Procurement

How to win procurement in Africa in 2022

By Abdishakur A. | June 8,2022

The COVID pandemic, the ensuing product shortages, and price disruptions have altered procurement not just in Africa but the world at large. In 2022, many organizations in Africa will continue struggling with heavily disrupted procurement markets, permanent and temporary changes in consumption patterns, changing input costs, as well as risk management.

Amidst this chaos, supply chain teams will also be playing an essential role as businesses revisit their programs and policies to address inclusion and diversity. Companies will have to put supplier diversity at the top of their procurement strategy in 2022 if they haven’t already. Also, they will have to answer the sustainability call by trying to emphasize sustainable sourcing and responsible procurement.

In this environment, several quick hits remain to quickly improve the profit and loss. Instead, many companies are attempting to navigate shortages and price disruptions across strategic groups. Procurement leaders are swiftly shifting focus from cost saving to a more intricate set of goals; improving procurement mitigation risk, and resiliency, trying to strengthen relationships with strategic procurement base partners, supporting nearshoring activities, and increasing transparency while also pursuing savings, and more.

 The best procurement crews will have to change the lens through which they see the elements of their value supply chain. While customers and suppliers will continue playing their conventional roles, the winning teams will have to start seeing them as strategic allies. For example, as crews utilize value engineering, they would also have to devise solutions for customers which meet design specs and also qualifications. They will also have to work with the suppliers to decide whether they can apply substitute materials or maybe alternate formulations.

To win in procurement, leaders would have to rethink the value equations as well as the way they display their wins. To accomplish this, supply chain teams can examine the following new success markers:

  1. Value management: The mission goes beyond cutting costs to include supplier diversity, environmental, social, and governance (ESG) initiatives, and supply risk reduction.
  2. Organization and business model: Have the ideal team size, coverage, and talent as well as the right roles, duties, and cooperation with other departments.
  3. Category management:  Use an organized, planned strategy to improve performance in every category.
  4. Supplier management: To streamline operations and generate value, companies manage and interact with third-party suppliers.
  5. Procurement strategy: We buy goods and services at the lowest possible cost to the company.
How to win procurement in Africa
What skills are needed?
Risk Management

When it comes to procurement and global trends, it is time to imagine the worst-case scenario and be as prepared as possible for whatever comes your way. This applies not only to the exterior environment but also to how all sourcing activities are carried out. Supply chain must be an organizational priority through the development of relevant skills in risk management.

Continuous Development

Without hard work and a commitment to personal and professional development, nobody in procurement would be where they are today. However, continuous personal development is now the only way procurement as a business and its professionals will move forward.

Business Intelligence

In a competitive market, businesses will use technology to obtain any competitive advantage they can. Developing Business Intelligence skills in procurement might not only give the company a competitive advantage, but it could also release procurement from the shackles of manual jobs. Professionals must be forward-looking, lead from the front, and challenge the departmental and organizational status quo. Knowing which jobs to automate and being prepared to accept new procedures and technology will help procurement to be a driver of change rather than a bystander.

Become a Digital Champion

Setting up as a Digital Champion begins with incorporating Business Intelligence expertise. The procurements future is digital, with Big Data and disruptive tools displacing manual, transactional operations. Professionals may free up valuable time and resources this way, allowing procurement to focus on the critical areas where it belongs.

Best Practices for Successful Procurement Strategy in 2022
  • Cloud-based procurement
  • Spend transparency
  • Supplier engagement
  • Optimized inventory
  • Contract management
Cloud-based supply chain tools

Taking supply chain in Africa digital is an important part of making supply chain activities ready for the future. Digital supply chain solutions help many teams minimize the repetitive operative aspects of procurement, which frees up crew members to concentrate on strategic duties which can win them more procurement bids in Africa. As technology continues to become an important part of daily activities, an entire digital transformation is inevitable for procurement activities.

Spend transparency

Trying to make supply chain functions completely transparent is the base for unlocking possible savings, and making headway to achieve operational excellence. This transparency is the best way of guaranteeing accountability and reducing fraud opportunities in the procurement procedure. A good way for increasing cost-saving is to bring your spending under management.  Here are five steps for ensuring spending transparency in procurement.

  • Defining and implementing procurement policies correctly
  • Monitoring and documenting each step in the procurement process
  • Identifying and also managing approved supplier lists
  • Establishing fool-proof supply chain contracts
  • Conducting regular audits
Supplier engagement

Each company has a variety of suppliers who provide important products, perform frequent maintenance, and provide specialty services. The procedure to identify a potential supplier, scheduling a service, on-boarding a vendor, getting an invoice, and payment can be exhausting. If handled manually, the process can consume a lot of time. Supplier management tools provide a unique set of features for improving the source to contract procedure and also enhance supplier engagement.

Inventory optimization

As profit margins drop in certain sectors, businesses are always looking for methods to manage their spending and also improve their bottom line. Therefore, it is essential for the procurement crews to continuously review the inventory and make sure they stay optimal.

Contract management

Even though supply chain leaders try negotiating potential cost savings in the sourcing phase, they never fully unlock the value. Although the reasons differ, a disorganized contract management procedure is the most common issue.

According to a recent survey on contract management in Africa, over 81 percent of businesses do not employ Contract Lifecycle Management (CLM) software. Thus, businesses are dealing with a variety of issues, including a lack of consistency across contracts (53%), time-consuming processes (45%), and procurement continuity issues (36 percent).

By transferring their contract management to the cloud, businesses can avoid these procurement pitfalls. Companies can better leverage their spending, decrease expenses, and manage risk when contracts are written, kept, and maintained in a single data repository.

Bottomline

Procurement is a complicated process that, contrary to popular belief, involves the entire organization. A strategic plan is required to not only determine procurement’s general direction but also to ensure that it is in line with your company’s corporate strategy. Procurement is a dynamic and ever-changing field. Professionals must ensure that they have the necessary abilities to advance themselves and win procurement in Africa.


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