The last time we spoke to Paul Howard, Chief Commercial Officer, New Zealand Defence Force, he and his team had just embarked on a procurement transformation that had moved the function on to become more strategically supportive to the business. The next aim, following on from that transformation was for Procurement to concentrate more on the suppliers with a move towards a more strategic supplier relationship management approach. And then, just as the new initiatives were being formulated and rolled out, COVID-19 hit.
The effects of COVID-19 further highlighted and underscored the need for NZDF to establish better management of its suppliers and the supply chain. The New Zealand Defence Force is, by its very nature and location, heavily reliant upon its suppliers in order to keep the military, its staff and in turn the entire country, safe, healthy and fed. To find out how NZDF navigated the choppy waters of the pandemic we join CIPS ANZ Supply Management Awards Procurement Leader of the Year 2020, Paul Howard, and Barbara McCallum, Deputy Chief Commercial Officer at NZDF.
During the early part of the pandemic, NZDF had people living on its nine camps and bases that were still heavily dependent upon the essential services of commercial providers such as ESS Compass, not just in order to eat and for the servicing of their accommodation but also to make sure that lockdown was effective in the camps and bases and so it was imperative that Howard and his team kept the supply chain resilient. Of course, the government could have called upon the Defence Force at any time and their suppliers are a key part of the delivery of outputs and outcomes and so Howard wasted no time in formulating his moves to strengthen supplier management.
Howard ensured that NZDF’s suppliers were paid promptly during a time of devastating economic uncertainty, to help build that much needed resilience into the supply chain, ensuring that suppliers were getting paid well within 20 working days; the unlocked cashflow allowing those businesses to carry on operating during the pandemic.
“We wrote to all our suppliers within the first week of the lockdown, essentially saying ‘Don’t panic,’” Howard explains. “We said: ‘These are the services we require, but we’ll work with you, plus we can make sure you’re on the Government’s essential suppliers list, should you need to move during lockdown restrictions on travel and movement.’” The suppliers reacted very positively to this, including our most strategic suppliers who looked after, e.g. Naval Fleet Management. The engineering services company Babcock moved to red team, blue team rotation in the Dockyard, to keep the business ticking over, reduced the potential for COVID-19 to spread and worked hard on making sure all of the protocols of getting on to the camps and bases during that period were done efficiently, smartly and in that spirit of cooperation.”