Why more is more in emerging economies
At a recent Global Procurement Awards event in London, Aurik achieved finalist status across three of 12 categories: innovation in supply chain, big and small business collaboration, and CSR Impact. It was also an opportunity for one of our directors to attend a 2 ½-day workshop on global procurement best practice.
Over this period, we listened to the biggest companies in the world talk about global procurement best practice. The message was universal: "less is more" and "the bigger (the size of a supplier), the better" so that you can implement penalties for breaches in SLAs. All the delegates were headquartered in the USA, Canada, Europe, the UK and Japan.
On the last day, Pavlo Phitidis, a director of AED, had to address the audience on emerging economy thinking in procurement. His message "more is more" was awkwardly received. Emerging economies are happy to allow the entry of developed economy multinational players to enjoy the profits that can be made in exchange for services from sunlight, minerals, wind, consumers and the like.
However, developmental policies also look beyond profits alone in instances where good governance pertains. Often, these globalisation efforts need to be supported with localisation outcomes. Most frequently, this includes the establishment and development of local SMEs into both the supply and demand chain of the MNC activities. Supplier development programmes are most frequent in these cases, especially where concessions are tendered for and won.
This outcome has proven to hold true and as a result, the ability of a globalising MNC to establish a localisation and SME strategy, often proves to be the elixir of its globalisation success. Aurik works extensively with MNCs in Africa to support the development and implementation of localisation strategy. Let us help you take your MNC to the next level!