Everyone knows that good procurement is one of the biggest contributing factors to a successful business. That being said, of course the way procurement is being carried on differs from one continent to another due to several factors such as geographical locations, resources and even cultures.
Here is a look at how procurement have improved in Europe over the years in comparison to Southeast Asia and hopefully, we can all learn a little lesson on procurement and use it to enhance the way procurement is done in our own businesses.
In the way procurement professionals learn:
European companies often use an in-house company training and Corporate accreditation or institute accreditation are often available for procurement professionals. This means a procurement professional can move from one company to another with a proof that they have been trained by an accredited trainer previously.
In Asian countries, companies use both public training and in-company training and despite procurement training being largely available, only industry-recognised or transferable accreditation are preferred by both companies. In this case, Asia might have a slight advantage. Public training are usually cheaper and subsidised by the government which means companies usually pay less for a world-grade quality education for their procurement professionals.
While Corporate accreditations are becoming more popular in Europe, Asian learners still favour university or institute accredited programs. Not only that, when it comes to e-learning, European procurement professionals are more confident and comfortable with online accreditations and online-based knowledge training whereas countries in Asia are still heavily reliant on instructor and accredited institutions for training purposes.
Centralised support for Southeast Asia Procurement following the steps of European countries
In the SEA, global organisations are centralising their support for procurement and supply chain functions to Malaysia and the Philippines in order to amalgamate business processes for a small region or globally. Centralised procurement processes is proven to have higher efficiency and lower cost of hiring in developed countries – as witnessed in European countries. A German chemical company for example moved functions like buyer, indirect procurement, material planning and direct procurements to Malaysia to service 15 countries globally from this centre.
Moving forward, there will be more European companies working hand in hand with Southeast Asian procurement companies to lower their cost and improve their efficiency. The good news is, Southeast Asia will see a climb in procurement activities, especially for countries like Vietnam and Philippines as well as Malaysia where hiring cost is still cheaper in comparison to countries like Singapore.
Europe is improving its uptake on innovative and green procurement
In Europe, 55% of procurement procedures use the “lowest price” as the only principle standard for public contracts. What this is saying is that public buyers might not be paying enough attention to quality, sustainability and innovation.
Therefore to improve the commitment towards strategic procurement, the European Commission are updating and will be issuing new guidance documents on the use of innovative, green and social criteria.The European Commission will also promote the exchange of good practice, including in strategic sectors, such as healthcare, IT and construction.
Countries in Southeast Asia like Singapore, Vietnam and Malaysia on the other hand has already seen a a boost in the healthcare industry that has caused a increase in manufacturing output. Pharmaceutical products in particular have seen exemplary growth due to the growth of Middle Class community.
Improvement in transparency and data integrity in procurement
In order to gain better analytics, reliable data is important. Without it, procurement professionals will have a tough time making decision that is best for their company.
In Europe, The commission is already looking at improving the access of data on public procurement by re-assessing the performance of procurement policies and optimising the interaction between public procurement systems. The European Commission is advocating for the set-up of publically accessible contract registers (publishing awarded contracts and their amendments) – allowing the reporting of corruption by setting up effective reporting tools and protecting whistle-blowers against revenge which will all contribute to better transparency and saving the public money.
ASEAN countries are not too far behind, if not on the same space. Countries like Singapore and Malaysia are already working hard on implementing new technology that will help them increase their efficiency and improve productivity. In both Singapore and Malaysia, the government is heavily involved in ensuring transparency and data integrity in procurement.
In hindsight, there is not much difference in the way Southeast Asian procurement has improved in comparison to that of European countries. While Southeast Asia’s procurement has boosted over the years due to its efficiency and lower cost, European countries are still working on hard to ensure the quality and integrity of their procurement still bare the highest standard. That being said, they are both learning from each other to improve their procurement processes.
ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.