VUCA – what does it mean for procurement?

VUCA - What does it mean for procurement

The acronym VUCA has been around for a while and is particularly relevant to those of us who are aiming to survive and thrive in the procurement world. Discussing this at the Smart Procurement World Indaba 2022 were panel members Deon Mocke, Chief Procurement Officer AVI Ltd; Melita Ntsane, Head of Procurement, CBRE; and Jeannine van Straaten of Proudly South Africa.

 

 

 

The four elements of VUCA, namely:

  • Volatility
  • Uncertainty
  • Complexity
  • Ambiguity

provide individual and combined challenges. In difficult times, we must ensure a constant supply of goods and services, despite setbacks. The VUCA panel discussed what must happen to be able to successfully operate under trying circumstances. It was suggested that the first step is to realign the procurement strategy to be in line with the new business strategy. Procurement must deliver services despite setbacks, implement emergency measures and guarantee sources of supply to ensure the organisation stays in business.

The panel agreed that strategic spend management is the key to VUCA. This means understanding your key suppliers, their openness to partnering and their ability to be flexible and innovative. Spend data needs to be reliable, complete and up-to-date so that detailed analyses can be performed. Breaking down the cost elements (cost drivers) and benchmarking opens the door to better negotiation and local sourcing opportunities.

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