Procurement has long been focused on obtaining the lowest price for the goods and services required. But a more strategic approach to procurement is ensuring aid and development programmes gain extra value from their supply chain.
While keeping costs down remains a priority for such programmes, strategic procurement also emphasises not just “what” is being procured, but “why” and “how”, to ensure commitments are delivered, as well as bringing corporate social responsibility (CSR) and environmental sustainability to the forefront of an organisation.
“We’re looking to achieve outcomes that align procurement with the aims of the organisation,” says Stephen Ashcroft, head of technical assistance at DPSA, which supports aid programmes worldwide with their procurement and logistics requirements. “Rather than just saying there is a specific delivery date and budget that has to be spent, we’re making sure that we’re supporting delivery of the programme’s goals. Part of strategic procurement, for example, is reviewing the specifications to fully understand what the customer is trying to achieve.”
Aid and development organisations recognise the need to safeguard their programmes, which includes ensuring that anti-corruption issues are addressed and enabling local communities to participate in supply chains.
There is no shortage of suppliers for all manner of goods, services and equipment, but finding the right ones is always a challenge in procurement. Within aid and international trade, these challenges can extend to dealing with conflicts of interest, bribery and kickbacks. DPSA risk management isn’t a onetime effort; it’s constantly reviewed to mitigate fraud risk factors and new risks appearing.
Procurement may traditionally sit at the front-end of a supply chain, but a strategic approach means asserting a core position in influencing the entire value chain as it progresses to the delivery of goods and services, and onward warehousing and distribution.
Strategic procurement brings new value to the supply chain
A strategic approach also delivers innovative solutions. For example, when dealing with large consignments to multiple destinations, even simple changes to established processes can save time and money. DPSA sorts bulk items ahead of dispatch so they are ready for use at the receiving end. It’s a novel approach which also allows critical delivery timelines to be met. It’s just one way in which innovation in procurement can bring wider benefits to customers.
“We have to excel in each of those areas and set the standards all of the way through,” says Mr Ashcroft. “It’s about early engagement with customers when programmes are at design stage, having open conversations with people right through the value chain to better understand their needs and ambitions, and making sure we’re aligned with those. We want to help make aid go further by ensuring procurement spending is undertaken fairly, with a very clean supply chain.”
AECOM not only adheres to its own strong ethics and values, including empowerment of women and environmental sustainability, but also favours suppliers that subscribe to the same standards. It supports the United Nations’ Sustainable Development Agenda, which was launched in January 2016 and calls for all countries to achieve 17 goals dedicated to ending poverty, protecting the planet and ensuring prosperity for all by 2030.
CSR naturally applies to employees within an organisation, but there is also an opportunity to have an impact and achieve such objectives through the engagement and management of a supply chain. This can make procurement the ultimate lever through the value chain in aid and development.
“Being positioned as a customer of choice for our suppliers, because they know our aspirations around CSR and sustainable development, can almost have a mirroring effect within our supply chain,” says Mr Ashcroft. “CSR is a key theme of our balanced score card of factors that optimise the impact of aid funding, rather than focusing on cost-efficiencies alone.”
For more information please visit www.dpsa.org.uk