The Oil Crisis for Dummies

I’m sure like me, most of you have watched with interest the price of oil plummet from well over $100 a barrel to below $50 a barrel in the space of just a few months. I’m quite sure that, like me, most of you have been in the dark as to why this is the case.  So I thought I’d do some research into the matter and try to uncover what is driving this price collapse, and what it means for you as an individual as well as a procurement professional.

While fluctuations in the price of oil are not particularly rare, ones as significant and unpredicted as this certainly are.  We’re talking about the largest fall in the price of oil ever, and one that, even as it was beginning, was discarded by most analysts as a small correction ahead of yet another uptick. Even when the price of oil was in the 80’s in October, analysts at Barclays noted, “It seems extremely unlikely that oil prices will remain below $100 for very long.”

So why has everybody been so wrong about predicting the price of oil, and why has it continued to fall while most analysts have continued to remain bullish on the price of Brent (the global oil benchmark)? If there’s one short answer to this – it’s OPEC – but more on that later. Instead we’ll begin by looking at two strong causes behind the slump.

Cause Number 1: US Oil Production

With rapid advances in drilling technology (particularly in extracting from shale), oil production in the US has increased by more than 50 percent in the last 2 years.  For anyone who’s done Year 7 economics, you’ll know that when supply increases and demand remains steady, prices come down.

US Crude Oil & Natural Gas Production 1970-2015
US Crude Oil & Natural Gas Production 1970-2015

Cause Number 2: A lack of intervention from OPEC.

Traditionally, when there’s a slump in the price of Brent, OPEC (Organisation of Petroleum Exporting Countries – fundamentally an oil cartel) bands together to cut supply and therefore prop up the price of oil.  In this case, for whatever reason, they decided not to step in.

The technological advances that I mentioned earlier don’t come without a cost, so by deciding to let things play out, OPEC basically condemned a lot of new shale explorers to bankruptcy, as their production cost per barrel sits at anywhere between $50-$70.  With the Brent Crude Oil rate sitting below this, it has become no longer financially viable for these ventures to continue exploring and drilling new wells . 

Production Cost Per Barrel of Major Oil Producers in 2020
Production Cost Per Barrel of Major Oil Producers in 2020

Why hasn’t OPEC stepped in?

Well basically they’re driving all of this new shale competition out of the market.  This reduces total global oil production temporarily, and when they’ve effectively bankrupted all the new kids on the block, OPEC can start manipulating the price back up to historical levels.

How long until they decide to intervene?  Suhail al-Mazrouei, The UAE’s Energy Minister, said a few weeks ago that OPEC would wait “at least three months before considering an emergency meeting”.  Good news – you can expect some very cheap petrol at the pump for at least the next few months. (You might even get some cheap flights in too, although the aviation industry strongly hedges their AVGAS purchases, so it might just be a pipedream)

So what does this mean for you?

I’m going to come at this very simplistically and from the point of view of someone in a developed country. It’s a good thing.  Consumer spending accounts for approximately 60 percent of GDP in most western countries, and cheap oil means two things.  First of all, you’ll have more disposable income as a result of a decreased cost of transportation – and secondly you can buy more with this disposable income, as the cost of goods is likely to fall. On the other hand, if you live in a country that is heavily reliant on oil production, like Russia or Venezuela, it’s not good news.

As a Procurement & Supply Chain professional, I won’t go out on a limb and give you an unequivocal answer as to the impact this will have on your job – I’m certainly not qualified enough to answer this – but I think some of the articles mentioned in this Procurious post might give you a good idea.

I hope this gives you a better understanding of the situation, and if you have any comments or thoughts on the matter (or if you think I’ve got it completely wrong) please comment below!

7 gadgets to help improve your sleep

Suffering from back to work blues?

Whether you’re putting on that extra layer to protect from the cold or basking in altogether warmer climes, January’s unlikely to ever win any accolades for favourite month of the year…

Ostrich Pillow - best gadgets to improve your sleep

To that end we’re providing you with a few good excuses to hide away and snuggle down for that little bit longer each morning. Eyes down for a selection of bizarre gadgets that will do everything from analysing your sleeping patterns to guaranteeing a good night’s sleep.

Sleep Number x12 bed

Sleep Number x12 bed

If someone were to remark that they thought your bed was pretty clever, you’d probably wonder whether they’d been getting enough sleep themselves… But you’d be forgetting that we live in an age where just about everything has become ‘smart’ – that’s right, even beds are getting in on the act.

US bed maker Sleep Number has gone and made the world’s first smart bed. The built-in Sleep IQ technology tracks the usual measurements (heart rate, breathing rate etc.) but also responds to voice commands to easily activate a wealth of other features. The x12 bed is also dual-sided and it (for example) allows you to make minute adjustments to alleviate a noisy snoring bedfellow.

At $8000 it certainly isn’t cheap, but with all that gadgetry onboard we’re sure you’ll enjoy a jolly nice sleep.

Clocky robotic alarm

Clocky Robotic Alarm

This little wonderful wheeled alarm clock started life as an engineering student’s project. Having trouble waking up herself, Gauri Nanda developed Clocky to shriek annoyingly and effectively, waking you up. The fun doesn’t end there though, Clocky will leap off your bedside table (without a thought for its own safety), and drive around your room, all the while performing random turns to whizz away from your grasp. There’s only one thing for it, you’ll have to get out of bed and hunt the little blighter down yourself.

Ostrich Pillow - sleep gadgets

Ostrich Pillow

“What is that silly thing around your head?” Enquires a bemused work colleague. “Why it’s only a revolutionary new product to enable easy power naps anytime, everywhere” you answer, Right, of course it is.

The Ostrich Pillow really can be used anywhere – be it airports, trains, aeroplanes, libraries, at the office, on a sofa and even on the floor. Heck we know it looks silly but its creators have been beavering away on the Ostrich Pillow for one year, testing and exploring the perfect dimensions and materials to create the best possible experience for the nap.

Selk'bag

Selk’bag

The strangely-named Selk’bag looks like a giant onesie, and has clearly been designed for those adults among us who just refuse to grow up (that makes most of us then).

It’s based on the Japanese Snuggie (which resembled a giant mutant tadpole) and amusingly became the stuff of Internet-lore back in 2009. Perfect for a variety of adventures, the Selk’bag is used by outdoor enthusiasts the world over for camping in a tent, under the stars, at the lake, on the beach, or log cabin (just don’t go scaring others in the woods…)

shapeup alarm clock

Shape Up Alarm Clock

It’s hard enough to get up in the morning and the Shape Up Alarm Clock (shaped like a dumbbell) is set to make things that little bit harder… OK so it’s a bit of a challenge, but you’ll look buff.

This is a digital alarm clock and dumbbell all wrapped up into one novelty alarm clock package. Set the digital alarm clock as normal using the friendly buttons and then wait for your wakeup call with a twist. Only the upward swing of the dumbbell shuts off the repeating buzz – 30 upward swings of the dumbbell that is – meanwhile you can watch your progress using the LCD display.

Sleep Recorder app for Windows Phone

Sleep Recorder App (for Windows Phone)

Prone to talking in your sleep? If you’ve ever wondered what you (or a loved one) sounds like then download the excellent Sleep Recorder app and see for yourself. Sleep Recorder uses your phone’s microphone to capture audio and saves the recording if it detects voice. It won’t record silence or noise. Editor’s tip: keep your phone plugged-in overnight to ease battery drain while in-use.

Sound Oasis Sleep Therapy Pillow

Sound Oasis Sleep Therapy Pillow

This unique pillow allows the weary to enjoy their favourite music or sounds in optimal relaxation and comfort. Audio is delivered via two high fidelity, ultra-thin stereo speakers positioned deep within the pillow, there is also an in-line volume control so you don’t need to faff around when turning the pillow up or down.

What’s more the pillow is finished with a soft brushed cover and hypoallergenic polyester fibrefill.

Do you have the soft skills to deliver on strategies?

Today we’re talking about soft skills.  We are all aware of the need for us all to be technically proficient at what we do, however more and more the drive for us is to drive and build relationships, indeed it’s often cited as one of the most important aspects of what we do.

Do you have the necessary soft skills to succeed?

A recent Deloitte CPO survey identified that globally 57 per cent of CPOs consider that their teams do not have the required skills to deliver on the strategies. Potentially this is because of the lack of the relationship and soft skills that are required to make connections with individuals.

The Faculty’s recent research on procurement capability discusses the increasing need for soft skills within procurement: “As the category management process matures, procurement leaders are shifting their focus from core concerns (cost, delivery, quality and compliance) to supplier relationship management. There is a recognition that effective relationship management has the potential to improve performance in all of these areas and drive supplier innovation and value.” Stay tuned for more articles on The Faculty’s research findings around procurement capability and soft skill development.

Your grandmother may have always told you that you never get a second chance to make a good impression, well the writers at Harvard Business Review beg to differ. BTW the “Gordon” the article refers to is not me!

In this article they suggest that when people view others they do through a series of lenses, these are trust, power, and ego.

  • The trust lens is employed when people want to figure out if you are friend or foe. Perceivers answer that question by tuning in to two particular aspects of your character: your warmth (your expression of friendliness, respect, and empathy), which suggests that you have good intentions, and your competence (evidence that you are intelligent, skilled, and effective), which shows that you can act on your intentions.
  • To get someone to see you accurately through her trust lens, project warmth and competence
  • The power lens comes into play when there is a disparity of power, especially when the perceiver has more than you do. He or she gazes through this lens to assess your instrumentality: “Prove yourself useful to me, or get out of my way.”
  • To create the right impression in your perceiver’s power lens, be sure to demonstrate your instrumentality at every reasonable opportunity.
  • The ego lens gives the perceiver a sense of who’s on top. Subconsciously, people often want confirmation that they, or their group, are superior to other individuals or groups.
  • To be seen positively through the ego lens, be modest and inclusive. Go out of your way to affirm the strengths of others, and try to create a sense of “us,” so that your perceiver can celebrate your achievements rather than feel threatened by them

If you started off on the wrong foot and need to overcome a bad impression, the evidence will have to be plentiful and attention-getting in order to activate phase two thinking. Keep piling it on until your perceiver can no longer tune it out, and make sure that the information you’re presenting is clearly inconsistent with the existing ideas about you.

A common theme we hear is to try and influence senior leaders within the business about the value of procurement or a specific strategy. A recent podcast I was listening to discussed the importance of getting the boss to buy in. There is a written piece to accompany this too.

The piece discusses that most managers struggle to sell their ideas to people at the top. They find it difficult to raise issues to a “strategic” level early in the decision-making process—if they gain entry into such conversations at all. Studies show that senior executives dismiss good ideas from below far too often, largely for this reason: If they don’t already perceive an idea’s relevance to organizational performance, they don’t deem it important enough to merit their attention. Middle managers have to work to alter that perception.

The piece highlights and expands on key tactics, these include tailoring your pitch, framing the issue, managing emotions on both sides, getting the timing right, involving others, adhering to norms, and suggesting solutions.

Let’s take a closer at involving others – while seeking input from multiple individuals can aid decision making, it can also fail as we select the wrong team members. The following piece from Harvard Business Review is all about avoiding this and how to make under-performing teams actually deliver what was desired.

The main issues that go wrong in groups are:

  • Groups do not merely fail to correct the errors of their members; they amplify them.
  • They fall victim to cascade effects, as group members follow the statements and actions of those who spoke or acted first.
  • They become polarised, taking up positions more extreme than those they held before deliberations.
  • They focus on what everybody knows already—and thus don’t take into account critical information that only one or a few people have.

The report goes on to suggest ways to make groups work better:

  • Silence the leader
  • “Prime” critical thinking.
  • Reward group success.
  • Assign roles.
  • Establish contrarian teams.

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

How falling oil prices are impacting Procurement and Supply Chain

How falling oil prices are impacting Procurement and Supply Chain

According to the BBC, the price of Brent crude oil has fallen to a new six-year low this morning. The price of a barrel dropped by a further 3% to $48.54, its lowest level since April 2009. Goldman Sachs have also stated that they believe the price of a barrel will stay around $40 for the first half of this year.

How falling oil prices are impacting Procurement and Supply Chain

Why is this happening?

Well, in short, the global demand for oil is falling due to weakened economies, increasing efficiency and a move away from oil to other fuels. There is also a surplus in production due to America’s fracking programme and high output in Libya and Iraq despite instability.

Personal vs. Professional

So while it may be a cause for personal celebration when we fuel up ours cars, what does it mean for us all professionally?

Supply Chain and Logistics organisations should see the benefit of falling prices at the pump, while procurement in other areas should see falling commodity prices and lower costs.

However, for those people purchasing travel for their organisation it’s not such a celebration. It is widely expected that travel, particularly air travel, will not benefit from lower prices, as airlines tend to purchase fuel in advance to lessen impact from price shocks.

The picture is also not so rosy for major oil companies. Most are now likely to have to rethink investment decisions and step up cost-cutting programmes. Onus for this cost cutting is likely to fall on procurement and suppliers.

Moreover, we need to consider our suppliers’ position if the focus is on cost cutting. Deflation in industries such as food and beverage and FMCG, is already causing issues for supply chains. An early example of this is in the dairy industry, with First Milk delaying payments to suppliers by 2 weeks due to falling prices and cashflow issues (http://www.bbc.co.uk/news/uk-30771288).

What can we do?  

1. Focus on relationships and partnerships, not just cost cutting. Supplier Relationship Management can play a big part here (https://www.procurious.com/blog/in-the-press/three-key-insights-on-the-importance-of-srm).

2. Work out where you can add value. Deloitte offered a broad range of thoughts in their 2014 CPO Survey (https://www.procurious.com/blog/in-the-press/procurement-time-to-move-through-the-gears).

3. Be more open to innovation from suppliers. It’s not something that procurement are traditionally good at, but there is value to be found by working more closely with suppliers (https://www.procurious.com/blog/trending/2015-will-be-about-innovations-in-the-logistics-world).

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

How sloppy security exposed Apple’s supply chain secrets

  • Incredibly sloppy security at one of Apple’s key suppliers exposed some of Cupertino’s most closely guarded secrets to anybody who could conduct a simple Google search.
  • For months, one of Quanta Computer‘s internal databases could be accessed using usernames and a default password published in a PowerPoint presentation easily found on the Web.
  • The path to Quanta’s database started last September when, on the eve of the big Apple Watch launch event, an anonymous Reddit user posted drawings and details of the super-secret device.
  • The document dates from January 15, 2013. It describes a Quanta database for managing the environmental aspects of products and components. The PowerPoint presentation appears to have been made to show Quanta’s customers how to log in and use the system. Incredibly, it includes a link to the database and details of the usernames and default password for at least two customers, including Foxconn, Apple’s main manufacturing partner in China.

Read more at Cult of Mac

Self-driving trucks to revolutionize logistics

  • DHL Trend Research has launched their latest trend report, titled “Self-Driving Vehicles in Logistics”, which takes readers on a journey of discovery, highlighting the key elements and incredible potential of autonomous technologies.
  • DHL plans to “maintain pole position in the world of self-driving vehicles,” wrote Matthias Heutger and Markus Kueckelhaus, the authors of the study. “The question is no longer ‘if’ but rather ‘when’ autonomous vehicles will drive onto our streets and highways.”
  • A boom in electronic commerce is making it harder for delivery companies from DHL toUnited Parcel Service Inc. (UPS) to satisfy consumers who expect first-attempt delivery even though they’re not home during daytime hours.

Read more at Supply Chain 24/7

Jaguar to create 1,300 manufacturing jobs with new sports car

  • Lode Lane plant in Solihull will receive largest investment in its 70-year history as manufacturer unveils plans for ‘practical five-seat vehicle’.
  • The new sports car, which will go on sale next year, will follow this year’s launch of the Jaguar XE sports saloon, also produced at Lode Lane, which has seen several thousand new jobs created in recent years.
  • The XE will create 1,700 in-house jobs at Solihull, 700 more at parts supplier DHL and well over 2,000 in the supply chain. Jaguar Land Rover chief executive Ralf Speth said: “Today’s announcements once again demonstrate our commitment to the UK and the advancement of a hi-tech, high skilled, manufacturing-led economy.
  • The Lode Lane facility incorporates Europe’s largest aluminium body shop and final assembly hall, collectively the size of 22 football pitches.

Read more at Birmingham Post

Industry shake-up as policy uncertainty forces a quarter of businesses out of the wind

  • FTI Intelligence has published its latest renewable energy publication: Global Wind Supply Chain Update 2015. The Update is part of a series of data-driven publications evaluating competitive markets, policy, finance, technology and business models across the energy spectrum.
  • The report examines the supply chain situation for 12 key components (350+ suppliers) and three key materials (150+ suppliers), which account for more than 95 per cent of a wind turbine’s total cost.
  • One of the key findings tells of the delicate balance in the offshore wind supply chain at present. Challenges remain in the medium-term – one third of the cost reduction of offshore wind energy partially relies on supply chain industrialization for disruptive technologies and key elements including the offshore wind balance of plant. This ambitious target is, however, unlikely to be achieved without long-term market stability.

For more info (and to access the publication) head here

Are we falling out of love with the PQQ?

Are you someone who can’t live without two stages?  Do you quake in you boots at the thought of having too many tenders to score?  Are you like my colleagues in works; do you love a good old PQQ?

The benefits of the PQQ

Well thanks to the EU procurement directive, Scottish Construction Review and improving public procurement practice, the Pre Qualification Questionnaire is in danger of falling into misuse in Scotland.  But will the PQQ really end up like a great pair of 1970s flared jeans?  Something which we put to the back of the wardrobe only to bring out again when they come right back into fashion.

Before you take your PQQ to the charity shop of procurement history, here are a few reasons why it might be just the procurement tool you’ve been looking for.

Don’t bin the PQQ just yet

So you’ve done your supply market analysis and you may even have published a future contract opportunity or a prior information notice.  All the intelligence you’ve gathered tells you that the tenders you should receive will be many and plentiful.

While you may be tempted to jump straight into the Invitation to Tender, a well thought out PQQ can benefit both your Client service and potential Suppliers:

  1. Reduces the amount of evaluation work required by the Client
  2. Sorts the ‘Great’ suppliers from the ‘Good’
  3. Allows Small and Medium Enterprises (SMEs) to apply and only spend valuable time and resources on a full-blown tender if they qualify and are really in with a chance of winning
  4. Speeds up the tendering process
  5. Allows a logical and defendable evaluation to be made.

Using a PQQ is the obvious answer to make sure the more detailed Price : Quality evaluation work at the second stage doesn’t take your Panel all year to complete.  Believe me, the Panel will thank you for this.

Sometimes a just asking a straightforward pass/fail qualification question doesn’t give you the detail you need to differentiate the great suppliers from the good.  A PQQ with some scored questions could be just the tool to use when you need a more sophisticated evaluation process.

SMEs don’t have the resources of larger companies.  For them preparing a tender will take resources away from their ‘day to day’ work, costing them both time and money.

It is much fairer to only ask them to do this if they genuinely have an opportunity to win the tender, and a PQQ will enable this.  Not only that, done correctly, the PQQ can demonstrate to the SME exactly what the Client is expecting (and so may deter SMEs who just can’t deliver).

While the PQQ is an extra-step on the ladder and may appear to increase the time taken between tender and award, in fact it can significantly speed things up.  By using the PQQ to decide who goes through to the tendering stage, it speeds up the Award process.  Not only that, but it spreads out the time and commitment from the Evaluation Panel, allowing them to schedule their contribution over a period of weeks and avoid the accusation that this procurement thing is just a load of bureaucratic time-consuming red tape.

Finally the PQQ can be used to defend decisions taken at an early stage.  Suppliers are told at the start of the process that either they can or can’t tender.  So any challenges to the decision not to be allowed to tender are made before the contract award.  This should mean that, once the contract is awarded, there’s no issue with the qualification part of decision.

Although the mechanistic days of using a PQQ just because we’ve always done are over, let’s not put our procurement “flares” to the charity shop just yet.  By thinking about how to effectively use a two-stage process we can get the best outcome for our services and our suppliers.

Best of all we won’t have to contemplate life without our beloved PQQ.

What are the burning issues affecting retailers in 2015?

Black Friday was arguably an important time for retailers, but what about the fragile post-Christmas when retailers are more at risk?

What risks do retailers face in 2015?

In retrospect it looks like Black Friday gave many high street retailers a much-needed shot in the arm. The last ONS retail sales report highlighted overall sales in November rose by 5.6 per cent and online sales increased by 12.9 per cent compared to the year previously. With the post-Christmas period expected to be a fragile time for the retail sector, as rents become due, for many companies it will be make or break.

With this is mind we’ll begin with some sobering words from the tail-end of 2014 courtesy of Dan Wagner, veteran retail expert and CEO of Powa Technologies: “It is apparent for me from the sharp rise in sales from Black Friday and Cyber Monday that retailers have been caught napping and many now have left it too late to respond to the rapid changes in consumer behaviour.”

“Consumers are driving this change and retailers need to review and innovate based on consumer behaviour – but the reality is that they have not innovated fast enough. These retailers are fighting for their own survival… In my view, changes in business rates alone are not going to be enough to halt the tide in the demise of those retailers that have failed to evolve. The post-Christmas period will be a bigger blood-bath than last year, and for some retailers, it is already too late.” 

In addition Nick Miller – Head of FMCG, writes: “As the festive season creeps closer, organisations, especially those operating within the FMCG sector, are ramping up their supply chain processes in order to cope with the influx in demand. Supply chains are pushed to the extreme limits and retailers are all too aware of the fact that getting it wrong at Christmas is the cause of many retail casualties.”

Crucially, Nick’s wasn’t issued on the eve of Christmas 2014… instead, an entire twelve months prior.

So what does this tell us? The same issues – year in, year out… Only some would argue that for every year that goes by, the stakes only get higher. Indeed, it seems some of the UK’s biggest retail powerhouses have been left licking their wounds after an especially vicious winter.

We’ve heard that Tesco, Sainsbury’s, and Marks & Spencer have all experienced struggles of their own in the post-Christmas period.

Although Sainsbury’s announced a 1.7 per cent fall in like-for-like sales over Christmas, the grocer had actually matched the same volume of sales as the previous year – except this time around (and perhaps crucially) the prices were lower. This is the first time in more than a decade it has experienced such a loss over the festive period.

Meanwhile Marks & Spencer has reported its 14th consecutive drop in clothing sales – a fall of 5.8 per cent during the third quarter. Online sales were also down 5.9 per cent, despite the introduction of a revamped website – a crucial entry point that should have borne fruit for the retailer.

Neil Saunders – Managing Director of retail research agency Columino commented: “This Christmas online was a critical channel for growth, accounting for a higher proportion of sales than ever before.”

He continued: “Unfortunately, M&S’s logistical problems meant that it could not properly enjoy the fruits of this growth.”

Year-on-year sales over at Tesco were down just 0.3 per cent – or up 0.1 per cent if fuel was factored in. But this hasn’t been enough to save it from a somewhat bleak aftermath, with bosses saying they will shutter 43 unprofitable stores across the UK.

Tesco’s plans for 49 ‘very large’ stores that had provisionally been given the go-ahead have been scrapped.

RetailWeek is also reporting that Tesco boss Dave Lewis is expected to scrap the system of rebates and penalty fees the supermarket forces on suppliers and instead focus on a scheme based on sales volume alone.

What do you make of all of this – if it’s happening to the UK’s most powerful retailers then surely no one is safe?

Step up your networking game: the basics

It’s a New Year so what better time to step up your networking game and make a splash among your peers.

Invest just a little time into sprucing up your Procurious profile and you have an effortless method of spreading your online influence.

How to build your personal brand online

Is your profile up to scratch?

First thing’s first, make sure you have a profile picture. The idea behind social networking is to make meaningful connections with people – so if you’re looking to strike out in this game, your peers will want to see who they’re talking to.

From your Profile page just click ‘Edit Profile’ to get things rolling.

Here you can choose a profile picture (or pick a new one if your existing one is getting old-hat), and add a header photo to your page if you so choose.

Just remember that you can move and resize the boundaries of your chosen pic as you see fit – make sure to select ‘Save Selection’ before moving on.

Tell us your story

You wouldn’t pick up a book without reading the blurb, or go and see a film without glancing at the synopsis first… So why leave your ‘About Me’ blank?

We’ve seen it time and time again on Procurious – this is your opportunity to tell other members a little bit about yourself.

Enter the desired information using the ‘Edit Profile’ page. Go nuts, it’s your stage!

How to add a profile picture

Make sure you’re contactable

We hope you find the Procurious messaging system useful, but we appreciate there are times when a direct email is the preferred option. To that end, make sure you have an active (and current) email address as your main point of contact.

You can add additional email addresses to your Procurious account quickly and easily on your ‘Settings’ page.  If you move company, or get a new email provider that’s cool too – just select the ‘Make this address primary’ option. Remember, you can add up to 3 email addresses to use as your Procurious login details.

If comfortable with it, why not leave your Skype handle or business telephone number too?

Import your work history

Gaps in your work history might be understandable to you, but look bad to other professionals. Save yourself a job by copying over all your essentials from LinkedIn.

When you registered on Procurious you were given the option to link your LinkedIn account to your profile. If you ignored this in the first instance don’t worry, it’s as easy as clicking a button.

Look to the top of your ‘Edit Profile’ page and press the ‘Import LinkedIn Profile’ button. Easy.

Connect your Procurious profile to other networks

Share your Procurious updates on other social networks

If you’ve got something to say then why not shout it from the top of your lungs? If you’ve successfully connected your Twitter, Facebook or LinkedIn accounts to Procurious then you’ll benefit from the extra amplification that these networks offer.

Manage what you put out on other social networks by scrolling down to the bottom of the ‘Edit Profile’ page and unlinking the accounts of your choosing.

Procurement: time to move through the gears?

That is the question that Deloitte’s 2014 Global CPO Survey posed…

Results from Deloitte’s 2014 Global CPO Survey

Something of a annual staple, the Deloitte Global CPO Survey report reflects the views of 239 chief procurement officers and company directors from 25 countries around the world.

Of those CPOs polled, almost six in ten think their existing teams lack the necessary skills to successfully deliver their organisation’s procurement strategies. The skills most lacking? “Leadership, influence, communication and relationship building.”

To further exacerbate matters 57 per cent also have issues with their own processes and technologies. Not an altogether pretty picture is it?

Happier news comes out of the UK with Deloitte chief economist Ian Stewart suggesting the fair isle will enjoy decent growth through 2015:

“Chief financial officers expect 2015 to be a year of investment and of recovering real earnings… Going into each year, from 2008 to 2013, finance chiefs’ main concern was the state of the UK economy. Now the risks are seen as lying elsewhere.”

Paul Feechan, office senior partner at Deloitte in Newcastle expanded on these ‘risks’ and provided some context: “The central challenges facing the UK’s largest companies as they enter 2015 are policy uncertainty at home and economic and geopolitical risks overseas. Rising levels of uncertainty have caused a weakening of corporate risk appetite which, nonetheless, remains well above the long-term average.”

Indeed, out of the respondents one in four CPOs felt threatened by geopolitical risks (citing recent events across the Middle East and in the Ukraine).

These risks are felt the world over… The Financial Times invites top economists to weigh-in once a year with their thoughts on the year ahead. Looking towards 2015, a majority of its respondents indicated that the threat from political uncertainty would likely affect business and in-turn consumer confidence.

But 2015 won’t be all doom and gloom: “Corporates believe that the long consumer squeeze has ended” – so says Paul Feechan, Senior Partner at Deloitte LLP.

“CFOs expect 2015 to be a year of investment and of recovering real earnings in the UK. Corporate and consumer spending look set to lend the UK economy important support, suggesting the UK will post decent growth through 2015.”

Feechan concluded: “CFOs are also predicting a buoyant year for business investment, with an average growth of 9 per cent forecast for 2015. Following growth of 8 per cent in 2014, this would put the UK at the top of the league for investment growth in the major industrialised nations and, if realised, will take the share of UK GDP accounted for by business investment to a 15-year high by the end of 2015.”

James Gregson, UK head of sourcing and procurement at Deloitte, said:

“The businesses they [CPOs] are serving are changing. Expectations are rising year on year and relatively small-sized procurement functions with a traditional set of skills are no longer the panacea answer to serving that broader agenda.”

“We are seeing a greater level of specialist skills being created in procurement functions. Rather than a very dominant category management structure, which has been the main quest over the last 10 to 15 years, I think people are starting to challenge the category management organisation and look for specialist skills in certain areas, and looking at partnering with other organisations or looking at shared services that can deliver these things more quickly.”

Gregson further commented: “Traditional blocks around category management are no longer the organisation structure of norm.”

And as for procurement ‘moving through the gears’ – Gregson offered:

“What is clear is this whole principle of procurement having to go through the gears, creating different means of delivering the value proposition. That multitude of different levers they are having to pull, the agendas they have to serve is putting a huge strain on the traditional procurement organisation.”

What of these so-called ‘procurement levers’? Those polled cited the following areas as attracting the most interest:

  • Consolidating spend – 40 per cent
  • Increasing competition – 37 per cent
  • Increasing the level of supplier collaboration – 34 per cent
  • Restructuring existing relationships – 34 per cent

You can view the full report here http://www2.deloitte.com/uk/en/pages/operations/articles/cpo-survey.html

5 point checklist for a great procurement boss

What are the qualities that make a great procurement boss?

Gossip, scorekeeping and throwing you out of the office certainly don’t sound like the traits of a great leader… but read on and you may change your mind.

How to be a great boss

I’ve been told that in this day and age employees choose bosses, not companies, when choosing their next job.  In 2014, our Procurious community provided their thoughts on what makes a great procurement boss.  So, as we kick off the New Year, I thought I would share five things I think you should look for when selecting your next procurement boss.

Ask yourself, are they a CPO who:

  1. Kicks you out of the office.  As helpful as water cooler chit chat and Google can be for finding answers to your questions, there is nothing more valuable than getting out of the office and meeting with your customers and suppliers.  Your internal customers will be impressed that you have made the effort to come and visit them and understand how they use the product or service you are buying for them.  Similarly, actually visiting a suppliers’ office or plant will help you understand a lot more about that category you buy and identify new ways to add value.
  2. Fills you in on the goss’.  While it’s not appropriate for your boss to share all the intricacies of what’s happening within the upper echelons of your business.  It’s important that you know enough corporate gossip so that you can expertly manoeuvre yourself and your projects through the minefield of personalities and relationships that make up your business.  Stakeholder engagement is one of the most important skills required to be a successful procurement professional, so understanding “the lay of the land” is critical to your success.
  3. Helps you keep score.  Whoever you are in an organisation, you need to demonstrate the value you are delivering.  In procurement, this often means savings, but it should mean so much more than that.  Your boss should work with you to explain how your role links to the delivery of the overall business strategy and how all the different dimensions of your role deliver value – efficiency, productivity, innovation, customer service and other non-cost related value drivers are all important conversations to your CEO.
  4. Has a game plan.  Yes, your boss should have an overall plan for how their team is delivering against the overall business strategy, but they should also have a plan for you – both for what you need to deliver and how you need to develop in the coming year.  The best CPOs I know are obsessed with finding the best people and helping them develop.  They send their people out to be trained up in the skills they need and to build peer networks that will develop their leadership skills.  The worst CPOs keep their category managers locked away from the rest of the world in fear that their people will be poached.  A great CPO doesn’t need to worry about this, because they know that they have developed a great employee value proposition that keeps their team engaged… and retained.
  5. Is a bit of a procurement rock star.  If your CPO is well known and has a strong peer network, this provides you with a type of insurance policy that they know what they’re talking about and will hopefully be a great teacher.  However, you need to be careful that they’re not so committed to building their own profile out on the speaking circuit that they’re not providing enough support to their team.  A healthy balance between managing their internal and external relationships should provide you with a leader that connects you and your organisation with the outside contacts it needs to “stay in the loop”, while keeping everyone on track within your organisation.

How you are going to assess your potential new boss against this checklist when you are outside the organisation? This is where your network becomes invaluable.  You will know someone who knows someone (use LinkedIn or Procurious to see the connections) who has worked for your target boss.  Contact them, have a chat, see how the CPO measures up.  The most telling sign of success is how the CPO’s employees have been promoted both within and outside the organisation…

Good luck!

Procurement in 2015 – A New Year’s Revolution?

A very Happy New Year from everyone at Procurious HQ.

We hope you, like us, enjoyed the break, over-indulged on Christmas chocolate and good cheer and have come back to work refreshed and ready to make 2015 the year for procurement.

New Year resolutions for 2015

We had some great content published over the holiday season, including some great ideas for what you as a procurement professional could be thinking about for the coming year. In case you missed it, here’s a quick recap:

Make sure that a Work-Life balance isn’t just something that happens to other people – https://www.procurious.com/blog/life-style/how-to-achieve-the-perfect-worklife-balance-for-a-productive-2015

Consider what other skills you might need as a procurement professional – https://www.procurious.com/blog/life-style/job-survival-skills-get-a-grip-on-the-numbers

Find out what it takes to be a great procurement boss – https://www.procurious.com/blog/procurement-news/what-makes-a-great-procurement-boss

Get your category approach right and reap the benefits – https://www.procurious.com/blog/procurement-news/category-approach-simply-tactical-excellence

Also, here are a few recommendations on how you can get the most out of Procurious this year:

  1. Complete your profile – if you haven’t already, add a picture, location and category so you can connect with the right people and they can find you too!
  2. Find an event near you by looking at our Events calendar – this is a great way to connect with fellow Procurians in person!
  3. Start or contribute to a discussion – if you have a burning question or want to share your thoughts, this is the way to do it.
  4. Check out our Groups – find a group that is specifically for your category, location or job and connect. Can’t find one for you? Why not create one and invite people to join.
  5. Top up your skills – check out the Learning hub for videos and podcasts. If you think we’re missing something, let us know.

We think this year is going to be a great one for procurement. Play your part and get involved!

China starts military procurement website to boost transparency

  • China started an official website to make some of its military procurement public, revamping a system that officials say encouraged opacity and corruption.
  • The website, which went online yesterday, contains a list of more than 350 items from satellite surveillance equipment to domestic-made information systems that will be procured by the military. The site is manged by the General Armament Department of the People’s Liberation Army.
  • “It’s a fresh start to make the military procurement transparent,” Yue Gang, a retired PLA colonel, said in an interview. “The lack of efficiency in military spending worries the top leaders as a major source of corruption.”
  • The overhaul of military procurement procedures aims to get qualified, private businesses involved in weapons research and production in a bid to improve competitiveness and efficiency, the official People’s Daily reported, citing Feng Danyu, director of the planning department of the PLA’s General Armament Department.

Read more at Bloomberg

Tesco to reveal new supplier payment system as fears of second-half loss grows

  • In the wake of a terrible 2014 for the retail giant, Tesco is preparing itself to overhaul the way it organises its supply chain.
  • According to the Sunday Times, which quotes senior sources, Tesco chief executive Dave Lewis plans to unpick the complex system of rebates and penalties used to extract money from suppliers, replacing it with a far less complicated structure built around sales volumes.
  • The Sunday Times’s insider also claimed the shake up would make Tesco more popular with suppliers, leaving rivals with the choice of following suit or sticking with the status quo.
  • Tesco has had a torrid time recently and Christmas sales figures are unlikely to offer much respite. A significant drop in like-for-like sales – perhaps as much as four per cent – is expected, which could be enough to push the company to a second-half loss on its British operations.

Read more at CityAM

European supply chain tackles counterfeits, says Converge

  • The aerospace and defence supply chain has a new certification for independent suppliers and distributors, which will dramatically change the industry for suppliers to high reliability markets.
  • SAE AS6081 Counterfeit Avoidance Standard has been in the pipeline since 2007, when the US government began to investigate counterfeit electronic components entering the Department of Defence (DOD) supply chain and the G-19 committee of the SAE was formed.
  • The committee developed a document that would standardise requirements, practices, and methods related to counterfeit parts risk mitigation. Whilst the AS6081 standard originated in America, the issues are global and the certification due to be launched in the coming months is designed to have an international scope.
  • “This will change the industry dramatically; all independent distributors who wish to supply the US DOD must comply and we expect that the global industry will follow. AS6081 is a very tough certification to achieve and few of the thousands of independent distributors in the market will be able to comply with it,” said Eric Checkoway, general manager and vice-president of Converge, the independent distributor owned by Arrow Electronics.

Read more at Electronics Weekly

Sainsbury’s and GLA team up to fight supply chain exploitation

  • Retailer Sainsbury’s is working with the GangmastersLicensingAuthority to address labour exploitation and modern slavery in the supply chain.
  • The GLA is providing tailored training for suppliers to the supermarket to help them identify hidden exploitative practices at farms, pack houses, processing plants and factories.
  • Paul Broadbent, chief executive of the GLA, said: “There is a real commitment and desire on both sides to identify any practice that subjects workers to exploitation. “By raising awareness through training, Sainsbury’s is showing a determination to identify any issues of concern. I applaud them for this and will continue to work alongside them to tackle it.”
  • The pilot scheme builds upon the protocol between retailers and suppliers launched by the UK government in October 2013.

Read more at Supply Management

Logistics Academy launches in Dubai

  • Logistics Executive Group has reached a major milestone with its global Logistics Academy recently completing its first course in the Middle East.
  • Organised as a result of a partnership between Logistics Executive Group and Iconis Learning & Development, a leading worldwide training organisation, the workshop was delivered in Dubai by Iconis directors David Rowlands and Jon Spencer, who possess over 50 years of learning and development experience between them.
  • The course included two half day interactive sessions focused on developing emotionally intelligent leadership and employee engagement skills.

Read more at Arabian Supply Chain