Looking back at Procurement and Supply Chain LIVE event

By Kavita Cooper, Managing Director Novo-K Procurement Solutions. 

Procurement & Supply Chain LIVE is a two day hybrid global conference covering all sectors, from energy to consumer goods. The event included live and digital presentations, whilst also offering the opportunity to collaborate and network with professionals in all specialisms and levels of procurement (and supply chain). The speaker line up and sessions, reflecting the theme “Risk and Resilience”, was carefully curated introducing a range of in-depth expertise, with representation from government functions to new digital platforms,

Here are my key takeaways from some of the most impactful sessions the Novo-K team and I attended.

Procurement’s Carbon Crisis: Pathway to a Sustainable & Resilient future

by Mr Mark Perera

We’re living in very disruptive times where uncertainty is on a global scale. However, climate change is still the biggest crisis for humanity. We MUST focus on the climate crisis at a business and individual level to make a collective effort towards combating it. 

• Organisations are now under pressure to address Value Chain Impact. Organisations need to scrutinise impact beyond their own operations and take more responsibility for scope 3 emissions.
• Scope 3 accounts for 80% of the emissions and is highly complex. Suppliers and partners, at every tier, needs to be aligned, educated and willing to take action.
• Steps to reduce scope 3 emissions include:
  1. Creating a rough baseline 
  2. Prioritising efforts 
  3. Seeking alignment 
  4. Collaborating selectively
• If you’re wondering how do we make decisions without data, the harsh reality is that we don’t have the time to wait for the data. So we need to make robust decisions without the data, and we must start NOW. 
• Control the controllable which include 
  1. Cohort i.e most scope 3 falls under purchased goods and services 
  2. Spend i.e what we spend on the high carbon footprint categories 
  3. Category and Suppliers i.e identify which of these have the the highest emissions 
• Use leading indicators as a reliable predictor of Lag Metric Performance and prioritise building active, collaborative relationships with strategic suppliers and stakeholders.
• Active collaborative relationships are characteristics of a successful supplier collaboration and innovation programme which enable procurement and the wider business to prioritise progress against their key goals. 
  

The future of the Government Commercial Function

by Mr Gareth Rhys Williams

• Commercial Function is a ‘Network’ supported by Resourcing team, Vendor Management team, Complex Transactions team etc.
• The function is now moving towards great ‘Contract Management’: 
  1. Letting the contract 
  2. Managing the contract 
  3. Managing the vendor
• There are 2 key activities: 
  1. Assessment centres (which are) 
  2. Matched against the ‘Blueprint’ to build and execute the right team
• Tracking, training and assessment centres have helped build a high performing team who delivered £3.7 billion in savings (equivalent to 7 teaching hospitals).
• The function is taking the waste out, whilst vendors are becoming more profitable while introducing and supporting policies including prompt payment for SMEs and influencing wider industry.
• Looking towards the future, currently a new bill is going to parliament to change the procurement rules. This will be based on simplification and streamlining, which will be underpinned by an open, fair and transparent process required for public procurement (which will take approx 12 months)
• In preparation, over the next 12 months 15k procurement professionals will need training. There is also investment into database for more transparency and to track contract pipelines.
• The Commercial Function’s key strategic plan to 2025 includes: 
  1. Our people 
  2. Digital and transparency 
  3. How we work 
  4. Influence and scale
• A key part of their success will be ‘Playbook’ which have been co-developed by industry and include a series of guidance documents and training to provide wider context to government commercial professionals. They include: 
  1. The sourcing playbook 
  2. The construction playbook 
  3. The consultancy playbook 
  4. The digital data technology playbook 

The People Side of Digital Transformation (and Behavioural Science)

by Mr David Loseby

• Ethics and transparency are considered when we change the way people work; looking at how people’s jobs are impacted when changes are planned and implemented.
• Important questions to ask: Are businesses prepared for the people who will lead and deliver digitalisation? Are organisations going to wait to be distributed or will they choose to be a disruptor when it comes to digitalisation?
• Successful digitalisation will require: 
  1. People Skills 
  2. Right Organisational structure 
  3. Consideration of the journey with Suppliers and Supplier/Value chain
• Digitalisation is a change catalyst and if viewed in positive way i.e. as a driver for competitive advantage, it can be more appealing for people/users. Helping people/users to understand digitalisation will help them see it as a boon rather than a bane.
• A digital platform should be seen as an enabler and when implementing, its important to recognise that the system should have something that is important to people/users. This can help make it frictionless, when presented internally and externally, for true adoption rather than just compliance! 

Can we improve patient care if we don’t tackle climate change?

by Mrs Jacqueline Rock

• Working with suppliers to deliver a sustainable NHS with £34 billion of addressable third party spend in the NHS. 
• Climate change poses a major threat to our health (air pollution causes 1 in 20 deaths, heatwaves contributed to 2500 deaths in 2020).
  
• NHS has led in sustainability, with emissions cut by 30% since 2010 and a Net Zero Carbon Commitment by 2040.
• An investment of £16m undertaken for Zero Emission ambulances (London Fleet is the greenest in the country) and E-bikes for couriers to reduce air pollution. 
• 25% of Carbon Emissions are through medicines and medical equipment; NHS is moving away from carbon intensive gases, reducing the carbon footprint of inhalers, and leading innovations in nitrous oxide emissions. 
• In Milton Keynes, Solar Panels on the roof of the hospital now provide 15% of total electricity, saving £225k in energy bills.
• NHS has invested £1m in 10 innovations with SMEs in 2022 including drones to deliver medication, development of new surgical textiles (low carbon), portable breathing system to reduce the use of Entonox (anaesthetic gas) etc.

Order from Chaos: A 2022 Global Supply Chain Survey

by Mr Geraint John

• Geopolitical risk is on Supply Chain leaders’ minds with 24% agreeing before the Russian invasion and 56% agreeing after – 𝗪𝗮𝗿𝘀 𝗱𝗶𝘀𝗿𝘂𝗽𝘁s 𝗴𝗹𝗼𝗯𝗮𝗹 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻𝘀!
• Global Supply Chains are being reconfigured in response to disruptive events. Most disruptions are frequent, expensive and often hidden from view.
• 64% say wholesale changes are planned to redesign Supply Chain footprints and 86% organisations are concerned about concentration of suppliers in one place. 
• 41% had 3 – 4 significant Supply Chain events in last 12 months and 49% have seen disruptions occur at 3 or 4 and 18% at tier 1. . 
• Average cost to an organisation due to Supply Chain disruptions are £182m. 
• Risk practices and technology adoption require further improvement. Supplier risk analysis and monitoring is insufficient with only 57% involved in any Risk Analysis and only 11% saying the risk is monitored continuously.
• Technology Solutions have a key enabling role, giving us a competitive advantage! Visibility is a major focus for technological investment with 75% looking to implement it. 
• Operational Resilience is a multi player game. 78% agree that more needs to be done internally across different functions. 81% agree that more needs to be done externally with more collaboration with suppliers and partners, more investment into relationship management and better understanding of business continuity plans. 
• Recommendations on how to move forward with caution: 
   
  1. Focus on “concentration risk”, be realistic about opportunities to nearshore or offshore. 
  2. Investment in additional resources to do ‘upfront work’ all the way through your Supply Chain and not just tier 1. 
  3. Broaden the number of suppliers evaluated for risk.  
  4. Invest in tech solutions the map Interdependencies. 
  

Building a Third Party Risk Operating Model in a post COVID world

by Mr Nick Jenkinson

• Key areas of focus for most organisations include Digital, Sustainability, Risk and Transformation,
• Third Party risk has jumped up the agenda for many organisations including how we create resilience in our Supply Chain. 
• Manage risks to avoid impairment of corporate values and drive excellence complained and controls. To achieve this you need to allocate resources and investments (remember, you are what you eat). 
• Third Party Risk Management (TPRM) must be delivered. In a structured way, be relevant to your organisation and adopt a holistic approach looking at: 
  1. Service management 
  2. Risk rating credibility 
  3. Inherent risk, how to implement and measure (be relevant!) 
  4. TPRM Framework and infrastructure 
  5. Transparency and Governance 
  6. Intra/Inter- Group arrangements

  Using 4 design principles 
  1. Simplicity 
  2. Enablement 
  3. Technology 
  4. Transparency

• TPRM – cannot be a standalone activity and needs to be fully integrated into S2P process and beyond, with tech and supplier related tools also requiring an integrated approach.
• A sustainable delivery model is supported through technology and a risk operations model. The delivery model for TPRM provides a long term solution for implementing TPRM activities through the use of good technology.