Procurement crisis? Social media can save the day!

Steven Lewis of Sydney-based Taleist on social media and procurement

How to use social media in procurement

Social media can be an erratic and angry beast. One minute your company is being praised, and the next it’s under fire for a minor procurement program that’s somehow landed in serious hot water.

To stay out of trouble, make sure you are prepared for any social media crisis well before there’s any sign of trouble.
Start by working up to a worst case scenario by considering what could go wrong, recommends Sydney social media trainer Steven Lewis of Taleist.

Consider who is going to be called in from other duties to lend a hand if trouble hits, he says.

“The first step in handling a crisis is to be prepared for the eventuality in the first place. If you’re prepared, you’ll know who’s going to speak, what they need, and you’ll have your channels and processes in place and tested. Having thought about those things in advance frees you up to think strategically when dealing with the specifics of a crisis.”

Conduct a risk assessment on each of your processes so you know how they might be questioned or attacked, and by whom, Lewis advises.

“Create a tailored response to each process that allows you to give clear justification, preferably with supporting evidence. If, for instance, you’re accused of using a supplier who uses child labour, what policies, inspections or assurances from the supplier can you cite and what would your response be to an accusation?”

People expect their corporate citizens to have human qualities, so don’t be afraid to respond on with some emotion, he offers.

If you don’t know something you’re being asked, say so.

“It’s not good for a clothing brand, for example, to say it’s never even considered there might be child labour in its overseas supply chain, but you might not have all the facts to hand immediately. But an empathetic response and a promise to investigate with a deadline will help.”

In this example, he suggests a response such as: ‘We care deeply about child labour too and we’d be horrified to find we’d supported it even directly.”

Furthermore, it’s becoming increasingly important to respond online, he notes.

“You need to be in the channels in which you’re being discussed. If you’re being attacked on Twitter, it’s not enough to put up a media release on your website. How will the people on Twitter know it’s there?”

Remember, a social media crisis seldom involves a rational exchange of views:

“Essentially, you have to be prepared for the emotion of a crisis. If you plan to deal with the crisis only through the cold exchange of facts, you won’t put out the fire.”

Lewis also stresses the need to get your side of the story up quickly and in the relevant media.

“You’ll likely have supporters and the more you can give them to share and get your side out, the better.”

However, be prepared to wear the criticism, he warns.

“In social media as in politics, it’s often the cover-up that will get you. People don’t like having their comments deleted.”

Leading female entrepreneurs front government export drive

The UK Trade & Investment arm of the UK government has just distributed ‘From local to global’. The guidance has been collated and published in aid of the GREAT Britain campaign – a campaign that encompasses the very best of Britain’s businesses, tourism, and educational offerings.

Kelly Hoppen offers export advice

Kelly Hoppen was chosen to pen the forward to a new online document that delves into the logistics and economics of the huge export market.

Kelly boasts an enviable track record, with over 30 years of first-hand experience building businesses.

“Language, logistical and cultural barriers can all be business obstacles. However, these barriers can be overcome with the right support, guidance and people to cheer you along throughout the journey,” she says. To that end here are a number of tips to help first timers thinking of entering the export business:

Know the currency

Understand the currencies you will need to deal with. Talk with your foreign exchange provider early, as they can give you insights into the potential currency risks.

Start small

It’s tempting to pursue multiple markets. Don’t. Begin by focusing on one or two markets.

Appreciate cultural differences

Failure to take account of different cultures can lead to damaging and costly mistakes. This could range from causing offence by not observing correct protocol to inappropriate packaging and marketing.

Get paid

It’s easy to overlook the risk of non-payment. Establish the credit rating of potential clients and guard against non-payment through letters of credit or credit insurance. If you’re a UK business, UKEF (UK Export Finance) can provide advice and insurance where the private market can’t help.

Business skills and networking

Kelly isn’t the only one offering her advice. Here’s Heather Melville, Director of Strategic Partnerships at RBS, on networking internationally:

Learn your markets

Use the experiences of your new contacts to get under the skin of new markets. Learn about the opportunities and the challenges. Ask questions to get the right answers.

Immerse yourself in the culture

Tap into the expertise of your local contacts. They can advise you on what to wear, what traditions to respect and even teach you some local dialect to throw in!

Know the business card etiquette

Be aware of business card customs when networking abroad. In Japan, for example, the business card is often embossed and represents a significant part of the process. Present your own card with both hands, and take the time to receive a card warmly.

Importing and exporting advice

Tips for using digital to sell overseas

The final part of the published guidance revolves around the notion of ‘selling while you sleep’.

Remember these top tips: 

Distance isn’t a barrier

Asian consumers, for example, are more connected because of their love of smart phones, meaning there are vast opportunities to extend the reach of your brand.

Spot common trends

Engage with your customer using the common trends in their market. Learning how different markets operate is simple but extremely effective.

Cost of digital

Weigh up the options of ‘digital only’ vs ‘digital and physical presence’ within a new market.

Know whether to scale up or down

Scalability is easy and affordable. Whether you want to sell into one country or 101, e-marketplaces allow you to trade across multiple countries via one platform.

Engage with social networks

Be more social. Consumers expect to be able to engage with you or other shoppers before purchasing.

Commodity changes affect market conditions

This week we are looking at technology and how the recent commodity pricing changes has affected both the size of organisations as well as their strategies.

Microsoft Tops Exxon as 2nd Biggest Company on Oil Drop

  • Exxon Mobil Corp. (XOM) ceded its title as the world’s second-largest company to Microsoft Corp. after the five-month oil rout cut $47 billion from its market value.
  • Apple (AAPL) Inc., the Cupertino, California-based iPhone maker, retains its rank as the world’s biggest company. Its shares have rallied 41 per cent in 2014, the 33rd biggest gain in the S&P 500, as the company bought back shares and extended a streak of beating analyst earnings estimates to eight quarters.

Read more at Bloomberg.com

The desperate struggle at the heart of the brutal Apple supply chain

  • The most valuable corporation on Earth has the power to make or break a company through its supplier relationships.
  • A $578m deal signed between Apple and GTAT in November 2013 looked as though it would not only bring sapphire screens to iPhones, but also create thousands of jobs in the US, salving a sore point with legislators critical of Apple’s use of foreign assembly for almost all its products, especially the iPhone and iPad.
  •  But it ended in October 2014 with GTAT filing for bankruptcy, hundreds of people put out of work, and GTAT’s chief executive and chief operating officer facing questions about insider dealing after they sold millions of dollars’ worth of GTAT stock before Apple’s iPhone announcement in September.
  • Though it doesn’t actually own any factories, Apple pours gigantic amounts of money – about $12.5bn in the past four quarters – into “plant, property and equipment”, the majority equipping its suppliers to make its products.

Read more at The Guardian

Economic volatility, low commodity prices to hurt mining industry

  • Global economic challenges, the strengthening US economy and an imbalance of supply and demand have had a devastating impact on the commodities market.
  • Current slump in prices was reflecting the cyclical nature of the industry.
  • For gold companies, while the long-term view was above current spot prices, volatility remained the key issue.
  • For base metal producers, a growing global population that would have greater overall need for products such as cars, computers and household goods, had helped support current prices.

Read more at Mining Weekly

Still Avoiding Social Media? You’re Losing Business

  • 74% of adult internet users use social media platforms.
  • Regardless of whether you are a business-to-consumer (B2C) or business-to-business (B2B) organization, your company can utilize the power of social media to see a real return-on-investment (ROI).
  • However, if you are not on social media then you are missing an opportunity to not only increase sales, but also provide better customer service to your existing clients.
  • What Percentage of People are Social Based on Income?
    Less than $30,000/year—79%
    $30,000-$49,999/year –73%
    $50,000-$74,999/year –70%
    $75,000+/year –78%
  • One thing is certain, your target audience is social. However, if your business is not on the social media platforms where potential customers are, then you are simply missing out on opportunity

Read more at Business 2 Community

Accenture previews digital disruption

  • Accenture has promised to continue to enhance digital transformation and business efficiency through the application of relevant solutions and technology.
  •  The rise of social media platforms has changed the game, stressing that data has become another source of revenue for telcos after revenue from voice appears to be peaking.
  • New emphasis on data and new sources of value: attention, identity, reputation, social graph, machine intelligence, robots, genetic modelling, new buyer values, change in control points and a winner takes all phenomena.

Read more at Biztech Africa

G20 climate challenge calls for a rethink of economics

  • Focusing on growth, the Brisbane G20 leaders’ summit has not grappled with three key issues.
  • How much more growth can the planet survive?
  • How can poorer nations raise their living standards to parity with the “developed” world?
  • How can a fairer distribution of the benefits of growth be realised?

Read more at The Conversation

How much do you really know about digital currencies?

In a report commissioned by HP, the Ponemon Institute has made a number of interesting finds. Its “Security & Compliance Trends in Innovative Electronic Payments” paper reveals that support for digital currencies and new electronic payment systems are perhaps stronger than originally thought.

Need a primer on digital payments? Watch this very informative video from e-commerce platform PinnacleCart.

Understanding the future of money and mobile payments

New electronic payment systems and virtual currencies are expected to make paper currency the horse and buggy of the 21st century. Are organisations up to the challenge of ensuring security and privacy when businesses and consumers use these payment systems for purchasing items and transferring of funds?

And while 79 per cent of the US organisations that took part in the research plan to adopt digital currencies, a key barrier to the adoption of innovative electronic payments remains. Namely: the issue of security. In terms of new electronic payments, all of the following were cited in respondent’s answers as either currently supported in marketplaces or the not too distant future: payments with a mobile device or use of phone number, e-currency (Bitcoin or other open source P2P money), stored value cards, and bar codes.

The biggest concern seems to be authentication risks with the use of virtual currencies. While new payment models are evolving, but the same security fundamentals for maximum protection in the overall payment process are still needed. The most critical are one-time passwords or tokens, federated identity and authentication systems and multi-factor authentication

There is also the perception that the pressure to quickly migrate to the use of innovative electronic payments is making it difficult to address the security and privacy issues.

A case-in-point: Digital wallets (or e-wallets) are used to hold virtual currency – and high profile names in technology like Google and Apple already have solutions in place to drive the adaption rate. In-fact belief is so strong that almost half (46 per cent) of respondents predict that virtual currencies will overtake paper currencies within the next five years. Perhaps there’s some truth in this… we are increasingly looking to financial institutions and credit card companies to make the inroads needed to take such practices to the next level. They’ll be the ones to create new approaches to the security and privacy of the electronic payment platform. These organisations are closer to the consumer experience with electronic payment systems and might have a greater incentive to innovate and improve both security and privacy.

What do you make of these new virtual payment systems: is more time needed to fully realise the benefits (and drawbacks) of such innovations? 

Strategies to limit backdoor or maverick buying

Procurement Professionals on LinkedInThis guest blog was written by Dr. Tom DePaoli and originally posted in the Procurement Professionals LinkedIn group. It has been redistributed with their permission.  Read more on Procurement Professionals LinkedIn group at: http://linkd.in/1uupe8p or Twitter: @ProcurementProf

Backdoor or maverick buying is a perplexing problem that plagues many purchasing organizations. The methods to counteract this behavior are highly dependent upon the cultural climate and ethical standards of your organization. There is no universal solution.

Strategies to Limit Backdoor or Maverick Buying

 

People’s behaviors are influenced by consequences. If there are no consequences for backdoor buying the behavior will continue and grow. Some of my suggestions are drastic, others are more reasonable. Purchasing professionals must use their judgment to select the appropriate actions that fit their particular organization.

An important aspect to solving this issue is to remain objective and to try to gather data on the costs of backdoor buying. These could include lost discounts, lost rebates, and extra transactional work by purchasing and others. Many purchasing organizations know the average transactional cost of a regular transaction with an approved supplier. Try to calculate the extra cost with an unapproved supplier. Always control your emotions when discussing this issue.

Here are some reasonable tactics to create an organizational atmosphere and climate that helps discourage backdoor buying. In my experience the biggest offender is usually the engineering department. So involve engineering in cross-functional supplier selection teams and standardization initiatives. Make them a stakeholder in approving suppliers. Get the vice president of engineering on board with OEM (Original Equipment Manufacturer) standardization and have them participate in OEM standardization processes.

Consider establishing a policy of no gifts or gratuities to be accepted from suppliers by both purchasing and all other employees (zero tolerance). This discourages lunchtime promises or promise buys to suppliers by non-purchasing employees. Another alternative is to have purchasing have their own modest budget to entertain, socialize and conduct work sessions with suppliers.

Get your compliance employees on board with your policy i.e., your legal department and accounting. Craft an approved supplier only purchasing policy and make it clear that unauthorized purchases will not be honored by accounts payable. Keep the list of approved suppliers visible and updated. Use your software safeguard controls to limit buying privileges and cross reference the approved supplier list. Many purchase cards can be limited to specific approved suppliers and or categories of goods. Meet with your approved preferred suppliers and ask them to use the grapevine to communicate any purchases from unauthorized suppliers directly to you. Most will gladly do this.

One of the most effective drastic actions occurred when I worked for a global chemical company. The company had just spent over $200 million on a worldwide ERP system. The CEO sent out a strong memo saying that all purchases must be made on the ERP system and only from the approved suppliers in the ERP system.  Employees were required to use the new ERP system. The very first day four employees went off system to purchase some items from a non-approved supplier. The CEO personally fired them and publicized the results of the incident to all employees. Needless to say there were no more such purchases.

Do your networking and informal work before you institute your policy. Meet one-on-one with stakeholders or in small meetings to explain your reasons for your policy and get their buy-in before you roll it out.

Establishing a policy against backdoor buying requires some deft maneuvering by purchasing that correctly judges the culture of your organization. Instituting the appropriate policy will help reduce backdoor buying. More important, you must enforce the policy and reprimand employees who violate it. A backdoor buying policy unenforced, is both hollow and meaningless.

Would you use a social network that pays you to post?

Tsu (pronounced ‘sue’) is a social network and payment platform that shares up to 90 per cent of its revenues with users. With a $7 million investment behind it (led by Sancus Capital Prive), Tsu has already attracted the gaze of 50 Cent, Timbaland, and NBA’s Carmelo Anthony – but sadly no sign of a Kardashian or Grumpy Cat yet…

Tsu the new social network that pays you to post

What is Tsu?

So by now you’re probably wondering just what is this Tsu that I’m hearing so much about?

It’s a new type of social network (hang on, we’ve heard that one before… ello, Ello?), but this one’s differential lies in its modus operandi. You see, you (the member) own the content you post, not only that but Tsu will pay you for the privilege.

Get paid to use social network(s)

Yup, that’s the jist. While it’s something of an incendiary headline, the New York Times led with “The Social Network That Pays You To Friend”.

The more people looking at your content, the more sales revenue Tsu makes from ads served. If this were Facebook or Twitter any wealth generated would only serve to line their pockets – Tsu will instead give back a slice of the pie.

It’s a ballsy business model that’s for sure.

Tsu Tmi?

Too much information? Tsu also provides detailed analytics to its users, so they can chart follower count, views, likes, and comments on posts made. This is in stark contrast to the news that a researcher from University of Illinois has created a browser plug-in that removes all trace of numbers (or metrics) from Facebook. Why? To show (or perhaps prove) that when not hell-bent on seeking others approval, the quality of posts and comments improved, as did enjoyment levels.

Download Facebook Demetricator

Tsu does move to ban users who spam in order to preserve the community, and that stretches to invites too. Don’t go thinking you can bombard your Facebook, Twitter, or LinkedIn friends with your member short code (required to sign-up and access the community), Tsu wants you to instead nurture ‘meaningful’ relationships through the network proper.

It’s not for me, but it might for Tsu…

Vote for Procurious in the UK Blog Awards 2015!

We’ve been entered into the biggest event in the UK blogging calendar, the annual UK Blog Awards!

Who’s heard of a social network that also publishes its own editorial content? LinkedIn goes so far, but Pulse is essentially community-curated…  This is where Procurious comes in.

Vote for Procurious in the UK Blog Awards 2015

Like what you read on Procurious? Help us out by voting at the UK Blog Awards 2015 (or #UKBA15 for the more social media savvy).

It’s super easy and will only take a second. Here’s how:

How to register your vote

Head on over to our official #UKBA15 voting page

Fill out your full name and email address in the required fields.

Press Submit!

Please note, if you vote more than once your vote will be not be counted. 

Share on social media

On Twitter, LinkedIn, Facebook, or Google+? Spread the word on using #UKBA15 and the link to our page http://www.blogawardsuk.co.uk/candidates/Procurious-2

We’ll also be sharing the link to vote around Procurious in the next few weeks, feel free to share and repost to your network too.

Voting opened on Monday 10th November 2014 and runs until Monday 1st December 2014.

Procurious thanks you for your support in advance – we are building a community, and we wouldn’t be here without you.

Is the economic future really as small as this book says?

If we believed everything we read then the UK has had to draft in Eastern Europeans to help make sandwiches, and our mobile phones are all giving us cancer…

Being the skeptical sort we’re inclined to take The Future is Small with a grain of salt, seeing as it raises pertinent questions about the future of investing.

Freefoto.com

The book begins by placing a spotlight on the current stagnation of world economies – arguing that despite trillions of dollars of support having been injected into the global financial system, the global economy will remain moribund for decades to come.

This is irrespective of record low interest rates remaining in place, and governments running higher budget deficits for longer than originally planned.

It’s a hard pill to swallow, given the words of Dr John Glen’s still ring in our ears – what we took away from the CIPS 2014 conference.

But given Williams’ credentials maybe there is some truth in his views… Could it be that small firms are set to be the stock market outperformers of the future?

Fundamentally, Gervais believes that it is the greater growth potential of genuinely small companies that explains why many can buck a tough economic trend, whereas most larger companies with major market positions are trapped by their flat sales lines.

Gervais Williams is an award-winning equity fund manager. He received Grant Thornton’s Quoted Companies’ Award Investor of the Year in both 2009 and 2010; then in 2012 his Diverse Income Trust was recognised as the Best New Investment Trust by the Association of Investment Companies. He was also What Investment’s Fund Manager of the Year 2014.

Gervais is a respected commentator on prospective market trends. He outlined his controversial views in his book Slow Finance in 2011 and develops those ideas in The Future is Small.

Is bigger always better, or is there beauty to be found in smallness? Could this be the new dawn that the little guys have been seeking?

A question of ethics: procurement managers accused of bribery

We’re kicking-off the working week with a handful of weighty issues, namely: ethics surrounding procurement, the state of US manufacturing, and Ebola. Eyes down for our pick of the web’s biggest stories.

Bribery in procurement

Bribery tag on procurement managers ‘unfair’

  • Suggestions that bribery is rife among procurement managers in hotels is unfair, with professionals calling for more attention to be paid to the actions of suppliers and other hotel staff.
  • The issue came up in a panel session at last week’s Hotelier Middle East Procurement Summit, which took place at The Ritz-Carlton DIFC in Dubai on November 4.
  • Fairmont Dubai purchasing manager Jean Manuel said: “In each [hotel] there should be a strong policy on bribery. And it should not only be for procurement. It should be for all the organisation because it is always implied on procurement, which is really very unfair, because it should be everybody.”
  • Nair had begun discussing the issue by citing a survey of suppliers byHotelier Middle East earlier this year, in which 55% said they had been asked to offer a monetary bribe, while 72.6% said they knew of other supply firms that were using bribes.

Read more on Hotelier Middle East

Levi Strauss’ smart thinking on supply chain ethics 

  • Levi Strauss announced last week that it will partner with the International Finance Corporation to reward suppliers in developing countries who score highly on environmental, health, safety and labour standards.
  • The reward for such ethical activities will be lower cost rates on working-capital financing. The apparel manufacturer’s efforts are a great example of the economic benefits that can accrue to companies that pursue sustainability and promote ethics in their supply chains.
  • A recent study by Software Advice, an SCM software consultancy, showed that consumers would pay more for ethically made products.
  •  One group of respondents said it would pay an average of $18.50 more if the raw materials were sourced ethically. Another said it would pay $19.70 more if the product had a carbon emissions offset, and the third group said it would pay $27.60 more for a product made in a facility with good working conditions.
  • The consultancy admits there can be a gap between what survey respondents say and what they will actually do. Still, says Forrest Burnson, market research associate at Software Advice, procurement and supply chain professionals can’t ignore the fact that consumers are aware of where and how their products are made and who made them. And that awareness can even extend to perceptions of outsourcing.

Big oil cutbacks deal supply-chain pain

  • Belt-tightening by big energy majors faced with plunging oil prices is battering the finances and share prices of their suppliers, as investors reassess the sector’s ability to keep gushing cash.
  • A growing list of delayed or cancelled projects, seen by some investors as a healthy move by majors to rein in capital spend after a poor history of returns is working its way through corporate earnings; it has already pummelled the share price of some European suppliers seen as financially fragile.
  • Fugro, once seen as a blue-chip on Amsterdam’s benchmark index, has had more than 30 per cent of its stock-market value wiped out in a week since scrapping its dividend. It is seeing trade swings more suited to a small-sized firm: on Thursday its one-day gain was 28 per cent.
  • The worst of this volatility may yet be to come, analysts and fund managers warn, as the recent fall in oil prices – triggered by a supply glut as well as worries over cooling demand – and the delayed effect of capital-expenditure cuts keeps up the pressure on companies to plug balance-sheet gaps. “Oil services firms are like euro zone banks a few years ago. There’s a lot of damage in the sector and it could get worse before it gets better,” said Arnaud Scarpaci, fund manager at Montaigne Capital.

Read more at Reuters Africa

President Obama announces plans to boost US manufacturing

  • US president Barack Obama has unveiled new executive actions to strengthen the functioning of US manufacturing supply chains. Aimed at fixing what is perceived as “the innovation gap faced by small manufacturers”, the Department of Commerce’s Manufacturing Extension Partnership, which serves over 30,000 US manufacturers each year, will build new capabilities at its state-based centres and pilot a competition for $130 million (£81.3 million) over five years across 10 states to help small manufacturers adopt new technologies and bring new products to market.
  • As part of the Supply Chain Innovation Initiative, the National Institute of Standards and Technology Manufacturing Extension Partnership (NIST MEP) will deploy new tools to help small manufacturers access advanced technologies, new markets, and growth capital.
  • These tools will help connect small manufacturers with testbeds housed at national research facilities to test new technologies, helping small manufacturers bring to market novel products and processes.

Read more at Supply Management

CEVA and FedEx leverage expertise to help Ebola response

  • FedEx and CEVA have both been using their expertise to aid Ebola stricken countries in west Africa in recent weeks.
  • CEVA, one of the world’s leading supply chain management companies, airlifted more than 70 tonnes of urgent supplies to Monrovia, Liberia on 10 October to assist in ongoing efforts to combat the West Africa Ebola outbreak. The airlift was chartered by the US Agency for International Development (USAID), the lead government agency coordinating US Ebola response efforts which has been working to expand the pipeline of medical equipment and supplies to the region.
  • Included in the shipment were infrared thermometers, disinfectant backpack sprayers, tents, and plastic fencing to be used in the construction of Ebola treatment units. The supplies were sourced by USAID from multiple locations around the world and delivered to CEVA Charter Services at Liege Airport in Belgium. From there, CEVA loaded the cargo onto a Global Africa Cargo MD-11 freighter aircraft for a direct flight to the Liberian capital of Monrovia.
  • CEVA Logistics Corporate Account Manager, Marc Burgard, said: “This was a really important charter, and we were honoured to have been able to play a part in the Ebola response.”There were several challenges along the way because of the diverse locations of the  items involved, the urgency of the job and the number of time zones concerned, but the charter arrived safely in Liberia.”

Read more at Supply Chain Digital

Supply chain woes at Tate

  • Tate & Lyle’s first-half results came hot on the heels of a profit warning in September, so the figures, though bleak, were at least anticipated. They reflect serious operational and supply chain disruption caused by the polar vortex in the US and the temporary shutdown of Tate’s Singapore sucralose factory. Tate’s logistics cracked under the pressure and it was forced to shell out £31m to get orders to customers, including sending goods by costly air freight.
  • And it didn’t help that sucralose prices fell faster, and for longer, than anticipated, slicing £18m off profit. Finally, the hit to earnings was compounded by currency headwinds.
  • Finance director Nick Hampton said Tate had been caught out by the supply chain issues and that the challenging first half had exposed cracks in the system. These are now being addressed, but Mr Hampton said Tate needed to build a more integrated and better-run global network to deal with the increasing complexity of the business, which included greater visibility over supply and demand. He said £100m is now being spent, both to boost capacity and make it more flexible, putting inventories closer to customers.

Read more at Investors Chronicle

Supply chain utilizations drop as China 4G development lags

  • Following the release of the iPhone 6 coupled with less-than-expected 4G developments in China, handset vendors in China anticipate limited 4G handset shipments throughout the end of 2014 into the second quarter of 2015.
  • Handset vendors in China had aggressive plans to push 4G handset sales in the country but as subisidies from local telecom vendors ended coupled with factors such as lagging awareness of the technology and consumers waiting for the iPhone 6, they witnessed less-than-expected 4G shipments, a trend that is expected to wither into 2015.
  • Supply chains do anticipate orders for the technology throughout the end of 2014 but believe the vast majority of orders will not come until the first and second quarters of 2015 when vendors prepare to release new units in the second and third quarters of 2015. China handset supply chain makers such as Kuangli Photoelectric Technology meanwhile have seen their utilizations drop as the trend occurs, with Kuangli’s dropping from 95% in the second quarter of 2014 to 60% in the third quarter.
  • Digitimes Research said major China-based handset vendors including Coolpad, Lenovo and Xiaomi Technology are unlikely to reach their shipment goals set for 2014 due to slow sales of 4G models in the third quarter and gloomy prospects for the fourth quarter.

Read more at Digitimes

Why collaboration is the key to effective supply chain procurement

Jacques Adriaansen, co-founder of Every Angle, shared his thoughts with Procurious around the big difference between earning money from your suppliers and earning money ‘with’ suppliers.

Working alongside your suppliers can add to your supply chain process

What do you see when you identify a supplier, as part of your supply chain procurement process? Do you see a necessary evil that must be negotiated before you can make a profit? Or do you see a potential strategic business partner that could play an active role in helping you to make money? Every day, I see examples of businesses who fail to see that there is a big difference between earning money from suppliers and earning money with suppliers. Of course, there are certain, specific cases where pressurising suppliers may be the only option available. However, in most cases, it’s clear that collaboration is by far the most effective approach.

Let’s face it – the objective of any business, regardless of its focus, sector or expertise, is to save costs, while at the same time, ensuring a consistent level of quality. This is especially true for those who find themselves dependent on a supply chain. It’s a fact that makes it even more bewildering to consider that the impact procurement can have on supply chain performance is still grossly underestimated in most organisations. Of course, most organisations keep a close eye on costs when they buy from suppliers, because after all, the purchase price is important.

However, they should also not forget that solid supply reliability is just as important – if not more so – when it comes to preventing disruptions in the production process. Remember that incomplete deliveries or deliveries that arrive too late or not at all, can have a significant and negative impact on overall business performance. All of which is why more focus needs to be placed on the role of procurement as part of overall operational excellence strategy.

Past experience shows that a lot is to be gained from streamlining delivery schedules. Meat-processing systems manufacturer, Marel, is a great example of how to do this effectively. By giving suppliers information about future demand as early as possible, it has managed to improve efficiency of its plant by as much as 40 per cent. In the past, all Marel could do was tell suppliers which purchase orders were outstanding. This meant that it had no insight into potential peak loads at their suppliers and were thus unprepared to deal with the consequences.

As a result, some suppliers were unable to deliver on time, which often resulted in a severely disrupted manufacturing schedule. By including the purchase order requisitions as well, they were able to gain a better insight into the peak loads at suppliers which they themselves generated. Based on these insights, they are now able to decide to bring orders forward or to postpone them. As a direct result, they are now able to identify which goods are delivered with greater consistency and ensure that schedules remain stable. Marel’s suppliers are now almost always able to meet the required level of demand, which means that it is now able to manufacture more efficiently and at lower costs. It’s an interesting example, as it really shows how using the available data more effectively can play a considerable role in contributing to operational excellence as a whole. 

In practice, procurement departments deal with hundreds of outstanding purchase orders every day, many of which may be overdue. Clearly, it is not cost or time-effective for them to chase all of those. Instead, they need to be able to quickly assess with purchase orders really impact production or delivery to the client. After all, why spend time and energy on things that have hardly any impact? Conducting this analysis in SAP can, however, be a complex process, requiring procurement departments to go through the same steps for every individual order. This can make establishing the relationship between a purchase order and a sales order almost impossible.

Production companies have to be aware of the fact that collaborating with suppliers and generating insight from procurement to final delivery, can have a major impact on the performance of the supply chain. By paying more attention to this element of the supply chain, a great deal can be gained in terms of efficiency, productivity and ultimate cost savings. For example, it can help you to prevent bottlenecks in the production process, reduce backlogs, detect delivery risks and optimise the workflow.

Don’t forget that procurement is not only responsible for good price agreements. It also plays an important role in improving the collaboration between supplier and client. The upshot of this is true collaboration, with suppliers being given the opportunity to contribute their knowledge and with buyers making good use of that knowledge. It’s a model that some of the best, most effective operations follow – are you following in their footsteps?

Stay up-to-date with Procurious