The Procurement Strategy Forum at P&SC LIVE Singapore 2024
At the Procurement Strategy Forum, held at Procurement & Supply Chain LIVE Singapore 2024 Rai A. De Jesus, Chief Procurement Officer, PLDT, and Rahul Garg, Founder & CEO, Moglix, shared their insights on building an effective procurement strategy.
Key Elements of Effective Strategy
Rahul kicked off the discussion by highlighting the need to work on three critical elements for an effective procurement and supply chain strategy. He said strategy starts with managing your risk across the global supply chain? How you are building towards a more sustainable supply chain and how it is will disrupt your digital journey.
Rahul emphasised the importance of creating a digital procurement strategy with AI at its core. “If you haven't started a digital journey, that is a problem,” he said.
AI can streamline procurement processes, making them more efficient and effective. Sustainability was another focal point. Rahul pointed out that building towards a more sustainable supply chain is not just a trend but a necessity.
Rai added: “Traditionally procurement has always been a cost-saving function in the organisation, but with technology advancing and more things being purchased, we should also be looking at how we impact overall sustainability and environmental goals.”
From strategy to execution
Execution outweighs strategy in importance, as noted by the panellists. Rahul said the focus is 10% on strategy and 90% on execution. Adding that strategy alone can't dictate all actions; collaboration and iterative processes between strategy creators and the execution team are essential for successful implementation.
Rai highlighted that the hardest part of any digitisation initiative is having the courage to start. While there will always be room for improvement and the need to course-correct. Recognising this and creating a dedicated transformation office can help manage the initiative and make necessary adjustments throughout the process.
“I think part of any transformation or implementation will always have to have that room to be able to course-correct, to be able to identify that this might not be the right solution or we might not have the right solution now,” he said.
“The most important aspect to recognise when you implement any digitization initiative is that it has to have a clear output because the strategy changes. Any change in both external and external can lead to change. It can impact the change to all of your transformation or implementation initiatives. So creating quick sprints for some organisations might be much more applicable.
“Whoever creates the strategy should always be part of it until it gets fully executed.”
Avoiding pitfalls
Both panellists discussed the key traps during strategy formulation include arrogance, lack of awareness of on-the-ground realities, and blindly copying strategies from other organisations without adapting them to the current context. Successful strategy implementation requires accountability, clear communication, and alignment throughout the business.
Rai stressed the importance of accountability, “You can have a very well-written strategy impacting goals or priorities. But if there is no clear figure or team that will help you sponsor this at the top of the organisation, provide that guidance at the operating committee and communicate it downwards. That's very important so that you can keep the organisation moving forward, address all the challenges as it are released and
keeping everyone on the same page.”
The pair then discussed how integrating a robust risk and resilience approach into strategy involves diversifying suppliers, considering ESG factors, and addressing global supply chain disruptions.
Post-COVID, these considerations have expanded to include geopolitical stability. Leveraging advanced technologies like AI and machine learning can enhance supply chain visibility and risk management. Effective strategies include having backup suppliers and aligning procurement goals with business objectives.
Rahul spoke on how organisations have traditionally relied on single-source vendors, but now it's crucial to diversify suppliers, considering basic risk, ESG factors, and global supply chain disruptions.
Post-COVID, geopolitical stability has become an important dimension, affecting supply chain relationships. These considerations are increasingly important and will continue to strengthen in the coming years.
"You have to think of all these dimensions now, which used to be probably only one. This third dimension, introduced post-COVID, is very unique and crucial for supply chain strategy,” Rahul adds.
More to come in 2024…
Procurement & Supply Chain LIVE will host two more events in 2024:
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