Big Ideas in Procurement in Asia-Pacific

With a huge geographical area and diversity of cultures and industries, procurement in Asia-Pacific is both highly complex and fascinating.

Ahead of the Big Ideas Summit 2016 on April 21st, we are taking a look at the key issues facing procurement in the coming years. We have asked experts and influencers in our community to share their Big Ideas on the themes we will be discussing on the day.

Here, experts who work in procurement in Asia-Pacific, share their thoughts on the Big Ideas impacting organisations and industries in Procurious’ second largest market.

Gordon Donovan, Procurement & Supply Chain Manager, Metro Trains

Talent – With the release of the recent Deloitte CPO survey, attention has once again fallen on talent – acquisition, developing and retaining.

Over 60 per cent of CPOs feel that their teams do not have the skills needed to perform their roles. However training budgets have largely stagnated, if not fallen.

There is a feeling that the traditional methods of training are not delivering the results required, therefore the onus now falls on more applied learning programmes that have a direct correlation to the workplace.

The big idea here is to focus on these types of learning activities which will deliver an immediate ROI as well as taking the theory from the classroom to the application.

Supplier Pre-qualification – Procurement needs to be agile in responding to its stakeholders, both internally and externally. Procurement also needs to “get more done with less”. Therefore, attention is turning to dealing with a set of suppliers who have already passed the hurdles required to supply to an organisation.

The need to ask the same question multiple times adds to the lack of turnaround time in procurement, and frustrates suppliers. Pre-qualification allows these questions to be answered once, and also will allow procurement to have pass fail/rates for areas such as supply chain transparency and accreditation.

Accreditation – Accreditation of your supply chain is becoming the hot topic in procurement. Do you know who you are dealing with and how your suppliers operate? Are we are aware of the ethical and sustainable issues within procurement and within the wider supply chain?

The hot topic now for procurement in Asia-Pacific, and across the globe, is how do we accredit our suppliers/supply chains and how do we ourselves gain accreditation for our policy and process to deliver value to our organisation.

Madeleine Tewes, Project Manager, Australian Maritime Safety Authority

Internationalisation – Traditional, family-controlled businesses across Asia are increasingly choosing to internationalise. Some Governments are supportive of this internationalisation. For example, one of the core tenants in China’s 2016 – 2021 Five-Year Plan is internationalisation, with many Chinese companies expected to ‘go global’ in this period.

As part of this process, many businesses are now looking to American, European and Australian consultancies and technology providers to radically overhaul their business functions and processes including procurement.

The overhaul includes tasks like introducing business English into meetings and contracts, expanding supplier bases, implementing technology to automate processes and provide greater spend visibility and even setting up procurement teams where before all that existed was purchasing clerks within a Finance team.

Mark Gibbs, President of SAP Greater China, notes that China is SAP’s second home, and that the trend of internationalisation is continuing to support the “massive cloud computing and e-Commerce expansion” that has been in progress over the past few years.

Innovation driving competitive advantage – Singapore has a focus on pioneering advances in innovation and driving competitive advantage for growth according to Teo Lay Lim, MD, Accenture Singapore and ASEAN.

More broadly in Asia, innovation is increasingly being recognised as the key to sustainable growth by companies around the world and as Capgemini research points out, innovation has evolved from a purely internal capability, to a collaborative process with the external network of supply partners.

Therefore, the ability of procurement to work with suppliers to identify and execute innovation within existing contracts, and to stimulate innovation outside of existing arrangements, is a key part of the procurement value proposition.

Some simple observations from Singapore include having incentive schemes in place relating to innovation in supplier contracts, having innovation as an agenda item on regular meetings with key suppliers as well as internal stakeholders, and having KPI’s in place which reward procurement team members for focusing on innovation, rather than relying purely on traditional savings or throughput metrics.

Corporate Social Responsibility – Research conducted by the Harvard Business School found that organisations who focus on corporate social responsibility (CSR) significantly outperform their competition in terms of stock market and financial performance.

One Singapore-based organisation, Fuji Xerox, describes their view of CSR very clearly, “…forging a link between long-term competitiveness and the sustainable development of society and the company…”. This seems to be a view echoed by a growing number of organisations across Asia.

Each of these organisations will have a different ways of using their procurement team to support their organisation’s focus on CSR. However, an IBM IBV CPO study found that 97 per cent of successful and influential procurement teams are significantly involved in their organisation’s CSR initiatives, compared to 61 per cent of average procurement teams.

Regardless of the current maturity of a procurement team though, or if it is the organisation driving these initiatives or procurement lobbying for them, clear KPIs (results driven rather than process orientated ideally) will allow procurement to demonstrate the value it is providing to the organisation.

Do you work in procurement in Asia-Pacific? What’s your Big Idea for the future of the profession? Let us know and we could be discussing them on April 21st.

Want to know more about Big Ideas 2016? Then visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.