Home' Inclean : INCLEAN Mar-Apl 2017 Contents 30 INCLEAN March/April 2017
By: Claire Hibbit
The nature of procurement is evolving from straight forward
purchasing to a more sophisticated function of strategic sourcing,
leading procurement managers and teams to look beyond price.
Adrian Oldham, regional director, Michael Page Australia, says
demand for procurement has been generally consistent over the past 15
years, but more recently the position has shifted into a specialist role.
“In the last few years [procurement] has very much become its own
standalone function,” Oldham said.
“The overall trend for the demand for specialised procurement has
constantly been on the increase, but there have been dips like any
According to Oldham, following an initial spike prior to the
GFC, demand for procurement specialists returned between 2009
“Organisations realised they weren’t able to make the same levels
of revenue [post-GFC] and the only way they could protect their
profit was to reduce their cost lines. Demand once again came off
between 2012-2013, once many organisations had established their
procurement teams. More recently we’ve seen it spike again.”
Janelle Ruston, senior business manager in procurement, Hays,
agrees procurement has steered away from its traditional role.
“Over the past decade it has become more of a niche field. It used
to fall under the CFO or within the finance team but it has since
become more specialist,” Ruston said.
Ruston told INCLEAN magazine the cleaning services industry is
one of the most complex industries to procure due to the increased
focus on compliance and workplace laws and the competitiveness of
“The cleaning services industry is a really competitive sector and
there’s a lot of pressure to keep the costs low to win big contracts,”
Ruston said. “Therefore, procurement are focused on a lot of factors
within the bid and tender process such as the products they use,
the cleaning equipment and the employment practices they have
including staff training and work health and safety.”
Value vs price
While price has generally been the main driver for purchasing
decisions, there has been a trend more recently to steer away from
the lowest price and seek value-adds.
As Michael Page’s Adrian Oldham explains: “Going back quite
a few years [procurement] was very much just purchasing in its
nature, which wasn’t particularly complicated. It didn’t delve
deep down to where the greatest value could be achieved, and
years ago price got squeezed so much that there was no value that
could be delivered.”
Procurement has since begun to focuse on value, rather than
purely seeking the lowest price.
Bruce Lees, general manager of RapidClean, says while price
remains a large decision driver, purchasing in the commercial
cleaning sector is becoming more analytic, with decisions based on
cost-in-use over solely the price of the product.
“I think the industry is starting to move in a more positive
direction,” Lees told INCLEAN magazine.“We’re moving away from
a simplistic purchasing model to a more sophisticated one, which is
a positive step for the industry. I think the smarter the customer, and
the more sophisticated they are, the less likely they are to buy just
based on price.”
The future of procurement
Demand for procurement specialists has led to an influx in
professional qualifications at universities across the country, and there
is more investment being made internally in procurement functionality.
But, as Oldham explains there is also now greater expectation of
the role: “There’s [more] investment in functionality but also more
investment in the expectations of what these functionalities deliver.
Before the GFC virtually any industry in Australia was making a lot
of money so we didn’t really require these procurement functions,
since then it’s become a lot more challenging and there’s a lot more
expectation [of the role].”
Oldham anticipates procurement to further evolve and become
more business centric: “It will become just like any other normal
business functionality within an organisation rather than being an
add-on support function.”
RapidClean’s Bruce Lees says procurement has found balance
within the commercial cleaning sector, with both operational and
procurement staff involved in the decision-making process. “I think
generally the market is improving. It’s become more centralised – it
has been through the process of being too far one way and too far
the other way, and now it’s in the middle. In my mind it’s crucial that
is stays this way – procurement and operational staff need to work
together to make decisions. Either one in isolation is flawed.”
How the role of
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