In the current procurement landscape, the dial has well and truly moved. Over the course of the last decade the procurement conversation revolved around how procurement could be positioned more centrally towards the strategic growth of a business with major companies around the world over investing millions into restructuring their procurement and supply chain management functions.
More often than not, these investments would see organisations build from the ground up to become an organisation defined and powered by a true world class procurement function. Procurement has traditionally taken a backseat in the evaluation of an organisation thanks to a major focus on sales and business function, followed swiftly by operation. In an ideal world, the conversation would change due to natural progression, but it often takes a moment of crisis or a fluctuating market to dictate where the spotlight will shine on a business. Money talks, and the global financial crisis of 2007-2009 had forced the hands of many businesses the world over.
“[…] we’re constantly communicating with our businesses through workshops to help them understand how supply chain management works, what are the risks that we face and then we try to mitigate them”
One of the key learnings from this crisis was that the strongest businesses were held up by their supply chain and procurement maturity, and thus a procurement evolution was born. “There were a lot of business cases from the period of 2008, 2009 and 2010 within the academic circle. These success stories of how businesses survived thanks to the agility of their supply chain management really kickstarted a major elevation of status, so to speak, of the supply chain management function,” explains Mohamed Habib, Vice President of Supply Chain Management at Tabreed. “Today, using my experience at Tabreed, people appreciate technology and supply chain management. As a function we have access to many platforms where a lot of key strategic decisions are made.”
“We [procurement overall] have a good exposure within the high-level management decision making and that’s a good thing. It’s pretty evident that this is a key component to the success of any organisation today.”
Tabreed is an organisation which not only needs a mature supply chain management function, it requires a resilient one that can withstand great risk and crisis as well as cater to the incredible demand that rests upon its shoulders. As a deliverer of award-winning, high quality, efficient and environmentally friendly district cooling developer in the UAE and across the GCC, Tabreed has played a pivotal role in a number of milestone projects that have been at the heart of infrastructure development and have set the standard for the industry. These include cooling infrastructure for the Sheikh Zayed Grand Mosque, the Burj Khalifa and The Dubai Mall; to name a few. The company currently supplies more than 1.338 million refrigeration tons of cooling across 83 plants and with cooling demand in the GCC expected to nearly triple by 2030, the pressure placed on Tabreed’s supply chain management function to be able to be ready for that increased demand is clear to see.
Joining the business in June 2019, Habib was given a clear mandate: to achieve significant maturity in supply chain management so that it is up to the required standards in order to support the growth required of Tabreed. “It was a clear message,” he says. “I had to come in and gradually transform the procurement and progress the function to the next level as part of the growth strategy.”
“Supply Chain management should be looked at as a vital organ. We collect, analyze, process then propose”
Empowered by a clear mandate, and a career spanning 15 years in supply chain management, Habib’s first challenge was to change the perception surrounding procurement. As a supply chain man by trade, he understands the nuances and complexities but in order to even begin thinking about achieving the required level of maturity he had to work to bring the wider business units into that same level of procurement conversation. To him, the biggest component and the biggest challenge that all supply chain management professionals face is proving the credibility and speaking the language of the business. “There are a lot of qualified people at Tabreed who understand supply chain, so it was pretty simple,” he says.
“We had to bring credibility very quickly, we did that by creating a lot of awareness on what the supply chain actually is and by changing the way we developed our operational reports, making them more contextually informative. So, we’re constantly engaging with our businesses through workshops to help them understand the impact of supply chain management, what are the market risks that we face and then we develop plans together to mitigate them.”
Despite the title, supply chain management at Tabreed isn’t solely centred around managing the transactions and issuing orders out to the suppliers. For Tabreed, it’s a complete assessment of the market, the business needs and how they run together. “When it comes to the communication part, I believe people will listen to you if you have credibility,” explains Habib.
“One of the things we have done at Tabreed is improve the quality of our reports and improve the quality of our data. So, every time there is a discussion around a topic, we bring in very objective thinking around it by using a lot of data because, to put it bluntly, data speaks.”
Habib is creating a function that is truly supportive of the business and how it provides this support must be in a manner that is flexible and responsive to the various requirements of the business. Habib and his team look to connect through both physical and virtual meetings, regular face to face conversations, and through emails. This, he feels, enables them to get closer to the business and hence better understand the needs and eventually know how they can best assist them. “At the end of the day, we are a support function and we have to provide services at best possible levels to our internal stakeholders,” he says. “That shift in paradigm needs to happen internally first within the supply change management, and then it would automatically portray itself outside to other departments.”
Since he joined, Habib has been blessed with very supportive management as well as a strong team around him. Tabreed has been successfully operating for more than twenty-two years and this kind of legacy can be perceived as one with a culture that is reluctant to change. After all, one would think, why fix what isn’t broken? Fortunately, this was not the case with Tabreed. ”When I came here, my approach was to understand what was the mindset of the company and what I pleasantly found is that the people are extremely welcoming to the idea of change. They were open to finding new ways of doing things,” he says. “My team had some really good ideas and so we decided rather than adopting a big bang approach to transformation we’d take small steps to improve our operations and to improve our mandate.”
This approach encompasses a wide number of areas of the business, including the upskilling of people and the changing of mindsets in order to bring in a culture of innovation. Habib analyzed the different policies and procedures to unveil opportunities of further optimization. “We scoured the market for new technologies that we can utilize as a company. The core idea behind it all was to bring in efficiencies to manage day to day supply chain operations”” He says. “Obviously, there’s always a challenge around how quickly you can obtain endorsements from the management to give you additional resources to spend on things like technology, consultants, or marketing.. But with a clear vision in place, you are able to sell these things to management the right away.” he further explains.
Habib notes that, sometimes professionals make a big mistake by embarking onto a role with the approach of completely transforming their function without truly understanding its current position, maturity, dependencies and the impact that change is going to have on a larger ecosystem i.e. the organization. “Supply Chain management should be looked at as a vital organ. We carefully collect, analyze, process then propose. If a complete change takes place too quickly, the ripple effect could be catastrophic. The link between the supply chain and the rest of the company could break resulting in a long road of synergy recovery.” He says. “Change that is driven organically and in complete sync with other functions are the ones found to be the most effective.”
As Habib has noted, data and numbers speak in procurement and as much as any procurement and supply chain professional wishes they could, nobody can truly predict the future. There is a major element of risk management involved, expecting and preparing for the worst as best as possible. But when the worst hits, sometimes even the strongest resilience cannot handle the impact. At the time of writing, the COVID-19 pandemic has taken a huge toll on both human life and the global economy. All the best laid plans have been hit hard and businesses have been severely affected.
“What’s happening right now is truly disturbing. For a lot of people, their lives are going to be changed forever. They will be impacted financially, economically, socially and of course medically,” says Habib. “To look at it from a supply chain perspective, this is the ultimate test. This is the time where we shine. This is where we put our best foot forward and say, “Yes we’ve been ready for this for years now.” This for me is where we can look, as best as we can, at the positives.”
And shine Tabreed has. “Resilience is one of the five core values of Tabreed, and one we cascade to all levels in our day to day work.” Given the nature of the business, Supply Chain Management knew that there would be delays on deliveries and services and so an immediate action was taken to refocus and regress the business to core operations. Thanks to a move towards virtual platforms, Tabreed has been able to work remotely without disrupting the business. Being an existing transaction-based function, the supply chain is readily prepared for this change as it often reacts to the business needs by utilising this virtual system. “Our policies and procedures allow us to find creative ways of doing things,” says Habib. “Yes, processes can be prescriptive in some areas, but we are not completely shackled by them. Hence, we were able to move quickly on to the virtual platforms.” This is but one example that highlights the internal readiness of Tabreed and Habib believes that the business has only been able to respond and continue to operate to the best of its abilities thanks to the culture it has at the organisational level where people understand each other’s limitations. “They understand the direction of the organisation and it makes it very easy for us to then accommodate for gaps and challenges,” he says.
“At the same time from our supply point of view, when I joined Tabreed I immediately arranged meetings with our key suppliers in order to build that relationship and network that would assist in withstanding challenges of all scales.”
“Be sure to focus on more than simply the supply chain management function. Look at the business and understand it. Only then by working hand-in-hand with the internal stakeholders and the suppliers can you begin to leverage on the advances in technology and processes that you are trying to implement”
At a time of crisis, Habib believes, it is only then you truly realise, and indeed appreciate, how good a relationship one has with their suppliers can help weather the storm.. He can point to firsthand examples where the suppliers proactively reached out to his team to address the situation and commit to full collaboration. “You have to realise that at the end of day what really matters is your relationship in the organisation and in the market,” he says. “It speaks to the way in which Tabreed establishes and maintains relationships with its suppliers so that we can collaboratively understand what is changing from their perspective, within their organisation and within their sector and market. We can then be quick to react, but the key component should always be that we are proactively looking at our suppliers and the changes in the market that might impact them; and they respect that.”
A key part of this successful response to such an unprecedented crisis, and indeed a key part of a modern-day maturity journey, has been Tabreed’s implementation of digital tools. Technology has of course created greater collaboration and a more seamless way of operating and there is surely no greater time for that to come good than now. “One thing that this crisis has highlighted was the importance of investing in technology ahead of time to upgrade our systems to be at maximum potential. We are now utilising that potential so that we can maximize our business operations,” he says. “As a result of that the management is more appreciative of these steps as we’ve been able to build a really strong case to move us very quickly to look at cloud systems for document management and knowledge management.” While Habib admits that there is still much more that he can do and use in the future, having a management team that is highly supportive of the idea allows him and his teams to assess different technologies on the corporate level to see how they can mature their systems and procedures moving forward.
Habib is a firm believer of using this as an opportunity to reflect not only on the response to a crisis but as a way of showing how far Tabreed has come on this journey of procurement maturity. After all, he believes it is a time to walk the walk, in procurement. To that end, he has been able to identify and highlight key successes as part of this maturity journey as well as looking at potential gaps and room for further improvement. “I think the most important thing for me has been the way in which my team has been and are extremely adhesive, so everyone is right there whenever there is a need, whether they are in operations or in projects or the finances or legal, we are always accessible. As a business, this has allowed us to stay composed and be able to tackle the situation head-on, instead of panicking,” he says.
“Obviously, there are so many other things and gaps and challenges that we are dealing with one day-to-day basis. Because what we are going through right now is abnormal. There are lessons to be learned and it’s only going to help contribute to the maturity of the people in the organisation.”
This journey into maturity will never truly end and the same applies to anyone in procurement and supply chain management. Habib believes that the key to succeeding, while not guaranteeing success, rests in the hands of the supply chain management professional. “The most important thing working in supply chain management is to understand where you stand internally within the business,” he says.
“Be sure to focus on more than simply the supply chain management function. Look at the business and understand it. Only then by working hand-in-hand with the internal stakeholders and the suppliers can you begin to leverage on the advances in technology and processes that you are trying to implement.”