DPW Amsterdam 2022
Procurement in the eye of the storm
Dr. Karim Ouali in his current role is responsible for translating the procurement strategy into methods, processes and digital solutions and ensuring their implementation. Furthermore, he is leading the procurement of external engineering and construction services for DTAG’s core business, such as civil engineering, cable duct systems, assembly or antenna construction
As DPW Amsterdam 2022 approaches, we caught up with Deutsche Telekom’s Dr. Karim Ouali, VP Procurement Steering and Digitalisation, to discuss the choppy waters that lie ahead. And find that although his company has one eye firmly on the present, at Deutsche Telekom there’s also a relentless focus on the future.
Interview with Dr. Karim Ouali, VP Procurement Steering and Digitalisation
What is the number one factor that will challenge the procurement industry over the coming year?
Karim: I see two main challenges, ahead of a queue of others. The first is the ability to get goods and services on time and of sufficient quality. The second issue is not to get them on budget, because that isn’t possible anymore, but to defend against inflation and cope best with the soaring cost of energy. The reasons behind what we’ve seen in the past three years is really the result of different events – and now it’s not about innovation, it’s about being in crisis mode and making sure that goods are arriving from China, from the US and avoiding, as much as possible, the impact of rising costs.
What emerging technology in your field could be the next big solution for procurement professionals in 2023?
Karim: I wouldn’t call it a solution, I would call it an approach because I don’t know of any process which can fix all these problems. We have to get deep into our supply chain. We know who our business partners are but a few years ago I needed to know where their headquarters were but I didn’t have to know about their production sites or delivery paths because the supply chain was really resilient. Today, we need to know about that production site – but this alone is not enough. We’ve got this information and we know where they’re delivering and producing but we don’t know about the logistics issues they have. The traffic jam in the Suez Canal, for example, or the lockdowns in some regions in China, or the strikes at a major port in the UK. We need to know if these events are going to impact them, so it’s not just about where they’re producing, it’s how and where they’re shipping. Then it’s not just about our suppliers, it’s about their sub-suppliers. This is what we’re working on and what we’ve been working on for the past two or three years. It’s a huge exercise, but once we have this transparency, we can play with the data because the processing of data is the easy piece here. Collecting the data in the first place is the difficult bit. I want to know exactly what I’ve ordered, where it is currently, if it’s on its way to be delivered, I want to track the route.
….the focus on getting more transparency within supply chains won’t only make us more resilient to tackle the current events but creates resilience against other events which will happen in two or three years.Dr. Karim Ouali, VP Procurement Steering & Digitalization /
VP Sourcing Engineering & Construction at Deutsche Telekom
Where do you see the procurement industry headed in the next 5 years (as it relates to your field of expertise)?
Karim: I believe the crisis will last for months, perhaps even the next year. I believe also, that once we’re out of this crisis, we all have to ask the question – “what’s next”. The world is nervous, the world is vulnerable. Over the last two years, we’ve had at least 12 different crises. Not all of them have been huge, but all of them have had an impact. I believe all the analysis – and it’s not just us here, it’s happening everywhere – and the focus on getting more transparency within supply chains- won’t only make us more resilient to tackle the current events but creates resilience against other events which will happen in two or three years. It’s a question of anticipating the future. I don’t believe that what has happened over the past three years will occur again in the next two or three. But something new will happen.
How is your organisation specifically helping to drive the industry forward?
Karim: I believe that in the next few years, we will have a huge fight for raw materials. That’s why we’re now looking at who owns the primary production and who has control over that. Then we’re looking at which materials we need for which product because this will show the real interdependence. It’s not a case of having a single source, and this sits in the US, and this is our main supplier. If China, for example, stops delivering magnesium, then we can forget about digitalisation because without magnesium there is no aluminum. And without that, we can also forget about cars. Would this happen in one week or one month? Probably not. But would it happen in three or four years? Maybe, yes. But when it comes to raw materials, the main risk isn’t a geopolitical one, The main problem is that it’s a finite resource, and one day it won’t be there. The main question for us, is when to start changing the product. This is one of the key elements when we’re looking to the future. The companies that anticipate the future are the ones that will stay ahead.