The Chartered Institute of Procurement and Supply (CIPS) code of conduct promotes procurement best practices by ensuring that employees who are their members behave and act in a certain manner that upholds the integrity of the profession.
Purchasing and Supply with with Nyasha Chizu
Procurement professionals are required to manage issues of conflict of interest, corruption and business gifts and hospitality. How are professionals expected to manage conflict of interest? Procurement professionals shall avoid any private or professional activity that would create a conflict of interest or the appearance of impropriety.
They must not engage in trade of products that are purchased by their organisations.
A buyer may not operate a pharmacy if employed in pharmaceutical industry in order to manage conflict of interest.
Procurement professionals are required to manage their relationships with suppliers. They must avoid engaging in personal business with any supplier representative or similar persons. They must also avoid lending money or borrowing from suppliers.
Procurement professionals under the code must avoid any form of nepotism.
Favouritism is more rampant in cases where there is overlap of duties in the procurement process.
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Good corporate governance requires separation of responsibilities between shareholders and the executive to enhance accountability and responsibility in procurement decision-making processes. This is necessary since most executives have the appetite to make procurement decisions when it is not their responsibility, at the same time avoiding accountability of procurement decisions when things go wrong.
The code requires that procurement decisions are based on the business case.
They must demonstrate value to the business. As such, procurement decisions must be free from political or outside influence but from the value perceived by the transaction. Procurement professional are required by the code to ensure that business dealings with suppliers are fair and transparent. They must refrain from showing favouritism or being influenced by suppliers through gifts or favours.
Procurement decisions must be based on agreed criteria for every supplier.
Some procurement staff may vary certain criteria in favour of a preferred supplier in the promotion of nepotism in procurement decision making.
Supplier confidentiality must be upheld.
Trade secrets need to be safeguarded and the Procurement Act provides for such protection under Section 35 for the “record of proceedings” that governs the information pertaining to a tender participant that the general public and other tender participants’ may access. The CIPS code encourages free registration of suppliers for both the approved and preferred supplier listing.
Selection of suppliers must be based on meeting appropriate and fair criteria.
The criteria must provide for scientific evaluation of compliance and non compliance that add value to the selection process.
When dealing with suppliers in addition to issues already discussed above, procurement professionals must discourage the arbitrary or unfair use of purchasing leverage or influence when dealing with suppliers.
This requires that purchasing specifications are designed in a professional manner, with the desire to add value and manage costs and not limited specific supplier or products without convincing basis.
To conclude, with respect to dealing with suppliers, procurement professional posses’ power and they must avoid the exertion of undue influence or abuse of their power in procurement decisions. In a nutshell, all procurement must be handled professionally and all suppliers must be treated fairly and equally.
This is critical in order to achieve business transformation through ethical procurement practice.
