Providing revenue and value for procurement in the Philippines: CPO Manila Roundtable

Yesterday, we assembled some of the more progressive thinkers in Philippine procurement in a roundtable session. The current value proposition of the function, although evolving, must continue to adapt and develop to remain relevant, the group agreed.

Like many geographies, the Philippines has suffered from market inflation, making savings more challenging to obtain. Despite that, CPOs have tasked their organisations to drive for efficiencies in the business.

Now, we are seeing a diversification of value delivery types in the country. For example, we detected instances of.

1.?????? Revenue generation

One retail organisation shared with us the importance of speed to market in delivery. “If I can reduce bill cycle and deliver faster contracts we can open stores faster,” said the CPO, “it means more to the business than negotiating discounts. I can show them the impact on sales and this drives value.”

This is a non-traditional pathway for a function, that has been historically fixated upon savings. However, to both gain traction as well as influence with stakeholders, but increasingly talking in the language of the business

This leads to a counter-intuitive position for procurement. This means that, at times, we will need to prioritise speed over cost reductions, in order to enhance sales for the business.

2.?????? Reducing risk

Many CPOs discussed concerns within their businesses on supply continuity. For one, eliminating stock-outs was a central KPI for the function.

"Risk management is a major deliverable for us," noted one CPO of a utility provider. "To deliver the right product at the right time is vital for us as a team, but also for the end-consumers who are dependent on our services."

This is leading teams to improve their approaches to supplier tracking, not only at the primary level, but throughout the supply chain. Many other organisations flagged their interest in acquiring more systems to inform their risk identification and evaluation. For those who are pushing the case forward, business cases point to the need for a technology stack, combining financial, operational and sustainability risks into a dashboard of supply chain vulnerabilities.

3.?????? Leading supplier innovation

One shared their organisational reticence to engage in direct supplier management – often this is a function conducted outside of procurement. However, increasingly, we are seeing experimentation and engagement with SRM.

“Sourcing managers need to take the lead on SRM,” argued one CPO. For another, this is about recognising suppliers’ contributions, celebrating that success and using this bedrock of goodwill to generate more innovation from the supply chain.

“We are looking for suppliers to be the source of future new ideas, new business proposals and new value for the business,” noted one. Acknowledging the value of the supply base may be a mindset tradition outside of procurement, but it will undoubtedly deliver major improvements within the business.

It is these ambitions that we see in Manila that will expand procurement’s reach through the current challenging times and long into the future.

For one CPO, it’s a period for procurement professionals in the Philippines to be both proud of their past achievements as well as optimistic about the future:

“Despite everything that we faced in the past – and are currently facing – we are still delivering savings for the business.”