Procurement managers as an endangered species?

The sixth Procurement Forum focused on current issues that procurement managers across a wide range of industry have to deal with. The most important topics were digital transformation, lack of people and, above all, a general definition of the current role of the purchasing department in companies.

The intriguing subtitle of this year's edition was The Role of Purchasing Manager in Company 4.0, and the whole program was dedicated to the question of the impact digitalization and Artificial Intelligence. Will they bring better results or a black scenario of human redundancy? "In 2009, procurement managers thought their role in companies would grow because companies would put emphasis on cutting costs and they would come into play. The opposite was true - in most cases the procurement department was the first one to cut costs," Robert Sobčák from the Procurement Association said and pointe dout an approach illustrating the long-term underestimation of the procurement potential. David Toms, Linet's Purchasing Manager, added: "In our company, the role of procurement varies depending on current needs. Previously, we were part of the Technology Department to make our designers aware of the cost of the materials, in the time of the crisis we came under the Finance Fepartment, later we had some disagreements with the Production Department, so we worked closely with them to reach agreement." The founder and co-owner of Sklizeno David Kukla is also the Head of Procurement because he understands the key role of this field.

Bearers of value

David Kukla had a specific position in the panel discussion of the second block, which touched on automation and AI. While most participants agreed on the need to streamline many processes - Jan Trbušek (Siemens) said that the company had plans to reduce the number of its procurement managers by half in the future - David Kukla said that in Sklizeno this idea is occasionally useless: "We have implemented systems, but many suppliers do not have the right technology on their side. So we can not use it anyway." Another Procurement Association representative, Pavel Uksa, shared his view of the use of some technologies commenting on electronic auctions: "This is an example that kills procurement and devalues its added value. An electronic auction can essentially be done by a porter." Subodh Kumar agreed that a one-sided look at automation suppresses the importance of bargaining skills of procurement managers if they are only forced to sit at the computer instead of meeting people.

Marcell Vollmer of SAP Ariba pointed out the way out of the rising skepticism caused by question whether a human purchaser will be eventually replaced by robots or not. "Robots can help with mechanical tasks and let procurement managers loose to gain added value and to be the initiators of innovation. Tim Cook also started as a procurement manager. And it was him who had an idea to order more durable displays for iPhone. You can still go further in getiing better. How is it possible that there are still companies where invoices are sent by mail so an addressee has to remove them from the envelope and scan in the computer?" Martin Hejl of Thimm Packiging completed the vision hen speaking of his own experience of a suplier. "Today, it's not just about comparing numbers in charts. Among other things, the price is not the only and the main criterion for choosing a supplier. The right purchaser is interested in technology and can perceive the price of packaging material throughout the whole value chain. It means the more expensive packaging can save time in the packing process or reduce the risk of injury." An interesting look at procurement managers' role in the fream of previous ideas about added value was also provided by Vít Sychra of Microsoft. In this company, the Procurement Department serves as support for internal customers who, on the basis of their knowledge of their needs, are provided with tools to be able to handle orders as simply as possible, and they actually become procurement managers themselves.

Youth forward! Or not?

The matter of generations was another aspect of human factor outside of robotizing. Subodh Kumar advised to educate young inexperienced graduates and teach them negotiating skills. "These newcomers are head and shoulders above us because they have much more courage," he added. However, several anonymous queries that appeared during the discussion in the application showed the dark side of this approach. "I've been working as a procurement manager in a multinational company for 15 years, and my knowledge and experience are starting to bother top managers because I disagree with some of the corporate changes. What shall I do with that?" Or "Is an older purchaser over due for the scrap-heap? Where do I get to work when I'm over-qualified for most of my potential employers?" Tomáš Ervín Dombrovský, the Labor Market Analyst from LMC Group backed these answers with several numbers and his message was about senior workers: "There are eleven thousand graduates today and seventy thousand positions. But the least opportunities are given to middle-aged people, so you should focus on them."

The next topic that returned technology to the game was that presented by Zdeněk Honek from Bisnode. He used several cases from the recent past to demonstrate the importance of screening potential business partners in term sof financial fitness or even security. With usage of publicly available sources, analysts are able to predict whether a company can face insolvency or is potentially bad risk in any other way. "General figures speak clearly: in the next 60 minutes 11 big companies will go bankrupt, 7 corporate addresses will change, 49 corporate phone numbers will change or be disconnected, 3 top managers will change jobs, 89 businesses will fail, 96 new deals will begin, 35 big companies change their names. The world is accelerating no matter what we do," Honek ended his speech.

This year's 6th Procurement Forum was produced by Blue Events and supported by SAP Ariba and Bisnode. The expert guarantor was Marek Rokoský and the professional  partner was the Procurement Association. The conference was professionally hosted by Patricia Jakešová from U & Sluno.

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