Leading light in the South African procurement space, Dr Faith Mashele, reminds us to focus on the 4 Ps to ensure that our industry thrives in the post-pandemic era.
Two months into the year 2022, remnants of the COVID-19 pandemic have continued to remain prevalent in our day-to-day lives.
For many of us, it feels like a lifetime ago when face masks were strictly classified as personal protective equipment (PPE) stock inventory items. Fast forward to our present reality, there has been a considerable market shift to face masks becoming essential fashion items that are often coordinated with our daily outfits.
Notably, the market size for face masks was estimated at USD 6,9 Million in 2020 and in December 2021, Bloomberg reported that this commodity would reach revenues of USD 15,1 Million by 2026.
Equally important to economic growth in today’s world, is the need to continue shaping inclusive business contexts, particularly those that enable procurement to thrive. Globally, procurement channels are used by many governments and organisations as a lever for development, particularly by creating access to markets and unlocking economic opportunities for Small Medium Enterprises (SMEs). According to the World Economic Forum, 12% of global GDP is spent following procurement regulation in the public sector. It is worthwhile highlighting that this spend was estimated at 12 trillion USD in 2018 which further elucidated the pivotal role of procurement.
By the same token, research continues to advance the fact that procurement and supply chain teams are inherently well-positioned to lead the change to post-recovery due to their multifaceted powerbase. Conversely, this article submits that while the road to recovery may be long and bound to be uphill, it will be worthwhile to seek building blocks that will pave the path to positioning procurement from a surviving state into one that is thriving and inclusive.
To that end, the following 4Ps are submitted as the essential elements for enabling a thriving procurement context.
The Harvard Review in 2020 indicated that COVID-19 was a wake-up call for procurement and supply chains, extraordinarily, since crisis management metrics for a pandemic were never high on the radar. For this reason, innovation and automation of procurement activities with a view of improving business turnaround times, augmenting capacity and enhancing capabilities, will remain key game-changers for organisations.
In a like manner, digital market intelligence aimed at transforming procurement models including supplier contracts, risk management, customer experience, inventory management and payments will continue to be sought after.
Almost every organisation in the public and the private sector has a set of practices, standards, rules and formal policies that influence the procurement of products, goods and services in the market. Research highlights that though public and private organisations are governed by different regulatory requirements, the decisions that are aimed at promoting inclusive procurement are subjected to some form of institutional structure that guides the objectives of the organisation while addressing the needs of various stakeholders.
Consequently, in a thriving procurement environment, the use of procedural rules and organisational policies contributes towards a shift in perspectives aimed at driving a positive preference in a procurement context. Similarly, it is submitted that through the knowledge base, which is gained and maintained, organisations can reduce the likelihood of unscrupulous tender processes and irregularities.
The United Nations Development Programme has suggested that in South Africa, inclusive business models are more prevalent in the agricultural sector and related value chains, which interestingly, to a large extent, tend to manifest as strategic partnership arrangements between commercial retailers, agro-processors, small-scale farmers and local communities. In addition, it has been observed that such arrangements tend to improve supply chain efficiencies whilst contributing towards shared economic growth.
Likewise, it is posited that collaborative business approaches should be advanced through various mutual partnership arrangements between business and society, to encourage inclusive development and market access, and unlock economic growth.
Public media reports of unacceptable practices such as fraud, corruption, modern-day slavery, human trafficking and wider issues such as child labour tend to be associated with the procurement & supply space. The 2020/21 Auditor General report estimated the irregular expenditure that had accumulated over recent years at R488 Million in South Africa. For this reason, the fundamental building block for a thriving procurement context is upholding the integrity of the procurement profession which is underpinned by responsible practices and ethical conduct by practitioners and stakeholders.
In conclusion, the 4Ps are anchored by an African Proverb which suggests that if you wish to move mountains tomorrow, you must move stones today.
By Dr Faith Mashele, Chairperson: CIPS Gauteng Branch