Amazon’s Christmas logistics robot army

The robots are coming… and they’re bringing Christmas presents!

In its latest bid to boost productivity and expedite delivery, Internet retailer Amazon is deploying a robot army – yep, just in time for Christmas.

Various sources are reporting that squat, orange, robots have entered several of its U.S. warehouses. The addition of these wheeled droids will save workers having to traipse the factory floor and scour long aisles chockful of Amazon goodies (sometimes up to 20 miles a day).

The addition of the robots is expected to bring in an impressive productivity boost – making picking and scanning 300+ items an hour a reality (compared to 100 previously).

Amazon founder Jeff Bezos told investors earlier this year that in total the company hoped to move 10,000 robots onto the factory floor. Such a move was only made possible after Amazon bought Kiva Systems’ material handling solution in 2012.

The procurement professional: a reluctant hero?

Procurement is sometimes like a jack-in-the-box.

Are procurement professionals reluctant heroes?

Procurement, one of the key parts of business process, is often downplayed. Businesses try to box it off concluding it is more important to speed things up, bypassing some best practice behaviours with the perception of saving time and money.

Procurement then springs out of its box just when you least expect it: to act as an honest broker to challenge business decisions and choices.

So here’s how I applied my top ten Procurement best practices when directing security procurement for the London 2012 Olympics:

See procurement as a key business function

Developing stakeholder engagement across the business is critical. Building these relationships ensures that spend is under Procurement’s influence will deliver optimal results.  Within LOCOG stakeholder engagement was complex with LOCOG executives, Civil servants, Government ministers and security experts all demanding consultation.

Be a leader in your profession

Adopt a visible style both within your business and also explore new opportunities in your profession.  When I sat on my profession’s board of management with responsibility for education I identified similarities between my business role and my non-exec role in the institute to make Procurement a relevant business function. Someone recently referred to me as a character of the profession. I am not sure if this was complimentary but it means I get visibility.

Articulate a clear vision

With clear objectives that link to the business your agreed objectives should then be driven by you and include:

  • high savings delivery per buyer;
  • high compliance with your process;
  • full coverage in all areas of spend; and
  • improved new benefits  each year.

Clearly communicate

In many businesses, procurement staff are the reluctant heroes. At LOCOG procurement’s activities and achievements were published and acknowledged. Among other things, this included commercial cost savings and protecting the Olympics from risk.

Broaden your expertise

Build your business knowledge, your soft skills and behaviours as well as your Procurement expertise.  This broader capability helps business engagement, and is crucial for procurement staff to advance beyond their core expertise in order to make them more commercially aware. Without my wide range of skills I would not have been as effective in LOCOG.

Always achieve your key results

Procurement had a clear set of London 2012 Objectives including the diversity of the supply base as this delivered the Olympic values.

Don’t over-promise

Procurement needs strong role models and ambassadors. Life can be challenging especially working in the Olympics spotlight so you want people to trust and support you to get the job done in the challenging time scales. Just be careful not to over-promise as non-delivery will quickly loose that hard earned trust.

Stay calm and don’t overreact

Procurement faces many challenges and frustrations. The familiar comment at the Olympics was its unprecedented meaning it had never been done before immediately causing panic and a victim mind set. So just stop and count to 10 and respond with facts rather than emotion.

Never miss your opportunity

At The Olympics I was constantly asked to present in front of boards and senior stakeholders. Just don’t forget you want senior management to know about procurement and see that as an opportunity to sell procurements value. During my time at the Olympics I encountered experts in their own specialism who wont know about Procurement so you should always be passionate about what we can do.

Don’t ignore the power of networking

My time at the Olympics opened up many doors for networking opportunities but just be selective about the events you attend. It is worth remembering that however strong your policies and process are, new opinions and practices can often provide inspiration!

Influential procurement writers: share your favourites

In search of influential procurement reading…

Influential procurement blogs

Those members who regularly visit Procurious may have seen our recently published list of who we think number among the 24 most influential people in procurement.

Need a refresh? Check out the full 24 here.

Our list was compiled from prominent Procurious members, and those making a splash across other social media platforms (like Twitter).

https://www.procurious.com/blog/procurious-news/24-of-the-most-influential-people-in-procurement

In-keeping with the theme we want you to share examples of influential writing that has stuck with you. Perhaps a writer that has bowled you over with their insights, or a piece you feel will benefit others.

Nominate using the comments section below, listing your reasons (and a URL). We’ll collate the best into a future feature on Procurious.

What does ‘Best’ look like in procurement?

Opportunity Knocks and being the best are the themes of the day. For me this brings images of 1970’s and 80s TV shows from the UK and remembering that dedication is what you need….

How to be the best at procurement

So to start our coverage of being the best, AQPC have conducted some research into what does “Best” look Like in procurement?

They have analyzed data from its Open Standards Benchmarking in procurement to determine how the top 10% of organizations compare to the rest in 4 core areas:

  • cost effectiveness
  • process efficiency
  • cycle time
  • staff productivity

The results indicate that there is a significant difference between top-performing procurement functions and others. You can read the full report is here.

KPMG is telling us that opportunity is knocking for procurement and that a single-minded focus on reducing input costs is not enough. Procurement leaders need to focus less on driving down suppliers’ prices and more on driving up value from end-to-end across the business.

From a procurement priority perspective according to their research:

  • 58% want to improve performance
  • 42% align more closely with business functions
  • 40% improve governance
  • 39% drive costs out of indirect spend
  • 36% improve supplier management with tier 1 organisations
  • 35% change the operating model of procurement
  • 29% drive costs out of direct spend

In terms of metrics used to measure procurement value added the results may not surprise.

Cost savings and management is still the most used followed by compliance and costs of running procurement function.

So how do we know who the best are? ‘Top Procurement Groups Deliver 7x Return on Investment’ according to Global Procurement Study by A.T. Kearney, ISM and CIPS.

The inaugural ROSMA Performance Check report findings were developed through the survey responses of hundreds of companies. The headlines are:

  • Top-quartile performers are reporting hard financial results in excess of seven times their costs and investment base in procurement, providing a strong basis for reinvestment and recognition. These leading procurement functions generate about $1.6 million in financial benefits per procurement employee each year.
  • Middle-tier performers are accretive, typically generating four to five times the investment and cost of their supply management assets, including people and technology, but they have not improved their productivity since tracking began in 2011. Bottom quartile teams are dilutive, with financial benefits that do not cover the cost of and investment in their organizations.

In previous articles I have talked about the importance of culture in both the supplier selction and and ongoing management aspects of procurement. This article talks about the importance of creating the best match of culturual fit for you as an employee. The example from WestJet is quite touching and serves to remind us that the cultural fit of employee and employer is crucial after all Culture is the heartbeat of a company.

To round things off I hereby present the following key takeaways:

Preserving company culture takes A LOT of hard work. It’s not easy. And it’s not always fun.

All of it amounts to nothing and it’s only a matter of time before it comes crashing down if the beat that drives your company isn’t strong and distinct enough to be felt by your people.

I think this can be applied to supplier relationships and ensuring that the effort that goes into selecting the right one to start with is maintained by the team throughout the relationship.

‘Savvy’ procurement can save you millions if done right

How efficient is your procurement process? The BBC saved £1.1 billion during the last business year… That and more in our weekly news blast:

BBC savvy procurement

Procurement contributes to annual savings of £1.1 billion at BBC

  • “Savvy” procurement saved the BBC more than £70 million on goods and services this year, a report into the broadcaster’s efficiency has stated. Total category spend of £655 million across 11,500 vendors in 2013/2014 is managed via framework agreements or managed services, and competitive pricing led to savings across the function, according to Driving Efficiency at the BBC.
  • In one example, a competitive tender that resulted in Siemens becoming the single technology provider to the BBC, led to annual savings of £37 million. Additional savings via volume reductions through the adoption of strict policies and targets, and price negotiation with Atos (which acquired Siemens’ SIS division) have totalled £13 million over the 10-year contract. Two major contracts re-procured in 2013 and 2014 for facilities management and domestic radio transmission are also saving the corporation £20 million a year.
  • Since the start of the current 10-year BBC Charter in 2004, annual savings have grown to £1.1 billion. The report forecasts these will rise to £1.5 billion by 2016/17.

Read more at Supply Management

Next recruits Polish workers after ‘failing to hire enough British people’

  • Next, the high street retailer run by multimillionaire Tory donor Lord Wolfson, is bussing in hundreds of Polish people to work in its Yorkshire warehouse after claiming to have failed to hire enough British people. The company, which made profits of £695m last year, admitted that it began recruiting Poles for minimum-wage seasonal warehouse jobs 5-10 days before advertising the roles in the UK.
  • Next said it was not preferentially hiring Polish people, but had started the recruitment drive in Poland first because it needed more time to bring people over from the continent. The company has hired about 500 British and 240 Polish people for a total of 840 warehouse roles required over the Christmas shopping and January sales period. The spokesman said the jobs were advertised on Next’s website, in jobcentres and on UK recruitment websites. Next is still actively recruiting in the UK and Poland for 100 more staff.
  • The Yorkshire and Humber region has the second-highest unemployment rate in the country, after the north-east, with 7.2% of people out of work compared with the national average of 6.1%.
  • Next and its Polish recruitment agency have arranged a fleet of buses to drive the 240 Polish recruits 1,180 miles from Warsaw directly to its warehouse in South Elmsall, West Yorkshire. The first of the buses began arriving last month, with up to seven coaches travelling in convey according to the Daily Mirror, which first reported the Polish recruitment drive.

Read more on The Guardian

Cardinal tops healthcare supply chain ranking

  • Cardinal Health, the giant US group, has taken the top spot in Gartner’s Top 25 Healthcare Supply Chains for the fourth year in a row – despite having to absorb the loss of more than $20 billion worth business from Walgreens. Gartner said Cardinal continued to have the widest breadth of any company in healthcare. “It is a manufacturer, wholesaler, distributor, retail pharmacy and a connector at many points in between.”
  • Mayo Foundation was second. Gartner said it was a model of consistency, combining the balance of high quality of healthcare scores and solid bond rating with top echelon peer and analyst scores. Mayo continues to demonstrate leadership in the healthcare value chain by retaining and developing top talent.
  • Intermountain Healthcare stepped up a place to third. “Intermountain represents one of the closest things to a literal ‘City on a Hill’ in the world of healthcare providers through its $40 million investment in its supply chain centre,” said Gartner. GlaxoSmithKline came in at number 23.

Read more at Supply Chain Standard

How 3D printing is set to shake up manufacturing supply chains

  • 3D printing has come a long way in an extremely short span of time. Initially built by Charles Hull in the 1980s as a tool for making basic polymer objects, today, the technology has spurred remarkable efforts in several manufacturing sectors; from building intricate aircraft and race car components, to human organs and prostheses.
  • Now, the wider business world is beginning to understand the potential of 3D printing for cost-effective, efficient and environmentally-friendly manufacturing. It is little wonder that analyst firm, Canalys see the global market for 3D printers reaching $16.2bn (£10.3bn) by 2018. With increasing adoption, the technology will revolutionise manufacturing as well as the supply chain and logistics processes which surround it.
  • Though manufacturing in certain locations can be low-cost, managing a global logistics network isn’t; especially given the transportation costs involved. 3D printing can reduce these costs by enabling businesses to station local manufacturing centres closer to strategic markets, reducing the length of the supply chain and helping towards a reduced carbon footprint.
  • Regional manufacturing centres can also tackle inventory concerns, especially for the industrial spare parts and consumer sectors selling highly-customised products. 3D printing technology will enable manufacturers to easily produce goods to order, helping save money and minimise waste.

Read more at The Guardian

UAE women ‘eager to develop’ supply chain sector

  • The Chartered Institute Of Procurement & Supply for the Middle East and North Africa region (CIPS MENA) is considering establishing a sub committee and a mentoring pool for UAE women working in procurement.
  • A demand for both was identified at an Abu Dhabi event held in October entitled ‘The Impact of Women in Procurement’, which was attended by about 70 procurement professional from diverse industries with most participants being female UAE nationals.
  • Rebecca Fox, general Manager of CIPS MENA, said: “This event has shown that there is a healthy appetite amongst women for the procurement profession to be conducted according to the highest international standards in organisations of all kinds and in all sectors.
  • “Women in this region are eager to nurture and develop this discipline, and we can play an instrumental part in advising and supporting them across various industries. “Since we started providing service and training to organisations and professionals across the Middle East, we have seen strong levels of commitment from women to creating sustainable supply chains, and to the creation of further employment opportunities.”

Read more at Arabian Supply Chain

UK Logistics Deal Delayed Until 2015

  • Hardly had the dust settled from Babcock’s selection as the winning bidder to acquire the British state-owned armored vehicle repair company Defence Support Group (DSG) when a newspaper report emerged claiming the firm is in line to secure a major deal with the Ministry of Defence to transform the purchase, storage and transportation of commodities.
  • Babcock and its partner, DHL, in a team known as Defence Integrated Supply Chain Solution, has been in a head-to-head competition against US company Leidos with Kuehne & Nagel and others acting as subcontractors to win the Logistic Commodities and Services (Transformation) (LCS(T) program. An in-house MoD team has also been bidding.
  • An announcement on a winner for the LCS(T) program had originally been planned for November. That slipped to December and recently an MoD spokesman said a final decision naming the winner had been pushed back to 2015. But now a report in the Independent newspaper here Nov. 28 said that Babcock had beaten Leidos to the deal.
  • The MoD denied a decision had been made and said it was sticking to its new timeline for an announcement in 2015.

Read more at Euro Supply Chain Jobs

Arms procurement policy will be in country’s interests: Parrikar

  • Defence minister Manohar Parrikar on Sunday said that his arms procurement policy would be in the interests of the country.
  • “India’s interest would be primary in arms purchase,” Parrikar said, adding that after taking into account India’s interests other things can be considered in arms purchase. Parrikar was replying to media questions on the demand put forward by Rajya Sabha MP Sitaram Yechury that India should stop purchasing arms from Israel. “I do not know exactly what Yechury said, therefore I will not comment. But my arms procurement will be in the interest of this country,” Parrikar said.
  • My advice to the defence minister is that in the interests of India and world stop financing Israel and its attack on Palestinians. Buying arms from Israel means giving profits to Israel which are being used to kill Palestinians, Yechury said. “Parrikar’s patriotism would be tested as defence minister, let’s see what he does,” added Yechury.

Read more at Times of India