While procurement leaders can take pride in adjustments made during the coronavirus (COVID-19) era, the shortages of medical equipment and other critical commodities at the start of the pandemic were not the result of supply chain disruptions.
They were the result of supply chain failures, David Gragan, chief learning officer, at the District of Columbia’s office of contracting and procurement, said during “Leveraging Collaboration to Assure Continuity of Supply,” a virtual session at the ISM World 2021 Annual Conference on Wednesday.
“Every one of us in this meeting has probably gone through a rough year,” Gragan said. “Supply chain disruptions are programmed — we anticipate them, and frankly, that can be healthy because they require us to have backup plans, contingencies and other ways to mitigate the impact. As supply chain professionals, we are responsible for managing disruptions, but of course, that’s not what we had (with the pandemic).”
Gragan shared the session with fellow members of the Continuity of Supply Initiative (COSI), a group formed last year to develop collaborative procedures to strengthen procurement contracts and avoid the kind of breakdowns that plagued the early weeks of COVID-19. The others were Stephen Gordon, Ph.D., faculty chair at Old Dominion University in Norfolk, Virginia; Norma Hall, CPO of the state of South Carolina; and Tammy Rimes, executive director of the National Cooperative Procurement Partners.
Clockwise, from top left: “Leveraging Collaboration to Assure Continuity of Supply” session moderator Darin Matthews, CPSM, C.P.M., faculty chair at the University of California, Santa Cruz, with panelists Stephen Gordon, Ph.D., Tammy Rimes, Norma Hall and David Gragan.
Though all four panelists specialize in public procurement, they emphasized lessons for companies of all kinds, in the manufacturing and services sectors. Among them:
- Build in redundancies — multiple suppliers and logistics providers.
- Develop a “circle of influence” and culture of communication, not just with suppliers but with the company C-suite and manufacturers. “Without communication, you can’t have collaboration,” said Hall, who elaborated: “What does the manufacturer need? What does a carrier go through to get a product where it needs to be? (A mistake) is giving partners only the information you think they need to know.”
- Craft “win-win” contracts that benefit all parties; also, reward suppliers for continuous improvement.
Rimes, a former purchasing agent for the city of San Diego, discussed public-sector use of collaborative procurement and “piggybacking” contracts. As an example, while at San Diego’s city hall, she helped put together a consortium of 17 Southern California agencies to negotiate a fuel contract at a more competitive price.
“We don’t have to reinvent the wheel,” Rimes said. “We’re all buying a lot of the same things, so there’s no need for all of us to bid for our own items when we can use other entities to help us get the important but mundane stuff.”
- The critical commodities shortages during the pandemic were a product of the longtime procurement priority of lowest cost, Gordon said. “It was part of (the mindset),” he said. “There was no villain wearing a dark hat.”
- COVID-19 has helped change the buyer-supplier relationship, the presenters said, from a transactional dynamic to a partnership. “It’s not the new normal yet, but we’re approaching it,” Gragan said. “I think many of us can see it from here.”
- Procurement organizations must learn from suppliers: How are they making contracts more resilient? What are the barriers to supply continuity? How can buyers help?
“While procurement is awesome — we rock; I will be first to pat us on the back because we help keep things running — we only know a little bit about a lot of stuff. We really don’t get into the weeds that much. That’s where these partnerships are helpful, because suppliers can bring resources, ideas and new things that you’ve never heard about.” — Rimes