Out and About in APAC - Hot Topics and Procurement Trends

Friday, July 26, 2019

Graham Crawshaw, Global Services Director, recently led a CASME Asia-Pacific procurement tour, which involved speaking at the CIPS Australia and ProcureCon Singapore conferences, as well as presenting several briefings to CASME members in the region.  In this special blog, he outlines the similarities between procurement challenges worldwide and the extent to which ethics in the supply chain is becoming a more important issue for APAC members to address.

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During July, I had the pleasure of meeting a significant number of procurement professionals operating in the APAC region.  More than 120 delegates were in attendance when I presented ‘Procurement’s Hot Topics and Future Trends’ in Kuala Lumpur, Sydney, Melbourne and Canberra.  I was also given the opportunity to participate in ProcureCon Asia in Singapore and the CIPS Australasia conference in Melbourne, and I found it interesting that the companies operating in these regions are facing the same challenges as those in Europe and the Americas.

The main objectives and procurement hot topics are:

  • Adding value beyond savings
  • Supplier relationship management
  • Compliance and governance
  • Risk management
  • Encouraging innovation
  • Stakeholder engagement
  • Sustainability.

 

Procurement’s Efficiency

Digitalisation is another theme currently being discussed in many organisations; however, it shouldn’t be the only focus for Procurement.  Instead, it should be viewed as an enabler for the business processes to operate more efficiently and with fewer people.  We discussed the possibility of Procurement making a business case for digitalisation, because doing nothing is not an option – a message that was clearly echoed by the audience.  It became apparent that at a practical level, more companies are implementing projects to introduce cognitive procurement.  This includes smart machine learning to help with tasks such as matching the values stated on complex professional services rate cards with those on statements of works and supplier invoices.

Despite the current trends for implementing digitalisation, artificial intelligence (AI) and machine learning, it is evident that the procurement function still relies so much on establishing successful working relationships.  From supplier relationships which tease out value and innovation, through to relationships with internal stakeholders to position the function as a business partner, Procurement’s role is predominantly to add value, not simply to be a savings generator.

In the Asia-Pacific region, the emphasis is to ensure that procurement professionals are trained, certified and possess the correct level of the skills in:

  • Change management
  • Commercial acumen
  • Digital and data interpretation
  • Integrity and unquestionable ethics
  • Relationship management and influencing
  • Story-telling ability
  • Strategic agility, which must be based on relevant experience rather than academic.

All these abilities must be balanced with the personal characteristics necessary to build and maintain stakeholder relationships.

 

Ethical Practices

Having recognised that risk, governance and compliance are hot topics, CASME recently responded to a member request to specifically identify the approaches being taken by organisations to manage ethical procurement.

Ethics in the supply chain is an increasingly important concern for procurement practitioners in the Asia-Pacific region.  In June, CASME conducted a membership survey which was used to support a topical roundtable discussion at ProcureCon Singapore.

Nearly all the CASME members who responded to the survey (94%) indicated that the governance of ethics in the supply chain is included in their organisation’s corporate, social responsibility (CSR) policy.  This policy is used to govern both Tier 1 and Tier 2 suppliers by 52% of those sampled.  In practice, the governance of ethics either takes the form of a code of conduct (48%) or a formal, structured programme (42%).

The majority of participants placed high importance on anti-bribery and corruption (ABC), labour laws, anti-slavery and environmental impact.  Almost 90% of the organisations surveyed have an existing whistle-blower procedure that enables employees to report misconduct in the supply chain. This demonstrates that the procurement profession is continuing to make headway in its attempts to become more transparent and implement ethical practices.

 

In conclusion

By ensuring compliance with anti-slavery legislation, taking a lead on improving ethics, and considering environmental impacts and sustainability, there are plenty of high-potential opportunities for Procurement to take ownership, add value and make a difference within the organisation.

Graham Crawshaw, Global Services Director, CASME 

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