chain networks and respond swiftly, but building resilience is the new approach. Supply chains are more global, more intricate and all buyers will need to understand the cost of mitigation at various points, for example at the early negotiation of contracts stage. Plans should become more resilient and robust at the earliest opportunity. Knowing how the true cost of risk transfer works, means closer collaboration with finance teams rather than being at loggerheads. So, we all need to get smarter around risk. According to the CIPS Risk Index powered by Dun & Bradstreet, in 2016, risk was at its highest level since 2013, and understanding what this means for your department means better management of taxpayers’ money and protecting reputation and trust in procurement capability. The impact of upcoming Brexit cannot be underestimated, as it reflects the global move from globalisation to more protectionism and closed-off borders. What this will mean to free trade and free, flowing, flexible supply chains is something that procurement teams can advise and manage. It is likely that relationship
management will become more complex and the new world order a different place from that enjoyed in the last few decades. One thing is certain, to manage those risks, to seek expertise in other areas, suppliers will play an increasingly important role, not just as suppliers of goods and services, but as innovators and also risk mitigators. Decreasing risk in supply chains means suppliers must also have a greater understanding of the risk landscape, and maybe even share the resulting consequences of any disruptions or difficulties – or take strong steps to protect not only their business, but your interests too. AGENTS OF INNOVATION Think procurement is just a process? Think again. Procurement teams are in the best place to understand the many social changes and technological advances in the coming decades. They can take the lead in developing policy and change behaviours in business, with suppliers and amongst the teams that procurement works with. Sustainable procurement means codes of conduct for suppliers, audits to manage change and create incentives to do things better. A professional licence already mandated by some businesses means rogue activities from boards and CEOs can be challenged by the loss of that licence. Social value has become a new force
Procurement
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where localisation provides the impetus to improve communities and local economies. Younger workers want to do good and not just earn a wage. Procurement will manage this eco-system where slaves in supply chains are traced and suppliers are driven to do the right thing. The Modern Slavery Act of 2015 has drawn attention to supply chains and those that manage them as clear evidence of the good that excellence in procurement practice can do. For all this to happen, the perception of procurement needs to change from ‘order taker’ to ‘change leader’ as professionals become the guardians of an enterprise, whether corporation, SME or government department. The professionals themselves must also see themselves differently. They must engage more with internal departments, with colleagues and with partners, to become powerful networks and abandon the image of stationary buyers and pen pushers. L
To read more, the Supply Chain Century paper is available free on the CIPS website, and is a result of our discussions with advisory groups, members, academia and our global community, to understand the procurement landscape of the next twenty years. FURTHER INFORMATION www.cips.org
Volume 24.1 | GOVERNMENT BUSINESS MAGAZINE
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