A New Era of Procurement in a New Era of Business

Introduction

I am excited to share our recent experience at the World Procurement Congress held by Procurement Leaders | A World 50 Group Community in London, where Rick Hof and I presented a case study on the evolving role of procurement at Alliander in response to the recent crises and the monumental challenges posed by the energy transition. Our presentation aimed to shed light on the significant changes we have implemented in our procurement practices to adapt to the changing market landscape.

Adapting to the Energy Transition

The energy transition has profoundly influenced the market and prompted us to refocus our procurement efforts on cost efficiency. As a result, in 2019 we embarked on establishing a world-class procurement organization with the goal of achieving results and driving growth, guided by key principles such as "Excellence in execution," "Close to the business," "Market knowledge," and "Commercial acumen."

Challenges and Collaborative Solutions

During this transformative journey, we encountered both external and internal challenges. From supply chain disruptions and price volatility triggered by factors like COVID-19 and conflicts such as the war in Ukraine, to shortages of materials and skilled personnel, we faced obstacles to our progress.

To tackle these challenges head-on, we realized the importance of fostering collaboration with the market and exploring alternative market approaches and innovations. We must establish new relationships with suppliers to drive change and progress towards our goal of becoming a world-class procurement organization.

Reinventing Ourselves and Embracing Change

The unforeseen crises in the market and the environment since 2019 have compelled our new procurement organization to swiftly address these challenges and adapt to the evolving market conditions. Our procurement strategy exemplifies this new approach, emphasizing increased collaboration with the market to co-create solutions. Additionally, attracting and retaining top talent is our highest priority.

The unique aspect of the current market situation is that the market, particularly the contractor sector, has experienced the same crises with similar issues in material and service supply. Consequently, demand-driven operations and simply resorting to larger-scale procurement bids cannot singularly solve the immense investment requirements for the coming years until 2030 and beyond. The demand-supply equation has changed, and collaborative problem-solving is now a better strategy.

Our Vision for 2024: A Collaborative Procurement Organization

Our vision for 2024 is to have a procurement organization predominantly built on collaboration with the business and demand-supply-driven strategies. This strategic shift necessitates revisiting our operating model and addressing the impact of crises on procurement and the supply chain.

Lessons Learned and the Road Ahead

Throughout our procurement transformation, we have gained valuable insights. We acknowledge that personnel changes are sometimes necessary as not everyone may align with our new way of working, prompting some individuals to choose to leave. Conversely, we find that this motivates others in procurement to contribute to the energy transition. We are fortunate to have ambitious yet achievable goals that inspire and encourage our employees.

Despite the challenges, we remain focused on the procurement model we introduced in 2019 and the four guiding principles mentioned earlier. While our progress may be influenced by the current turbulent times, discussions with other organizations in the Procurement Leaders | A World 50 Group Community network and our own procurement vision indicate that our model is still valid, albeit with some refinements. Hence, we will recalibrate our operating model and address the implications of crises on procurement and the supply chain.

Embracing Change and Building a World-Class Procurement Organization:

We embrace change and recognize the importance of embarking on a new era of procurement in this transformed business landscape. As we continue to reinvent ourselves and adapt, we are confident that we can realize our ambition of becoming a world-class procurement organization and continue creating value for Alliander.

In conclusion, a new era of business demands a new era of procurement.

Rick Hof, CPO

Bas Zuiderent, Procurement Development Manager