The Philippines can become the world’s hub for procurement and supply chain, with both functions already regarded by locally based companies as their competitive edge, according to a Procurement and Supply Institute of Asia (PASIA) official.
Arguably the world’s leader in the business process outsourcing industry, the Philippines can easily extend its offerings to provide procurement and supply chain services to the world, PASIA president and chief executive officer Charlie Villaseñor said in a chance interview with PortCalls. This, he noted, can be achieved through the use of technology and domain expertise. The Filipinos’ proficiency in the English language is also definitely a plus.
Villaseñor said PASIA has over the years noted significant moves toward this development. “We’ve seen companies relocating here to put up their procurement back offices; we are seeing more companies that are adopting electronic procurement, e-commerce,” he noted.
(One major international shipping line has been operating some of its back office operations in Manila for some years now.)
“I think we’re also riding the wave of ASEAN integration. Trade is actually happening. That’s all (a function of) procurement and supply chain work,” he added.
Asked how the country compares with ASEAN peers in procurement and supply chain service, Villaseñor said that from a capacity-human resource view, “I think we are the best.” When it comes to enabling tools such as procurement software and electronic procurement, he said the country is “not left behind” and is “even leading.”
Villaseñor said this edge is getting sharper as Philippine companies start to train their procurement and supply chain officers for capacity development, strategic sourcing, and category management.
“They are not trained to cut on the prices, they are trained to mitigate risks to create value and to manage the total cost of ownership,” the PASIA chief said, adding that “money saved is money to the bottom line.”
He pointed out how more and more companies are promoting to senior-level positions officials well-versed in supply chain management rather than marketing or finance.
He said the competitiveness of a company is now measured not just by its product but also by its supply chain efficiency. “More companies realize that the competitive edge is now on the supply chain rather just competing on the product that they manufacture.”
More firms are also implementing electronic procurement or e-commerce, according to Villaseñor, including the country’s biggest port operator, a major food and beverage company, and some banks.
Right infrastructure needed
But for the Philippines to achieve procurement and supply chain hub status, he said the government “should provide the right infrastructure and incentives to people who are bettering the way they conduct procurement.”
He explained: “We’re saying that good procurement is good for the company. What is good for the company is good for the economy. What is good for the economy is good for nation building. I think the government has to support the pronouncement and their own practice of ethical, efficient, and e-enabling procurement.”
As for the private sector, Villaseñor said it must change management procedures and put in place new solutions, such as e-commerce. This calls for “getting the organization to really adopt change management because procurement is very hard to change.”
To do so, he said, the company should provide the right level of education and training. “We need more people who are formally trained.”
Villaseñor said PASIA is providing rigorous training and workshops on procurement and supply chain management, as well as certifying warehouses and validating the conduct of procurement by a company.
PASIA is a member of the International Federation of Purchasing and Supply Management, a confederation of 50 national supply chain organizations where Villaseñor is the first Asian to sit as member of the Board. – Roumina Pablo
Image courtesy of khunaspix at FreeDigitalPhotos.net
