. I also became a member of The Faculty’s CPO Roundtable, something that I have continued with, via Procurious, in the UK.  

The Roundtable has proven itself time again to be an incredibly valuable resource to Global CPOs, facilitating discussion, sharing experiences and, most importantly, learning from one another. This learning has been valuable over the past two and a half years in my current role as Procurement Director of Murphy.  

Murphy is a leading family owned infrastructure business that operates in the power, rail, construction and utility sectors in the UK, Ireland and Canada. Due to the nature of the work we undertake, most of our projects in the UK have still been operational during the pandemic. It would be remiss of me not to share some of my own learning from the challenges forced upon us by COVID-19. 

To be honest, the current situation has reinforced many of my beliefs about our profession: 

1. You must treat your suppliers as partners  

One thing I have always believed and shared with my fellow CPOs is that developing close relationships with your supply chain is crucial to your overall success. Those relationships, the key, strategic ones, need to have a solid foundation of trust and then be built around the concept of ‘tough love’.  

As with any relationship, there will be plenty times where you must have the ‘difficult’ conversations with your suppliers. However, it’s always better to have these conversations with a supplier you have a long relationship with, know inside and out and have worked well with in the past. It’s also infinitely better than a ‘slash and burn’ strategy (adopt, use, discard), or a master-slave relationship, as at some point, inevitably, you will need your supply chain more than they need you. 

Supply partners will help keep you going in the toughest of times, frequently going above and beyond their duty to keep projects going. They appreciate the openness, the loyalty and even the tough love to build up a trusting relationship over the years.  

2. You, both as a function and an individual, must be relevant 

In the current global crisis, procurement has an amazing opportunity to show how relevant and crucial it is to the success and survival of all organisations. Global leaders, such as German Chancellor Angela Merkel, have publicly stated how the German Government is utilising procurement as a strategic weapon to fight COVID-19.  

I’ve told my fellow global CPOs that if we can’t make our function relevant now, we never will. How do you stay relevant? Stay close to your stakeholders and help them deliver their targets. You can’t prove relevance from the stands – you need to be on the pitch. Ask yourself, “How close am I to the real action that makes a tangible difference to my business?” 

I am currently embroiled in it, very much by choice! If you’re not, then maybe it’s time to move on and let the next player on the pitch. Unfortunately, there are still far too many ‘procurement butterflies’ floating around, getting involved with this and that, without delivering anything of substance or relevance. It’s time for leaders to stop flitting about and really get involved. 

3. Build a great team – then trust them to deliver 

I have been incredibly fortunate to develop and work with some great teams throughout my career. My current team at Murphy is no different. We have some great, young talent coming through, we have been awarded the CIPS Excellence Standard – it has been a pleasure to lead it. 

But your team will never truly achieve greatness, unless you trust them to deliver. With all the virtual tools and means of communication we have available to us now, even a global pandemic is no excuse for not staying in touch. Just look at Procurious gathering its global CPO leaders virtually to exchange ideas and still achieving the depth of information and experience as it would have face-to-face. 

The procurement team of the future won’t need to travel as much as we used to and working from home will become the new normal. But only as long as everyone in the team has clear outcomes to achieve and a leader who is willing to let them get on with it (though on hand for advice and encouragement as appropriate).  

Plus, there’s still the chance to get together (virtually) for the team building exercises too! 

4. It’s still all about people – so make sure you look after yours 

No matter the technological advancements we have now and into the future, people will still be at the centre of everything we do. In strange and challenging times, it’s even more important to look after your people – understand what drives them, what challenges they have outside work, the status of their mental health, especially if (as it has been for many), they have been furloughed. 

Though physically further apart, there is an opportunity for us to be closer to our people than ever before. We still need to ensure that our people can develop through training. eLearning resources, such as the ones offered by Procurious and CIPS, are great for this. Encourage your team to utilise these and provide them with enough time to complete them. 

And, of course, don’t forget about yourself. As I have said, look after yourself and make sure you’re still learning. Never stop learning, setting yourself new challenges and winning that fight to stay relevant.  

Coming out stronger 

We are facing challenging and frequently troubling times. But I strongly believe that procurement and supply chain will come out the other side of this stronger and in a more influential position. We must seize this opportunity, use all of the resources at our disposal and lead our teams on the next steps in this journey. 

Don’t forget though, you are never alone. No matter your level, from the newest new start in procurement, right up to the most senior of global CPOs, there is always a chance to share. Use resources like the CPO Roundtable to bounce ideas off your peers, pick their brains and see where they have succeeded. And, just in case I haven’t mentioned it often enough – never stop learning! 

Join Procurious to connect with 40,000 other ambitious procurement professionals and get free access to networking, industry news, training and much more. 

Out Of Africa – Procurement News

On the cusp of a groundbreaking Procurement event, in the wake of catastrophic pre-COVID events, and despite grim economic outlooks and stifled Supply Chains, Africa is proving itself to be an innovative, resilient force in World Procurement


It’s an exciting time for Procurement in Africa! Two leading influencers in the African Supply Chain and Procurement profession have created AFRICA SUPPLY CHAIN IN ACTION: the largest ever online learning, knowledge sharing and networking event for the profession focusing on Africa. SAPICS, The Professional Body for Supply Chain Management, has joined forces with Smart Procurement, Africa’s leading supply chain and procurement information service, to present this ground-breaking event on August 19 and 20 2020.

More than 1000 delegates are expected to attend: a significant proportion will no doubt be the thousands of Africa-based Procurious members! Join SAPICS and Smart Procurement along with Procurious’ greatest minds and register here.

AFRICA SUPPLY CHAIN IN ACTION will help African Supply Chain professionals position themselves and their businesses to adapt and thrive, now and beyond COVID-19. Their exciting packed programme will examine what Africa has learned from the COVID-19 pandemic and how individuals and organisations must work together to change the dialogue, strategies, and operating models in response to the new tomorrow.

This happens just as Africa is currently pioneering very positive developments in Procurement Technology. Africa’s pains during the COVID-19 pandemic have been well-documented: the lockdown of key countries’ exports, closure of borders and factories, and poor healthcare facilities. However, despite the doom and gloom, there is a general level of optimism and enthusiasm for innovation by people across the continent. Entrepreneurs in Nigeria, South Africa and East African countries are developing digital applications to solve our 2020 supply chain problems. 

While fruit, vegetable, meat and seafood exports into Europe have taken a temporary hit, agritech solutions, such as remote sensing of crops and data- mining and analysis using e-platforms, are successfully being adopted by commercial farmers as part of their digital future. Nigeria is leading the way in applying technology to improving regional logistics: the transportation start-up Kobo360 is now in most countries in West Africa.  Kenya and Uganda lead the way in affordable mobile services to support small business. The South African government is using WhatsApp to run an interactive chatbot which answers all types of queries about COVID-19, including business-related issues.   

While Africa as a whole has recorded relatively few deaths from the disease, the numbers are rising and African countries are struggling to contain the spread. McKinsey has proposed different scenarios for Africa’s economic growth in the wake of the pandemic, the most likely being an annual growth rate as low as -3.9 per cent. This is based on the most realistic scenario: a lack of containment both globally and in Africa. The health of Africa’s Supply Chain and economy rests significantly on whether or not the spread of COVID-19 can be contained so trade can resume.

Africa’s trade with China

China’s exports to Africa over the last two decades have remained steady with South Africa, Nigeria and Egypt its three largest trading partners. Africa’s exports to China have been increasing, but are heavily dependent on commodity prices; the main products exported are raw materials including copper, iron ore and oil coming from Angola, South Africa and the Republic of Congo. While the data is not 100% reliable due to China’s reporting process, it is accurate enough for us to see the trend before this current crisis.

Figure 1


Foreign direct investment and agricultural investment in Africa by China has also been increasing over the same period but the trend was already slowing before the current crisis. There are still some high-value engineering and construction projects happening, especially in North and East Africa.

That was then …. this is now

Most of Africa is closed for business right now. Seaports are mostly closed, air cargo and other transport routes are limited and business lockdowns are in effect, halting exports. In China, Mass production shutdowns and supply chain disruptions due to the current crisis are causing problems. For example, 85% of South Africa’s mobile phone imports are from China, their largest import category by value. Not only does this impact the end consumer, it also affects the wider telecommunications industry and many service sectors.

The Chinese economy is not likely to bounce back from this pandemic as quickly as in previous similar episodes (Bird flu 1997, SARS 2002-2003, Swine flu 2009). Despite this, China will probably continue to be one of Africa’s biggest trading partners after the worst of this crisis has passed.  

Africa’s global trade  

Global law firm Baker Mackenzie notes that “over three-quarters of African exports to the rest of the world are heavily focused on natural resources and any reduction in demand impacts the economies of most of the continent”.  They identified such countries as the DRC, Zambia, Nigeria and Ghana as being significantly exposed to risk in terms of industrial commodity exports, such as oil, iron ore and copper.  They expect that once COVID-19 is brought under control it could lead to an increase in the demand for raw materials from Africa, especially from China.

 Figure 2 – Africa’s commodity exports to the world

 

Source:  Chatham House 2020


Africa’s Exports to Europe

Africa’s exports to the European Union stood at around US$133 billion in 2016. Most African countries have duty-free access to the EU market.  Raw materials normally account for 49% of the value of Africa’s exports to Europe. It is expected that this will return to near normal when mining activities resume at full capacity.  It is not that clear whether manufactured goods such as textiles and machinery will get back to current levels of 35% of exports. Food products and beverages make up the other 16%. 

In sub-Saharan Africa, South Africa is the strongest and the most engaged when it comes to trade with the EU, supplying fuels and precious metals and other mining products, as well as machinery and transport equipment. The main destinations are Germany, Netherlands, Italy and the UK.  West Africa is also a leading exporter to Europe.  Animal products, vegetables, tobacco, and textiles are mainly imported from Benin, Senegal, Ghana and Guinea. Other countries, like Niger and Sierra Leone export commodities such as diamonds, uranium, and precious metals primarily to France, Italy, and the Netherlands.

What is next for Africa?

Normal business operations, as we know them, will be irrevocably changed as a result of this current pandemic. Many companies were not prepared for the level of disruption this unforeseen crisis would bring. We may not ever return to “normal” practices or to the marketplace as it was. What is clear is that companies that gave scant regard to managing their supply chain risks have received a wake-up call!  Companies are advised to consider a range of different possible scenarios and develop plans to deal with each eventuality.

How did your Procurement Team handle the crisis so far? 

As activities start to normalise, we need to reflect on how well we have been able to navigate the previous 3–6 months. A study of the success, or otherwise, of procurement events will highlight areas of improvement. 

  • How well did we execute emergency sourcing events?
  • Did we make the best use of our available technologies?
  • Did we act at the right time and in the right way with our suppliers? 
  • How could we have managed our sourcing processes better?

AFRICA SUPPLY CHAIN IN ACTION aims to answer all of these, 19-20 August 2020. Read up on the latest Procurement news and game-changing ideas on Procurious before registering here.

The path forward for Africa will no doubt be challenging, but it’s up to us to pave it – and together, we can.