The COVID-19 pandemic, corruption, supply disruptions and the conflict in Ukraine have created an extremely uncertain business environment, meaning that effective supply chains have become more important than ever, according to Malcolm Harrison Chief Executive Officer of the Chartered Institute of Procurement & Supply (CIPS).
Speaking during a visit to Namibia, Harrison said it was critical for supply chains to be agile and flexible during times of disruption to mitigate risk, deliver innovation, conserve the planet and drive benefits to end customers.
“The considerable challenges occurring across Southern Africa have not escaped Namibia.” Said Harrison during the visit. “But these challenges give us the opportunity to work with procurement professionals and businesses across the region to transform supply chains to overcome barriers and deliver solutions that offer a more sustainable and equitable society.”
The Namibian economy is estimated to have recovered moderately during 2021 and is projected to improve further in 2023, supported by better growth for the mining industry and most tertiary industries.
However, the current estimates were revised down from 1.5% largely reflecting lower performance for sectors like non-metallic minerals products, construction, wholesale and retail trade, and financial services.
Coupled with the global impact of volatile trade relationships between the United States and China and, more recently, the effects of the war in Ukraine, the situation is daunting, but procurement professionals are rising to the challenge, Harrison says.
“Procurement professionals have always managed to navigate disruption, perhaps not always on the scale we have seen recently, but they are adept at finding solutions to manage the situations they are faced with. This is where they are coming into their own and demonstrating their core value managing supply chain relationships and sourcing from new suppliers, often at a local level.”
Namibia imports 60 percent of its total domestic consumption needs, with most originating from South Africa. Given that, on average 70 percent of Namibians rely on market access for food this is high risk for the unemployed and those who live below the poverty line.
The Namibian government has approved a policy that provides a market platform through local procurement of food from local producers. The directive obliges public institutions to support local production of food by sourcing from local producers. This can also be complemented by bringing markets, finance and technologies to smallholders using business-to-business e-commerce platforms.
Harrison believes digitalisation of systems will go a long way in driving procurement reforms and creating effective communication platforms that can be utilised by the state.
“Digital transformation will increase public value and trust, lead to greater transparency, improve citizen participation, stimulate proactive service delivery and enable economic development and growth,” he adds.
The case of DHL Namibia is a good example, where the first wave of automation using intelligent robotics has arrived in the logistics industry. Robotic solutions becoming more important in the supply chain, assisting workers with warehousing, transportation and last-mile delivery activities.
However, Harrison insists that the issues of sustainability and ethical business practice must not be ignored: “its vital reform must ensure that procurement professionals embed both ethical and sustainable practices at the heart of their operation.
“The reality is that we are running short of vital resources at a greater rate than we are consuming them. Wildfires droughts and floods are a regular occurrence. Now is the time for procurement teams to get a handle on this.
“In many organisations, 90 percent of the impact on the climate is in the supply chains, not from within the walls of an organisation’s activities. No organisation will address climate change or truly have a sustainable business model unless they focus on addressing these issues in their supply chains.” Harrison says.
The Intergovernmental Panel on Climate Change report in 2021 declaration of “code red for humanity” has made it a business imperative to increase the focus on actions to establish more sustainable supply chains.
For procurement professionals to overcome the many challenges disrupting supply chains in Namibia and globally, Harrison recommends that they:
Embrace technology and seek out new opportunities to find better ways of working to drive greater transparency;
Seek out opportunities to embed sustainability and social value within sourcing projects;
Understand the available data and become the go-to person for stakeholders to gain valuable insights and information;
Embed themselves within the business and align with stakeholders’ goals and language.
Be brilliant in everything they do, and build a reputation for always delivering on time;
“Procurement professionals are in a very privileged position to make significant changes for good, and should use their knowledge, skills and influence over supply chains to make a difference now and for future generations” Harrison said.