Seemingly overnight, every procurement professional’s top priority has become helping their company get through the COVID-19 pandemic and start preparing for the business conditions that are to follow.
We now face more questions than ever before, not to mention unusual working conditions, distributed teams, and challenging market and supply chain conditions. Fortunately, leading procurement professionals also tend to be excellent planners, a skill that will be in great demand over the coming weeks and months.
Although our visibility horizon does not extend far into the future before getting extremely fuzzy, we should always be thinking in the short, medium, and longer term as we do our best to weather this storm.
Short Term: Today/This Week
Procurement’s most urgent short-term focus is likely to be information-based. Stakeholders may be looking for support, either trying to secure scarce materials, find service providers willing to be present in a facility, or secure the products and technology required to remain operational from home.
Fortunately, the investments made in digital transformation over the last few years should allow procurement to quickly answer all of those questions from anywhere with an Internet connection. In the interest of working cooperatively and keeping the company going through these unprecedented times, procurement should err on the side of ‘breaking the rules’ to make things happen (within reason) and worry about the process exceptions later.
Medium Term: The Next 2 Weeks/This Month
As the effects of the pandemic start to hit the corporate bottom line, procurement will be called upon to somehow make the suddenly disjoined top and bottom lines connect. Even if no contracts are to be changed during this time, and no major directional decisions made, procurement can start identifying and qualifying opportunities to cut costs in advance.
Some spend categories are seeing spikes in demand (video conferencing) while others (corporate travel) have cratered. Procurement should start investigating whether the resulting spending shifts might partially cancel each other out. They should also come together as a functional team, assigning category responsibility if that is not how the team is already organized. Procurement can then pre-identify and start qualifying contracts or spend categories where expenses can be reduced through direct supplier negotiation, re-sourcing, or simple leveraged contract extensions.
Longer Term: The Phase that Begins when the Shutdown is Over
“When this is all over…” How many times has each of us uttered that phrase in the last few weeks? Ironically, it presents one of the greatest risks for corporate supply chains. When this is all over, we cannot allow ourselves to go back to the way things were before. Procurement should be working to capture and understand every roadblock, breakdown, source of delay, and confusion and take steps to remedy them for the future.
The coronavirus pandemic is an un-asked for stress test that every company is now being measured by. It will reveal weaknesses that no one could have imagined (and a few that could have been). The motivation to prepare for another such disruption will never be as great as the period immediately after industries and economies regain their equilibrium, but that moment won’t last long. The work has to begin now – while we press through – because as much as we all think we will remember every minute detail of this experience forever, we won’t.
There is no question that a great deal of attention will be given to our response to the pandemic after the fact. That is not our concern right now. Today, all we can do is respond to each challenge that arises with professionalism, empathy, and creativity. As new information becomes available, we can add it to our list of assets, and it will expand our planning horizon. Until then, anything that is too fuzzy to see clearly is outside of our scope. Let’s control what we can control today, and leave the rest for tomorrow.
Header Photo: http://www.fotogestoeber.de – Getty Images