At the fifth Universités des Achats event, a group of experts gathered together for the opening plenary session to discuss the position and responsibility of procurement departments regarding future challenges.
On the panel, Stéphane Soumier, former BFM Business presenter and founder of a new television channel dedicated to economics and finance (BSMART), leads the discussions with:
- Laurent Tardif, Prysmian Group CEO of South Europe
- Nicolas Payer, CPO of Total
- Jean-Luc Baras, CPO of the Eiffage Group and President of the CNA
- Jean-Philippe Riehl, SPIE Risk Control and Internal Audit Manager
- Claude Monnier, Chief People Officer at Sony Music
- Fabrice Bonnifet from the Bouygues Group, President of the College of Sustainable Development Directors, and Sustainable Development & Quality, Safety and Environment Director of the Bouygues Group
How COVID-19 is shaking things up for procurement departments
Laurent Tardif, Prysmian Group CEO of South Europe, began the discussion by recalling the impact of the health crisis on procurement departments: "The shock we have experienced has further highlighted that procurement departments are essential. They have obviously been involved in all of our COVID-19 meetings and committees". For the energy and telecommunication cable company, procurement departments had to simultaneously guarantee the required stocks of personal protective equipment for employees, ensure that the production was operating properly, and finally identify the risks associated with supplies.
After the urgency of the first few months of the crisis, procurement departments are still just as active, with two priorities on the agenda:
Procurement departments will undoubtedly need to reduce costs to ensure that their businesses are resilient and help support their transformation. The difference is that now, they're having to find other ways to achieve their goals. It is no longer a question of lowering supplier prices, but rather of working hand in hand with suppliers to improve productivity, in a way that is beneficial for the various stakeholders. This includes optimising and digitalising processes, improving efficiency, reducing waste and receiving "just-in-time" products, for example.
Securing supply chains
COVID-19 has highlighted new risks in our interconnected supply chains. For example, Jean-Philippe Riehl, SPIE Risk Control and Internal Audit Manager, pointed out a concerning statistic: 60% of cyberattacks are now targeting the supply chain. This serves as a reminder of how important it is to ensure that the supply chain is resilient.
Economic performance vs. CSR?
Another matter that had to be addressed by the panel was corporate social responsibility, which has been a key topic in recent years. In this area, buyers are sometimes caught in a double bind between economic performance and environmental and social responsibility.
Fabrice Bonnifet, President of the C3D (College of Sustainable Development Directors) and Sustainable Development & Quality, Safety and Environment Director of the Bouygues Group, called for a complete reassessment of the economic model, at a time when, in his industry, construction, 40 million tonnes of waste is produced each year, and less than 1% is reused. He is also convinced that procurement departments are key to transforming the economic model, compared to production, which ultimately only represents a small lever for reducing a company's social and environmental footprint. There are many solutions available to buyers, including the incorporation of responsible and sustainable criteria within sourcing, but also, and more importantly, all the approaches of the circular economy such as an economy based on use, recycling etc.
Fabrice Bonnifet noted that during the health crisis, France recorded an 8% reduction in greenhouse gas emissions, yet the country's GDP fell by 6 percentage points. To achieve the climate objectives set out in the Paris Agreement (i.e. cutting greenhouse gas emissions by 60% by 2050), these results would have to be achieved every year, for another three decades, which is certainly food for thought.
In conclusion, procurement departments need to learn how to purchase differently and incorporate new data to help contribute towards their company's transformation. This requires effective tools and strong convictions, but above all, it makes the job meaningful.