We spoke to procurement and supply chain directors across our network to find out how COVID-19 impacted short and long-term plans across the industry. This included leaders at defence, aerospace and IT organisations.
We kept all the responses anonymous to allow for complete transparency and freedom of speech.
Each respondent echoed this statement, discussing the spotlight shone on their departments. This focus is an effort to maintain a flexible cost base that can be ramped up or down, according to demand. All respondents agreed that such business agility is more important now than ever before.
The importance of strong relationships
At its heart, procurement is a collaborative department, liaising with multiple suppliers and internal key stakeholders. The crisis has shown that relationships are everything, with changes in payment terms, deferments and reductions in scope cited as some of the main reasons for having solid partnerships with suppliers.
“It’s easier to flex when you have a trusted, transparent relationship,” pointed out a director in the professional services industry.
Having open, honest communications with suppliers during lockdown, enabled decisions and cost savings to be made quicker, and more efficiently. Ultimately, the crisis has meant investment decisions being delayed, or even put off indefinitely, with difficult conversations had across a range of industries. These demanding discussions put true partnering with suppliers firmly at the top of procurement directors’ agendas.
“Our suppliers need to step up and provide solutions which truly develop our plans and capabilities. Suppliers who understand our business need to drive down cost and put a halt on non-critical projects, become our partners – we feel like they are genuinely in the trenches with us. And these are the partners we’ll ensure are factored into our long-term growth strategies.”
More time for strategic thinking
In the first instance, procurement – as with many operational functions – was diverted to crisis management and cost streamlining. Once this reactive phase passed, with suppliers kept in the loop on parked/stalled projects, there was a more proactive stage where procurement focused on projects and programmes that could still be achieved.
Working from home was described as “efficient” by all respondents, allowing the whole department to catch-up on long-standing tasks and have time to focus on “innovative thinking and strategic goals”.
“It’s only when you’re away from the day-to-day that you really have time to think differently,” said one department head. And that’s reflected in a range of studies. According to Harvard Business review , “ in a remote working environment you are often physically distant from the site of the problems you’re trying to solve and you therefore think about them more abstractly.”
This space to think – combined with regular remote face-to-face meetings, using platforms like Zoom – has meant more teams are making innovative changes to processes and workflows that they may never have done pre-crisis.
What does the procurement team look like next year?
“Virtual teams will be the norm and I can only see us returning to the office for a project-specific basis,” says the procurement director of a global solutions provider.
For larger businesses, respondents agreed that they saw less and less travel/commuting on the horizon. “We will try to avoid the concept of 9-5 working,” said one aerospace leader boldly, whilst another added that “employees will want the right to choose where and when they work.” The freedom and empowerment that employees have been given cannot now be relinquished.
Meanwhile for mid-market firms, procurement heads saw a flexible balance between remote and office-based working; yet were keen not to lose the benefits of the former.
“If I look forward 12 months, I see a change to the way we operate, but maybe not to the extent we all think. There will be a creep back into the office, although working from home will still be seen as usual. Office-based working will be used for collaboration and creativity time, as opposed to the norm.” (IT procurement lead)
The impact remote working has had on mental health and wellbeing was raised frequently, with home-working largely having a positive effect on work/life balance. However leaders were keen to point out that there is no one-size-fits-all approach. Some workers felt isolated or more pressured in the home environment, so it’s all about taking an individual-led approach to where and when we work.
“There are some functions and individuals who don’t enjoy remote working, and we need to create solutions for them. We are after all humans, and thus are pack animals on the whole,” commented one tech leader.
Conversely, whilst remote and flexible working has been positive for supply chain teams, most agreed that one area that could prove challenging is maintaining the aforementioned strong relationships with partners. Many of these relationships have been cultivated in person and will need to be managed carefully in a remote setting. Each leader agreed that putting time and effort in maintaining collaboration with partners is key.
Tech to improve jobs
With the fourth industrial revolution in progress, there is opportunity to bring in technology which reduces the drudgery of repetitive tasks and plays a critical role in supply chain engagement. According to an IT solutions procurement lead, this tech needs to be “cross-functional and enable tight deadlines to be achieved.”
Whilst tech on the whole is welcomed by the group, one leader commented that some people may have difficulty with the freedoms given by releasing them from tasks that automation tech could do faster:
“Some employees who are more autocratic and prefer micromanagement will struggle to accept the new world, and may prevent or limit the benefits of flexible working and the value of technology.”
Ultimately though, change is necessary to drive procurement forwards; with the most popular technology enhancements including bespoke workforce and supply chain management tools , the use of AI to improve supply chain resilience, cloud-based supplier management and process automation.
Whatever the future holds, we can all agree that procurement never should be the same again, and that we need to take this opportunity to innovate, think differently and reward the people at the heart of our organisations.