E11: Procurement Value Proposition

Last year, during a one of focus group session, I had the pleasure of meeting Cpt BELAL Moosa ツ ; his insights immediately captured my attention. His eloquent speech and remarkable journey through life left a lasting impression. With a background in procurement, an area I hold in high regard, our paths converged, and I am thrilled to have him as a guest on today's episode.

In our episode, we often start by delving into our guests' life purposes – those unique motivations driving us daily. Captain Belal purpose is fascinating: he aspires to lead his country. However, what fuels him daily is the relentless pursuit of knowledge, skill development, and contributing to society through education and knowledge transfer. His personal growth journey keeps him motivated.

But how does one maintain this motivation and consistency when daily challenges can be daunting? Captain Belal admits that the struggle is real. Self-motivation is an ongoing battle, but his vision of a brighter future for the next generation in his country serves as his guiding light.

"I love to train to the people I love to transfer the knowledge and what motivates me more is my own progress and that my own progress is keeping me going on." said Cpt BELAL Moosa ツ

He emphasizes the importance of understanding different generations' needs, preferences, and potential. Bridging the gap requires a careful balance between guiding young talent toward leadership roles while encouraging them to embrace freedom of thought. This approach ensures the continuity of innovation and progress.

Procurement's Vital Role?

Transitioning to our main topic, procurement plays a pivotal role in organizations today. Cpt BELAL Moosa ツ underscores that procurement professionals allocate approximately 70-80% of a company's revenue, making them indispensable. He advocates for a people-centric approach in organizations, emphasizing that when you invest in developing your workforce, they, in turn, drive process efficiency, enhance customer service, and generate more significant financial value.?

Navigating the Procurement Value Proposition

Captain Belal elaborates on the multifaceted nature of procurement's value proposition. It extends beyond cost savings to encompass quality, service, and innovation value generation. In an era marked by purchasing power dynamics, inflation, and the relentless pressure to cut costs, procurement must master the art of negotiation, nurture supplier relationships, understand quality parameters, and ensure timely delivery.?

We discuss the evolving consumer landscape, where customization is key. Captain Belal views this as an opportunity for procurement professionals to explore innovative products and services, enhancing their ability to articulate benefits to internal and external stakeholders.

Captain Belal stresses investing in supplier relationship management rather than focusing on customers and employees. Suppliers, customers, and organizations benefit in a "win-win-win" scenario. He advocates for supplier development, acknowledging their crucial role in the value chain.

"Many people they talk about the win-win situation, what win-win is you and your customer, but I talk about the win win win situation your supplier must win from that project supplier is working with you on that your customer must win from that project he has giving you the business everyone should feel the value everyone should have a value from those projects" said. Cpt BELAL Moosa ツ

Regarding addressing challenges in supplier relationships, Captain Belal acknowledges that payment delays are widespread. Additionally, overlooking suppliers' needs and treating them as mere vendors rather than partners can hinder progress.

Navigating the Impact of Innovation in Procurement?

Cpt BELAL Moosa ツ emphasizes treating suppliers as extended partners rather than mere vendors. He highlights that many companies need to pay more attention to the benefits of supplier collaboration by imposing strict rules and dominance over suppliers. Payment delays are a common issue, impacting supplier relationships negatively. However, Captain Belal underscores the significance of collaboration, understanding supplier skill sets, recognizing innovative ideas, and appreciating their strengths.

When discussing the persistent problem of delayed payments, Captain Belal identifies a significant contributor: the need for more finance professionals' understanding of the supplier's perspective. He stresses that timely payments to suppliers ensure they meet their obligations, such as paying staff salaries and incentives. This, in turn, fosters a happier and more motivated workforce, benefiting both suppliers and the organization.

Captain Belal suggests that collaboration is critical. Procurement should convey the importance of on-time payments to finance, while finance should transparently communicate payment procedures and requirements. A two-way approach ensures smoother financial operations and supplier relationships.

Moving forward, Captain Belal dives into the financial impact of procurement decisions. He shares that procurement professionals can significantly affect an organization's profitability more than they might realize. Procurement's role has evolved substantially from cost savings to generating profits over time.

Captain Belal traces the evolution of procurement from focusing on timely deliveries to price negotiations, total cost of ownership, and now, value management and innovation. He emphasizes the role of data analytics, trend monitoring, supplier engagement, and technological transformation in modern procurement.

Technological transformation plays a pivotal role in procurement's efficiency and effectiveness. Captain Belal highlights the integration of extended ERP systems that involve suppliers in the process. This integration facilitates clear communication, reduces misunderstandings, and timely notification of requirements, fostering a stronger partnership between organizations and their suppliers.

Building Competence and Skills for Procurement Excellence

Captain Belal highlights a multitude of skills and competencies essential for procurement professionals. He emphasizes the need for negotiation skills, supplier relationship management, and problem-solving abilities. Furthermore, he encourages professionals to embrace innovation and strategic thinking while adhering to ethical practices. Contract and risk management skills are equally vital, and cross-functional collaboration is crucial in today's multifaceted business landscape. Proficiency in technology and, most importantly, practical communication skills are indispensable.

Captain Belal underscores the significance of investing time and resources in developing new procurement professionals. He believes that focusing on the culture of an organization, department, and individuals is paramount. Developing soft and hard skills and fostering a culture of learning will empower new joiners to thrive in their roles.

As a closing note, Captain Belal emphasizes the financial impact of negotiation skills. He suggests that procurement professionals should understand the financial implications of their decisions. For instance, recognizing that a one dollar increase in a contract can influence an organization's profitability or financial health is crucial. Aligning negotiations with the organization's financial goals is a critical responsibility that can make the finance team's job easier and contribute to overall success.

Captain Belal concludes by emphasizing the importance of knowledge transfer and training within the procurement profession. Sharing knowledge and expertise with others not only benefits individuals but also strengthens the procurement team and the organization as a whole.