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Q&A: Procurement teams and their current challenges

Our team discuss the challenges that procurement teams are currently facing and the way that they have evolved their practices to mitigate them.

What issues have procurement teams been facing during the pandemic?

During the pandemic we’ve being working with many different procurement teams across a variety of different sectors.

One of the main challenges that they have been facing over the last year is a lack of supply, which has created some serious issues. For example, we have seen many situations contracts are in place with existing suppliers and, suddenly, those suppliers are unable to fulfil the terms of the contract without warning. This leaves the procurement teams with an immediate requirement to find alternative suppliers and put new agreements in place. In a nutshell, a lack of consistency in supply has been a real issue throughout the pandemic.

What arrangements have procurement teams been putting in place to deal with these issues?

There is no ‘one size fits all’ as it’s very much dependent on the type of product and the sector in hand. One thing we have seen a lot from procurement teams who are trying to work around the issue of consistency in supply, though, is stock piling, where teams are ‘over-buying’ to mitigate for potential shortages coming down the track.

Another tactic some teams have employed is moving to consignment stock, instead of relying on rolling supplies. One further option many teams have looked at, albeit rather more reluctantly, is sourcing alternative and new suppliers, so that they are prepared to plug any gaps in their supply chains where they can see potential risks.

Are procurement teams evolving?

As a general observation, rather than relating to the pandemic, we’re seeing that procurement teams in all sectors are becoming ever more sophisticated in their practices and it’s fair to say that procurement is something of a ‘hot topic’ at the moment.

There is certainly more of a structured approach to procurement, in terms of businesses investing in establishing formal teams with access training programmes. This is a big shift we have seen over the last five years.

Are there any key themes that you are seeing in procurement documents?

This follows on from the trend above and the way that procurement teams are now being structured. We are seeing much more sophistication in terms of the legal documents that are being put forward, so the contracts we are being asked to review are very well-drafted, very thorough, very professionally put together and much more complex than ever before.

For example, we now frequently see references to external documents, intranets or suppliers’ codes of conduct, which simply weren’t included in these documents previously. Part of that is obviously the development of the procurement teams themselves, as I have mentioned, but the greater part of it is the evolution of modern legal practice and the greater focus on compliance. It’s a natural evolution and a ‘raising of the bar’, which is being clearly reflected by the many documents that we are being asked to supply and/or review.

Our team are here to help you. If you are looking for advice and assistance relating to your business operations as we prepare to emerge from lockdown or any other aspect of commercial law, you can contact us by emailing enquiries@andrewjackson.co.uk or call our friendly team on 01482 325242.

 

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