The 3 biggest challenges keeping procurement directors up at night, and how to solve them

The past year has seen most of our lives turned upside down — both professionally and personally.

No-one predicted the situation that would unfold over 2020, and while we work towards understanding just what the ‘new normal’ will look like, we need to find ways to navigate around the obstacles that the pandemic brought with it.

Traditionally seen by many as purely a purchasing function —predominately focused on price and cost-savings — the role of procurement directors and managers as a vital commodity within organisations has really come to the forefront over the past 12 months.

From disrupted supply chains to soaring un-forecasted costs, procurement leaders have had a huge number of challenges thrown at them this year.

At OfficeTeam, we are acutely aware of the issues that the sector is currently facing.  As part of our mission to better understand and support our clients, we recently hosted an online webinar  and invited leading experts in procurement from various industries across the UK to share their thoughts, experiences, and best practices.

So, what are the biggest challenges keeping them up at night, and more importantly, how do can solve them?


Maintaining product continuity

One of the biggest stories of 2020 was the PPE shortages. When Covid-19 hit, many suppliers and users — including the UK Government — were caught out; faced with rocketing prices and unable to source the essential hygiene products required.

This issue wasn’t limited just to PPE however, with supply chains disrupted worldwide, many everyday products became more difficult to source, and as a result, we witnessed exponential rises in market prices.

Although that initial wave has now passed, procurement leaders are now focused on securing consistent, trustworthy, and reliable supply chains to help prevent a repeat of the issues experienced.

Sunil Bhatt, head of procurement at Four Seasons Healthcare shared his thoughts on this subject: “Sourcing PPE and other hygiene products was a huge challenge for us last year. All our focus was on the continuity of supply to try and overcome the shortfall. We had the highest number of new suppliers come into the business, and we needed to validate those and certificate the products.

“With the main concern of our business being the safety of our residents and staff, cost and budgets went out of the window.”

Streamlining the supply chain while in a pandemic might not seem like the best solution. However, by working closely with a strong strategic partner, longer-term — ideally up to 6 months — plans can be put into place to secure products, and ensure contingency stock levels are in place while ensuring that product quality and conformity is maintained.


Keeping control of costs

The shift overnight to homeworking had an unprecedented impact on many organisations’ bottom line. With reports that an estimated 40% of employees are using non-approved suppliers, with an estimated additional cost of over £27 per order in additional admin, keeping control of the spiralling cost of remote workers is headache shared across all sectors.

Steven Schools, head of procurement at Provident Financial Management Services talked of his experiences in this area: “As a doorstep leader in a non-standard market, we had to effectively throw away our operating model. We’ve revolutionised our business over the past 12 months.

“In terms of procurement, this has had a two-stage effect. From the initial panic at the start, we needed to source laptops and IT equipment for all our staff, as well as PPE, which became a rare commodity.

“We also then needed to purchase new tools and devices to enable home working. Such as digital signature software and look to new sources to fill the gaps that we had manual processes in place to do, whilst maintaining our levels of due diligence.” 

Each of our panellists agreed that budgets and cost control have been pushed further down the priority list for their organisations. They all recognise, however, that the short-term tactical approach seen in 2020 cannot continue long-term and that a more strategic approach is needed.

The use of technology in this area is already delivering tangible bottom-line benefits. Business management and digital procurement systems — such as our SmartPad tool — put budget controls back in the hands of procurement managers. Online ordering facilities, with customisable permissions levels and access to pre-set products, allow for the flexibility of remote working, without putting costs at risk. The ability to use real-time data to compare market prices, and produce reports at the touch of a button also plays a vital role in saving time, and ultimately, money.


Getting CSR back on track

Corporate social responsibility has been a key focus for the supply chain sector for many years. However, during the turmoil of the past 12 months — as almost all organisations were forced to turn their attention inwards — sustainability dropped off the agenda for 2020.

As firms now look to the future once more, and the focus to ‘build back better’ picks-up pace, how can we get CSR back on track?

Paul Kefford, global head of procurement at Halma PLC shared his thoughts: “I’m proud of our commitment to CSR and investment that we have made in this area. Personally, it’s something that’s very important to me. If we unite together, we can overcome the challenges.

“People are emerging into a new world post-Covid-19, and hopefully, that will help to drive a change. This experience has shown us all that we have an enormous ability to adapt.. Moving forward, I think the desire to change will grow.” 

“We should be driving and endorsing that through our supply chains.”

Linked to our previous points on streamlining suppliers and embracing technology, partnering with a focused procurement supplier, a more sustainable approach is far more likely to be achievable. By working smarter, stock levels can be better managed — in turn reducing the number of delivery miles and CO2 emissions.

CSR has always been a core mission for us at OfficeTeam. We’ve adapted our delivery service to accommodate home workers, our fleet is updated regularly, and we’ve introduced mixed dry recycling into our CDC, as we continue to research innovative packaging solutions for the future.  

If you missed our webinar where we discussed these key points and more, you can view the full recording on our website.

To find out more about how OfficeTeam is perfectly positioned to become your procurement partner for the future, or to discuss our free 30-day procurement reset test, please click here, and a member of our team will be in touch.

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