World Procurement Congress 2024 – H&Z Panel Discussion: "Procurement as the Disruptor of Short-Term Thinking? Or is it Only About Savings?"

World Procurement Congress 2024 – H&Z Panel Discussion

Martina Buchhauser from The Procurement Initiative, Thomas Janvier, former CPO of INNIO, and Richard McIntosh from H&Z participated in this year’s CPO panel discussion at the World Procurement Congress, the world’s most prestigious senior procurement event, held in London from May 14th to 16th.

With more than 800 attendees, over 100 speakers, and in its 21st year, the occasion remains the must-attend procurement event. The panel discussion, hosted by Procurement Leaders, provided a platform for an insightful dialogue and an audience Q&A focused on the short-term demands placed on CPOs, and the mid to longer-term objectives of transforming the procurement function to be fit for the future.

Aligned with this year’s overarching theme, "Glidepath to 2030," the extensive conversation included perspectives from C-Suite procurement discussions, strategies for evolving into a best-in-class procurement function, and real-world examples shared by CPOs.

The Future of Procurement - Responsible, Resilient, and Competitive Value Chains 

Martina Buchhauser outlined the forward-thinking research of The Procurement Initiative to lay out the model of the future of procurement, focusing on five areas where change is necessary to support the needs of people, profit, and the planet: 

• Organisational (re)thinking, focusing on a people-centred culture and leadership.

• Cost reduction 2.0 and the need for ongoing cash generation to fund organisational change.

• Collaborative supplier relationships, with more long-term thinking, shared responsibility, and win-win.

• Developing a supply base footprint and supplier strategies to increase resilience through the supply chain.

• Challenging early-phase product development to drive sustainability and circularity as an integral part of the procurement process.

The Challenge of NOW! - Savings, Sanctions and Sustainability 

But, the demands placed on Procurement Leaders have become even more short-term.

With costs falling and supply markets stabilised, businesses need to reset their cost bases, and procurement, as the biggest lever, must take the lead.

CPOs tell us there is an increasing need to focus on savings, de-risking potential trade sanctions, mitigating the impact of geopolitics (US and China in particular), and (in Europe) managing the increasing regulatory requirements for ESG.

Meanwhile, there is increasing demand for procurement functions to achieve more with less.

Panel Discussion: How Can Procurement Be the Disruptor of Short-Term Thinking?

The panel discussion and Q&A covered a range of perspectives:

As the demands of the board become progressively short-term, how do procurement leaders manage the conflict? Should procurement leaders focus solely on savings to satisfy the CFO's demands? How can they communicate the true value of procurement to board members, genuinely engage the business, and manage the needs of a Gen-Z procurement function?

There were a number of key takeaways from the discussion:

• Cost avoidance and savings delivery is a given. This is core procurement competence and a straightforward hygiene factor. Every function should be focused on this, but:

• CPOs and Procurement Leaders must enhance their capabilities to drive, not just support, their organisation’s long-term objectives while meeting the needs of the people and communities they operate within.

• Procurement must be proactive and operate strategically, not simply reactive and transactional. Procurement must become a leader, not merely a follower in an organisation.

• CPOs and Procurement Leaders must communicate the real business value of procurement at all levels within the organisation, especially at the board level, to establish its strategic position and become a catalyst for change.

• Procurement must drive the change to circular value chains.