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OPINION…..PROCUREMENT: A CATALYST TO ECONOMY AND INFRASTRUCTURAL DEVELOPMENT

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By Ahmed Olubakinde

A company that fails to manage its supply chain at a strategic level is unlikely to meet its business objectives effectively. (Chris Freeman-CEO of Logic).

 

I must first of all give glory to God almighty that make me a procurement and supply chain management professional. Why is professionalization of procurement and supply chain management so important that make me put up this piece of write up? Meanwhile, the above statement by Chris Freeman has substantiated the importance of professionalization from what has already been said in various workshops, seminars and academic circles. The only way that procurement and supply chain management personnel will gain recognition for outstanding contributions to their nations or organizations is by becoming just a professional as people in other vocations. They must recognized as people of a specialized profession, just as lawyers, accountants, architects, engineers, pharmacists and doctors are. To do this, they must have comparable standards of accomplishment. Part of this is the need to establish state Bureau of Public Procurement Act and saddle its responsibility to the procurement and supply chain management professionals.

The issues involved in this specialized field of endeavor are important and it is by paying adequate attention to them that operational/national productivity can be improved. Procurement and supply chain management may not be the oldest profession in the world. Meanwhile, however, another probably better known and more widely practiced is usually given that distinction. That purchasing/ procurement is a very ancient one, however, cannot be doubted. The very first book (Bible and Quran), even tells extensively the story of Joseph/ Yusuf being the procurement manager of the Egyptian Pharaoh.

He (Joseph/Yusuf) bought all the surplus grain during the seven full years so that food would be available for the following seven years of famine. The World Bank study popularly refers to as Country Procurement Assessment Report (CPAR 2000), even confirmed the above claimed by saying that the most important ingredients of success in business management whether public or private during the decade ahead is in procurement and supply chain management. It is also worthy of note that in all forward planning being done by any business, today the procurement planning or forecast serves as the foundation of all planning and execution.

At this point, we can therefore, say with confidence that the business man who does not have some knowledge of the rudiments of modern supply chain management cannot hope to rise far in the business world of tomorrow.

You may now ask, why professionalization is so important in any field of endeavor? The foregoing or introduction probably gives very good answer. One of the big problems of modern world is the lacking consistency in the agreed use and meaning of words or concepts. Just think how words such as democracy meant and mean different things to different people- Athens at the time of Plato, 18th century England, modern America and Russia. So many people use word differently, that untold confusion can arise therefore, the same happen in procurement. The fact that until comparatively recent years, when the world bank came up with their recommendation during the tenure of president Olusegun Obasanjo`s (GCFR), even the largest government ministries, departments, parastatals, and most progressive firms downgraded the purchasing or procurement function and put the least qualified people to handle the functions certainly shows how important it is to improve the status of procurement and supply chain management. The stigma of both past and present, happenings cum generations of purchasing management that linger in the public mind on ten percentage (10%) slogan also indicates the need for a much more professional type to be brought to carry out this job. It is interesting to know that procurement controls a large percentage (75-80% in many cases), of the expenditures of many firms or budgets of many governments. This one itself is a valid reason for having highly trained and truly procurement personnel.

May 2017 is a greater day for me that I will always remember in my procurement professional career and to Alh Aliyu M.J. the former president and now Registrar/CEO who is always out for the good of young once.

On that faithful Thursday 11th of May, 2017 my usual visit to the office of our amiable, resourceful, creative, inspirational, meritorious, admirable, estimable and number one procurement and supply chain management professional in Nigeria, Aliyu, the Registrar/CEO of the Charted Institute of Purchasing and Supply Management of Nigeria (CIPSMN) not in a good looking. His face was pale, not looking good and appearance shows that something was happening, and I quickly asked, sir what is the problem? He then revealed to me that my State is planning to embrace the modern and legal way of procurement and contract management process. There and then I quickly put a call to the necessary powers and shakers in Ilorin who assured me that the Institute (CIPSMN) will be carried along for a sound law that will benefit the state.

Though, it is interesting to note that, we are not surprising that this crucial bill (Bureau of Public Procurement Bill) is coming up under the leadership of His Rt. Hon. Dr. Ali Ahmad. Dr. Ali has been known to be a vibrant and progressive political actor, and community parliamentarian loved by masses who always yearning for community and sound state development.  From the records, Rt. Ali while he was a National Parliamentarian proposed, presented and supported several bills and served as an active member in several important committees and Ad-Hoc committees like National Centre for Agricultural Mechanization bill (NCAM), Petroleum Industry Bill, Terrorism Amendment, Pension Commission, State of emergency among others.

However, his emergence as the speaker, Kwara State House of Assembly is not unconnected to his previous achievements. Thus, the pool of procurement stakeholders have a great confidence in his leadership that Procurement Bill will not only be successfully passed, it will also be implemented and counted as part of his achievement during his tenure, because it is a sunshine bill and indeed an anti-corruption strategic one.

It is the general adage that development is the consequence of individual needs for achievement. Thus, any society that is yearning for socio-economy development is bound to look for a new or different method in solving her societal problems.  Prior to the year 2000, procurement and supply chain management profession seems to be new in Nigeria but its existent globally can be traced to the traditional era as earlier stated above.  For instance, in the ancient history including the Egyptians in 3000 BC, there was material management aided in the building of the pyramids.  In this period a scribe was used to manage the supply of the projects, recording the amounts of materials and workers needed on payrolls.  Though there was no designated procurement function.

However, in addition to Joseph/Yusuf, another earliest acknowledgment of the procurement function can be traced to the Charles Babages 1832 book, on the Economy of Machinery and Manufactures.  Who then pointed to the need for a material man in the mining sector that will source, evaluates, selects, purchases and tracks goods and services required.  During this period, there was a serious agitation for a centralized procurement office. Also, during the industrial revolution, procurement solidified its importance.  For example, purchases and disposition of items in rail sector, specifically in acquiring goods from developed parts of the countries bringing them to the South and Western part of the world.  In this period, departmental status was later granted to the procurement profession.

Unfortunately, the world wars (I & II) forced procurement initiatives to shift back away from a strategic role to strictly clerical.  Due to the scarcity of materials and depression in this period as well as paucity of knowledge on procurement profession, the worlds actors then resulted to obtain just enough raw materials, services and supplies simply to keep the economy running.  It was not until the mid-1960s that procurement once again took on managerial role and on a very wide-scale.  The concept of resource management became order of the day and procurement professionals emphasized competitive bidding while price becomes the determining factor for most contracts.  Emergence of many trained procurement professionals at that time fuelled the profession to regain its departmental status.  By 1990s, the role of procurement has transisted into strategic sourcing, where professionals regarded suppliers/contractors as partners in progress and long-term contracts were encouraged.  This was the genesis of modern day procurements evolution.

The above analysis is necessary for the government of the day especially kwara state government to understand the stage of which she embraced procurement professionalism and best practice.  Today, it has been globally recognized that procurement professionals are the instruments for economy and infrastructural development hence, many organizations in advanced countries especially large ones, rely heavily on specialists to ensure that procurement are handled sensibly.  They are the one responsible for quality initiatives for the development of a solicitation, evaluation, monitoring, auditing and disposition of items. While discharging this responsibility they will identify and work with the qualified suppliers and other sector stakeholders.

In this modern day of which the procurement is still awaiting government approval in Kwara State, new technological techniques have evolved in the profession; such as E-procurement, for instant source suite its an electronic platform in e-procurement that has created more efficient approach to strategic sourcing.  There are also an E-procurement bid and vendor management software, if all these are incorporated in procurement profession the organizational/state resources such as fund, time, will be economically utilized.  For example, source-suite alone can streamline the procurement process for over 1000 buying organizations across the country.  E-GP has been practicing in many countries of the world such as, United States of America, United Kingdom, Japan, China, Maritius, Republic of Korea, Portugal etc, while Kenya was the first African country to implement E-procurement to devolved administration before other African Countries like South Africa, Rwanda, Uganda etc, embraced the techniques in order to meet up with the global standard operating system.

The credit of discovery of World Bank procurement system goes to former President Obasanjo. When he discovered that Nigeria might soon become the centre of Advance Free Fraud (AFF) amongst the committee of Nations if urgent step is not taking and to address procurement matter as well as to embrace local contents of this great country led to the activations and establishment of most of the institutions, such as; Independent Corrupt Practices Commission Act (ICPC) 2000, Economic and Financial Crimes Commission Act (EFCC) 2004, Bureau of Public Procurement Act (BPP) 2007, Chartered Institute of Purchasing and Supply Management Act (CIPSMN) 2007, Code of Conduct Bureau (CCB), National Economic Empowerment and Development Strategy (NEEDS) and many others.

We must admit that, since the enactment of the Public Procurement Act 2007, this country has been able to saved Billion of Naira/Dollars due to the elimination of procurement abuse, fraud, waste, awarding of white-elevant contracts and many procurement procedures have not only been compliance with but several contracts have  successfully been awarded, and executed with due process mechanism.  Since then, States, such as Lagos, Kano, Rivers, Kaduna, Ekiti, Osun, Ondo, Edo, etc; that has domesticated the policy have made tremendous achievements in their socio economic and infrastructural development.

On this note, a good institutionalized procurement law will not only address procurement process imbalance but it will structurally outline procurement procedure that will be subjected to the reality of time.

 

OLUBAKINDE AHMED AIYELABOWO writes from Central Medical Library Compound, Yaba Lagos via aolubakinde@yahoo.com

 

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