Strategic procurement: enabling KSA’s Vision 2030

Rachel Collins
Exciting times for the Kingdom of Saudi Arabia as new infrastructure and megaprojects are launched. To deliver these effectively, procurement must be strategic, smart and engaged from the start.

Since 2016, Saudi Arabia has steadily moved towards economic diversification via its ambitious Vision 2030. The Vision outlines specific goals to contribute to GDP growth, including raising the private sector contribution by 25 per cent, increasing FDI by a third, and growing the SME sector contribution from 20 to 35 per cent.

Infrastructure is a priority, with government investment to be augmented by the private sector playing a wider role in development, funding, financing and operations, via innovative mechanisms overseen by the National Centre for Privatization (NCP). Development of better tourism and entertainment facilities are also seen as a priority, as well as social infrastructure such as healthcare and residential.

The construction market is therefore set for buoyancy as a wide range of programmes and projects emerge across the Kingdom. Projects such as NEOM, Qiddiya Entertainment City, and the Red Sea Project are already under way, led by the Public Investment Fund (PIF). Ambitious timescales are in place for this multi-sector surge of construction activity, much of which is expected well before 2030. And whilst mature entities with solid experience of project delivery operate across both public and private sectors, there are also newer entrants, who face significant challenges.

Procurement and supply chain integration represents a substantial challenge, which is set to intensify as the market responds. However, there is a real opportunity to develop the strategic, cohesive procurement approach that has become the norm in more mature construction markets. This shifts the procurement function from its traditional operational position into the strategic domain.

Embedding best practice procurement principles and applying lessons learned from across the globe will be key to successful project delivery—and, ultimately, fulfilment of Vision 2030.

But there’s no time to lose, as procurement and supply chain opportunities begin at project inception, to realise maximum value. This timing is now critical, as so many programmes are scheduled for a swift start.

Future sustainable project delivery will hinge on innovative solutions that push the boundaries of traditional practices and harness new ways of working. There are increasing opportunities for the Kingdom to benefit from alternative construction technologies—modularisation and offsite prefabrication results on average in 18 per cent reduction in schedule durations.[1] 

A procurement strategy developed at project inception allows time to explore these options and to develop the conditions needed to make them work: global partnership opportunities, inward investment, relevant skills and manufacturing infrastructure.

The optimal procurement strategy is tailored to the individual client, is aligned with the project aims and outcomes, and balances opportunity and risk against the cost, time and quality objectives.

Supply chain insight is crucial. Digital tools will ideally be used to collect and analyse market intelligence, identify trends and opportunities, and determine supply chain performance, capacity, interests and commitments. The resulting data should underpin the search for the best procurement solutions for each individual client.

At Faithful+Gould, we’re committed to supporting the economic development of the communities we work in—and, here in Saudi Arabia, that means helping the Kingdom fulfil its Vision 2030 goals. We’re investing in our strategic procurement service, as we believe it has a vital role to play in Vision 2030 success. Our KSA team builds on lessons learned on numerous procurement exercises in the Middle East region and throughout the world.

To find out more, join us at the Big 5 Saudi on 13 March 2019, where our Head of Procurement, Rachel Collins, will lead a workshop on How Strategic Procurement Can Support KSA’s Vision 2030.

 

[1] Building Design & Construction, Dec 2018.

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