How to Future-Proof Your Procurement Function in Asia

Procurement is constantly evolving. Rapid technological change, economic uncertainty, and increasing competitive pressures for cost reduction and spend optimization are reshaping the industry. Change is the norm, and organizations must evolve their strategies and capabilities at lightning speed.

In this post-event narrative, let’s hear from Rosegail Rovilla-Uy, Ayanish Sen, and Matthew Quimba on how we should future-proof our operations to cope with the disruptive terrain, from harnessing the power of data, prioritizing sustainability, and developing their talent pool to build resilient and high-performing procurement operations.

The Evolving Procurement Landscape: Building Resilience, Agility, and Gaining Competitiveness in this Digital Age

The procurement landscape is increasingly complex and unstable. As stressed by Matthew, “the conventional pursuit of stability is passé. Agility will be the name of the game.” Companies must now focus on building readiness by turning every potential risk into a growth opportunity, investing in the right people, processes, and technology to foster a culture that thrives even when market dynamics are shifting.

Business environments are becoming more and more demanding on delivery timelines. Ayanish believes that firms can weather through these storms by harnessing in customer-centric solutions and laying the groundwork for supply chain transformation. Early adoption of digital platforms will give them a competitive advantage.

A key differentiator lies within applying these to their best fit / fit for purpose methodology as not all enterprises can integrate these new technologies for cost-effective results within a short span of time. As technological platforms are increasingly embedded into operations, automating and streamlining their process, driving clear ROIs, this will create a more value-driven procurement function.

Digital investments will lead to advancements in strategic sourcing and category management, operational procurement, and business process excellence. For example, these investments can improve accuracy and cost optimization in indirect procurement and contract lifecycle management. By gaining visibility into costs that go unnoticed, effective TCOs (Total Cost of Ownership) shed light to spending patterns and highlight potential opportunities for saving.

The AI-driven revolution cannot be dismissed nor is it a magic instrument that has control over existing operations without the guidance of a skilled master. Ayanish believes in finding the right balance between Human and Artificial Intelligence (HI and AI) as this is highly critical in supporting the procurement function in predictive analytics, historical trend understanding for line-item procurement and understanding the behavior of market influencers.

Possessing business acumen skills to align to organizational goals and objectives to drive operational and financial excellence would be demanded. Accuracy of data and processes outputs would need procurement managers to be certified on tools like Six Sigma and Deming /Q3M and leading the initiative of digital transformation in organizations.

Therefore, millennials will have to catch up along with Gen-Z in this evolution journey with big data analytics and Machine learning skill sets. Fundamentals of category sourcing strategy management will get modernized towards niche expertise with help of technological platforms. Evolution of Procurement Leaders as Business managers will be a key skill to develop and hence the back-end industry- academia collaboration links must grow stronger to meet daunting challenges. It is important for supply chains to transform at a rapid pace as stakeholder engagement models and business model S- Curves will continue to see fast churns.

ESG: A Pressing Imperative

Investing in ESG initiatives to achieve positive ROIs may pose a challenge to procurement professionals who wish to make a business case on it, especially when immediate financial returns aren’t guaranteed.

However, the benefits of ESG are manifold and highlighting them to the management is key. They include risk mitigation, improved brand reputation, and cost savings.

Risk Mitigation: Such practices can reduce risks related to regulatory compliance, supply chain disruptions, and reputational damage. Rosegail stated that they are critical in helping them stay informed of the changing laws that regulate business in the HVAC industry such as lower GWP (global warming potential) factors for refrigerants and higher EEF (energy efficiency factors).

Improved Brand Reputation: Brands that integrate ESG practices effectively are perceived as leaders and earn the trust and loyalty of their consumers. Furthermore, by laying out their responsibilities towards global sustainability needs and integrating them into your business USPs, leaders can stay ahead of their competitors while proposing business solutions to customers down the value chain.

Cost Savings: Robust ESG leads to improved or more efficient resource management, including waste management; value engineering project on use of recycled plastics is one example.

On the other hand, Rosegail recommends a top-down approach where the support would come from the board-level, down to everyone in the different business units. The programs of ESG and their advantages must be seen in the strategy development of the business units. These programs should be in OKR's (Objectives and Key Results areas) and in ERM (Enterprise Risks Management) of every business unit in the organizations.

Building a Future-Ready Procurement Organization

As the business landscape in Asia continues to evolve rapidly, Procurement professionals in the region will need to develop and hone several key skills and competencies to thrive. As contributed by Rosegail, here are some of the essential ones:

1) Grit, Agility, and Adaptability - flexibility to respond to rapid market changes and disruptions; openness to continuous learning and upskilling; ability to manage change within the organization

2) Digital Literacy and Technological Proficiency - understanding and leveraging emerging technologies like AI, blockchain, and IoT; proficiency in data analytics and business intelligence tools, and familiarity with e-procurement systems and digital supply chain platforms

3) Strategic thinking and Business Acumen - understanding of market trends and geopolitical factors affecting supply chains; skill in risk management and mitigation strategies; ability to align Procurement strategies with overall business objectives

4) Cross-Cultural Communication and Negotiation - understanding of diverse business cultures and practices across Asian countries. strong negotiation skills adapted to different cultural contexts, proficiency in English and other multiple Asian languages as a plus

5) Sustainability and Ethical Sourcing - ability to implement and monitor sustainable supply chain practices, understanding of ethical sourcing principles and compliance requirements

6) Innovation and Creativity - ability to drive process improvements and efficiency gains; skill in identifying and implementing innovative sourcing strategies; creative problem-solving in complex supply chain scenarios

7) Financial Acumen - understanding of cost structures and financial impact of Procurement decisions; ability to conduct thorough cost-benefit analyses; skill in budget management and cost optimization

8) Regulatory Compliance and Legal Awareness - knowledge of regional and international trade regulations; understanding of contract law and intellectual property rights; awareness of data privacy and cybersecurity regulations

9) Relationship Management and Collaboration - building and maintaining strong supplier relationships; collaborating effectively with internal stakeholders and cross-functional teams; networking skills to stay connected with industry peers and thought leaders

10) Project Management - ability to manage complex procurement projects; skills in resource allocation and timeline management; proficiency in project management tools and methodologies

As stated by Rosegail, “what will the present Procurement leaders now leave as a legacy to the Procurement professionals of tomorrow.” There is a need to embrace generational differences within the function when introducing new procurement leaders to the organization. As the digital evolution is an emerging phenomenon, there is a need to implement training programs around the adoption of technological platforms to prepare procurement professionals of all ages.

Apart from investing in talent development areas to build a future-ready team within the function, Ayanish stated that there is a prominent need to foster cross industry collaboration, networking, and knowledge-sharing about best practices and understanding what’s at stake and what's next with emerging technologies. Case studies and offerings from established and emerging solution providers in the Procurement space could be showcased to open opportunities for adoption.

It is inevitable that we face uncertainty of another black swan. Therefore, seizing new opportunities for continuous innovation is a survival imperative that procurement leaders need to know.

Our Contributors:

Rosegail Rovilla-Uy, AVP & Strategic Business Unit Head for Procurement, Concepcion-Carrier Air Conditioning Company (CCAC)

Ayanish Sen. CPO, Manjushree Technopack

Matthew Quimba, AVP, Head of Category Management for ICT & Head of SCM Contracts Management, Meralco