Four ways to tackle uncertainty in social housing procurement
How does a procurement professional working in social housing manage his or her way through less certain times?
Uncertainty has become a frequently used word in the last year or so. Although positive and negative projections have both been made for the UK’s future since the EU referendum, many people are united in saying they lack knowledge about the road ahead. In other words, uncertainty prevails.
In a function such as procurement, which needs to plan, budget, project and make its decisions as cost-effectively as possibly, this kind of climate can be challenging. In social housing, which already faces pressures to reduce rents, cut costs and more recently, start gearing up to build more affordable housing, the challenges are probably multiplied.
Last year uncertainty may have been part of the reason for a stalling in house prices with a number of housing associations increasing delivery of homes for outright sale and shared ownership, which increased exposure to a volatile property market. This in itself would present its own challenges to the procurement function.
Uncertainty isn’t a help when it comes to many of the processes the procurement professional has responsibility for. So how should we manage ‘unknown unknowns’?
1. Pursue those doubts
One way to tackle uncertainty head on is to face up to each and every niggle you may have.
Professor Tuckett from University College London claims that to make good decisions we should look at things that we find difficult, rather than avoid them. If we get information or knowledge that makes us uncomfortable, he suggests we pursue those doubts in more detail.
Seeking out expert advice and finding out the facts about a difficult situation could help to alleviate uncertainties.
2. Tailor contracts
Taking into account the probability of change is essential. Without it spend management is likely to be much more challenging.
Think about designing new contracts to allow for a range of potential changes. See whether you can work with your suppliers to structure more flexible procurement contracts.
Recognising that change is almost certain will help everyone. It can give your organisation more flexibility and enable people to prepare.
3. Make yourself heard
Speaking up to make your perspective known could be a way to start building clarity. If you have a European supply chain, you need to make your voice heard now, according to Logistics and Supply Chain writing after the triggering of Article 50 in March.
A risk that multiple supply chain links could be damaged or even broken by a sudden imposition of trade barriers between the EU and UK has been highlighted, so the advice to supply chain professionals is to play a key role in ensuring that UK and EU negotiators understand the degree of interdependency that exists in supply chain ecosystems.
4. Don’t stop progress
Rather than letting uncertainty stop any discussion of innovative products and technologies for social housing, consider a middle ground that enables you to explore new opportunities without making a full commitment.
Research and consulting company Delta-ee points to carbon friendly innovations that could complement gas and electric heating, helping to keep renewables on the table when there are unknowns about the future. It says that social landlords are interested in microgen options for heating, for example, but have been deterred by policy changes, budget cuts and Brexit.
The answer lies in working openly with partners and suppliers to look at solutions that can be developed to ensure progress is not brought to a halt, without requiring the organisation to make a 100% commitment at this stage.