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INTERVIEWS

Hottest information about 5th Annual Strategic Sourcing and Procurement Summit MENA

2019

TARUN ROCHWANI

Dep.General Manager – Procurement
Al Faraa’a Engineering General

Questions For Tarun Rochwani

How can artificial intelligence and block chain revolutionize procurement? What innovative procurement tools and techniques are you implementing?

Block chain and artificial intelligence could play a transformational role for the future. The global market for block chain related technologies itself is anticipated to reach billions of dollars, therefore it will be at the fore for any business. A lot has been spoken about the role of block chain along with BIM (Building Information Management) modelling shaping the construction industry. The benefits would be taking off intermediaries, transparency and trust for parties, establishing of efficient smart contracts and an overall transparency for clients. This will certainly contribute towards lean procurement.

A brief of tools and techniques:
We follow an efficient process of having specialized teams appointing our supply chain by a concise technical and commercial evaluation. We use less complicated preliminary formats initially leading to a final contract award. We have been persistent with using tools like contract soft software along with Microsoft Excel formats for supplier appointment and administration. Supplier performance, supervision, tracking, and feedback is done accordingly by our project control teams by ensuring our supply chain adheres to strict project milestones (These performance milestones being considered in the supplier contracts.).

What are the main innovative strategies to reduce costs procurement and purchasing?

We help cost reduction significantly by providing value engineering and providing alternatives for our Clients. We constantly work on improving our payment terms and achieving procurement budgets by pre-qualifying newer capable vendors who are looking to penetrate the UAE market etc. As a conglomerate we have our own in-house divisions that work to satisfy economies of scale and cost. This helps improving our own capabilities and cut down on spending.

What are the specific trends and challenges of procurement strategies in your industry? What is the vision of strategic sourcing and procurement for the upcoming year?

For us the challenges have been very tight cash flow, extremely competitive market with low price war, low procurement spend budgets, dealing with VAT (Value Added Tax), and tracing capable suppliers to perform consistently.
The vision for the upcoming year is working and dealing with small coherent companies/supplier divisions that have low overheads and are ready to take up challenging jobs as the market continues to be more competitive with tight cash flows.

2019

WALEED S. ALREHAILI

VAS Director, Procurement
STC

Questions For Waleed S. ALREHAILI

How can artificial intelligence and block chain revolutionize procurement? What innovative procurement tools and techniques are you implementing?

Many procurement functions are embracing technologies such as artificial intelligence (AI) and blockchain. However, many also struggle to understand the potential role and impact of these emerging technologies.

AI will continue to make a number of procurement processes more efficient in the future:

➢ Portal and helpdesk support: Robotic voice interaction integrates category cards, portal content, preferred suppliers, and price data

➢ Workflow efficiencies: Machine learning-based approvals help to monitor and expedite approvals

➢ Master data management: The automated updating of product, material, supplier, catalogue, and contract data is improving interactions with suppliers

➢ Contract management: Renewals and performance calculations are available on dashboards

In addition, other several instrumental implications. As for block chain, integrating this emerging technology into e-procurement systems could provide greater security, trust and transparency, including:

➢ Portal and content management: Supplier’s prices, specifications and lead times updated in catalogue systems in real time

➢ Enhanced contract management: Opening up remote supplier deliveries for goods and service confirmations are integrated into contract performance and key performance indicators

➢ E-sourcing and e-auctions: Enabling the adoption of mobile e-auction apps through public and private keys

➢ Payment processing: Secure access for suppliers to register and update banking information for accounts payable and to integrate goods receipt with dynamic discounting and supplier-triggered payments. It also provides the ability to integrate treasury with banking to make electronic payments

What are the main innovative strategies to reduce cost of procurement and purchasing?

For every business in every sector, keeping costs down is vital.
Here are two expert strategies to reduce costs in procurement and purchasing …
Be Bold – Negotiate!
Master negotiation and Host it with suppliers. A number of efficient tactics and methods could extremely support the cost reduction objective in different situations. On a strategic level, organizations may change the nature of demand when high supply power while they can leverage the competition among suppliers when high demand power. On the other hand, they should devise a negotiation strategy of managing spend when supply and demand are low, however seeking joint advantages with supplier if both demand and supply are high.
Buying Only What You Need
It is a direct value creation to buy products in an appropriate amount, which necessitates investing in a more realistic quantity, rather than purchasing the absolute maximum you can afford. In addition, that entails meticulous assessment and thorough analysis of forecasted demands and challenge internal stakeholders. If the research, market trends and data explicitly show that there is unprecedented demand out there, verification should be sure before processing purchasing orders.

What are the specific trends and challenges of procurement strategies in your industry? What is the vision of strategic sourcing and procurement for upcoming year?

The telecom industries around the world are facing many challenges in this era. New technologies like Internet of Things (IoT), augmented reality (AR), virtual reality (VR), microservices, and more necessitate that telecom providers realign their business strategies and restructure themselves as per the cloud era, in terms of operations, architecture and networks as well. That is one side of the challenge, and the other side is how to find the right applications out when a lot of other emerging technologies such as 5G or augmented analytics are progressing into maturity cycle, and such a new application would be threat to a company business if procurement doesn’t work consistently fast with other technical sectors.
Moreover, in order to gain a competitive edge, procurement should boost companies to focus on providing customized solutions to their customers and focus on developing long-term relationships with them.
Disruptive trends in technology are changing the function, as we know it today. Procurement is fast evolving into a more strategic and value-generating function.
Over the past decades, procurement has evolved from an operative, administrative service into a strategic function. Business collaborating has changed the purpose of procurement from cost cutting to value-generation. Such a novel purpose requires materializing the new vision of strategic sourcing to underpin procurement to contribute expansively in two dimensions:

  1. Leverage the purchasing power of a company to get the best price and desired quality for goods and services to be delivered at a certain time within a long-term strategic sourcing master plan
  2. Embrace automation to eliminate slow and paper-based processes and to reduce transactional costs within integrated digital infra with strategic suppliers

Eng. Waleed Alrehaili has over 16 years of experience in ICT leadership roles within a number of global service providers, multicultural suppliers and management consulting organization. He has vast exposure in several industries such as Telecom, IT, Banking, Oil, etc. He holds an Executive MBA and Electrical Engineering degrees from KFUPM University as well as executive educations from Harvard and Oxford. Currently, he leads Value-Added Services procurement department as a Director in Saudi Telecom Company “STC”.

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