Recently, procurement executives participated in the ProcureCon Indirect Virtual Event, a 3-day event of core procurement discipline sessions and discussions regarding the ongoing response of procurement through the pandemic. Steve Braat, VP of Business Strategy and Development at BuyerQuest joined executives from AAA and Citrix for a ProcureCon panel discussion entitled, “Panel: Capitalizing On And Sustaining Procurement’s Wins From The Pandemic.”
During the session, the various procurement leaders shared their experiences and how their respective organizations have responded to the dramatic changes to supply chains caused by the pandemic and what they have learned.
Christian Widmann, Principal Global Category Lead (Business Services - Indirect) at Citrix noted that with events being canceled, the business had to find new ways to do business as well as alternative methods to interact with staff now working from home. Like all businesses, the organization had to move forward and continue to work.
Mark Richardson, Head of Procurement and Fleet at AAA-California saw the positive impact of some of the changes forced as a result of the pandemic. Vendor risk management, an important component for procurement, was elevated in priority to the C-level. More nimble suppliers that were able to overcome issues with creative responses will likely become more strategic vs. those suppliers that could not. Finally, with staff unable to come to the office, hybrid digital models became fully digital, with very little paper being processed.
Steve Braat pointed out that many companies that were in the midst of a technology transformation “hit the pause button” in the short-term and returned to business fundamentals, with a more tactical focus on product delivery vs strategic projects to drive cost reduction and revenue.
Analytics Played a Role
Organizations have been driving process optimization since as far back as the 1940s. The global pandemic, as Steve assessed, was a worldwide “stress test” for the systems, individuals and technologies at an unprecedented scale. Steve shared BuyerQuest’s observations of the different responses and the role analytics played.
Companies with “ruggedized” systems and processes were able to look across the 10’s of thousands of suppliers, and billions of dollars in spend to uncover trends that could be used to predict future actions. Some of the areas of analysis included:
- Different product search patterns
- Changes to supplier onboarding (speed, location, categories)
- Relaxation of permissions & approvals controls across the value chain
- Various bundling trends around sanitary and PPE purchases
With the intelligence available companies were able to be preemptive and not just reactive. This allowed them to get ahead of issues that may have begun in one region and had not yet occurred in another by preemptive sourcing, supplier onboarding and other activities.
For Mark at AAA, the demand challenge created through the natural “hoarding” behavior had to be managed as local stores reopened and needed to be outfitted with appropriate materials. As stores made requests, the organization used calculations to determine how much the store needed for a 2 week supply versus their order amount.
Buying Become Local, Suppliers Got Creative
For larger, global organizations, it was challenging to meet supply needs from centralized sourcing. With the situation changing regularly and each geography having different restrictions on operations, it became critical for these central leaders to trust their local teams to make the best decisions for their region.
One of the panelists shared an anecdote around their experiences with their trusted supplier. A supplier who typically provided IT category items such as pc’s, keyboard, monitors, etc., was delivering hand sanitizer. To ensure the sustainability of supply, one of the companies was paying suppliers with checks at delivery.
Being Ready for the Future
At the end of the discussion, the panelist agreed that a lasting effect of the pandemic will be a higher priority placed on risk and risk management. Specifically, one panelist theorized that a new category of risk, “exposure vulnerability” could be a new factor.
The wide-ranging panel discussion highlighted the importance of digital processing, vendor relationships, intelligent applications of analytics, and the ability to transition from central execution to local execution to weathering unforeseen events.