GAME

CHANGING

PROCUREMENT

TRENDS IN

AFRICA

1

The Future of Procurement as a Recognised C-SUITE Role

Next Steps Going Forward

The African Emerging Trends and Forecast

Context

2

Population sample

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

local Continental European Americas

2009

2011

2013

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Manufacturing/Production

Mining andResources

Services Food andBeverage

Governmentand SOC/SOE

Agricultureprocessing

Logistics andSupply chainmanagement

2009

2011

2013

Geographical Spread Sectors

■ Revenue range: between USD20mn and USD400bn

■ Inclusive of Fortune 1000 companies, FTSE 250, JSE 100

companies, State Owned Entities (SOE), government

departments etc

■ Largest representation: Government and SOE

■ Smallest representation: Agriculture processing

30.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Chief Logistics officer

Chief Procurement Officer

Chief Supply chain ManagementOfficer

Chief Operating Officer

2013

2011

2009

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Procurement

logistics

Operations

Customer Service

2013

2011

2009

Factors critical for bottom line performance Factors directly impacting government service delivery quality

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Procurement

logistics

Operations

Information systems

Finance

Supply chain management

Customer Service

2013

2011

2009

Factors directly impacting small business development Roles that will become standard C-level

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Procurement

logistics

Operations

Customer Service

Finance

Supply chain management

2013

2011

2009

Customer

Service

Operations

Logistics

Procurement

Chief Supply Chain

Management Officer/

Emerging trends and forecast

4

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2009

2011

2013

Global and strategic outlook

Communication skills

Financial management

Negotiation skills

Networking Leadership skills

Corporate governance

and directorship

ICT Understanding interdependencies

Analytical

skills

Procurement Business Law

Logistics Operations Management

Critical skill requirements of a Chief SCM/ Procurement Officer

Emerging trends and forecast

50.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Strategic Business need/ trend

External benchmarking

Non executive Board Directive

CEO directive

Competitition

Cost savings

Globalisation

Treat from China /India

Outsourcing/ Ofshoring/Co-sourcing etc

Value chain complexicity

Always had it as C-Suite function

EXCO Consensus Procurement representation

EXCO Consensus- Logistics representation

EXCO Consensus-Operations representation

2013

2011

2009

The future of Procurement as a recognised C-suite role

Reason for SCM/CPO elevation to the C-Suite role

6

Leveraging spend

Industrialisation

Job creation

Reduction in business risks

Local content development

SMME growth

Tackle youth unemployment

Local supplier development

National interest

Government imperative

Social responsibility

Other responses

7

Procurement and supply chain management functions are moving from a Backroom to a

Boardroom

Pressure on the organisations to deliver performance have driven EXCO level professionals to

rapidly fill emerging positions …..

Ethical and conflict of interest issues must be voiced out by the profession and its main

overseeing body i.e. CIPS

Current EXCO and non executive Board members watching to see how procurement and

SCM professional rise to this “second calling”

CSCO shall increasingly replace COO in the C-SUITE**

Content for Executive level supply chain management development must be reviewed by

ACADEMIA & TRAINERS with industry requirements in mind

What are the potential implications of the findings?

8

CPO shall assume more

responsibilities and further

rise to CEO!!

Board

CEO

Chief Financial Officer

Chief Marketing Officer

Chief Procurement officer

Logistics

Procurement

OperationsChief Information

Officer

Chief Legal Officer

Others

From the backroom to the boardroom: The rise of the Chief

Procurement Officer

9

Comparison between the past and current state

2009-2013

CPO was seen as managerial title and

role and not a C-SUITE role

Procurement had an image problem at

EXCO level

Strong operational competencies

Strong operational, tactical and

managerial competencies

Relative lack of directorship and C-SUITE

competencies

Rampant misuse use of CPO title by

procurement managers created challenges

2014-

Shift in thinking

Procurement at the core of Supply Chain

Strategic and impact sourcing

More economic development

Competitive advantage and shareholder

wealth creation

Governments are actively and innovatively

using Procurement supply chain

management to:

– improve public sector governance

– create sustainable jobs

– improve service delivery

– industrialize

– add more value to resources

– stimulate SMME growth and development

10

Procurement aspects of supply chain management is firmly back on the strategic agenda

Governments and public sector aiming to use supply chain management to stimulate economic

development

Private sector companies using SCM as a weapon for competitive advantage

Chief Procurement officers with a strategic and global mindset shall increasingly assume Chief

Supply chain officer roles on EXCO

Procurement as a profession shall remain one of the CORE functions under supply chain

management

Title and role description confusion created by “procurement managers” means the Chief supply

chain officer and not Chief Procurement Officer will most likely be one of the more acceptable C-

SUITE titles

Collective executive skills development and education will be the key to acceptance in the

boardroom and policy making corridors

Conclusion and the road ahead

THANK YOU