What can the Spice Girls teach us about being reasonable?

This is the third article in a fortnightly series from Gordon Donovan in which he ponders ‘is now the time to be reasonable?’

One of the banes of contract is the term “reasonable”. For many of us the first time we have been introduced to this concept is via Carlill v Carbolic smoke ball when one of the judges (Lord Justice Lindley) suggested that:

Another meaning, and the one which I rather prefer, is that the reward is offered to any person who contracts the epidemic or other disease within a reasonable time after having used the smoke ball”

What can Spice Girls teach us about reasonable endeavours?

Springing into the 21st century we have now got contractual terms that says reasonable or best endeavours, but what does this mean. Recently I came across a couple of decisions and pieces which seek to put some further rigour around it.

First is an article in Supply Management that seeks to understand what a “reasonable “notice period for termination is.

This case states that a reasonable period would be subject to 5 key principles namely:

  • each decision must be made on its own facts;
  • what amounts to “reasonable notice” should be ascertained at the time at which the notice is given;
  • consideration should be given to the general circumstances and practices within the relevant trade;
  • any specific circumstances existing at 
the time of the contract should be taken account of;
  • the degree of formality in the relationship is a relevant factor.

Next was a case in Australia that made it to the high court. The case centred on a gas supply agreement. The agreement obliged the sellers to use “reasonable endeavours” to make available a supplemental maximum daily quantity of gas.

The court outlined three observations about reasonable endeavours clauses in general:

  • they are not an absolute and unconditional obligation.
  • the extent of the obligation is conditioned by what is reasonable in the circumstances.
  • some contracts with a reasonable endeavours clause contain their own standard of what is reasonable

Read more about reasonable endeavours here.

In a couple of recent articles a lawyer friend of mine has written about the differences between nest and reasonable endeavours (in Australia there does not appear to be any practical difference between the meanings of these terms).  

And in this article she goes onto discuss a specific case which gives us the following learnings

  • The words “reasonable commercial endeavours” mean that a party is obliged to take steps reasonably available to it to put it in a position to fulfil the obligation
  • If the party does take steps, but is unable to fulfil the intended outcome of the clause, the clause does not require that the party go any further

So what does all this mean?

You need to be specific rather than relying about the criteria of the obligation and how the clause should be followed (describe an example of the steps required maybe?)

Think about how changes in market conditions or the commercial landscape will be dealt with

If you are going to use best or reasonable then don’t use a ‘reasonable endeavours’ clause AND a ‘best endeavours’ clause within the same contract. Pick one set of terminology and stick with it.

Above all, early engagement with the legal team is important to help in managing the risks that come with this.

In other words you have to know what you want, what you really, really want! And while you’re at it, refer to this article in Supply Management…

As ever you can subscribe directly to the sources I have identified here (nothing is my copyright), and if you wanted to discuss please feel free to contact me via Procurious, or follow me on Twitter.

5 more common procurement myths busted

Procurious.com – busting procurement myths since 2014.

We arm you with another handful of myth-busting one-liners to help you educate your workplace.

Procurement myths
It’s not just all about buying you know…

Myth: Procurement is just a fancy word for what was once known as the purchasing function within a business.

Reality: Procurement operates in a constantly changing environment and continues to evolve to meet business needs. Whilst its basic practice has always been around, procurement’s role and responsibilities and the skills required have significantly developed over time. What was considered purchasing is not the procurement of today, and the same may be said of the procurement of the future..

Myth: Anyone can get a job in procurement.

Reality: Procurement benefits from professionals with diverse backgrounds, and like no other profession is more active in seeking a mix of knowledge and experience. Procurement professionals are a good reflection of the industry sectors and business functions they work in and across. And yet, procurement still has a skillset that is distinct and requires specific training and development focus.

Myth: Most people end up in procurement as a career by accident.

Reality: There’s a new generation of procurement professionals that have actively chosen procurement as their career of choice. This surge will continue.

The shift is a result of businesses realising the potential opportunities for investing in dedicated procurement and procurement becoming more widely known and recognised. Just take a look at the new programs developed specifically for procurement in the education and training sector.

Myth: Procurement people don’t communicate effectively with other levels of the business.

Reality: Procurement people have the tough job of communicating messages and making changes across vertical and horizontal levels of the business. Often it’s the message, reasons and impacts of communication that is difficult.

Myth: A good chief financial officer can do procurement tasks just as well.

Reality: Procurement considers a wide outlook in decision-making and is in a good position to do this objectively. Finance is a highly important factor but must be weighed up against other business needs (such as service, risk and innovation).

Want more? Read the original 5 procurement myths

Procurement and supply chain apprenticeship launches in Scotland

Out of the loop? Join us as we reveal what’s been happening in the world of procurement during the last seven days.

L’Oreal completes five year supply chain transformation

  • The world’s largest manufacturer of beauty products, French company L’Oréal, has been on a five-year plan to completely overhaul its supply chain to cope with new trends in consumer behaviour and new purchasing technologies.
  • The group’s global supply chain employs around 7,000 people serving 130 markets, fulfilling about 16m orders annually. It operates 150 distribution centres globally serving some 40 factories, with around half operated in-house and half by third-party logistics providers.
  • Key to the efficiency improvements was the closer involvement in supply chain executives in the sales forecasting activities that are normally the preserve of sales and marketing teams.

Read more at The Load Star

Procurement and supply chain apprenticeship launches in Scotland 

University

  • A new apprenticeship to encourage young people into a career in purchasing and supply chain has been launched in Scotland.
  • City of Glasgow College has opened its first “industry academy” for procurement and supply chain, a teaching model that makes sure students’ experiences replicate working environments. The curriculum has been developed, and is updated regularly, with help from procurement professionals, and has the support of CIPS.
  • The college’s new industry academy and the modern apprenticeship in procurement and supply chain will attract young people into an industry that benefits Scotland’s economy and businesses while providing good long-term career prospects.

Read more at Supply Management

IT Sourcing not just an isolated procurement activity

  • While many people talk about IT sourcing as just buying hardware or software, leading commercial companies know that IT sourcing is far more complex than just “buying stuff.”
  • The IT Supply Management process has four closely interconnected dimensions. They are IT Supply Strategy, IT Category Management, IT Relationship Management,  and IT Sourcing Strategy,
  • The commercial sector’s experience in IT sourcing offers a number of lessons learned that the DoD can adapt as it builds an IT sourcing strategy.

Read more at C4ISRNET

Bank Branch Shake-Up To Test Procurement

  • Growing demand among the global population for online and mobile banking means that the traditional bank branch is changing.
  • Bank branches of the future will move away from simple transactional tasks and will act as a platform for upselling to customers. There will be an increase in the use of self-service machines to cut labour costs and time spent on lower-value transactions.
  • Ensuring contracts for fixed-term agreements with suppliers are detailed is vital as additional work will rack up expenditure significantly in an already cost-sensitive project.

Read more at Procurement Leaders

Improving the value procurement delivers can generate €7.6m in revenue

  • A well-managed supplier relationship management programme can save top performing businesses €22.8m in spending and generate €7.6m in revenue per €1bn of annual spend, according to research by The Hackett Group.
  • Established procurement specialist Xoomworks claim to have built an innovative framework called Complete Procurement which helps high turnover organisations in finance, insurance and retail make significant savings through improving returns on current investments in people and technology.
  • The balance between solid mechanics and positive behaviours allow organisations to break through the frustrations often experienced when only the mechanics are in focus, thereby allowing the procurement function to acquire new levels of added value for their organisations.

Read more at Retail Times

Has RFID technology revolutionised logistics?

This video from IBM demonstrates how RFID technology could revolutionise logistics services… But this isn’t from 2014, instead it’s been sitting gathering dust on YouTube since 2006.

So what’s happened in the preceding years? Honestly, not as much as you’d have thought… RFID has faced a number of challenges despite its advantages and usefulness within industry. But not from lobbyists with privacy concerns, conspiracy theorists, or lunatics who believe RFID has something to do with the Mark of the Beast. Instead it is feared that RFID technology has the potential to place significant complications on organisations as it opens them up to external (often invisible) risks.

Sports manufacturer Adidas has just attracted considerable attention by sewing RFID tags into the jerseys of national football teams.

In a statement to Deutsche Welle, Adidas said: “As part of a logistics project we have tested for the first time an RFID label with a virtual number. It is a read-only label without any additional data. The label is not tied to the article number, size or color of the article and we also can’t link it with end customer data. It is of course up to customer of this product to cut out the RFID label along the dashed line and throw it in the trash”.

So just what is RFID anyway?

RFID is short for radio-frequency identification, it transmits data wirelessly through the use of electromagnetic fields. There are many benefits for adopting RFID technology into your products, not to mention its barely-there proportions, and teensy price-tag (in-fact EPCglobal is campaigning for the cost to fall to just 5 cents). When applied it functions as a tracking device (of sorts), allowing the producer to keep tabs if they so wish.

Today you can find RFID tags being commonly used across storage and logistics industries. Retail is also catching-on, so it’s not surprising to learn of Adidas’ dabbling.

The participants at this Canadian yoga event confirmed their attendance at a RFID-fitted kiosk. And the library at Sydney’s University of Technology is looked after by robots – how is this possible you ask? Through RFID of course…

Problem solver by nature? Procurement’s for you

A career in procurement has opened countless doors for Ashish Srivastava.

Ashish Srivastava

The Chicago-based career professional recently transitioned into a new role that puts him in charge of ICT Parts & Service in North America, where he spends his time sourcing and buying technology services and products.

This year, he wants to build and grow a North American-focused IT organisation that’s fully capable of delivering to his business needs.

The new role comes after a decade of industry experience in managing and delivering large and complicated system integration and transformation programs for Fortune 500 clients in financial services, healthcare and automotive sectors.

It’s no wonder he landed such a remarkably complex role. He’s well versed in client relationship management, and can practically develop a strategic roadmap with his eyes shut.

Procurement appeals because he’s a problem solver by nature. He loves his role because of the high levels of ambiguity and the large scope he’s given.

He names integrating the technology platforms of two large US banks after a merger as his greatest professional achievement.

“This was a very long and complicated process of leading multi-platform, geographically distributed technology and process landscape. And 18 months later, everything worked like magic.”

Ashish is an enterprising type. While at Melbourne Business School, he noticed that the career opportunities were geographically limited to Australia. So, he developed a program called Asia Career Track, which sent students interested in a career in Asia on a short trip to meet various potential employers and engage in a productive dialogue with them.

The program was hugely successful, enabling some graduates to land jobs in companies like Apple, Standard Chartered and Louis Vuitton. His program has now been adopted as an ongoing initiative run by the Melbourne Business School.

When he’s not at work, you can find Ashish strumming his guitar, reading a book or listening to topics on world affairs, economics or business trends.

“I’m most comfortable in the company of people who like to discuss a variety of topics over drinks, coffee or dinner.”

Hamish Petrie asks ‘can you plan your career?’

In this first part of a two-part article, Hamish Petrie – former VP of People and Communications for resources giant Alcoa – offers advice to professionals at all stages of their career by encouraging the use of ‘career anchors’.

Hamish currently writes for the Business Times in Melbourne. Read more about his story here.

Career planning discussions start at an early age now during high school years as young people struggle with the question about what they want to do with their lives. This is an impossible struggle as no one can conceive how seemingly minor events will change their lives.

When I first started working as a shift metallurgist in a small tin mine on the west coast of Tasmania, I could never have conceived that 32 years and 20 jobs later, I would be sitting in a corner office on Park Avenue in Manhattan as Vice President of the world’s largest metals company. Life is full of twists and turns and chaos, so how can you prepare yourself to manage your career?

Planning your career by Hamish Petrie

Today, there are some generally accepted models for career planning that can be very helpful in starting the thinking process about your career. Generally, these models have four steps that include knowing yourself and your life priorities, exploring alternatives, deciding on a direction and then acting to implement this plan. The very first step in determining your life priorities is the most important, and it can be the most difficult. Aside from thinking about your personal values and strengths, it really forces you to think about what sort of job design and people interactions suit you the most.

While working at MIT’s Sloan School of Management in the 1970’s, Professor Edgar Schein developed the concept of career anchors, where the anchors represented an amalgam of personal values, talents, and preferences. These anchors shape the decisions that you will make about what is most important to you, in both your career and life.

This model has evolved now to define nine career anchor themes including technical or general management competence, autonomy, security, creativity and lifestyle. When I reflect on my career, I lacked the specific technical competence for any of my last fourteen jobs so it is very obvious that my career anchors were creativity and general management competence. Luckily, my family supported me with the frequent relocations necessary to take on each new career opportunity. The key outcomes of analysing your own career anchor is that you are most likely to be happy and satisfied when you can work in a job which is aligned with your personal anchor.

If you are on the flip side of this process, where you are making decisions about candidates for a job, then it is well worth exploring each candidate’s career anchors. Technical competence is very important in some jobs, like brain surgery, but for many jobs, it is not the most important factor, so taking a risk with a candidate can be very rewarding. Luckily, I had many bosses who were prepared to take a risk with me although I lacked specific knowledge about their job.

What your profile picture says about you

When God created man he made everybody equal. He also saw to it that no two people looked the same (well apart from identical twins, but stay with us here).

What your profile picture says about you
Hey good looking, do you come here often?

Uploading a profile picture helps other Procurious users put a face to a name, and makes them more inclined to learn more about you. No face, no dice.

It’s easy to achieve too. If your profile is currently sans face, just click on that sad empty placeholder and select ‘Edit profile’ (alternatively click on your name to uncover the just-as-handy drop-down menu).

From here you are free to select a picture at your leisure, and upload it for the rest of the community to see. So choose your best winning smile and away you go!

The importance of profile pictures
Oh hey! You don’t have a face?! Me too!

A strong profile picture can open all sorts of doors for you, but make sure it’s not a misrepresentation – after-all, the carpet should match the drapes…

What not to do

That teasing slither of flesh might help you make new friends, but maybe not in the way you intended… Same goes for those ‘come hither’ bedroom eyes, practice your smouldering, steely gaze for sure, just make sure the only protection other Procurious users need is for their browser.

Hello Mr X, I’ve not been expecting you (because I don’t know what you look like).

Been hitting the gym? Yes you might have a beach body but this isn’t Tinder people, the only thing you should be showing off is your bulging contact book.

Love pets? Of course you do. But that doesn’t mean you should take on the likeness of Mr Bumblepuss. The same goes for pictures of your newborn – adorable as their cheeks may be, it’s just not appropriate OK?

And while abstract pictures and pop-culture icons are nice, you don’t want to be left waiting for Walter White to knock…

Why anchoring matters in negotiation

Welcome to the second article in a monthly series from John Viner-Smith.

Have you ever looked at all the perfectly good, almost brand new cars on the forecourt at a car dealership and wondered where they came from? If you haven’t noticed what I mean, let me give you an example. If you search a certain Prestige manufacturer’s website for an “Approved Used” example of their best-selling model you’ll find you can have a choice of around 200 cars, all under six months old with around five thousand miles up, priced 15-20 per cent lower than the cost of an identically specified brand new car. So who are all these people who buy brand new cars and return them before the first service is due? Someone has to be losing money here, right? Or is something else happening?

Negotiating a used car deal

A friend of mine used to work for a company that had a particularly odd company car policy. He had, at any given time, two brand new premium brand cars on his drive. He would keep them for three months or six thousand miles and, when either of those milestones was reached, drop the car off at the dealer and pick up another one. Coincidentally, my friend’s employer was a wholly owned subsidiary of the car manufacturer whose products he drove. See where this is going?

So here’s a question; why would a car manufacturer build cars to just to run them themselves for a few months and sell them at a big discount?

The answer, if you haven’t guessed, is to maximize the margins they can make on all the cars. The manufacturer makes a decent margin selling the car at the “nearly new” price. If they didn’t, they stop making so many cars. But they need to sell cars at the “brand new” price point for two reasons. Firstly, because there are people who will pay it (this is particularly perverse when you consider that those people typically have to wait for the car they ordered to be built rather than drive a car away from stock). Secondly, the existence of the “brand new” price point gives the “nearly new” buyer the satisfaction of feeling they got a great deal. If the narrative in the buyer’s head is something like “Wow! This car is basically brand new and I’m getting 17 per cent”, they will be satisfied. If that buyer doesn’t believe that they are getting a great deal, they will push harder for even deeper discounts. The price of the new car acts as an anchor – setting the expectation of the buyer and offering them the satisfaction of a deal if they secure a discount on that price.

Why does this matter to us procurement folk? Well, it turns out that anchoring is one of the oldest and most effective techniques in negotiation and the processes, technologies and strategies we have adopted have made us extremely vulnerable to it. To understand how, it helps to revisit the basics.

Even the simplest negotiation has a range of possible outcomes. The buyer comes to the table with a maximum price that they are prepared to pay. The seller comes to the table with a minimum price that they are prepared to accept. These are their respective walk away points. Be clear on this; your walk away point is your worst case scenario deal. You would do that deal, but it represents a bad day at the office. What you really want to do is get the best possible outcome, which, in a simple price negotiation is the deal as close as possible to the other person’s walk away point. Too many buyers lose sight of this, and one of the reasons for that is the extent to which they become anchored on the seller’s price. When that happens, the buyer stops thinking about how they are going to get to seller to accept the lowest possible price and starts thinking instead about how they are going to get the Seller to come down to a price they, the buyer, can live with. Instead of focusing on getting more, they’re relieved to get just enough.

Procurement’s reliance on the tender process makes us particularly vulnerable to this. We offer the seller the opportunity to put their price on the table first and they gladly accept it. When the proposals come in they’re typically more than the Buyer wants to or can pay. So the buyer’s goal becomes to secure the best supplier at a price they can live with.

Procurement people do a lot of benchmarking. Again, this process can be extremely damaging if you fall into the trap of benchmarking un-negotiated prices. If you assume that all bidders open with a price that is inflated to give themselves room to move and offer you “deal satisfaction”, then the “benchmark” price may merely be least ambitious opening position. I know plenty of buyers who have been happy with “saving” 5 per cent by getting the highest quality bidder to contract at the price of the lowest quality bidder. I’ve seen that change in price described as a cost avoidance saving of 5 per cent. But if, as is perfectly possible, the successful bidder’s walk away point was 10 per cent lower than their opening bid, then the truth is that the buyer overpaid.

How, then, do we combat this? Here are three simple steps;

  1. Get them anchored on YOUR price.

Put your price on the table first. You will get more from your negotiations if your vendor is lying awake at night wondering how they’re going to move you from a place where they can’t close the deal to a place where they’re getting just enough to do a deal.

Some buyers will feel that, by opening the negotiation and putting the lowest price they can imagine the seller taking on the table first they will make themselves vulnerable and they are right. If you open your negotiation at the lowest price you think the seller will accept, you will probably end up paying more. Firstly because your assumptions will probably be wrong. Typically, negotiators (on both sides of the table) underestimate how much room the other party has to move before they reach their walk away point. Go with your best guess and you’ll probably open at a price that is better for them than their walk away point, and any concession you make from that opening will move you closer to your walk away. The answer is to open your negotiation at a position you know they can’t do. But that’s another post.

2.  If they open first, don’t anchor on their price.

Their opening position typically has nothing to do with their walk away point. If they are any good; they have chosen their opening position based on their understanding of your walk away point. They should put a price on the table that they do not believe you can do, because they want you to be relieved when they offer you a deal that represents just enough for you. So ignore their first offer and make your extreme opening proposal. Anchor them on your best outcome.

3.  Play a different game.

Negotiation academics call this style of negotiation “positional” negotiation. In a single variable negotiation (e.g. when you’re only talking about price), the only strategy available to you is to negotiate this way. You have nothing to trade but the other party’s satisfaction. If you want to negotiate differently, accept that you will need to find other things to trade.

In an interest-based or collaborative negotiation, you prepare by figuring out both parties’ interests in the deal and use this information to consider the full range of negotiable variables that could be brought to the table and traded. Identify the things you believe they value that cost you, comparatively, less. Identify the things you value highly that you believe cost them, comparatively, less. Finally, identify the things that are of equal cost and value to both parties. For example, if you know that your counterparty needs to book a big deal before their year-end, you may choose to make timely contract signature and (depending on how they choose to account for deals). Contract duration variables in the negotiation because they are things that cost you nothing, but are key to the deal meeting their interests.

Preparing and executing an interest-based negotiation is not something you can do ad hoc. If you believe that this is going to be the appropriate strategy to help you get the most from the deal, you need to consider how you position, open and leave room to trade on all the conceivable variables in your sourcing process. There are four distinct negotiating strategies available to you. The details of each, and the framework for assessing which is appropriate and when, will be the subject of a subsequent post.

Finally, what good is this going to do you next time you go shopping for a premium branded German automobile? Think about preparing differently.

Start by checking out the prices of almost new, ultra low mileage examples of the car you want to buy on the dealer forecourt and use those as the benchmark price for a new car. You may not get the new car at that price, but you will get more than you thought possible.

The logistics behind Zurich 2014 European Athletics Championships

This guest post was penned by Sarah Robey. Sarah represents a UK-based logistics finding service.

22nd European Athletics Championships - Day Three

Making the magic happen

The 22nd European Athletics Championships in Zürich last month was a splendid success, both in terms of attendance and their overall social goals. The CEO of Zürich 2014, Patrick Magyar, said that in the final analysis they managed to increase children’s and young people’s interest and participation in athletics. Equally important, at least from a financial perspective, the games were an excellent opportunity to increase the visibility of Zürich in general, and assist in the marketing of the 2000 year old financial centre as a tourist destination and as a place of business.

As you surely know, staging an event such as this with world-wide aims and aspirations is no small feat of logistics. Six large evening and afternoon events, ten stadium sessions (and just shy of 81 per cent of sold out at that), six-figure crowds at the road races and a City Festival with nearly a quarter million attendees – Zürich 2014 was no small exploit, and the organisers should be proud.

CEO Magyar thanked his volunteer team for the hard work they did rising to the logistical challenge, as well as the local police, the City and Canton of Zürich, the Protection and Rescue Service and the Swiss Armed Forces. A few very important organisations were left out of the spotlight though. An event of this size could not take place without thousands of hard working logistics specialists and dozens of 3PLs and other logistics organisations. I’d like to give just one example of a company that helped make this event happen.

Organisation of one particular logistics company 

Conceptum Sports Logistics, a German logistics company, was Zürich 2014’s official logistics partner. Over the course of the games, more than 1400 athletes and thousands more coaches and personal support personnel converged on Zürich. Conceptum was there to get participants, coaches, gear and equipment where they needed to be and when they needed to be there. Organising chaos is a logistics organisation’s bread and butter, and Conceptum Sports Logistics performed at least as well as the winning athletes. Maybe CEO Magyar could have spared a bit of praise for them?

Then again, the perfect logistics professional is a bit like the perfect butler – out of sight and out of mind, managing events behind the scenes and only visible when they are needed. Perhaps the fact that Conceptum didn’t feature is another testament to their skill. If so, I have no doubts that their performance at Zürich this year will keep them in clients for some time to come.

So what about your logistics needs? Perhaps you won’t be spending £23 million putting on a sports festival this year. Perhaps you only need to find a better LTL carrier for the extra orders you expect this Christmas. Perhaps you need a better place to store inventory. Britain boasts thousands of 3PLs and logistics companies that would be thrilled to help.

Sarah Robey represents www.whichwarehouse.com. Whichwarehouse offers a logistics finding service that carries listings of many logistics providers from all over the UK.

MasterCard & Basware create new platform to speed-up supply chain payments

Hungry for your weekly news fix? Join us as we reveal what’s been happening in the world of procurement during the last seven days.

MasterCard and Basware launch supply chain payment platform

Basware and MasterCard launch an automated supply chain finance platform

  • Basware has the largest electronic invoicing network in the world — one million organizations generating 80 million transactions a year, worth $500 billion, and growing at 50 per cent annually. MasterCard has one of the largest payment networks, and it is fully global.  They’ve joined forces and created Basware Pay.
  • The solution connects buyer’s and supplier’s payment processes through the Basware Commerce Network which provides an open and interoperable network that only authenticated buyers and sellers can use. Once the invoice is approved by the buyer it becomes available for payment through a virtual MasterCard account number. The combination automates invoice processing and ties the invoice information to the payment, all within a secure, closed environment using MasterCard’s single-use Virtual Account Numbers (VANs) for protection.
  • Hany Fam, President, MasterCard Enterprise Partnerships, said the opportunity is huge: “This market is nascent and in size it is bigger than the entire consumer market. It is very under-penetrated electronically. While the consumer space is 85 per cent non-electronic, this is north of 90 per cent.”
  • “MasterCard is global and none of the others operated globally. We can offer a global solution.” MasterCard is brand agnostic — it will accept payments from Amex and Visa, wires, or even cash, and it works with other business networks, like SAP ’s Ariba.

Read more on Forbes.com

Gartner reveals best regional supply chains

  • Gartner has published its annual list of leading supply chains in Asia Pacific with ten regional companies making the list.
  • Gartner Research Director James Lisica says that Asia Pacific supply chain leaders continue to create agile and lean supply chains capable of dealing with regional challenges. “We have observed some key themes across most industry segments that include building customer-centric supply chains, aligning to local markets while still serving global customers, strengthening risk management processes, improving cross functional communication, driving operational excellence to achieve fiscal discipline and prioritising talent management programs,” he says.
  • The top three is made-up of the likes of Samsung, Lenovo, and Toyota.

View the list in full at Techday.com

Jamaica to benefit from regional procurement system

  • The Regional Integration Electronic Public Procurement System, which is to be implemented across Caricom member states, is geared towards the liberalisation and integration of the regional market for trade in goods and services. This involves establishing and maintaining a regime for the free movement of goods and services within the CSME. The programme is being implemented by Caricom, with funding support from the European Union.
  • Ivor Carryl, programme manager for the CSME at the Caricom Secretariat, disclosed that a regional approach to public sector procurement, supported by a regional procurement system, can bring many benefits to the Caribbean region, and can be one of the key pillars for the advancement of the Caribbean integration process and the CSME.
  • “You are looking at a market that is somewhere in the vicinity of US$17 billion annually and for a region of five and a half million people (with the exception of Haiti). That’s a lot of money,” he added.

Read more on Jamaica Observer

Is Apple’s supply chain a risk to the company?

  • If the rumors are to be believed, Apple‘s newest product, the iWatch, will be announced at its Sept. 9 event but possibly won’t ship until 2015 because of supply chain issues. This was originally reported by Apple analyst Ming-Chi Kuo, and subsequent memos have pushed back the launch date from October to early next year.
  • Based on a thorough analysis of Apple’s supply chain, Kuo has been relatively accurate on delays. He predicts a delay in Apple’s larger-size version of its newest iteration — the iPhone 6, a 5.5-inch “phablet” model — pushing the release date for that unit back to 2015 as well.
  • A slightly ironic point is that these issues seemed to crop up after Tim Cook took the reins. Widely considered a “supply chain maven” among the analyst crowd, Cook started his Apple career as a senior vice president for worldwide operations. Through a relentless focus, he quickly fixed the supply chain, eliminating lags from months to days. Cook was promoted to chief operating officer before becoming the company CEO in the wake of Steve Jobs’ declining health.

Procurement has traditionally had ‘low status’ in UK government

  • The National Audit Office (NAO) said the government “fails to recognise the value of contract management” and “it is doubtful that the government can improve its capability to be able to have the best contract managers on all its contracts”.
  • In Transforming government’s contract management the NAO said current reforms were “going in the right direction” but there is “a lot still to be worked out”. “Too often contract management has been seen as delivering the deal that was agreed when the contract was signed. This has meant that contract management has been seen as a way to avoid things going wrong, rather than unlocking value,” said the report.
  • Amyas Morse, head of the NAO, said: “For several decades, governments have been increasing their use of contracts with the private sector to provide goods and services. This has produced successes but also thrown up major new challenges, which are not easy to surmount. “Not the least of these is the need to build up the commercial skills of contract management staff, both in departments and in the centre, and enhance the status and profile of their role.

Read more on Supply Management

Businesses urged to register for supply chain programme (Durham, UK)

  • NEPIC’s BASME (Business Acceleration for SMEs) programme was set up in 2012 to help regional firms which are keen to increase sales to companies within the sector.
  • So far the programme, which is financed by the Regional Growth Fund, has supported the creation of 450 direct and indirect jobs in the North East and 360 businesses have registered to be part of it.
  • Felix O’Hare, BASME Project Manager at NEPIC, said: “NEPIC launched BASME to help SMEs in the process industry supply chain to develop their sales to the sector. Using a mentoring approach with some of the sector’s most experienced managers, businesses are able to learn more about what companies look for when sub-contracting work so they can be in the strongest possible position to succeed.

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