QUESTION $1(25$ marks$)$

As highlighted in the case study, examine the strategic areas that procurement should prioritise to enhance organisational

success and attain a greater competitive edgeQUESTION $1(25$ marks$)$

As highlighted in the case study, examine the strategic areas that procurement should prioritise to enhance organisational

success and attain a greater competitive edge.Students should prioritise the following when answering the question,

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Providing the relevant content for the question.

Making use of relevant examples and illu stations.

COVID$-19$ pandemic has put an enormous strain on global supply chains, at times halting manufacturing while shutting down airports and seaports, interrupting delivery of raw materials and finished goods. At the pandemic$$s onset, procurement departments switched to crisis$-$management mode to help companies alleviate disruptions, including sourcing personal protective gear for employees and helping smaller suppliers manage their cash flow. Based on research and feedback from global procurement leaders, there is a belief that companies can continue to rely on procurement to recover from the current crisis, in much the same way that they used the function to recover from past crises. But for procurement to lead the way, companies will want to reimagine not just what the function does but also how it operates and which new capabilities it will need. Research analysis suggests that procurement could gain the most by focusing its strategic initiatives in five key areas: strengthening supply$-$chain resilience, zero$-$basing the design of category value$-$creation strategies, investing in supplier partnerships and innovation, accelerating adoption of digital and analytics, and transforming to an agile operating model. By proactively making these changes, procurement leaders can not only counter some of the worst effects of the crisis but can also set themselves up to prosper in the future.

Procurement has led prior crisis$-$recovery efforts

Companies have a lot to bounce back from. As of this writing, many of the world$$s largest economies were experiencing record$-$breaking economic contractions. Yet procurement has helped companies$$ weather global crises before. According to research, in the five years immediately following the $2008$ global financial crisis $($GFC$),$ total return to shareholders $($TRS$)$ for companies with top$-$quartile procurement capabilities was $42$ percent higher than for companies whose procurement operations were in the bottom quartile. While procurement can again play a crucial role in recovering from a crisis, this time procurement leaders will want to take a different approach to the function in addressing a range of new issues. In a recent survey conducted, top Asia$-$Pacific procurement leaders pointed to a significant difference between recovery efforts after the GFC and what$$s happening now. Then, most companies focused on strategies to recover from the financial effects of the recession. Today, in addition to recovering profitability and finding ways to preserve cash, companies face the added challenges of shifting supply$-$market dynamics, changing ways of working, increasingly volatile demand, and de$-$risking their supply chain to make it less vulnerable to disruption.

When the pandemic disrupted deliveries, it highlighted the issues in a complex global supply chain. In a separate McKinsey survey, $93$ percent of procurement and supply$-$chain leaders indicated their intention to enhance their supply chain resilience, while $44\%$ is willing to compromise short$-$term efficiencies $$although this sort of trade$-$off can prove avoidable in some cases. Building relationships with more diverse suppliers may help companies withstand further disruptions in supply availability. The pandemic upended market dynamics and value pools in many industries: for example, expanding value pools for tech companies with cloud$-$based platforms that help remote workers communicate and collaborate, while adding pressure to commercial real$-$estate markets and the airline industry. Decades$-$old paradigms are being upended: ever$-$increasing global sourcing now potentially giving way to regionalization of supply, and lean inventory targets being reset in favor of higher buffer stock. The pandemic upended market dynamics and value pools in many industries: for example, expanding value pools for tech companies with cloud$-$based platforms that help remote workers communicate and collaborate, while adding pressure to commercial real$-$estate markets and the airline industry. Decades$-$old paradigms are being upended: ever$-$increasing global sourcing now potentially giving way to regionalization of supply, and lean inventory targets being reset in favor of higher buffer stock.

Work from home was becoming popular even before the pandemic. Forced social distancing accelerated the reimagining of the workplace$$and in particular the switch to remote work$$faster than almost anyone could have predicted. As in otstrations.