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.
If there’s one thing this crisis has taught us, it’s how quickly things can change overnight. Don’t think we are out of the woods, just because supply chain risk has declined. Our community has never been more vulnerable.
Publication of our Supply Chain Confidence Index, quickly followed by riskmethod’s Risk Report has created a “perfect storm” of data to show that now, more than ever, we need to be vigilant and proactively address supply chain risk.
Aside from the obvious pandemic outbreak risk increase, which riskmethods reports is 34.7 times that of 2019, changes are impacting virtually every aspect of business. Some of which include:
A major increase in cyber security risk-related warnings, stemming from the transition to working from home
Substantial growth in risk associated with labor practices and human rights, as well as employee stability
A 26% increase in natural hazard risk
And with lack of visibility into supplier and geographic risk topping the list of lessons learned from COVID-19, it’s clear our job here is not done.
Putting out the fire
The lack of visibility, data and agility acted as an accelerant, enabling the disruption to spread like wildfire from supplier to supplier. Procurious found that:
The hardest-hit companies were more than 50% likely to have multiple key suppliers go out of business due to COVID-19
30% of CEOs had a supplier declare Force Majeure
65% of organisations were forced to source alternative suppliers for affected categories
Consider all the ‘prepare for the second wave’ and ‘the worst is yet to come’ talk a storm warning. The weatherman may not be 100% accurate, but it’s almost always a matter of when and to what extent, then whether it will happen at all. We need to keep supply chain risk on our radar.
Not only did our research indicate supply chain and procurement leaders are still bracing for peak impact, the riskmethods 2020 Risk Report predicts more damage to come, as supplier financial distress risk was 105% higher in May than the beginning of the crisis.
Most economists expect a second wave of bankruptcies – with one recognised expert predicting the amount of large bankruptcies (at least $100 million) will challenge the record set after the 2008 financial crisis.
So, how do we avoid another disaster? This year, riskmethods reported a 34% increase in early supply chain disruption warnings compared to the same time period in 2019, including:
A 151% increase in disasters at partner sites
A 100% increase in disasters at location
A 45% increase in instability in key employee positions
This urgency placed around supply chain risk management should not be viewed as negative. The newfound spotlight gives our profession the spotlight we need to expedite critical decision making and drive real change.
While the extent of the impact of COVID on our supply chains is no longer surprising, the disruption offers a clear and urgent call-to-action for global organisations to rethink and rebuild supply chain risk management strategies from the ground floor.
Our Index showed that failing to invest in SCRM was the No. 1 technology regret during COVID-19. The majority of respondents (73%) are planning significant procurement and supply chain strategy shifts. For many, this means increased investments in supply chain and procurement technology. The emerging and Industry 4.0 technologies that show the most promise for mitigating future supply disruptions include:
Robotic process automation
Internet of Things
Additive manufacturing and 3D printing
We still have a long way to go before we even determine what ‘business-as-usual’ will look like—never mind reach it again. And when that happens, remember: the worst thing to do when it comes to supply chain risk management is nothing at all.
Join us and riskmethods on Tuesday, July 28 as we reflect on lessons learned and continue crowdsourcing confidence with fresh data from the frontlines. Register now.
2020 is the year of things that seemed easy suddenly being oh so hard. Take going out for dinner, for example, which many of us took for granted until restaurants worldwide were shut. Or from a work perspective, ease of logistics. Closed borders in every continent has certainly presented way more issues than any of us ever thought possible.
And yet another area of life that always presented its own challenges, and now even more so, is looking for a job. Whether you’ve been made redundant or stood down, or you’re starting to feel as if the pandemic isn’t bringing out the best in your employer, the prospect of job hunting right now seems a little scary. What’s even out there? Will I ever find something? And how do I manage my emotions in such an unstable time?
To help guide you through your job search, we spoke to two highly experienced recruiters, Imelda Walsh, Manager of The Source, an boutique procurement recruitment agency based in Australia, and Christina Langley, Consultant at Langley Search and Interim in the UK. Both enlightened us on not only the nuts and bolts of how to manage your job search at the moment, but also how to best manage and talk about your experiences if you have found yourself unemployed.
I’m not feeling that confident at the moment. Is that ok?
At the best of times, job searching can feel a little daunting. But right now, job searching can feel downright terrifying. With job listings in some sectors in the UK down by up to 59%, and job listings in Australia following a similar trend (latest reports show listings are down 54%), many people are feeling overwhelmed by the competition out there, but at the same time underwhelmed by their ability to break back into the market, especially if they’re unemployed. But is the situation so dire when it comes to procurement?
Christina certainly doesn’t think so, as many of her clients are actively hiring for roles. Yet at the same time, she understands that procurement professionals may be feeling a range of emotions right now:
‘How people feel right now depends on their coping strategies. Some will feel empowered and organised; confident in their skillset and pragmatic about what they will consider.’
‘Others may be in denial, unable to view themselves in the context of what has happened. They may be feeling angry, or even struggling with home obligations so it might be difficult to devote the time needed to find another role.’
I’m unemployed right now. How should I be looking for a job?
There’s no doubt that looking for a job right now can be stressful. So how do you ensure that you don’t get caught up in it all, and spend hours and hours obsessively looking for anything and everything?
When it comes to job searching, Imelda says that you need to make a plan and stick to it:
‘Start your job search by defining what roles you want. And at this time especially, I’d also recommend having a plan b. Be clear on what you want but also what you’d accept if you don’t get what you’re looking for in a certain amount of time.’
But what about if you’re really keen to get back to work? Should you apply for anything just in case?
‘No.’ Imelda says.
‘Be strategic about what you apply for, and don’t apply for something that doesn’t genuinely interest you, as this will dilute your profile and make you look desperate.’
Throughout the job search process, Christina says it’s critical to keep balance in your life, and to make sure you’re exercising, eating and sleeping well. Beyond that though, Christina says that like anything, in your job search you need to create achievable goals:
‘Give yourself goals, such as, this week I’m going to network by contacting ten former bosses or colleagues, next week I’m going to write my CV.’
‘Completing these actions will make you feel like you are making progress.’
How do I network effectively at the moment?
Right now, it’s fair to say that most people have a lot going on, with many still working through the pandemic and what it means for their jobs and lives. Thinking about careers and networking might not be at the top of everyone’s mind, so it may feel awkward or inappropriate to network.
Christina believes, though, that we don’t need to feel embarrassed about networking right now. It’s all about mindset, she says, and thinks that we need to change the fundamental question we ask:
‘It’s not “please do you have a job?” but instead “please let me know if you hear of anything.”’
Imelda and Christina both believe that if you are networking, you need to be systematic and targeted in how you do so. Specifically, Imelda recommends:
‘Start by researching the market. What industries are hiring right now? In many parts of the world, that might be healthcare, government, FMCG, tech and a few others.’
‘After you’ve done your research, figure out, ideally, what industry, company and leader you’d like to work for.’
‘Then specifically connect with them or ask to be introduced on platforms such as Procurious and LinkedIn.’
Actually connecting with people should only form part of this process though, Imelda says. The other part is giving back to the community and growing your personal brand and presence. The best way to do this is to be proactive online, through sharing your opinion via commenting on what others are doing and saying in your industry, and publishing your own thought-leadership articles.
How do I interview confidently?
Interviews are nerve-wracking at the best of times. But especially if you’re unemployed, and especially during a pandemic, they can be particularly nerve-wracking.
Fortunately, Imelda and Christina both believe there are many things we can do to calm our nerves before an interview, and especially one with a hiring manager.
Imelda believes the key to good interview performance is preparation. Prior to any interview, she says that it’s imperative that you know your resume:
‘Before an interview, ensure that you can explain all of your roles and your amazing achievements. To do this, reflect on your career and the value you’ve delivered.’
‘And make sure you’ve done your research. Practice storytelling and have answers prepared to common questions.’
Preparation, in and of itself, can make you feel more calm. But if it hasn’t completely taken away the nerves, do whatever you need to just prior to the interview to get yourself ready:
‘Whatever it takes to make you feel better. Meditate, listen to your favourite song, practice your answers in the mirror. If it works for you, ensure you do it!’
As someone who interviews hundreds of people in any given year, Imelda does acknowledge that interviews can be harder than they seem. But at the same time, she thinks that we need not be too hard on ourselves. Hiring managers and recruiters alike know that it’s a difficult market, and that many people have been stood down. The key, she thinks, is to be able to effectively explain your time off:
‘The pandemic is global – everyone knows what is happening. So if you’ve found yourself with a resume gap, people will generally understand.’
‘But still, a good explanation of what you’ve been doing will help. For example, if you say you’ve been doing “nothing” managers might be a little concerned. But if you say you’ve used the time to upskill, or even to progress a personal hobby or project, that will suffice.’
Recruiters can also be a big help if you’re nervous, Christina says. Specifically, she encourages all candidates to ask questions in order to understand the big picture of any job they may be going for:
‘Always ask your recruitment consultant for the real story and requirements beneath the job description.’
‘And also try and find out about the hiring managers who will be interviewing you. What is their background? Where have they worked? Etc.’
How do I know if I’m nervous in an interview?
Try as we might, sometimes it’s just not possible to get rid of interview jitters. But how do you know if you’ve successfully squashed your nerves or not? There’s a few things that give you away, Imelda says … and they may not be what you think.
‘Fumbling over words, sweating, nervous twitches like shaking a leg, a lack of eye contact, or even talking too fast and rambling are common signs you’re nervous.’
Christina agrees, adding that your voice volume can also give you away:
‘If someone’s nervous, they often talk too loudly or even too quietly.’
While these might be common signs of nervousness, Imelda has also seen a couple of other less common signs of nervousness that we should all be aware of:
‘Often, candidates are told to use “power poses” before the interview to calm nerves. But a couple of times, I’ve seen the overuse of power posing, for example, sitting back in a chair with a leg up on your knee, in interviews.’
‘Although this may feel commanding, it is often a compensation for nerves.’
Note to all: keep the power posing to before the interview!
What should I talk about in an interview?
The world of procurement has most certainly undergone a shake up since the pandemic. So does this mean that employers are looking for certain traits and experiences now that may not have been as important before?
Imelda certainly thinks so.
She’s seen the following shift in what employers are looking for:
‘We’re seeing an even bigger focus than ever on supplier relationships. Organisations are wanting procurement to have a genuine strategic relationship with vendors, meaning they can lean on them in times of need.’
Beyond supplier relationships, Imelda believes that the soft skills that were always considered important in procurement are considered even more important now:
‘Your ability to influence, engage and be customer-focused is even more critical right now.’
‘Beyond that, businesses want savvy procurement professionals who know that now is no time to waste a crisis. Instead, now is the time to step up and show the importance of procurement.’
‘Innovate, be open to change and take advantage of this opportunity to make a positive difference.’
How is job search going at the moment? Are you having to do anything differently? Let us know in the comments below.
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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
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.
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.
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.
2020 has been a year like no other. Which of course means we need an update in our go-to career tips…
Unfortunately, careers often look better with hindsight. If only I hadn’t taken that role, we often think, or perhaps, I could be better off if only I’d learnt to better negotiate my salary.
Fortunately for you though, those types of concerns or regrets might not be something you have to worry about after you read this article. We all need some good news right now, so to bring you five of the most life-changing career tips of 2020, we chatted to one of the most-experienced supply chains recruiters in the world, Tim Moore. As the President and Owner of Tim Moore and Associates, has single-handedly placed thousands of high-ranking supply chain executives into roles all over North America for the best part of almost three decades.
He sat down with us to share ‘something money simply can’t buy’- hindsight.
Tip 1: Stand out – you may soon have some competition
When it comes to global supply chains, it’s fair to say that the coronavirus pandemic has changed absolutely everything. From food to medical supplies, the crisis has caused all of us to consider just about every element of what we do, from how we manage suppliersto what technology we use and why.
It has also brought significant awareness to the importance of a resilient, secure and reliable supply chain. This, in turn, says Tim Moore, has led to an increased interest in completing your supply chain qualifications:
‘Thanks to COVID-19 and the awareness of Supply Chains there will be a long overdue “spike” in the number of new students enrolling in supply chain courses.’
‘Fortunately, I think there are now many degree programs ready to cater to this boom and help rectify today’s shortages of supply chain talent.’
Is an increased interest in a supply chain as a career going to pose a threat to today’s seasoned supply chain professionals? Not really, says Tim, but if you are at a more junior level, standing out when applying for jobs will become more important than ever.
Fortunately though, more qualified junior talent in supply chain will be of great support to teams this year who have a lot to grapple with throughout the pandemic and beyond.
Tip 2: Your profession has skyrocketed in importance and awareness – make the most of it
Prior to writing this, we Googled whether there was such a thing as the ‘Year of the Supply Chain’ (sort of like the Chinese Zodiac “Years Of”). Sadly, there wasn’t.
But if there was, undoubtedly it would be 2020.
At no time in history has supply chain management been as crucial and all-defining as it has been this year. Suddenly, procurement and supply chain has gone from an overlooked ‘function’ to the crucial heart of the organisation. If ever you wanted to be strategic, get noticed and truly ‘take a seat at the executive table,’ now is the time to do so, says Tim. But you have to be strategic and proactive.
He truly believes that this year will be career-defining for many supply chain professionals who step up and take the initiative:
‘There has never been a time since the second world war, when the supply chain profession, and the techniques they bring, have been so important and visible to the senior executive within the firms that employ them.’
‘Every supply professional has learned lessons about the vulnerability of their particular supply chain(s) – and should be proactive taking steps to reduce the risk of disruption in the future.’
‘You can’t afford to wait and gamble that it won’t happen again…it will.’
Tip 3: Salary surveys may give good insights – but be careful how you use them
With the supply chain profession being elevated in importance, and businesses (hopefully) edging towards recovery as the year continues, opportunities may increase for people in the hunt for a better salary. But Tim cautions everyone to be very careful when it comes to the old ‘grass is greener’ salary argument.
Tim has seen many supply chain professionals become disgruntled because they believe they are being underpaid. Yet the places they get their information may not be what they seem:
‘I’ve heard some people say that “money talks” and they’ll crack open an industry salary survey to try and determine whether they’re ahead or behind others in terms of the salary curve.’
‘The thing is, those surveys can be almost impossible to fully interpret, and are often misleading to the casual reviewer.’
Especially this year, Tim says, salary survey results may not be able to tell you much as many companies are freezing pay levels and asking employees to take pay cuts. The ‘greener grass’ may in fact not be green at all when it comes to pay.
Yet should you still use these salary surveys as leverage in your own pay discussions? Tim says:
‘In any salary discussion, it’s important to know what your range should be, based on firms of the same size, in the same industry and of the same profit level. But really, it’s hard to glean this information from a survey so likewise, hard to use this as leverage.’
‘Pay discussions should be based more on your achievements and your tenure with the firm, whether the firm has been profitable and frankly, whether or not there has been recent layoffs or downsizing.’
Tim cautions, though, that now might not be the right time to ask for a salary increase:
‘In some cases, people should be happy to have a job, let alone be seen as gouging their employer for demands for a salary increase.’
Tip 4: Consider the big picture – and put your negotiation skills to good use
The coronavirus pandemic has wreaked havoc on economies, lives and jobs losses, and that means that inevitably, some supply chain professionals might find themselves without work this year. This is a terrible outcome, of course, but when the market picks up Tim does genuinely believe there will be more opportunities than ever.
But when and if we all decide to accept an offer of employment, Tim believes that we should consider the ‘big picture’ of what an employer is offering; as it will be more important than ever before:
‘When considering a new opportunity, of course look at the salary range, and compare this to your competitors and your industry at large.’
‘But remember, as your supply chain training has taught you – salary, like price, is only one element to consider. Think long and hard about other benefits, for example: educational reimbursement, membership in your local supply chain association, bonuses if any, (and how frequently they’re paid), stock options, and healthcare and dental coverage.’
‘Post-COVID, increased benefits may be easier to achieve than a dramatic salary increase..’
When it comes to negotiating your package, however, Tim believes that supply chain professionals need to remember their training:
‘I’ve always maintained that you never get paid what you’re worth, but you ALWAYS get paid on how you negotiate and how well you have interviewed.’
‘It’s surprising that so many supply chain professionals go blank and completely forget their negotiation training when presented with a job offer. After you feel confident that you’ve checked all of the boxes and know you’re the right fit, just like with negotiating with vendors, you can always ask for: 1. Time to consider it further, 2. For the offer to be put in writing, and for those adventurous 3. “Is that the best you can do?”’
With the final request, Tim says, if you execute it politely and professionally, you may be able to leverage up your offer.
Tip 5: Ask the hard questions
With unemployment approaching an all time high, many of us may be forced into a ‘beggars can’t be choosers’ type situation, where we simply take the first job we can get. But nonetheless, Tim says, you should research the company you plan to join, because if you do end up having to leave after a short amount of time, it may not look great on your resume.
In order to research the company you plan to join, Tim recommends the following:
‘Find out about everything. Look up the organisation’s products and services, read their financial reports, look at their social media accounts. Make sure you take detailed notes in all of your interviews, and don’t be afraid to ask why they’re interested in you and how you might fit exactly within the role in their eyes.’
‘But more than that, ask some harder questions. Ask WHY the position is available, and what happened to the previous individual in the role? Enquire as to how long they were in that role? You’d be amazed at what you can uncover!’
There’s very few professions that will be able to claim that 2020 was a great career year. But for many of us in supply chain and procurement, we might just be able to surprise ourselves.
Will you negotiate harder for your salary increase or greater benefits this year? Or are you concerned about competition? Let us know in the comments below.
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How do you lead through difficult times? What four key roles should all leaders play?
This year has been one of the most challenging in modern times for business leaders, organisations and employees worldwide. And as many famous quotes allude to, nothing is tested more in challenging times than leadership. Many leaders step up and shine, yet just as many fall victim to stress, anxiety and frustration, leaving them a shadow of their former selves.
So how do you make sure you’re the former?
One person that knows how to lead in the best of times, as well as in the worst, is Vice-President of AI Applications and Blockchain at IBM, Amber Armstrong. Amber’s illustrious career at IBM started when she joined the company as an MBA graduate 13 years ago, and she’s quickly risen through the ranks.
Amber joined us for our latest podcast episode in the IBM Career Bootcamp series to delve into all things leadership and in particular, how to lead through difficult times.
Here’s what you’ll learn in the podcast:
What does being a great leader actually mean and how would you define your personal leadership style?
Over the years, the definition of leadership has evolved enormously. Leaders, recognising that the more authoritarian styles of leading are no longer effective, have begun to diversify their styles away from command and control and towards a more inspiring vision of what leadership should be. But is inspiring others the sole role that leaders need to play nowadays?
Not at all, according to Amber. Amber thinks that there are four things every leader needs to do in any organisation. In fact, Amber believes that these four things are so important that she had her team of executive managers agree to them as part of a leadership pact.
Amber is clear on what she thinks these four things are:
‘Leaders should, in my opinion, set the vision, communicate clearly, prioritise relentlessly and finally, coach.’
Throughout her career, Amber has used these four priority areas to not only lead others, but also to gather feedback and learn and what is and isn’t working. Beyond these things though, Amber has also put considerable thought and effort into her leadership style and has come up with a personal mantra that describes how she personally wants to lead:
‘From a personal brand perspective, I aspire to be known as someone who is passionate, focused and kind.’
‘And in moments when things get particularly tough, there’s one particular thing I try to have more of.’
How do leaders develop their own personal style? Should they do this through experience or through someone like a coach?
Amber’s personal leadership style is well-known and admired at IBM. But how do we all go about developing our own unique version of that? Amber has developed her style through a combination of experience and also through working with an executive coach, and she believes both of those things helped her get where she is today.
From an experience perspective, Amber believes that it was through making mistakes and having empathy that she came to develop her current style:
‘I joined IBM 13 years ago after I graduated from business school, and fortunately, I’ve been given a lot of opportunities here. This has led to many successes and also countless mistakes, but I’ve taken the opportunity to learn from each and every one of them.’
Amber remembers one particular period in her career where she came to understand the critical importance of kindness as an element of her personal leadership style:
‘At one point, I was told I have to give a lot of people bad news, news which would affect their personal lives.’
‘I put up a sign at my desk with my mantra, the words passionate, focused and kind. I felt such comfort having those words there, it helped me to turn them into a reality throughout that difficult time.’
Recently, Amber also started working with an executive coach who has further helped her shape her leadership style. This has been beneficial for one specific reason, she says.
Can you lead without necessarily having a leadership position?
Amber has had an extremely successful career, and now manages a large number of people, including fifteen other managers. But for those of us who may not be in such senior positions, or perhaps those of us who may not be leading anyone at all, is it still possible to be a leader?
Absolutely, Amber says.
In fact, there’s one thing she thinks all leaders need to do, regardless of our level of seniority:
‘If you want to lead, you need to take care of yourself first.’
‘For me, I do three things to take care of myself. Firstly, I run a mile, I make sure I sweat. Secondly, I walk 5,000 steps every day and then thirdly, I meditate for ten minutes. Self-care is so important.’
Beyond self-care, Amber also wants to let us all in on a little secret, and it’s an important one. In a nutshell, even leaders with a great amount of authority (those who are senior and have a lot of responsibility), don’t really have authority unless they can garner respect. Amber explains:
‘To be a leader, you need people to respect you, you need them to trust you. So even if you’re an authority figure, sure, you can force people to do things but that isn’t leadership.’
‘Leadership is about creating clarity and building respect. You need to be able to influence others in a positive way.’
Also in the podcast:
What needs to change about our leadership styles in these challenging times
The pink recession
And much more.
Amber Armstrong’s podcast on leading through difficult times is part of our IBM Sterling Career Bootcamp. Designed to power your mind and help you excel, the Bootcamp consists of 6 electrifying podcasts with internationally renowned experts and speakers. Sign up here if you haven’t already.
What are the decisions to make when planning for the next normal in outsourced services?
As we slowly and cautiously, masks on and two meters apart, think about emerging from the COVID-19 crisis, there is quite a bit of uncertainty about what the world will look like when we step back outside. Knowing there is no cure or vaccine on the near horizon means workplaces will be different. The economic impact of the virus has changed the corporate landscape. What we thought was temporary just may be permanent.
For procurement teams managing outsourced services categories, there are more questions than answers. While we grapple with this uncertainty in our own companies and careers, we must also set expectations with suppliers. It’s a double challenge.
Early in the crisis, the focus in services was enabling a transition to work from home. While that may have been a small speedbump for office roles in developed countries like the US and Australia, certain offshore locations faced additional challenges. Offshore service centres scrambled to enable workers who used fixed desktop computers and worked in clean room environments to ensure data security. MSA waivers were given to service providers, and large firms compromised a bit on standards as we rushed into what appeared to be a short-term fix.
For the most part, providers managed to keep the virtual lights on; while reports varied, most services were stabilised within two weeks. Providers of voice services struggled a bit more, but end-consumers also adapted and accepted an online solution as a sufficient substitute for a call. We dug in and started to think about the next stage – what if the virus infected so many people that a significant percentage of workers were out sick or caring for loved ones? We talked about talent resiliency and resource continuity planning. Save for a few heavily impacted areas (New York City, Mumbai), the lockdown worked, the curve was flattened, and there has been no significant productivity drop (yet). In fact, some buyers and suppliers are claiming productivity is up in this new work from home world, and that’s changing how we view the future.
So, what’s next? At Everest Group we see two paths in play: a scramble to reduce costs and prop up financials in light of the recessionary environment, and a reset to what we call the “next normal” in outsourcing and offshoring. Where your company and your procurement team fall on these paths will vary quite a bit by industry, corporate strategy, and even timing.
The coronacrisis is changing outsourcing and offshoring very quickly
Shoring up cost structures
While some industries were hit exceptionally hard by the crisis (retail, travel, energy), some seem to be weathering the storm with a more limited impact (banking, food and beverage, life sciences), and others are thriving (high tech, home media). Regardless, the drop in consumer spending and high unemployment will have a ripple effect across all markets.
Smart CEOs and their boards have started to buckle down. In a late April 2020 survey, 71% of companies were looking at operational costs, while 62% were addressing external spend. Since then I’ve had contacts in procurement say “I thought our costs were competitive, but my leadership wants more.” Outsourced services spend tends to be a significant cost, so expect to hear that knock on your door if you haven’t already.
Where to start with cost cutting? We shared tips to optimise and modernise delivery in our “5 Cost Levers To Pull Right Now With Your Outsourced Services” webcast on Procurious. That advice still stands, and you can hear more directly from our pricing assurance practice leader in this new session on “Outsourcing Pricing: Key Opportunities to Improve Costs Now”. As we said in both sessions, this is not a time for hard line, tactical negotiation. It’s a time to look at modernising your model and making structural changes that benefit both buyer and service provider. Regardless of where you are in the term of your contract, it’s a time to arm yourself with knowledge of the market and have a serious conversation with providers about how to take costs out of the system.
What are you doing to prepare for the “next normal” (or to return to some sort of business as usual)?
Planning for the next normal
The other path is nearly universal to all organisations: navigating next steps as we struggle to emerge from the crisis. While these decisions stand on their own, they are also deeply intertwined with cost takeout initiatives. Through many conversations with service providers and buyers we have outlined six key areas of focus. No one knows all the answers to these questions yet, but for each component there are targeted questions to ask within your organisation and to your service providers.
Sourcing strategy and provider portfolio
Do we need to prune our portfolio to strengthen the core?
Shall we consolidate providers or diversify our portfolio?
Which activities should be brought in-house?
Which new activities could be outsourced?
Are there changes in the scope of our agreements we should consider?
Should we shift more work onshore or offshore?
Where are we too geographically concentrated?
Which countries would diversify our portfolio?
Where do we need multi-location mitigation plans?
How will office space restructuring affect service centre output?
Will remote work be allowed or encouraged by providers?
What new skills are required? Where is retraining needed?
Pricing and cost
How should we change our pricing model?
Are we paying the right rates?
Are we getting enough value?
Where can innovation reduce operational costs?
How do we measure productivity in a remote environment?
How do our SLAs and metrics need to change?
What new relationship management techniques are required?
How do we build in incentives for innovation?
Policy and contracting
How do we ensure information security and compliance in the new environment?
What policies need to change to support this new strategy?
What flexibility needs to be built into contracts?
How has liability changed for either party?
How should our business continuity planning change?
Which new data sources do we need to improve monitoring and mitigation planning?
How can we enable more agile sourcing decisions?
Decisions to make when planning for the next normal in outsourced services
In our recent discussions, the greatest focus has been on planning for solution design, risk, and governance. Of course, the path for each of these areas will dictate cost models and price. A few significant decisions set the foundation for others and seem particularly tricky. The first is partner strategy. Balancing a multi-country strategy to mitigate risk seems to contradict the desire to bring down costs by concentrating work with fewer providers. While this seems counterintuitive, we’re at a point where everything is on the table. It makes sense to reconsider location models while reassessing the partner portfolio.
Even the concept of pushing for cost reductions feels a bit tacky for some vendor management folks, given these are strategic partners and we’re all weathering the same storm together. That’s why we need to think win-win in modernising delivery and reshaping solutions in a way that benefits both parties. Simply asking for line item discounts for crisis-related shortcomings will not get us there. We often talk about “strengthening the core” – that means letting go of lower-performing providers to focus efforts on high value relationships with strong partners. Keep in mind that most of the top 25 service providers are in a relatively good place financially. While they don’t want to give up margin, they do want to do the right thing for their clients, including structural and digital improvements. They can even enable these initiatives both financially and with a different level of expertise. While these may not be the easy, short term cost take-out tactics we might want, they leave us with a stronger and more cost-efficient portfolio longer term.
I wish I could end this blog post with a very simple recommendation for surviving the crisis and thriving in the next normal, but that just isn’t realistic. There is no one right answer. Of course, it depends on your industry, your current portfolio, and many other factors. You can, as a procurement professional, arm yourself with the tools to facilitate the development of a plan with all stakeholders. Start with the checklist above to make sure you don’t miss critical decisions. Dust off your make/buy model, category strategy, and any previous location analyses. Check in on your rates and contract competitiveness, performance data, and risk profiles. Ask your service providers their proposed plans, see how they mesh with your MSA and policies. Your team has decisions to make, your role is to make sure they are fact-based and all possibilities are on the table. If you’re missing parts of this list or need a sounding board, the Everest Group team is available to help.
Assistance for services buyers
During the COVID-19 crisis we are offering pro bono assistance to services buyers in the procurement community:
A locations data check comparing two global locations on key factors such as size of entry level talent pool, market landscape of providers, financial attractiveness, and operating and business environment risk – consider whether geographic diversification is a smart move.
A service provider risk profile covering four key parameters (finance, governance, operations, reputation) – find out if there are underlying concerns with your provider beyond the immediate crisis.
Complimentary price checks on up to three standard roles in three different locations – a pulse check to see if your rates are in line or out of line with the market.
COVID-19 creates new career opportunities for procurement and supply chain professionals, despite recent job losses and pay cuts.
COVID-19 wreaked havoc on the job market. The most recent U.S. analysis reveals that 21.5 million Americans remain unemployed. In the European Union, 397,000 people lost their jobs in April, according to the EU’s June report. Globally, Citi projects that 44 million people around the world, excluding China, could lose their jobs due to the pandemic.
The procurement and supply chain function is not immune. Our research, which was conducted between 4/28 – 5/12, found that 20% of supply chain and procurement departments experienced job cuts due to the crisis. Diving deeper into those numbers:
Nearly half (48%) said the job cuts were limited to about 10% of the team
15% said their teams experienced cuts of 50% or more
Similarly, 23% of respondents said they were forced to take pay cuts. Of these:
38% saw pay cuts of about 15%
32% saw cuts of about 25%
10% saw cuts of about 33%
19% saw cuts of 40% or more
Millennials took the most pay cuts (32%), while Boomers took the least (18%).
While these numbers are alarming on the surface, they may not be as severe as they appear. A recent U.S. survey from the Census Bureau found that 47% of adults said they or a member of their household had lost employment income since mid-March. This may indicate, on a comparative and anecdotal level, that procurement and supply chain practitioners have somewhat been spared.
The harsh reality: Given the magnitude of job loss across the world, it was always a matter of how much, not if, procurement and supply chain functions would get hit. Across many industries, it simply did not matter how talented you are, or the results you produced. Many organizations saw revenues drop by nearly 100%, which naturally (and unfortunately) affects employment.
The good news comes in what’s next. Our research found that the majority of organizations are valuing procurement and supply chain like never before. More than ever, procurement and supply chain leaders play a critical role in organizational resiliency, recovery, cost controls and business continuity.
Go-forward job confidence reflects this thinking. On a scale of 1 – 5, weighted job confidence for the next 12 months is 3.96—meaning procurement and supply chain practitioners are more confident than not. Nearly half (43%) said they were extremely confident they would have a job 12 months from now, compared to only 5% that said they were not confident. We see this confidence mark as an incredibly positive sign considering the employment turmoil around the world.
Could this confidence – along with the newfound appreciation for procurement and supply chain – lead to more promotions? While it’s safe to assume most organizations will take a tepid approach to compensation and spending for the foreseeable future, we believe this crisis will create fresh career and financial opportunities for Generation Next. If anything, this crisis – and the strong performance of teams across the world – crystalizes the importance of investing in people, technology and the overall function, which should open up more (and new) doors.
Building on this dynamic, the majority (73%) of organizations we surveyed are planning seismic shifts in supply chain and procurement strategy post-pandemic, including supply base expansion, inventory management changes, and reductions in supply chain globalization. These changes represent fundamental shifts to traditional approaches, and will require substantial smarts, experience and an immensely committed and results-driven team for success. All of this points to higher demand for great people.
There’s no escaping the chaos caused by COVID-19, especially when it comes to jobs. But for procurement and supply chain leaders, the light at the end of the tunnel is bright.