“Procurement in the Middle East is no longer price sensitive”
In conversation with Hariharan Laxminarayan, head of procurement, EMAL
Hariharan Laxminarayan, head of procurement at Emirates Aluminium Company (EMAL) is an active member of the Chartered Institute of Purchasing and Supply (CIPS) UAE Branch Committee. Laxminarayan speaks to Big Project ME about the changing role of procurement managers in the Middle East’s construction industry.
What is the role of procurement in the construction process?
Procurement in construction today is not just limited to making materials and services available when required. It is now a complete and continual assessment of the defined and implied requisites of the industry and business by aggressively driving value generation across each project phase such as design, construction, commissioning and operation. Procurement managers need to focus on strategic plans covering the entire project cycle, keep stakeholder’s value in mind and treat all project activities as a link to deliver targets. They should also continually assess the procurement business process and remove bottlenecks without the slightest delay.
How does procurement tie-in as a part of the overall EPC offering?
EPC has different phases depending on the size and type of project, and can include equipment work packages; safety and quality compliances; engineering services; construction services and so on. Procurement drives cost controls and value analyses of these phases, keeping not just post-construction or post-commissioning, but long run targets and continual productive expansions in mind.
How can procurement managers exercise quality control in price sensitive markets?
Price sensitive mindsets did prevail in the last decade, but the merger of global economies in the Middle East has changed the outlook. Infrastructural growth has altered the role played by procurement managers and business leaders. To a large extent, the percentage of volume-based price sensitive activity is lowering year after year. We cannot avoid these segments as they are needed to ensure the availability of feasibly priced sources. However, the need for sustained growth, demand for continually growing infrastructure, and expectation for innovations have made the role of value-based procurement much more vital in Middle East.
What are some challenges faced by procurement professionals in the region?
Price volatilities in every stage for each activity and resource; dynamically changing policies in different areas, especially in energy and environment industries; local market factors; continually growing supply-demand imbalances are some of the complex challenges faced by procurement managers. Availability of skilled employees and their long-term retention remains a big concern. Environmental aspects addressed by numerous laws and by-laws, which are formed prioritising national interests over the needs of business are some of the challenges I see. However, mobilisation, training, development and retention of human resources are indeed bigger challenges to address.
Can procurement managers encourage sustainability?
Sustainability is a concern procurement has always encouraged and today, we link this concept as a primary focus of procurement. With globalisation exposing the threats to present economics as well as future environment, procurement and supply chain operations have been enhanced to become responsible, accountable and proactive about sustainability.
