Quantitative Easing: What does it mean for the European economy?

Everything you ever wanted to know about Quantitative Easing but were too afraid to ask…

Everything you wanted to know about Quantitative Easing

The European Central Bank (ECB) announced this week it will inject 1.1 trillion (1,100,000,000,000) Euros into the floundering Eurozone economy.

ECB President Mario Draghi suggested the move was made to “address heightened risks of too prolonged a period of low inflation”.

This process, known as Quantitative Easing (QE), is designed to stimulate the Eurozone economy and steer the continent away from another recession – a challenging task in the face of heightened deflation.

It’s a term we’ve heard a lot of in recent years, but what exactly is Quantitative Easing? Fortunately our friends at the BBC have put some time into describing this complex finance play in laymen’s terms.

Now you know what it is, what outcomes should we expect from QE?

James Sproule, chief economist at the Institute of Directors (IoD) provided us with the following comments:

“Ultimately, QE on its own risks setting the Eurozone on the road to Japanese-style stagnation and deflation. QE is not, should not and cannot be seen as a substitute for the kind of structural reforms to labour and product markets that the EU so desperately needs.”

He goes on to say: “The problem across much of the Eurozone is a lack of entrepreneurialism, as rigid and anti-competitive systems hold back enterprise and growth. Much greater liberalisation of product markets is necessary and we must appreciate and accept that the disruption this causes will lead to a degree of creative destruction.”

Sproule also believes that QE will have no discernable effect on unemployment levels across Europe – despite the general good health of the economy. High European unemployment remains a structural issue, and businesses are unwilling to hire because of a desire to avoid the significant liabilities of employment that still characterises Eurozone labour markets.

So how exactly does QE differ to the financial practices adopted outside of the Eurozone?

Sproule explains: “European businesses are far more dependent on bank debt than their American counterparts. In order for Eurozone QE to work, European banks have to use the new cash to lend, which in turn means they must be confident that their existing balance sheet is solvent and that the new loans they make are equally prudent.”

In closing, Sproule makes a recommendation for the European Union going forward:

“Member states need to work quickly to liberalise social and employment law, complete the single market in services and embrace digital innovation. The risk now is that QE blunts the desperate need for wider economic reforms.”

Tim Cook: From Supply Chain Management to CEO

Is Apple CEO, Tim Cook, procurement’s greatest ambassador?

One of the key goals of Procurious is to improve the image of our function.

Apple CEO Tim Cook, procurement’s greatest ambassador?

It’s fair to say procurement has received a bad wrap over the years. We’ve been dubbed corporate policemen, paper pushers, roadblocks, as well as a raft of other unflattering names we dare not mention.

Thankfully, due to the innovation and hard graft of procurement professionals, the function is shedding this negative image and starting to become recognised as an integral part of any successful business.

Perhaps the greatest exemplar of procurement’s ascendancy to date is Apple CEO Tim Cook.

In 1998 Tim was the vice president of Corporate Materials for the Compaq computer company, a role that that saw him hold responsibility for the organisation’s procurement and inventory operations. Despite having no real intentions of leaving this role, the enigmatic Steve Jobs managed to convince Tim to take on a role at Apple (pre iMac, iPod, iPad, and iPhone).

Tim’s performance at Apple was stellar, particularly from a procurement point of view. In his authorised autobiography of Steve Jobs, Walter Issacson described Cook’s methodical approach to supplier rationalisation and inventory management.

“Cook reduced the number of Apple’s key suppliers from a hundred to twenty-four, forced them to cut better deals to keep the business, convinced many to locate next to Apple’s plants, and closed ten of the company’s nineteen warehouses. By reducing the places where inventory could pile up, he reduced inventory. Jobs had cut inventory from two months’ worth of product down to one by early 1998. By September of that year, Cook had gotten it to six days. By the following September, it was down to an amazing two days’ worth. In addition, he cut the production process for making an Apple computer from four months to two. All of this not only saved money, it also allowed each new computer to have the very latest components available.”

The procurement and supply chain decisions made by Cook highlight the critical importance of procurement to Apple’s success. The strength of the company (and arguably its competitive advantage) has been in building and managing a complex network of suppliers that the company has successfully leveraged to produce ground-breaking technology products. Put simply, without the supply network, there is no product.

Cook’s performance in Apple’s supply chain clearly caught the attention of Steve Jobs who gave the follow recommendation of Cook during his departure from the firm.

“I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.” Steve Jobs

The promotion of Cook to CEO shows that the board of Apple understands the critical importance of external suppliers as a source of innovation for the company. Apple clearly sees the procurement function as the conduit to successfully managing these relationships and ensuring the future success of the business.

Apple is the world’s most valuable brand, has undergone a remarkably successful business transformation and has produced products that have changed the way we interact with each other and the world around us. With so much of this success being attributed to great procurement practices, could there really be a stronger endorsement for our function?

“Tim Cook came out of procurement which is just the right background for what we needed.” Steve Jobs

Want to start your own ‘Group’ on Procurious?

So you’re a fully-registered Procurious member: you’re sharing stories with your peers, contributing to interesting discussion topics, brushing-up on your learning using our learning resources, yet you’re still craving more… Let us introduce you to our new Procurious Groups – the perfect haven to hang out with likeminded professionals around a core theme.

Groups on Procurious

Sergio Giordano – one of our original, early Procurious members has forged ahead and set up The Italian Procurement Professional Community. It currently boasts 44 members, making it the largest active Group on Procurious.

We asked Sergio if he’d like to share some words about the Group, and the approaches he’s adopted to entice new members:

“Italian professionals are beginning to understand that to achieve reputation you must first demonstrate your competence by helping colleagues and proving to be an expert in a specific field.

This is an essential feature which is the basis of my request to join the group. I also tried to make it clear to them that the opportunity to grow the Italian community in Procurious is huge. On one hand it helps to get in touch with a world of international procurement with the support of other Italian colleagues with whom to share their knowledge. And on the other hand, a means to enrich themselves with the expertise of colleagues from other countries. 

Finally, as you know, Italians like sport (and competition) so I spurred the decision to join the group by issuing a challenge: to be the most numerous and competent team in Procurious, by putting together the excellence of Italian procurement professionals. However I think that the first interest in joining  the group is the uniqueness of Procurious: we all felt a great need of a specialistic network like yours or, let me say… like ours.”

Create your own Group

To take a leaf out of Sergio’s book, navigate to the ‘Groups’ page by following the link (it’s nestled between the Discussions and Blog items).

To set up a group of your own, begin by clicking the ‘Create Group’ button.

Now you need a good name… The Group name should be succinct, and easily identifiable. You can go into extra detail in the ‘Description’ field – this should spell out your modus operandi.

You’ll also need to specify relevant industry and category choices using the drop-down menus (just like you did when you originally joined Procurious).

Finally, upload a small image that can be used as the Group’s profile picture. Now you’re ready to start inviting other Procurious members to your new Group – you can do this by typing names into the ‘Add members’ field.

Set privacy and permissions for your Group

Ideally you’ll want to retain full control of your little corner of Procurious – this is where the privacy and permissions controls come into play.

Set the Group privacy to ‘Posts visible only to group members’.

To manage the flow of new members to your Group we’d recommend selecting the ‘Any Procurious member can ask to join’ option in the first instance. This means that every time someone makes a request to come onboard you’ll receive a notification to approve/deny their membership.

We’ll be exploring Groups in more detail in future postings, but in the meantime we encourage you to have a play around and explore the new functionality on offer.

Have any feedback/comments? Leave below for Procurious to see!

Oil’s dropped, when will my flights get cheaper?

Oil is at $47 a barrel, shouldn’t we all be flying for less?

To answer this question I’d like to roll back the clock to 2012; a slimmer, less grey-haired version of me was working as a Procurement Specialist and had been tasked with renegotiating air travel, a category admittedly I knew little about…

Oil’s dropped, when will my flights get cheaper?

After perusing an article in the Economist magazine on the way to work detailing the falling price of oil and its impact on the economy, I foolishly assumed my upcoming contract negotiation would be a breeze.

I’d done my research. I knew that jet fuel accounted for between 30-50 per cent of an airline’s operating expenditure. So it stood to reason that if the price of this commodity fell, so too would airfares. I started doing some rudimentary savings calculations in my head and readied myself for a round of congratulatory high-fives.

Not so fast…

As it turns out, the link between oil prices and airfares is a little stickier than I first thought. The following points provide some background into why:

Airlines are now reluctant towards unchecked growth

In the past, airlines have seen lower fuel costs as an opportunity to increase their fleet, boost the number of routes they service and to reduce ticket prices.

While these knee jerk responses to low fuel costs made airlines money in the short term, as oil prices started to climb again, many firms were burnt (often to the point of no return) by the investments they made.

As one industry expert put it: “there are a lot of decisions that make sense at $80 a barrel that simply don’t add up at $100 a barrel.”

Having learnt from their past mistakes, airlines are now far more disciplined in their approach to capacity growth.

Jet fuel pricing is managed on a long-term basis

Whether it is locking in long term pricing agreements, or creating business strategies that are based on high oil prices, airline operating models are no longer designed to offer fare reductions every time the price of oil drops.

John Heimlich, the Vice President and Chief Economist of trade group Airlines for America, suggested in a recent conference call that the primary objective for airlines is to secure long term financial health and to implement measures that will help weather the next recession. He noted that spot discounting of fares would not aid in this endeavour.

In response to calls that the falling oil price should signal a period of discounted air travel John clever stated. 

“We don’t really hear people clamouring for lower prices of cheeseburgers when the price of beef comes down or lower prices of iPhones when the price of semiconductors go down.”

Not all costs are variable

Many consumers (and mainstream media outlets) assume that if oil prices fall by 50 per cent, so too should the cost of flying. This logic flies in the face of the most basic procurement theories, fixed vs. variable costs.

It’s true that fuel is, to some degree, a variable cost (see previous point). However, the majority of an airline’s operating expenditure is tied to costs that do not fluctuate with the price of fuel (wages, planes, airport taxes, food, etc.). This means that only a small percentage of a ticket’s price is subject to change based on oil price fluctuations.

Demand remains high

Airlines simply don’t need to reduce prices when demand levels are as high as they are.

An IATA (International Air Transport Association) press release published on January 8th indicated a 6 per cent growth in total passenger kilometres (a demand indicator used in the airline industry) for the month of November; similar figures have been recorded throughout 2014.

If flights are full at current prices, where is motivation for airlines discount fares?

The comments of American Airlines President, Scott Kirby, not only sum up this sentiment, but also make sound economic sense.

“Air travel remains a great bargain. We’ll continue to keep it a great bargain for customers. But in a strong demand environment, we don’t have plans to go off and just proactively cut fares.”

The airlines need to cash in

The airline industry has always been a tough place to make a buck. Warren Buffet articulated the cutthroat nature of the airlines when he famously stated:

“How do you become a millionaire? Make a billion dollars and then buy an airline.”

Airline bosses know that tough times will again befall the industry, so many are seeing the current boon in profitability as opportunity to prepare for the tough times that lie ahead. The following quote from B. Ben Baldanza, CEO, President, and Director of Spirit Airlines highlights this point.

“Lower fuel prices create a little bit of tailwind in the margin right now, which is good for us and probably good for the industry. But as long as demand stays strong, as we see it right now, we believe that, that (sic) we’ll take good advantage of that in the pricing environment as well.”

Well there you have it. While airfares may indeed decrease over the coming months, be prepared to discover (like I did) that they may not move as much as you initially thought. So you just might have to find another way to earn that high five from your boss. Here’s a hint to get you started.

Supply and demand is alive and well in the British toy industry

With sales at a four-year high, is it all fun and games for the British toy industry? 

Toy Fair 2015 at London Olympia

Toy Fair is the only dedicated toy, game and hobby trade exhibition in the UK. Through Jan 20-22 London’s Olympia opens its doors to the UK and European toy trade, as more than 260 companies debut their wares to retailers, buyers, and the media.

The British toy market has increased by 4.4 per cent in 2014, its best result since 2010 (+8 per cent), to reach £3 billion at retail, an increase of £130 million.

According to the global information provider, The NPD Group, 2014 was boosted by a comeback of collectable brands where unit sales rose by over 12 per cent to 416 million toys, as sales under £5 increased by 9 per cent. This comes after a flat performance was recorded for 2013.

“This is a tremendous result for the British toy industry during a year of challenging trading conditions. The industry continually evolves to remain relevant to the demands from children and their families and this innovation combined with many consumers’ desire to prioritise their children’s playtime has undoubtedly had a positive effect on the year,” commented Roland Earl, Director General of the BTHA.

For the first time ever, toy sales during Black Friday week increased by as much as 10 per cent as consumers snapped up big ticket items and electronic toys. This resulted in Black Friday sales exceeding those of the week prior to Christmas, traditionally the largest selling week in the toy market. Overall, the Christmas season was strong with an overall increase of 3 per cent year-on-year for December.

Dog eat dog

It’s not just the supplier trying to keep their costs down, and losses at a minimum.

Despite the health of the British toy market, there are pitched battles being fought in the retail space, as Brian Simpson – Buyer and General Manager of the family-run SMF ToyTown observes:

“Our industry is set on slaughtering each other, with most of the majors trying to be the cheapest on every line and leaving the rest of us to try and shift the stocks we bought at cost price or below.”

Simpson continues: “Don’t get me wrong there is plenty of good stuff happening in 2015… but we really need another craze that captures kids minds. I know that sales of other items reduced because of the Loom craze, but I don’t see things being balanced with the natural uplift of other items to cover off the demand from Looms, it will be an interesting Q1 for us to see what trends there are… I’m finding my attention is increasingly drawn towards trying to see which products I feel will be price-slashed at Christmas, and therefore my approach is far more defensive.”

Peering into the crystal ball – Jonty Chippendale from The Toy Shop in Cumbria comments: “[2015 needs] better margins, lower carriage paid enabling me to order frequently, and lower volumes to thereby range better.” 

Coiledspring Games - a UK success story with Robot Turtles

Coiledspring Games: a UK success story

Coiledspring Games are completely UK-based (Twickenham to be precise), but the moderate-sized distributors are growing rapidly. Coiledspring has now amassed a portfolio of a few hundred games, and to-date it has shifted over three million Rory’s Story Cubes. Last year Coiledspring Games had three of the Guardian’s top 5 new games for 2014…

Coiledspring told us that they’ve started to turn their attention to manufacturing their own games and products. Why? For profitability of course.

There are two ways of achieving this: either buy a game that’s already available in another terror and rebrand it, or in the case of Dodekka (otherwise known as Numberwang) take preexisting elements to carve a new theme.

Dodekka was a cross-collaborative effort. Coiledspring initially (and remotely) worked with an artist in the States, a UK-based designer helped with the rules, before Coiledspring started talking to manufacturers about box sizes, texture of the card, as well as card quality.

This has proved a good process to run through – so much so, that Coiledspring plan on bringing their first full-sized board game to market later in 2015.

WowWee demoed the MiPosaur at Toy Fair 2015

Is WowWee’s football playing dinosaur the saviour of toys?

From Coiledspring’s humble beginnings to a Hong Kong-based behemoth that designs, develops, markets and distributes its own brand of breakthrough consumer technology.

In 2014 WowWee’s MiP proved to be one of the world’s most popular consumer robots – shifted 750k units, capping-off a truly successful year.

For 2015 WowWee toyed with different forms, maybe a dog, maybe another different robotic form. They settled on MiPosaur – a highly intelligent, gesture controlled, robotic creature that can sense its own surroundings and environment.

WowWee’s product is all made overseas [in China], the stock is then imported, and stored domestically ready for distribution.

We spoke to a WowWee representative at the show: “We [WowWee] were the pioneers of robotics, it’s definitely a more-cluttered space these days. Spin Master is obviously a big competitor with tech stuff. But still think we deliver top quality product in the space, and it’s nice, it’s nice to have competition. It expands the category as well; it’s a very growing category in a lot of retailers. With regards to cutting corners: for someone to knock us off – the amount of technology in here [MiPosaur] is huge – I’d tip my hat to them.” 

“WowWee’s goals for 2015 will continue on its path of providing great innovation with proprietary technology and methodology that will deliver fantastic experiences at affordable prices within the field of robotics and youth electronics,” said WowWee Canada President Richard Yanofsky.

2015 will also see the launch of REV (Robotic Enhanced Vehicles).

Extreme Fliers will launch Micro Drone 3.0

The Drones are (still) coming

As regular readers will know this isn’t the first time the humble Drone has entered our airspace… Companies are increasingly looking towards Drone technology to provide logistics solutions – see Amazon, DHL, and more.

Of course kids need Drones too, so we were thrilled to see the Olympia’s skies awash with buzzing machines – some big, some small, and some even smaller.

But with Drones being in vogue, are there any worries that the market will soon be saturated?

We spoke to Extreme Fliers (the folks behind the Micro Drone) – a palm-sized Drone whose development dates back to 2010. They told us that when it comes to sourcing the highly specialized parts a lot of their competitors will elect to buy 1000 units (from China) to help drive costs down. Micro Drone differs because it’s taken a great deal of research and investment to get to this point – added to that; the company uses Makerbot 3D printers to build its toys. The investment spans a five-year period – and the end result is clearly not something that just happened overnight.

The third iteration of the popular flyer will incorporate HD camera-toting skills, a micro gimbal (for a smooth and stable flight), and support for the Google Cardboard VR Headset. All of that has been achieved at one of the most-affordable price points on the market – the Micro Drone 3 is expected to retail below £100 (competing models come in anywhere between £200-300+).

2014 a year to forget for McDonalds Japan

From the Great Fries Shortage to McNugget-Gate – 2014 was a tough procurement year for McDonalds Japan.

McDonalds has had a turbulent time in Japan

Food rationing, emergency airlifts, contaminated meat scandals and cultural insensitivities. It sounds more like a review of a military organisation’s supply chain operations than that of a global fast food giant. However, as hard as it is to believe, these events all occurred in the supply chain of McDonalds Japan in 2014.

Procurement’s Butterfly Effect

The inherent relationship between external market forces and procurement performance was once again exemplified over the December holiday period as McDonald’s Japanese supply chain descended into crisis.

The issue began on the US west coast where 20,000 dockworkers have been locked in protracted contract negotiations since July of last year. Operators at the affected Pacific Coast ports have accused the dockworkers of deliberately slowing work in order to impact the turnaround times of ships.

In keeping with butterfly effect, this lethargy at the ports sent waves across the Pacific, waves that crashed into the supply chain of McDonalds Japan.

Delays at the ports caused shipping times for US produced french fries, destined for Japan, to stretch from two weeks out to more than four. This slippage caused a major shortage of the popular side dish in Japan, a country that imports more $330M USD of American potato products a year.

The sheer volume of potatoes required to services Japan’s insatiable appetite for fast food, combined with McDonald’s complex internal procurement arrangements, meant it was difficult for the company to quickly find alternative suppliers to cover this shortcoming.

The magnitude and impact of this series of events only becomes apparent when you consider that McDonalds Japan sources 100 per cent of its fries from the US.

By mid-December the impact of the delayed shipments started to be felt at McDonalds outlets across Japan with the New York Times announcing that the country had “entered the great French fry shortage of 2014”.

Drastic Times Call for Drastic Measures

In a move normally reserved for times of war or natural disaster, McDonald’s was forced to implement a rationing strategy to manage the distribution of its dwindling supply of fries.

In order to avoid “running out of fries” during the December/January holiday period, customers at McDonald’s 3135 Japanese outlets were limited to only small serves of French fries.

A note on the company’s website stated:

“Because we are currently having difficulty stably procuring McDonald’s French fries, we are offering them in the small size only,”

To sure up supply, McDonald’s took the drastic step of airlifting 1,000 tones of frozen processed potatoes into Japan. The firm has also established a longer-term solution that sees shipments of fries being dispatched from US east coast while the west coast labour discussions continue.

Fortunately for the fans of the golden arches, these measures enabled McDonald’s outlets in Japan to once again offer all three sizes of fries from January 5 onwards, signalling the end of a three-week period of rationing.

2014 a year to forget for McDonalds Japan

The Christmas fries shortage has rounded out a terrible year for the firm’s Japanese procurement operations. In July the organization faced an even more serious supply chain issue when it was found that expired meat (procured from Chinese supplier Shanghai Husi Food) had found its way into the production of the company’s popular Chicken McNugget product.

Despite the best efforts of one Kanagawa Prefecture store manager, who told his staff to bow more deeply than usual to customers who bought chicken products, concerns over the safety of McDonald’s food led to a 17.4 per cent drop in same-store sales during the month of July. Similar drops in sales were recorded for the proceeding months.

The crisis could have been better managed

The way the in which ‘McNugget-Gate’ (as it was so dubbed) was handled by management at McDonald’s has also drawn stern criticism in Japan. The President of FamilyMart, a leading convenience store in Japan that also held contracts with the disgraced Chinese supplier, made an apology to customers immediately after the contaminated meat story broke.

An apology from McDonalds President and CEO, Sarah Casanova, was not received until a week after the story broke and even then, was only delivered in response to a question posed at a scheduled earnings announcement.

 

Casanova was further criticized and accused of being insensitive to Japanese corporate practices when she portrayed her firm as a victim of the crisis rather than taking responsibility for the errors that had occurred in her company’s supply chain.

Brand and bottom line both take a hit

As well as impacting the firm’s brand image in Japan, it appears 2014’s supply chain slip ups will have a marked and lasting impact on the company’s financial performance.

On December 8th (prior to the rationing program) the company released a statement claiming Asia/Pacific, Middle East and Africa sales were again down for the month of November, directly referencing “the ongoing impact of the supplier issue on performance in Japan and China”.

What can we learn from all this?

From a procurement point of view, there is a great deal to take away from McDonald’s recent shortcomings. The impact that external market forces can have on a procurement team’s ability to secure supply, the risk of overreliance on single geographies and the fact that a company’s image can be tainted (pun intended) by the actions of its suppliers jump immediately to mind.

Fortunately for Japanese french fry fans, the rationing is now over, Big Macs will once again be accompanied by a sufficient supply of American fried potatoes and fast food dining in Japan can return to normal.

I bet the McDonalds procurement team is hoping for the same.

Does procurement have a role to play in cyber security?

In the past few months alone there has been a significant number of cyber attacks on high profile targets including Sony Pictures, celebrities’ phones and personal computers, and, just recently, an attack on the US Military Command’s Twitter account.

Procurement's role in cyber security. Image Flickr

Now, as the World Economic Forum labels emerging technologies as one of the major global risks for 2015 in light of these attacks, we consider what procurement can do to aid organisational efforts in cyber security.

How big a worry is this?

If the WEF is highlighting it as a major global risk, then it’s certainly something to be taking seriously. Emerging technologies will allow hackers and cyber terrorists to carry out attacks that are more sophisticated and harder to stop. Additionally, there is a reported increasing skills shortage in cyber security personnel, expected to peak in 2017.

However, it’s not all bad news. The high-profile attacks have helped increase the focus on this subject. As a result, the UK Government has issued advice and information to organisations to help them be cyber-safe, as well as signing up to a second US-UK Cyber Security Innovation Summit. There are also now cyber governance health checks and a Cyber Essentials Scheme available to help organisations.

Procurement’s Role

A representative from the organisation that compiled the WEF report, Marsh & McLennan Companies, was quoted as saying “As a company you are not protected [against cyber attacks] unless your supply chain is protected.”

So what can Procurement do to help? Individually, you can do everything you would do to protect your personal accounts and computers:

  • Report all phishing and suspicious e-mails
  • Don’t click on links in e-mails unless you are sure of the source
  • Be wary of unsolicited e-mails asking for information

There are other steps that you can take as part of an organisation to assist with the overall security

  • Ensure your knowledge is up to date by attending conferences
  • Work with suppliers to put security plans in place
  • Make security plans part of your evaluations
  • Take responsibility in your team for checking and ensuring compliance
  • Investigate the Cyber Essentials Scheme

By making this part of day-to-day activities, procurement can do its bit to make organisations more secure.

Biggest Global Challenges in 2015https://www.procurious.com/blog/trending/what-are-the-biggest-global-challenges-in-2015

Cyber Security Boosthttps://www.business-cloud.com/articles/news/cyber-security-boost-uk-firms

Cyber Essentials Scheme (UK)https://www.gov.uk/government/publications/procurement-policy-note-0914-cyber-essentials-scheme-certification

Read on for more of the biggest stories commanding headlines right now:

Supply Chain woes help doom Target in Canada

  • Minneapolis-based Target Corp. said Thursday it was shuttering its 133 stores in Canada, laying off 17,000 workers and placing its Canadian operation under bankruptcy protection.
  • “While this is a difficult decision, we believe it is the right one for Target,” Brian Cornell, Target chairman and chief executive officer said in a press release. “We had great expectations for Canada but our early missteps proved too difficult to overcome.”
  • New York Times article Friday said that supply chain problems helped doom Target’s operations in Canada. “Differences in suppliers and other factors meant that Canadians found Target’s Canadian stores to be more expensive than they anticipated, and a poorly executed distribution network meant that shelves were often missing basic products,” according to the Times.

Read more on CFO

Troubled McDonald’s Japan to put CFO in charge of supply chain 

  • McDonald’s Japan Holdings Co is putting its chief financial officer in charge of its supply chain, according to an internal email seen by Reuters.
  • The move comes after foreign objects were found in customers’ food, the latest trouble for a fast-food chain hit by sliding sales and a shortage of french fries.
  • Andrew Brough, senior vice president and chief financial officer, will take over the company’s Supply Management Division from Feb. 1, the Friday email from CEO Sarah Casanova said. The email does not say who was previously responsible for the supply chain.
  • Hidehito Hishinuma, senior vice president and chief support officer, has in recent days appeared at news conferences to discuss the company’s procurement, in one case apologizing for the objects, including a tooth and plastic, getting into food.

Read more at Business Insider

Yusen Logistics expands Sydney operations

  • Yusen Logistics Australia has announced that it will open its sixth Sydney warehousing facility this month. The site is at Greystanes in Western Sydney and is ideally located for all major arterial routes.
  • The new warehouse, which is dedicated to a major US retailer, consists of 12,500 square metres and will comprise 18,500 pallet locations. Operations will commence immediately.
  • Yusen Logistics’ Managing Director for Australia, Ian Pemberton said: “This additional facility continues the expansion of our portfolio in line with our three year growth strategy, and demonstrates our commitment to increase the range of international clients to whom we provide supply chain solutions. The capital investment is in excess of $2 million Australian dollars and the facility will employ an additional 25 Yusen staff.”
  • Yusen Logistics Australia is a leading provider of supply chain and transport solutions with over 26 years of service in Australia and revenues of over $125 million Australian dollars in 2014. The business has 12 offices throughout Australia with 420 people covering international freight forwarding, in-house customs clearance and contract logistics (warehousing and distribution) services.

Read more at Supply Chain Digital

Jailed Military procurement official blackmailed

  • Former Greek secretary general for military procurement Yiannis Sbokos is being blackmailed by a fellow convict, revealed a Greek police case file. Sbokos has been in prison for the last two years, since his conviction for money laundering.
  • According to the case file, Sbokos is being blackmailed by a convict (Yiannis Sk.) who found out that the former Greek government official had 10 million euros in cash. Yiannis Sk. allegedly received this information from Akis Tsochatzopoulos, fellow convict and former Greek Defense Minister.
  • Yiannis Sk. allegedly threatened Sbokos, requesting part of the money. However, when the former official refused, his fellow convict attempted to bomb his house in Athens.
  • Sbokos and Tsochatzopoulos were imprisoned after it was revealed that they had received multiple bribes for arms deals during their time at the Ministry. Furthermore, it was revealed yesterday that Tsochatzopoulos had ordered a bombing attack against Sbokos.

Read more at Greek Reporter

Thailand drafts public procurement law following UNDP review

  • The Thai government is drawing up legislation to manage the risk of corruption in public procurement, following the UN Development Programme’s ‘integrity risk assessment’ of the country’s public purchasing system.
  • The assessment found evidence of “weak integrity in public contracts” and a concentration of improvements in public services in Bangkok and the central region, leaving “significant deficiencies” in other parts of the country.
  • Risks to integrity in Thailand’s non-regulated public procurement process are “rife” because of the large amounts of money at stake and the interface between the government and private sector, which is characterised by a high volume of transactions.
  • The assessment was conducted as part of the ‘Mitigating Risks to Integrity in Public Procurement project’, established by UNDP Thailand with key stakeholders in the Thai Government, including the Offices of Public Sector Development Commission and Public Procurement Management Department and the State Enterprise Policy Office.

Read more on Supply Management

What’s got you motivated in 2015?

Thanks to everyone who has been contributing to the Discussion forum, both in asking and answering questions. We really appreciate the contributions, as do those people who are posing the questions.

What's got you motivated in 2015?

As it’s a new year, we’ve picked out a few popular questions on topics you might be considering as part of your professional and personal goals this year.

As ever, we’ll be linking these discussions to our great blog content so you can get further into the topics and read more about them.

What’s got you motivated in 2015?

This question looked at both the personal and professional side of people’s aims for the coming year.

On the personal front there were some interesting and enviable responses. Procurious HQ will admit to being jealous of Peter’s travel plans, while agreeing with Antoinette in hoping that all our members will be enjoying time with friends and family. And don’t worry Georgia – none of us are particularly green-fingered either!

Professionally, 2015 seems to be a year for development. A couple of common threads were social media and digital strategies and how these are going to impact working lives. The use of social media is on the rise in organisations and many are looking at specific strategies to manage their profiles and presence.

At Procurious, we think there’s a great chance for procurement to be an early adopter and lead the way for businesses. Why not think about a Procurious workshop on social media for procurement.

Also on the professional front, motivations for 2015 included fresh starts, either in a new role, or after some time off (good luck, David!), increasing the profile of public procurement, developing skills through e-Learning and removing silos in businesses through working on internal relationships.

Also remembering the importance of external relationships, networking and meeting fellow Procurians!

Tips to stay on track – make a plan, don’t make excusesrespect your abilities and chipping away at your goals.

I will be starting out as a new face in procurement in May 2015. Any advice on how I can and should be preparing myself?

We’ve all been there at the start of a new job or when we moved into procurement, so unsurprisingly this question was well answered.

Top answers from the community included:

  • Reading about procurement and your new company and understanding their policies and processes
  • Never being afraid to ask questions (there is no such thing as a stupid question!)
  • Speaking to experienced professionals to learn from them
  • Finding a mentor to help you out

Social media can play a big part in this process too. It allows you to connect with and ask questions of experienced professionals, develop your knowledge through eLearning and follow news stories – either via industry publications or #procurement on Twitter.

Other things the community suggested included:

  • Finding templates for policies and processes
  • Understanding how the procurement process fits in the organisation
  • Getting your hands dirty straight away and get out and see the other functions
  • Performing basic spend analysis to help give you a quick overview of the company spend
  • Thinking about the end-to-end process including sourcing and assessment of vendors, payment and delivery terms, risks and how to mitigate/manage them.
  • Remembering that your face and your voice are the ones of your company

It’s often overlooked that it can be challenging starting a new role or in an unfamiliar profession and, as a result, individuals can struggle to adjust to new ways of working or feeling like they are capable.

However, these tips aren’t just for new starts. Even people who have been in procurement for a longer period of time can still learn from this and put these tips to good use.

Hope that helps, Zach! And good luck!

Helpful links

Get involved with a workshop on social media for procurement – (https://www.procurious.com/blog/procurious-news/procurious-announces-webringthedonuts-campaign)

Kick off your learning on Procurious with our ‘Introduction to Procurement’ videoshttps://www.procurious.com/class/all

What can you do in 2015 to make the most of social mediahttps://www.procurious.com/blog/procurement-news/procurement-in-2015-a-new-years-revolution

Getting the most out of networking – https://www.procurious.com/blog/procurious-news/step-up-your-networking-game-the-basics

Know what other skills you might need in procurementhttps://www.procurious.com/blog/life-style/job-survival-skills-get-a-grip-on-the-numbers

What are the biggest global challenges in 2015?

WEF summit to look for answers to major global challenges.

Biggest global risks in 2015

Water crises, interstate conflict and climate change number among the top risks that the world will face over the next twelve months. This is according to the Global Risks 2015 report that the World Economic Forum has readied ahead of its summit on 20 Jan.

Emerging technologies were also cited in the forward-looking document, an area that’s come under considerable scrutiny of late owing to the numerous cyber attacks (hacks) made against major organisations.

The report was put together (in part) by Marsh & McLennan Companies – a representative commented: “As a company you are not protected [against cyber attacks] unless your supply chain is protected.” 

We’ve compiled a collection of tweets around the highlighted issues (as well as some educated guesses) that are all expected to come out of the 2015 discussions.


5 minutes on Procurious – a primer for new members

Following on from our call to step up your networking game, we’ve published a quick, digestible guide to spending five minutes on our network.

Five minutes on Procurious

If your Community Feed is looking a bit empty, then that big green ‘Build your Network’ button (1) is your friend…  We’ve waxed lyrical on the benefits of this tool in the past, see here. Invite your LinkedIn contacts, send a personalized email link, or use the filters to select members by country/industry/category.

For instant gratification, can we instead draw your attention to ‘Get Connected’ (2). This presents a selection of Procurious members we think you should connect with. Click ‘View more’ when you’ve exhausted the recommendations.

Got something you want to get off your chest? Post a status update (just like you do on LinkedIn/Facebook, or send a Tweet on Twitter) to your Community Feed. Just start typing at the ‘Share your thoughts’ prompt (3). Don’t feel like you need to be restricted to text either. Feel free to post a fun/informative/thoughtful photo, or upload a document that you’d like to share with the rest of your network.

Posted a status? Great! Hopefully other Procurious members will take a shine to it and comment (4). Try it yourself by leaving a comment on a post in your network.

Remember, you can tag other Procurious members in comments and statuses by prefixing with the @ symbol.

If commenting on statuses isn’t enough for you then look to ‘Latest discussions’ (5). Here you’ll see a list of the most recently submitted discussion topics that Procurious members have posed.

Click into the topic to answer and air your thoughts. You can also elect to follow discussion topics, and share them to your Community Feed if you so wish.

See something in your Community Feed that you like? Click the thumbs-up to give it your seal of approval (6), or click the share icon to repost to your network.