Empowering Tomorrow's Procurement

Understand your spend.

With visibility and transparency on what, where and why you’re spending, you can make tactical changes around discretionary spend. Cut travel, stand contractors down over Christmas for six weeks instead of four and postpone noncritical capital projects – all of these tactics can provide quick relief.

Focus on your key categories.

Focus on where you can make a significant impact through traditional tactics like supply chain consolidation, leveraging volume and considering alternative suppliers.

Sustain your savings through strategic design-to-cost and design-to-value work.

Chris Hodgson, Executive Director, Strategic Initiatives at ArcBlue advises, “A strategic cost program takes more time, it’s more complex, you need a different skill set, and you need great engagement and influence with the business to create change. But this is how we’re helping most clients ease cost pressures.”

Build a rounded development plan.

Training is just part of the solution – invest in capability programs that focus procurement practitioners into a more strategic category management path.
Retain talent by investing in individual development plans. Jacqui Priestly, Director Learning & Development at ArcBlue explains that investment in your people has never been more important. To upskill talent quickly, she recommends building targeted training plans based on both immediate and longer-term role objectives and to use formal coaching to embed the skills learned through training programs.

Celebrate and nurture strong performers.

“To change the organisational view of procurement, demonstrating high performance in the function is critical.
Leverage and develop talent you can scale, teach and who can use their natural business partnering abilities to persuade and influence business units of the value of procurement.” says Adrian Gjurasic, Executive Director, Asia at ArcBlue, “Build on their influence with clear KPIs and metrics so you can chart a course towards the future.”

If your organisation is lacking in specialist procurement expertise, get help.

Hire additional resources with requisite category knowledge and make the most of the resource by assigning internal procurement team members to shadow the consultant or contractor to pass on knowledge.

Don't wait to be asked how you're progressing.

Companies should move from a reactive to a proactive position so sustainability procurement can become more valuable and meaningful to the business.
Don’t wait for a reporting request to demonstrate the impact of ESG initiatives. Instead, embed ESG into the corporate strategy with clarity around delivery and measurement.
Get ahead of the game by addressing requirements outside of the sourcing and proposal submission process.

Actively seek to understand your Scope 3 emissions in your supply chains.

Build a baseline understanding of your Scope 3 emissions to help you identify where to prioritise your efforts. You can leverage your spend data to build a carbon cube that will highlight categories and suppliers that have high emissions, so that you can build an engagement strategy focused on the areas where you can make the biggest impact. You can begin those conversations with priority suppliers to address issues now while there’s still time.

Build strong relationships with your sustainability champions.

In 2024 procurement teams will need to work smarter with sustainability teams to drive transparency around de-carbonisation by using spend data and desktop analysis to get a sense of their organisation’s carbon footprint.

Build and test the backup plans.

Contingency planning involves alternative sources of supply and alternative channels. A major ports operator, DP World Australia recently shut down its terminals around the country to contain a “cybersecurity incident.”²

Incidents like these show the value in establishing alternatives throughout the supply chain and regularly testing these.

Focus your technology investment on improving resilience.

Procurement leaders are likely to increase investment in cloud-based digital technology in 2024 with many organisations motivated to analyse cost
reduction opportunities, improve supply chain visibility, understand where emissions lie in their supply base, and source new value chains.

Supplier relationship management is key.

By gaining visibility across the supply chain and sharing knowledge and data with your suppliers, you can predict future risks and build more resilient supply chains. Longstanding and collaborative supplier relationships founded on trust will be hugely beneficial to help manage risks in the supply chain.

Make sure the technology is suitable for your transformation.

With new technology shaping the way procurement teams interact with stakeholders and deliver value, choosing the right systems for your business is crucial.
Now is the time to understand business objectives, do your research and make sure the technology you choose is aligned with your actual requirements.

Choose a solution that matches your maturity and risk profile.

With many new players in the technology space, procurement has more choice than ever before. A tech start-up may offer a more cost-effective solution
that grows and evolves as your organisation matures. Choosing the right solution will depend on your goals and risk appetite.
“Are you a company that’s willing to work with and test new technologies, or are you relatively risk adverse and prefer tested and proven solutions?” says Adrian Gjurasic. “Once you understand the benefits and risks, you can effectively select technology solutions that support the change you want to drive.”

Ensure AI is providing you with real value.

Barry Ward, Senior Managing Analyst at ArcBlue explains that actionable AI is key. AI is not foolproof and is largely dependent on the quality of the input. It will not always deliver the result you are aiming for unless it is understood and scrutinised with a procurement lens.

Make sure you're analysing the right data.

Data must be relevant, clean and governed with an emphasis on transparency and granularity on transactional data to target Scope 3 emissions. For many
organisations, a small group of suppliers will account for a large portion of Scope 3 emissions.
Engaging these suppliers and collaborating on a strategy that ensures supplier data is complete, accurate and verified will be critical.

Build capability in insights, not just analysis.

Enhance data analytics skills within the procurement team or partner with a procurement analytics specialist so you are equipped to derive useful insights from your data. Building
data analysis skills will give your organisation a competitive edge when it comes to making informed decisions, optimising costs and improving efficiency.

Invest in visualising your data.

“Visual dashboards are invaluable to procurement teams,” says Dan Renfrey, Director for Infrastructure and Renewables at ArcBlue. “There are advanced solutions in the market and procurement teams can tap into consultancy expertise to understand what a good dashboard looks like, where the data comes from, the science behind it and crucially – the strategies to use it to make an impact.”

Everyone is now a producer.

From rooftop solar to wind and biomass, new technologies and rapidly declining unit costs put microgrids not just in reach but increasingly a genuinely
attractive part of the energy solution for all consumers and thus a key consideration for 2024. The ‘make versus buy’ comparison can be complex (almost always involving a hybrid strategy) and is a critical first step in category analysis for procurement.

Energy reduction is a valuable lever.

Volatile gas markets, still a major part of the energy mix across Southeast Asia, provide an important incentive for energy saving as an immediate value lever for businesses.
Every business should have an ‘Energy Champion’ and team to harness workforce interest and enthusiasm in energy saving. Environmental imperatives are
also impactful for the bottom line.

Take advantage of experienced skill sets when you find them.

With the energy market rapidly evolving it’s vital to take the time and access expertise to understand the new possibilities and approaches. These could range from new affordable technologies that enable organisations to be a producer to long term Power Purchase Agreements (PPA) that actively support the growth of renewable energy projects. This is a complex market and engaging the right expertise is key, even if that means you have to engage a specialist contractor or consultancy.