Our latest initiative ‘Conversations in Middle East Procurement’ aims to publish a series of interviews conducted with well-known Procurement Practitioners from the region, who lay out the vision for their function while detailing out the best practices they have implemented along the way.
In this last blog post of the trilogy, Moustafa Helmy shares how Qatar Foundation mitigates supplier risk through supplier onboarding and performance management
ZYCUS: Alright, so let’s talk about the Supplier side of things. What path are you taking towards improvement of your procurement objectives in terms of supplier management? Are you focusing on supplier negotiations or is supplier collaboration your major area of focus? There are multiple pathways that one could take to focus on the supplier performance improvement. Is there any particular tactic that you are focusing on?
M. HELMY: Yes, we already have a section from our business support department focused on vendor relationship management. These guys are taking care of all the supplier interactions in the process. From supplier evaluation, registration and renewal to their complaints, access to the system and everything else in between.
We also undertake an annual supplier performance report which evaluates all our suppliers for a fiscal year on 4 main areas: delivery, communication, user feedback and pricing. We further classify our suppliers after this stage under the ratings of A, B and C. As the next step, we give our suppliers feedback. ‘A’ rated suppliers are sent Thank You letters. Suppliers falling under ‘B’ are sent letters identifying the issues specific to them while C’s are given warnings.
We are also trying to improve our relationship with suppliers by meeting them face to face. We conduct a vendor symposium every alternate year where we gather all our suppliers and greet them. We also have awards like ‘Best Performing Supplier’ based on our end user survey and delivery performance. Then, we share our future plans and projects along with their contribution and the future contribution needed from them.
We care for our suppliers and look at multiple ways to retain them. The market in Qatar is a growing one but highly specialized. The needs of Qatar Foundation are fast growing and we do not meet all our needs from what is available in Qatar. Thereby, we work with suppliers and facilitate their development, share our plans with them, put them across international facility management companies so that they can set up joint ventures with them while they work for Qatar Foundation. We are trying to give our local suppliers an opportunity to grow internationally.
ZYCUS: Alright, I think you’ve laid it out pretty well as to what the priorities are, what the plans etc are. What are the potential roadblocks you are going to face while you go trying to realize the vision that you have outlined?
M. HELMY: Many challenges. The first and foremost one is change management. How to change people, how to change their habits, how to make them objective/goal oriented? On the process side, how to replace, re-engineer some of the inefficient processes? We are facing a number of challenges with people, with end users, with customers and even with suppliers. For example: implementing the e-tendering solution will mean that suppliers will not have to send their annual envelopes with details any longer, they will submit them online as encrypted files. This is a big change in the culture of the region and will be a big challenge for us.
For the suppliers, as of today they deliver these envelopes in person and are sure that their bids have been received. With the new system in place, they will need to be taught as to how to submit their bids online. A lot of questions and doubts will come from them as most people here are used to manual systems and processes. We need to convince these people that this new online system is a secure one. Another challenge involves improving our policies and procedures, without affecting our general guidelines and rules.
Business is growing around us, world is changing around us. Our policy, procedures and rules should change accordingly to grow. Working with our management and our legal department changes every year as we have new rules to implement and adopt.
Our third challenge is to move away from people centric processes to technology enabled ones. This means investing further in automation and process re-engineering instead of hiring people. We want procurement to move higher up the value chain and empower them to drive strategy rather than tactics.
ZYCUS: Thanks Moustafa for your valuable insights. We are sure the vision and the roadmap you have outlined in this interview will prove to be helpful to a number of other organizations from the Middle East.
Learn More: Vendor Management Guide