Melbourne is in lockdown. Again. Many are asking, ‘How did we get here?’. The answer is multifaceted and, unfortunately, procurement played its part. The Conversation recently published an excellent article on the role procurement had in Melbourne’s clumsy hotel quarantining, including its influence on the troubled private security industry.
We all know procurement can be a force for good. But when blinded by the lure of savings, it can also do great harm. The economy is going to need a hand getting back on track, and procurement can (and will need to) be a huge help in that area, but only if it’s used conscientiously.
So, how can procurement kick-start the economy?
TUC has published an excellent piece on 10 Ways to Kick-start the Economy. When it comes to procurement, they recommend that the UK government award contracts that include clauses guaranteeing apprenticeships, meet the contract obligations in an environmentally sustainable way, and strive to provide job opportunities for marginalised groups where appropriate.
This advice should apply to all governments and industries looking to use their procurement superpower to drag economies out of recession and thrive post COVID-19. We have to be forward-thinking. We need to carefully consider what skills need to be fostered, support sustainability and the values we want perpetuated. Procurement dollars should go towards the maximum positive impact.
For example, The Conversation’s piece highlights the Cleaning Accountability Framework set up in 2014 as an initiative that allowed procurement dollars to positively influence a highly competitive industry to improve its labour practices. We can have a similar impact while kick-starting the economy by being forward-thinking with our procurement practices.
Think Global, Buy Local
I have written previously about the power of SMEs to diversify supply chains and make them more resilient. At the same time, we want to avoid propping up inefficient industries simply because we want to buy local. If a local vendor is as efficient as a global vendor, no doubt we should put our procurement dollars into supporting that vendor. But we shouldn’t let patriotism blind us to inefficiencies and substandard products. Propping up underperforming industries is NOT forward-thinking procurement; it’s bad business. We must use our purchasing power wisely.
We can’t kick-start the economy with procurement if we don’t spend. In the TUC piece cited previously, the UK government was encouraged to bring planned procurement projects forward. We advise organisations to do the same. For government, that might mean bringing forward infrastructure builds or rebuilds. For businesses, it means that today is the time to restructure supply chains and make other meaningful procurement changes.