Posted 17th Oct
Procurecon 2019 has given some great insights into the underlying themes in procurement, and a number of areas are worth reflecting on.
The core of discussion this year has had a ‘digital’ theme to it: how can digital improve or influence procurement, what are the components we can think about, how can we have a digital future. Much of the commentary and discussion suggests that there is an underlying challenge in determining just what this all will mean over time, particularly when looking at the issues individuals face when trying to deliver excellent outcomes - such as getting alignment with stakeholders.
However, there is another underlying theme, breaking out in side discussions and covered in at least one mainstream presentation: that is ‘sustainability’. This, in part, links to the need for procurement activity to be closely aligned with the strategic direction of our organisations. It also reflects that the external environment, in some marketplaces, is driving heavily at a sustainability message and ethos.
At a detail level, this requires a significant amount of thought to build sustainability into category strategies, as some of the initiatives are likely to be very impactful: not just in terms of delivering a sustainability outcome, but having complex interlinked outcomes some of which may be unintended without good analysis.
One swift example provided was the impact a heightened sustainability agenda will have on packaging, much of which has disposable plastic elements within it. Identifying alternative solutions and technologies, rebalancing a set of business requirements, finding suppliers with new capabilities, and making sure that the eventual outcome is acceptable to customers is a significant task. In recent times, we’ve seen major chain restaurants move from plastic to paper straws; some of that has been successful, and some less so as the replacement items behave differently than the original single use plastics.
If we multiply the need for innovation to deliver sustainability out across a wide range of product lines, we can see the scale of effort needed to attack this agenda, while aiming to hold the line on availability, customer overall experience, quality. Within all of this is the risk of unintended consequences, as there are often impacts which are unexpected, which turn up in early testing or, worse, once in volume use.
We also have to allow for th e capacity for change in the organisation. Changing packaging materials for liquids is a substantial effort. Different equipment, different line speed, different handling requirements, retraining, marketing effort, even simple things like getting ink to stick to new materials, can all add time and effort to what looks initially like a simple change.
Even services have a challenge in this space, defining what sustainability might mean in a service environment. Where substantial travel is involved, there may be a need to reconsider provision, push for even more teleconference use or, in extreme cases, follow Greta Thunberg’s example and sail the Atlantic.
While writing this, I can hear here separate conversations in this area going on around me. It might not be digital, but it is certainly a hot topic.
Let’s see where it takes us, and how we can get out in front of it.
by Mark Hubbard