“Despite the difficulties and its solvency, the purchasing function has been strengthened”

AutoRevista.- How have those responsible for Purchasing been affected by the events from the Covid pandemic to the war in Ukraine, including energy prices, the lack of products from Asia and the tensions in logistics flows?

Cristian Lienas.- The new challenges presented by the current global economic context have highlighted the essential role of purchasing professionals. And keeping these factors in mind, the purchasing group has shown that it is a capital actor for companies. If their presence on boards of directors had been becoming more and more frequent, now it is becoming commonplace: in an unpredictable environment in which the supply chain has been and continues to be highly stressed, they have been able to adapt to continue protecting the margins and continue to lead a proactive management of costs and risks in the markets, without neglecting aspects such as innovation or sustainability policies. Despite the difficulties and precisely because of the solvency that it has shown when facing them, the purchasing function has been strengthened.

AR.- How do these factors, as well as others such as inflation or the rise in interest rates, influence the so-called Purchasing Managers' Index?

C-L.- Taking as a reference the PMI corresponding to January 2023 related to the manufacturing industry, which is the one that sets the trends of economic behaviour, the data indicate that, although business conditions deteriorated to a lesser extent than in previous months, our country remains in contractionary territory and weak demand remains a key issue.

However, there are reasons for optimism or, at least, to begin to abandon the discouragement that has accompanied us in the last three years: the contraction rates have been easing since December and show incipient signs of recovery, in January there were the highest degree of confidence since the middle of last year and, as indicated by the buying and selling price inflation rates, inflationary pressures have also shown signs of slowing. We are therefore confident that demand improves in the next twelve months.

AR.- Has this combination of circumstances led to a rethinking of the Purchasing function in terms of sources of supply and visibility of the supply chain?

C.L.- If globalisation made it easier for us to contact suppliers from all over the world, the consequences derived from the pandemic first, the blockade of the Suez Canal and, now, the war in Ukraine, among others, have led many companies to reflect on their high degree of interdependence and reconsider relocation. The increase in logistics and transportation costs, changes in consumption patterns, as well as ensuring security of supply or promoting investment in automation and robotics, have led many companies to consider whether global supply chains they are as solid as you would think a few years ago. What will be the majority trend? It is early to venture, but since the just in time system seems like something from the past, there is a certain inclination to relocate a more or less significant part of the production. In short, proactive risk management of the entire supply chain through the different Tiers.

AR.- What are the differentiating elements that can make the automotive sector one of the most advanced in Purchasing management?

C.L.- Historically, the automotive industry has been the main engine of growth and innovation both globally and in our country. Taking advantage of this condition to face the transformation that the sector will undergo in the coming years can be one of those elements of differentiation: considering that most of the total costs of an automobile manufacturer come from the acquisition of materials, products or services from suppliers external suppliers that are becoming clear drivers of innovation in fields such as technology, electronics and mechatronics, it is time to take advantage of the capabilities of these external suppliers that will be strategic to increase the added value of vehicles. The promotion of the different propulsion technologies, from electric, hybrid and everything that has to come with hydrogen and other alternatives, leads sustainability as a spearhead like few other sectors. Perhaps other sectors do not have this competitive advantage today.

AR.- What impact can trends such as electrification, connectivity, digitisation or sustainability have on Purchasing?

C.L.- Digitisation and new market demands are transforming all sectors and, in all of them, the purchasing function is forced to adapt. As was made clear at the third meeting of the think purchasing tank in which AERCE participates together with large companies and which took place last November, from now on, the purchasing professional must have a character that we could define as more "entrepreneurial". In the case of the automobile, for example, the purchasing teams, in addition to guaranteeing the supply of new electronic systems and components and compensating for price increases by managing costs, they should not focus their business models solely on production and sales processes; It is necessary to explore new ways that allow the business model to be directed towards the different types of vehicle uses and new mobility preferences, as well as the entire life cycle of the vehicle. And given that it is a transformation that all agents in the sector must face, the ideal would be to rely on other areas to face the change from a multidisciplinary perspective.

AR.- With more than 40 years of experience, how has AERCE been interacting with the automotive world?

C.L.- AERCE was created with the aim of professionalising the purchasing function. An objective that little by little has been fulfilled and has evolved towards an ambitious purpose: to become the main hub for innovation and knowledge in Purchasing and to be a benchmark social partner to boost the economy of our country. And the best way to achieve this is through quality training, events and conferences that generate value for Purchasing professionals and facilitate networking, alliances with strategic organisations...

There are many tools that we make available to all the sectors represented at AERCE, including the automotive sector. During the last year, we have designed specific initiatives for him, fundamentally related to technology, sustainability and new trends in mobility. In relation to the future, taking into account that it is a sector with which we share concerns and expectations, we are sure that we will continue to advance together.

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Interview published in AutoRevista 2.377