Archive: April, 2020

Coronavirus 2

As coronavirus continues to take its toll on people’s health and finances, we hear stories of individual heroism which provides hope. Neighbours helping the most vulnerable in their community, medical staff putting themselves at risk to care for those who are suffering and corporate organisations donating equipment to be adapted for use in health centres.

As far as I am where they have been no positive stories about procurement and supply chain. Insufficient ventilators have left patients suffering unduly and low stocks of personal protective equipment (PPE) have put health professionals at risk.

Most governments have tried to assure worried health professionals and patients, but it has only increased suspicion that they are out of touch with ordinary people trying to do their best. Photos of doctors using diving masks and nurses wearing bin liners have proved much more memorable than the politicians’ empty words.

Many reasons have been put forward for the poor performance for procurement and supply chain: unprecedented global demand, fragile supply chains and inadequate logistics to name but a few. In response, commentators have made predictions, both positive like a new era of collaboration and negative like the impact of suspending supplier payments.

Are all these reasons linked in some way? And if they are, can they be used by procurement professional to help their organisations, their suppliers and the global community recover more quickly?

Let’s take the example of PPE. Most medical staff need a standard set of PPE – gloves, apron and, in some cases, masks. They are all inexpensive and disposable. What this simplistic analysis fails to recognise it that there are millions of medical staff, some with specific needs, in thousands of locations. The issue is not the product but the scale and complexity of demand. The challenge for procurement professionals is as follows:

  • Simplify demand: rationalise specifications and standardise process
  • Manage master data: identify all the locations and ensure data is kept up-to-date
  • Analyse data: continually analyse demand and share the analysis with key stakeholders like suppliers

Unfortunately, this level of complexity can only be managed by enterprise resource planning (ERP) systems which requires a significant investment of money and time. Perhaps coronavirus will provided the burning platform to accelerate existing trends and fundamentally change the way markets operate.