LWOL: Dinesh Kumar discusses the topic ‘What’s trending in Procurement?’
Associate Director at KPMG Dr Dinesh Kumar recently joined the Lunch with our Leaders (LWOL) forum on LinkedIn to chat with anyone having a question on the subject of procurement. A great online session ensued, with some useful insights emerging. We have transposed a few of the Q&As from that lunch hour below, but first let us briefly introduce Dinesh to those of you unfamiliar with him and his credentials.
Dr Dinesh Kumar is an Associate Director with KPMG Services, based in Johannesburg, South Africa, and is the regional country leader for supply chain and procurement practices. With a balanced combination of engineering and business management skills, Dinesh provides insights to clients at all levels. His key skill and passion lies in convincing clients to identify and to embark on transformation journeys.
As one participant who engaged in this LWOL session commented, “It’s nice to have a platform like this and to get a professional to give us credible answers.” We hope you too find the conversation with Dinesh to be insightful and beneficial…
Impact of legislation and compliance on process efficiencies
Q. How do we address the impact that Legislation and compliance has on process efficiencies in Africa?
A. We cannot shy away from Legislation as it is part of the tools to enforce compliance. However we need to have flexible measures within our Legislation to ensure that processes are not delayed as a result. The focus must be on ‘effectiveness’ of Legislation rather than on making it stricter.
The skill gap in procurement
Q. Please could you give your perspective on how the skill gap in the procurement profession across Africa can be bridged?
A. Firstly we need to create awareness of the Procurement profession from secondary school level to increase the number of graduates in this profession. This is however a long-term view. In the short term we need more training institutions offering improved content on specialised procurement skills e.g. strategic sourcing and category management. Thirdly, the focus on analytical skills is quite important. Cross-pollination and sharing of skills across the continent would be a key to address the issues.
Q. For the short term, do you think the public or private sector will be in a better position to drive these specialized training centers?
A. The choice should not be between public and private sectors. We should be looking at working on a collaborative basis between the two sectors. The public sector should set the direction and the incentives to drive the skills development. The private sector should then provide the means and mechanisms to implement these requirements as it often has the greater capacity and resources to enable this transfer.
Organisations promoting skills upliftment
Q. Institutes like CIPS – are they playing any significant role to ensure that procurement and supply chain are promoted to young people as a career choice? My experience with SAICA is they are very much involved in marketing the accounting profession from high school level. Why is CIPS not doing the same?
A. Thank you for your comment. Organizations such as CIPS, APICS (SAPICS in Africa and now with SCC), CSCMP and Smart Procurement are adding a huge value to skills upliftment.
Q. From my experience in the freight industry, firms in other African countries procure heavy machinery and goods which my firm help with the cargo and transportation, from my view and from those involved in what I do, lack of inter-regional trade agreement within African countries is not doing us much favour. Even in ECOWAS region, SADC regions and the likes where you expect borders and regulations to be less strenuous, the opposite is the case. How can we develop African entrepreneurship with this kind of bottle-neck at the various borders?
A. The setup principle of border agencies is to promote the business, not to restrict. However, in practice, it is mostly the latter.
To do business in an economic zone (Africa has 5 economic zones) is easy, but doing it across the zones is still a challenge. We are not yet an integrated continent, where taxations, customs and government regulations are quite simple to enhance trade. Eastern zone is however doing this better.
The feasible model for the moment is ‘regional’, a ‘continent wide’ setup will take a while to become reality.
How procurement can drive savings
Q. How would you say that procurement can drive savings such that it contributes directly to the bottom-line?
A. Firstly procurement professionals should understand the business within which they procure so they are able to look beyond the cheapest prices, or discount structures offered by suppliers. One of the available options is to create a separate cost centre to bank all savings achieved. This should be supported by correct budgeting and budgeted management, and understanding of cost drivers for each service or product procured. There are different established and proven mechanisms to achieve savings through the life cycle of a procurement project. The principles of benefit realization need to be clear and auditable.