Global markets are increasingly unpredictable, and the role of procurement is undergoing rapid evolution. Dr Arnd Hirschberg, Chief Procurement Officer of Siemens Energy, offers valuable insights into how this transformation is unfolding and what it means for businesses aiming for sustainable growth amidst uncertainty.
Challenges of Growth
Dr Hirschberg identifies growth as a double-edged sword for procurement. While expanding markets promise increased revenue and opportunity, they also strain supply chains. Growth “puts constraints on the supply chain,” he said, adding as a general rule that “if it’s a continuous growth, capacities are getting scarce.” As capacities tighten, companies face the challenge of securing adequate supply amidst heightened competition from other expanding firms.
Moreover, geopolitical tensions add another layer of complexity. Siemens Energy mitigates risk by diversifying suppliers across three independent regions for each commodity. This strategy aims to reduce dependency on any single market and provides resilience against geopolitical disruptions, such as sanctions.
Technology and Talent
Managing transparency across complex supply chains is a critical challenge during periods of growth. Dr Hirschberg emphasises the pivotal role of technology in addressing these challenges. However, implementing and managing sophisticated software solutions requires skilled digital experts, presenting a significant talent acquisition hurdle. In a competitive talent landscape, companies must innovate to attract and retain the right talent capable of navigating digital complexities.
The Shift Towards Long-Term Partnerships
Traditional procurement strategies focused heavily on price negotiations. Dr Hirschberg advocates for a paradigm shift towards building long-term partnerships over short-term gains. He argues that relentless cost-cutting jeopardises supplier relationships and, consequently, transparency in procurement processes. Instead, fostering collaborative partnerships enhances flexibility and responsiveness in supply chain management.
Sustainable success, he asserts, is about “getting from top negotiation skills and short-term optimisation, into long-term partnerships.” By prioritising relationship-building over transactional haggling, businesses can cultivate supplier loyalty and encourage flexibility in meeting specialised demands.
Adapting Strategies Across Industries
Dr Hirschberg acknowledges that not all industries operate under the same incentives. Short-term consumer goods may prioritise cost-efficiency over long-term partnerships. However, for most industries, adopting a strategic focus on long-term relationships fosters resilience and agility in supply chain management.
Embracing Digital Transformation
Central to Siemens Energy’s procurement strategy is purposeful digitalization. This transformation streamlines purchasing processes and enhances data analytics capabilities. By automating routine tasks, companies free up human resources to focus on strategic initiatives and relationship-building activities crucial for sustained growth.
Navigating Future Uncertainties
In conclusion, Dr Arnd Hirschberg’s insights highlight the evolving landscape of procurement in an era marked by volatility and global uncertainties. Navigating these challenges requires a shift towards strategic supplier relationships, facilitated by technological innovation and a skilled workforce. By embracing long-term partnership strategies and leveraging digital tools, businesses can enhance their resilience, optimise supply chain efficiency, and position themselves for sustained growth in a dynamic global market.
As businesses continue to adapt to these evolving dynamics, Dr Hirschberg’s perspective offers a compelling roadmap for procurement professionals aiming to navigate complexities and capitalise on opportunities in an increasingly interconnected world.
Note:
This article is part of an ongoing series exploring trends in the APAC procurement sector. Next, we’ll explore how to unlock hidden talent. Can’t wait? Download the entire series as a report here.
About the Author:
Ben McDonald is a Co-Founder and Partner at Connexus Global. With a 20-year track record in recruitment, particularly in Supply Chain & Logistics, Ben partners with clients to secure top talent, driving their success in the Asia-Pacific region.
About Connexus Global:
Connexus Global is a specialised recruitment firm operating in Singapore, Bangkok, London, and Austin, focusing on the industrial, consumer markets, commodity trading, and renewable energy sectors.
