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Does the procurement profession in Africa have the right profile to capitalise on the region’s economic growth?


SupplyManagement

8 August 2013 | Andrew Allen

Sub-saharan Africa has become one of the world’s great economic success stories. It is the second-fastest growing region in the world after Asia and, according to the International Monetary Fund, it will see growth of more than 5 per cent this year, compared with 3 per cent worldwide.

But is procurement missing the party? Academic Douglas Boateng indicates this may be the case when in a recent presentation he described the function as undervalued and under-rewarded across the region.

Professor Boateng, of UNISA Graduate School of Business Leadership in South Africa and CEO of consultancy PanAvest International, says government and industry increasingly accept the need to bring procurement into the strategic decision-making chamber. But, he adds: “The pontifications have unfortunately not really been matched by real corrective structural adjustments.”

In his view, procurement professionals receive less recognition as well as worse remuneration than counterparts in other business functions. These factors make it hard to attract talent. Lower pay also raises the risk individuals will act unethically.

The solution? Boateng calls on industry leaders and government policy makers to take “decisive steps” to “ensure respectable recognition for the ethically and performance-driven procurement and supply chain management professional”.

The remarks will strike a familiar chord for many procurement professionals in Africa. Chabeli Ramakatane, CEO of Bareki Consulting, South Africa, tells SM: “There is progress, however, it is not at the pace we expect. The highest-paid procurement person here is poorly remunerated compared to the highest-paid finance or marketing person.

“There is definitely a leadership vacuum. Even where you find capable leaders they might not be empowered to do what is necessary.”

At the heart of the problem is organisations’ reluctance to appoint a CPO who reports directly to the CEO and who has a strategic remit. Instead procurement tends to be located further down in the structural hierarchy led by a purchasing manager. “Fewer than 20 per cent of companies or large public sector organisations have CPOs,” says Ramakatane.

Naomi Kinyanjui, civil projects operations manager at Ardan Risk and Support, Kenya, agrees the function has typically been pigeonholed as a back office transactional role. “With regards to it being under-rewarded, that has been true to a large extent,” she says. But she believes that private sector organisations are increasingly beginning to pay their purchasing staff a fair market rate as they realise procurement can add value to their businesses.

Phillip Dahwa, managing partner, The Global Procurement And Supply Chain Management Practice, Zimbabwe, believes that if procurement is undervalued, this is precisely because the function has not yet earned its stripes. “The calibre of most procurement professionals is questionable in most instances,” he says.

While the professionals have technical skills they tend to lack business acumen, softer skills and leadership competencies. This, in turn, has denied them the chance to shine at the highest levels of their organisations, he believes. “The challenge is now for the professionals themselves to prove that they can add value rather than just purporting to be undervalued,” he says.

Skills shortages pose a problem for procurement everywhere, but Tom Woodham, director of Crimson & Co consulting, which works with many multinational clients in Africa, believes the talent pool in Africa is particularly small. Not only are there fewer business graduates in the region but procurement, like most business functions, is lagging behind many other regions in maturity “by about 20 years”. Nevertheless, Woodham does not consider buyers – at least in many of the larger multinationals – to be more poorly paid than colleagues in other business functions. In Africa the lack of prestige attached to procurement rather than lack of pay is the most serious obstacle to attracting the best talent, he believes.

“FMCGs and multinationals really struggle to find people to bring in both in terms of previous experience and of people with an interest in procurement.

“These companies spend an awful lot of money training people and they find they have to start from a lower base than they would in Europe or elsewhere,” he says.

Ulrike Kussing, at PwC in South Africa, believes companies are increasingly seeing the value in supply chain management. “Now there is more of a focus on looking at things end to end. The stance has shifted from the past where it was viewed more as a logistics function,” she says.

Nevertheless Kussing says that while supply chain managers can rely on modern technology and increasingly good infrastructure, problems such as facilitation fees and unreliable delivery times present a major challenge for supply chain professionals.

She is not alone in seeing significant grounds for optimism in the region.

Woodham says: “A lot of multinationals out there are changing their focus. Previously they would have brought in expats to fill vacancies. Now they are training and developing local people.”

For Ramakatane there is one factor that will guarantee procurement’s rise up the corporate ladder in Africa – that organisations will sooner or later come to realise the significant cost savings that can be achieved by implementing a strategic sourcing model.

“We expect organisations in both private and public sector to realise that the only place left to achieve savings or to improve the bottom line is in procurement,” he says.

Does low pay cause corruption?

“Most procurement professionals are not bold enough to stand up against fraud and corruption,” says Phillip Dahwa. “They facilitate corruption in an attempt to win the hearts of their bosses.”

It is a controversial viewpoint but one that African procurement professionals will understand.

Chabeli Ramakatane says the lack of visible punishment for buyers caught accepting bribes is a major incentive for fraudsters. He believes low pay bears some responsibility for the prevalence of bribery, as well as unmanaged conflicts of interest, inadequate screening of suppliers and just plain greed.

Naomi Kinyanjui says it is inevitable that low pay leads to increased temptation to engage in corruption.

However for Ian McNally, vice president of Efficio, it is not always clear where cases of ‘supplier loyalty’ within companies are due to corruption or rather “loyalty to a supply base that has delivered service and where the relationships are strong and long lived”.

“What we have seen is that in most cases, a clear, open, transparent, fact-based approach works with stakeholders in the same way as it works in a European or North American context,” he says.

SCE inks S$8.8m deal with Mauritius


The Business Time

July 11, 2013

By Angela Tan

SINGAPORE Cooperation Enterprise (SCE), an integrated arm of International Enterprise Singapore, said on Thursday that it has signed an S$8.8 million contract with the Government of Mauritius, to provide advisory services for the procurement of the Mauritius Light Rapid Transit (MLRT).

Under the contract, SCE will gather experts from SMRT International Pte Ltd and Aurecon Singapore Pte Ltd as the Transaction and Technical Advisors for the programme.

The Singapore team has already conducted business case; planning and reference design in Stage 1 and the new contract will form Stage 2 of the project.

It will ensure that the delivery scenarios reflect policy and legal requirements based on international best practices; and that the Public-Private Partnership structure will be acceptable to market and be bankable

 

Procurement Leaders Need to Challenge Tradition to Build a Resilient and Agile Function


The Sacramento Bee
The Sacramento Bee (Photo credit: Wikipedia)

The Sacramento Bee

By IQPC Exchange

August, 24, 2012

LONDON, August 24, 2012 — /PRNewswire/ —

CPO Exchange releases results of pan-industry, C-level procurement survey:

  • 83% of procurement leaders agree that they need to rethink their procurement strategies to better position their organisations to tackle present and future challenge
  • 57% are aiming for cost reduction and better control of spend to improve efficiencies and gain greater influence in the organisation;
  • 45% of respondents are looking to improve stakeholder management and communication and;
  • 39% aim to streamline internal processes through deployment of procurement technologies.

Over the last six months IQPC Exchange spoke with a pan industry group of C-level procurement leaders spanning Europe, Asia, Africa and the Middle East to find out what strategies they have put in place to safeguard their organisations in the unsettled economic and political climate and how are their procurement departments are responding to the fact that volatility is the new ‘normal’.

83% of procurement leaders agree that they need to rethink their procurement strategies to better position their organisations to tackle present and future challenges. Consequently, procurement risk management and supplier risk management came up as a top priority for 62% surveyed.

Gathering business intelligence about their suppliers and key markets, closely monitoring critical KPIs and spreading their risk by having more suppliers are further strategies mentioned.

Livia Trubenova, Head of Research at the CPO Exchange, commented on the results: “This fascinating survey is just the start of our continuing research with CPOs. We can already see that procurement leaders are working on growing the influence of and recognition for the procurement function within their organisations I look forward to the lively debate and benchmarking at the next CPO Exchange!”

The CPO Exchange will be releasing expert views on these and other topics through speaker interviews and updated research findings with C-level procurement leaders on the CPO Exchange website http://www.cpoexchange.co.uk/PR. You can get involved by joining the CPO Exchange group on LinkedIn CPO Exchange to engage with leading procurement professionals.

The CPO Exchange is an invitation only event which brings together the most forward-thinking leaders in procurement to discuss strategic issues shaping their and your business agenda. This forum offers a perfect setting for leaders in procurement to network, benchmark and discuss effective business strategies. Attendees will tailor their agenda by selecting from a range of keynote presentations, lively panel debates, peer sharing roundtable discussions, interactive BrainWeave sessions and one-on-one business meetings of their choice.

For details of solution provider opportunities or to request your invitation, please get in touch with CPO Exchange team via exchangeinfo@iqpc.com or visit http://www.cpoexchange.co.uk/PR.

* Senior procurement professionals

About IQPC Exchange

IQPC Exchange provides business executives around the world with tailored practical conferences, large scale events, topical seminars and in-house training programmes, keeping them up-to-date with industry trends, technological developments and the regulatory landscape.

Contact:

Beata Majcher+44(0)20-7368-9404

SOURCE  IQPC Exchange

Bigwigs oppose dalit procurement quota


The Times of India

November 4, 2011

NEW DELHI: The proposal to make it mandatory for central government bodies to source at least 4% of their purchases from enterprises owned by Scheduled Castes/Scheduled Tribes was greeted with scepticism in the Cabinet, before an invocation of Congress president Sonia Gandhi  made the doubting Thomases fall in line.

Sources said a number of members of the Cabinet, including three who are in-charge of large PSUs, strongly expressed their reservations about the proposal. One the sceptics doubted there
were enough entrepreneurs among dalits/tribals to help the government meet the mandatory requirement, while another expressed the fear of quality being compromised.

The misgivings threatened to hold up the decision when one of the attendees reminded his colleagues that it was Congress president Sonia Gandhi who had made a commitment to give preference to dalit/tribal enterprises in government procurements. The Cabinet minister recalled that Sonia, who visited South Africa in August 2007, was impressed by the country’s policy to leverage public procurements to encourage businesses promoted by blacksRead more.

New Research Gives Insight into the Procurement Practices of the Top 100 US Public Companies


The Sacramento Bee

By Trading Partners

October 27, 2011

CHICAGO, Oct. 27, 2011 — /PRNewswire/ — TradingPartners (www.tradingpartners.com), the leader in spend management and visibility technology and services, today released research showing the spend management and sustainable supply chain practices of Fortune 100 companies.  The study showed that while almost half of the top public companies cited spend management as a key strategic objective, only four have a Chief Procurement Officer.  The research results also illustrate that:

  • Only 20% of companies have board members with procurement or supply chain backgrounds.
  • The most successful companies have advanced sourcing tools.
  • Companies that include suppliers in their corporate, social and environmental responsibilities (CSER) programs, tend to have a higher net income margin than those who do not.
  • Despite CSER being a success factor for many companies, only seven Fortune 100s have a Chief Sustainability Officer.
  • 35% of CEOs see emerging markets as a key strategic objective, yet only 15% have executives from BRICS (Brazil, Russia, India, China, South Africa) countries on their senior management team.

The study “Procurement Practices: What Every Company Needs to Know About Spend Management Practices in Fortune 100 Companies” was officially released today in conjunction with TradingPartners’ first annual procurement forum in Chicago.  The event hosts C-level executives focusing on innovation in spend management and visibility, as well as sustainable supply chain best practices.

“Our objective with this research was to determine the best practices in both spend and sustainable supply chain management among the top companies in the country,” said Mark Barnekow, Chief Executive Officer of TradingPartners.  “We were astonished to discover that many companies are not taking full advantage of the tools they have, nor are they making serious commitments at the board or executive level to focus on managing spend.”

A slideshow summary of the study can be found at http://slidesha.re/v1Orda, while the full version of the research is available on request fromwww.tradingpartners.com.

About TradingPartners

Based in Chicago, with European headquarters in London, and operations in Africa, Asia and Latin and South America, TradingPartners provides growing companies and global Fortune 500 firms with the most comprehensive and effective spend management and visibility technologies and services.  With a global vertical focus in foodservice, healthcare, manufacturing, public sector, retail and services industries, TradingPartners assists its customers to reduce the cost of their direct and indirect purchases with tangible results often in the 10-25% range.  TradingPartners’ unparalleled domain expertise, comprehensive supplier database, and robust spend management technology platform have helped hundreds of corporations and public sector entities achieve dramatic business process improvements and tangible cost savings.  For more information, visit www.tradingpartners.com.

TradingPartners and its respective logos are trademarks of TradingPartners Ltd.  All other trademarks are the property of their respective owners.

SOURCE TradingPartners.

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