What’s procurement like in your part of the world? – South Africa (Elaine Porteous)

Cape Town - Pixabay

Procurious showed you its map of the world last week, marked with where all our members come from, and asked what procurement was like in your part of the world.

Following on from looking at Scotland, Italy and the USA, Elaine Porteous tells us what procurement is like in her home country – South Africa.

Elaine is a freelance consultant, published writer and editor of business articles for various on-line and print media, specialising in Supply Chain, Procurement, Logistics and Career Management.

She has previously shared her knowledge on a number of these topics in guest blogs for Procurious.

Read her full story here.

How do you think procurement differs in South Africa, as opposed to elsewhere in the world?

I think we have a unique situation and a lot of challenges. Firstly, we have an historical situation that is being addressed partly through Broad Based Black Economic Empowerment (BBBEE). The aim is to redress some of the imbalances of the past and broaden the base of suppliers through preferential procurement and sourcing locally for defined commodities.

Skills are scarce, particularly in the public sector where there is a lack of capacity and inadequate planning and budgeting. We are struggling with managing conflict of interest, limiting fraud and tackling corruption. The good news is that there are government initiatives afoot to improve risk management and make substantial improvements to their processes. Our Government CPO is implementing an e-tender portal shortly to tighten up tender processes.

Procurement in the private sector is alive and well; there are many organisations that are developing their staff and applying best practice, not only in the multi-nationals.

Do you know how many other procurement professionals are in South Africa?

I would estimate more than 10,000. CIPS has 2295 members in South Africa and more than 16,000 members across Sub-Saharan Africa.

How did you get started in procurement?

Like most people, by accident! I was cruising along as an HR business partner in a big multinational when the HR Director was tasked with launching a procurement function.  He nominated me to come along for the ride and the rest is history.

What do you see in procurement’s future in South Africa and how can social media play a role?

The procurement function is growing in stature and slowly getting more traction and visibility in organisations.

There is a very active community of procurement people, from both the public and private sectors, who engage extensively on LinkedIn.  Also, there is a small band of enthusiastic specialist recruiters that ply their trade there and on Twitter.

We have an on-line marketplace that is hosting a Procurement Africa e-Conference, in association with CIPS, shortly.  This may be a first for Africa. Many procurement professionals are avid networkers and attend the various conferences and events in the procurement field.

Why did you join Procurious?

It was refreshing to find a platform for us to interact on a wide range of subjects without having to belong to a formal organisation or have to put up with lots of advertising and sales pitches.

What are you hoping to get out of the network?

I like to keep up with global trends in supply chain and to hear other’s opinions on the topics of the day in the procurement field.

I’m really interested in helping young procurement people advance their careers and advising them on what the options are and importantly, how to get there.

How are you going to get your peers involved?

I see Procurious going from strength to strength.  I will use my networks to introduce others to this great resource.

More on the South African CPO Tender portal here.

Read more of Elaine’s writing for Procurious by following these links:

https://www.procurious.com/blog/life-style/your-job-role-might-be-obsolete-by-2020-will-you-be-sustainable

https://www.procurious.com/blog/life-style/influencing-skills-can-be-learnt-start-now

https://www.procurious.com/blog/life-style/should-you-ever-rehire-an-ex-employee

5 factors to consider when deciding on a supplier

What are the top 5 factors you consider when deciding to partner with a supplier?

Factors to consider when choosing a supplier

The second part of the discussion wrap this month looks at the factors that are considered when deciding on supplier partnerships. The top five factors were (in no particular order):

  • Cultural Fit – including values
  • Cost – covering price, Total Cost of Opportunity (TCO)
  • Value – value for money and value generation opportunities
  • Experience in the market and current references
  • Flexibility
  • Response to change – in orders and products
  • Quality – covering product and service quality and quality history

Okay, we know that’s seven but it was hard to split a couple of the more popular ones!

Other factors suggested by the community included trust and professionalism, strategic and process alignment and technical ability.

The final factors are worth investigating in more detail. It’s critical to have executive level buy-in from both sides otherwise it can cause the relationship to stall. Supplier innovation should also be considered, particularly in line with any cost-cutting or process streamlining efforts by the supplier, as this may in turn lead to value creation for the purchasing organisation.

Finally, it was recommended that buyers should be aware of the breakdown in business percentage on both sides. You neither want to represent a high percentage of the supplier’s business, nor do you want to rely on the supplier too heavily.

For more on this theme, check out the following articles:

The Importance of SRM – https://www.procurious.com/blog/in-the-press/three-key-insights-on-the-importance-of-srm

Take a ‘joined-up’ approach to logistics – https://www.procurious.com/blog/in-the-press/in-logistics-take-the-joined-up-approach

Considering the Right Outsource Partner – http://www.fronetics.com/7-things-consider-choosing-right-outsource-partner/

7 ways to inject love back into your supplier relationship

As part of a Valentine’s Day special, our founder, Tania Seary (who has a long-standing love affair with all things procurement), is exploring ways that procurement professionals can ensure everyone they touch can “feel the love”. So far we’ve covered community and stakeholders…. now to focus our attentions on our favourite audience of all – our suppliers.

7 ways to inject love back into your supplier relationship

Given that Valentine’s Day is only hours away (and I’m encouraging procurement professionals around the world to make sure everyone they touch “feels the love”), I thought you might like some tips to inject the love back into your supplier relationships.

In supplier relationships, as with romantic relationships, there unfortunately comes a time when the romance fades away…

While the relationship with your beloved strategic supplier may have grown stronger (and more co-dependent each year spent contracted to each other), the romance, the sparkle, the mojo, that desire to impress, often dissipates into a very boring business-as-usual patter.

As leading best-practice procurement practitioners, we all know this is a bad thing – because theoretically we need to be continually improving the value delivered from our strategic suppliers. And unfortunately when the sparkle starts to disappear, or one partner starts to feel neglected, then the cracks start to appear. The bond may break and you are in the law courts with your separation clauses under the microscope. On the other hand, a healthy supplier relationship is productive – it drives out costs, inefficiencies and spawns love children in the form of innovation.

Let’s face it; maintaining a strong working relationship (whatever the setting) requires effort. As we say at Procurious, you have to give to receive.

While researching (well, let’s face it, Googling) this topic, I stumbled across a very practical set of advice from one Ms Monika Mundell: 7 ways to inject romance back into your relationship.

I realised that there were some amazingly scary parallels for we procurement folk. So, I’ve reworked Ms Mundell’s 7 tips to provide you with some shine to put sparkle back into those all-important strategic supply relationships.

  • Eye gazing: Even though I’m obviously a true-believer in social media, I am also a true-believer in the good old face-to-face meeting and telephone call to build understanding relationships. Too much gets lost in translation when we are emailing, texting and tweeting. If we are to keep the relationship alive, we must meet with our strategic suppliers regularly to ensure we fully understand the status and nuances of the relationship.
  • Book a romantic surprise getaway: OK… not really appropriate – but think about it… When was the last time you and your supplier got your leadership teams together to think of ways of both getting more value out of the relationship? You could have a “staycation” and have a one or two-day conference in your offices, or book a mutually convenient off-site location to help facilitate bonding at all levels. A getaway could really identify some fresh ways to invigorate the relationship and add more bottom line value for your shareholders.
  • Touch your partner more often: OK, now you’ll be thinking I’ve really crossed the line here… but think about it. How many touch points do you have with your supplier, and are you using all the different communication mediums available to connect with them at all the appropriate levels in their organization?
  • Write a love letter: Seriously, when was the last time you wrote an email, a letter, a card, showing appreciation for something your supplier did for you? In a day and age where people are running around crazily ticking items off their to do list, a considered, well-penned note means a lot more than it ever did. Take some time out – formally thank your supplier – and I am sure you will feel the love reciprocated in some way or form into the future.
  • Surprise your partner with a romantic dinner: I was really touched when a long-term client and his wife took me to a five star restaurant last year – and paid on their personal credit card. As my clients know, I am very dedicated to them all and I was really touched that this couple took time out of their busy diary and budget to treat me to a special meal. Think about it…
  • Spend more time together: According to Ms Mundell, a common cause for drudgery in a relationship is the fact that we disconnect. All of the points above provide you with opportunities to spend more time with your suppliers. But remember, it doesn’t always have to be elaborate, or premeditated, just spending simple time together on-site, on the job, in the warehouse or with your joint customers is all very important time invested in building that all-important relationship.
  • See a counsellor – OK there’s a reason why this is obviously my last point – because it’s kind of a last resort if all else is failing. At my procurement management consultancy, The Faculty, we’ve often considered developing a “strategic alliance counselling” service… not unlike a marriage counsellor! When thinking about how to re-ignite the spark in your supplier relationship, don’t underestimate the value of getting a third party involved to take an objective view of how your partnership is performing. While you probably won’t need to recline on the chaise lounge, a healthy review could offer some fresh insights into how both sides of the partnership could potentially change their behaviours for the greater good.

Are you making sure your suppliers “feel the love”?

Sustainable and Social Procurement – Are We Doing Enough?

Sustainability and social procurement

Even though sustainable and social procurement are currently high-profile topics, it’s been hard to get people excited about them. This is down in part to a lack of consensus on what they are and what people should be doing on a day-to-day basis.

The question is how can we, as procurement professionals, change this?

What are Sustainable and Social Procurement?

A good place to start is a brief definition of both. It’s tricky as there isn’t really a consensus, but these are the most common ones.

Sustainable Procurement – The process for meeting the needs of the current generation for goods, services, utilities and works while considering the overall impact on the environment and wider society.

Social Procurement – A strategic approach to the delivery of organisational objectives while delivering social benefit.

The Current Situation

Increasing numbers of organisations have implemented codes of conduct, ethics and sustainability policies and spend targets for social enterprises. Initiatives such carbon neutral operations and ethical sourcing provide good examples of organisations considering the impact of their operations on the environment and wider society.

And consumers have begun to expect this. Around 88 per cent of consumers would choose to buy a product with a social or environmental benefit in a like-for-like comparison, while 90 per cent of Americans say they are more likely to trust and remain loyal to brands backing social causes.

However, recent high-profile examples, such Rana Plaza in Bangladesh and the UK horse-meat scandal, highlight the importance of companies ensuring that these standards are upheld throughout the supply chain.

So what is holding organisations back?

A lack of understanding is one of the key reasons for organisational inaction. Other common reasons inaction include:

  • Increased cost
  • Resistance to change
  • Lack of management support
  • Increased time to undertake sourcing activities
  • Inability to find ‘social enterprises’ or lack of response from them

And the reality is?

The reality is that all these reasons are surmountable. This is where Procurement must step up and take the lead.

As Procurement touches all parts of the organisation, it can help to ensure that the key decision makers are involved from the outset, helping with both executive buy-in and resistance to change.

Working with external stakeholders can provide both innovation and new ideas, ultimately lowering the Total Cost of Ownership for ‘green’ products. Once the processes are seen as part and parcel of sourcing activities, the time cost is lowered too.

Finally, companies can engage with organisations such as Social Enterprise UK and Social Traders (Australia), who can assist procurement departments in getting involved with social enterprises.

The Future

Experts have identified trends in sustainable supply chains for the coming year, including:

  • Better resource management – focus on codes of conduct, chains of custody and supply chain reporting and evaluation
  • Innovative bio-based materials – less use of primary resources and increased use and development of renewable materials
  • Eco-efficient operations – organisations finding a better balance between economics and the environment

Social media will play a key role too. 64 per cent of millennials use social media to address companies about social and environmental issues, and 36 per cent of consumers say they mainly share content to promote the causes they care about.

What can I do?

  • As a consumer, try to buy brands linked to sustainable or social activities
  • When comparing two like-for-like products, choose the ‘green’ option if you can
  • Integrate sustainability and social procurement into your procurement processes
  • Make a case for your company working with social enterprises and having spend targets for them
  • Ensure all the suppliers in your supply chain are signed up to your code of conduct
  • Leverage social media to highlight your success and set a benchmark for other procurement teams to achieve.

Reading and Reference

Loyalty and Trust for Social Causes: http://instamun.org/90-of-americans-more-likely-to-trust-brands-that-back-social-causes/

Social or Environmental Benefit: http://www.conecomm.com/stuff/contentmgr/files/0/e3d2eec1e15e858867a5c2b1a22c4cfb/files/2013_cone_comm_social_impact_study.pdf

Social media habits: http://www.conecomm.com/csr-and-millennials

Are we going to run out of chocolate?

Cacao crisis - are we running out of chocolate?

Last week I warned that the increases in value of the Swiss franc could spell troubled times for chocolate lovers. Unfortunately, this week I have more troubling news about our favourite sweet treat…

In its 2015 report, the Earth Security Group (a company that provides intelligence on managing global resource risks) points out that we are headed for global shortages in cocoa (the key ingredient in chocolate) as soon as 2020.

Where is the chocolate going?

A number of factors are thought to be contributing to the dwindling supply of cocoa. These include; increased demand from emerging markets (Indonesia’s chocolate consumption is growing at 20 per cent a year) and fears around what might happen if Ebola crossed the border from neighbouring Liberia and Guinea into the Ivory Coast. The Ivory Coast is the world’s largest producer of Cacao – boasting 38.7 per cent of global production.

However from a procurement perspective – it is the fact that cocoa farmers are shifting their efforts to other crops that I find the most interesting.

In order to understand the reasons why cocoa growers are shifting production to palm oil and rubber, we need to look at the intriguing nature of the cocoa supply market.

An agricultural oddity

The cocoa growing industry is an anomaly of sorts in modern agriculture – in that it is still dominated by small landholders rather than corporate enterprises. These small landowners produce over 85 per cent of the world’s cocoa supply.

The highly fragmented supply market for cocoa means that farmers hold little bargaining power when it comes to negotiating with the large buyers like Nestle and Barry Callebaut*.

As a result of this buyer dominated market, the price of cocoa halved between 2009 and 2011. In 2012 the Ivorian government introduced a fixed pricing scheme designed to keep its cocoa industry intact and prices started to recover.

Combine falling prices with the fact that cocoa growers are very poorly remunerated for their efforts, and the motivations for shifting production begins to become apparent.

Makechocolatefair.org suggests most cocoa farmers earn less than $1.25 USD a day, meaning they living in ‘absolute poverty’ as defined by the UN. The paltry sum they receive from large buying organisations means cocoa farmers have a high propensity to shift production to more profitable crops. It just might be what pulls them out of poverty.

Furthermore, farmers in these communities remain largely unconnected to the global information sources and the outside world. This is resulting in two worrying occurrences. The first is that sustainable farming practices and infrastructure have not been implemented in cocoa farming regions causing widespread land degradation. The second is that these small holders have no concept about the increases in the global demand for their product and the implications it could have for the price they charge.

“You can’t sustain a booming chocolate industry worth billions while the producers are living in poverty” – Alejandro Litovsky founder and chief executive Earth Security Group.

Cocoa is an old mans game

The combination of tough customers, poverty, low prices and changing climatic patterns is severely hampering the motivation of young farmers to move into producing cocoa. It is estimated that the area of world’s surface dedicated to cocoa plantations has decreased by 40 per cent in the past four decades.

Perhaps more concerning is that the Fairtrade organisation estimates the average age of a cocoa farmer is 50! If that’s not a telling sign for the future of the industry, tell me what is.

The Earth Security Group report highlights the challenge that chocolate producers face, and the need to change the dynamics of this supply market. Companies should look to spread the benefits of what is a lucrative industry downstream and back into the supply chain. Failure to do so will mean facing the future supply crisis, knowing that they hold at least some of the responsibility for the shortages.

* Never heard of Barry Callebaut? That’s where Cadburys, Hershey’s, Ben and Jerry’s and Magnum get their cocoa. The company purchases about 40 per cent of cocoa available to the open market.

Meeting of minds in pharmaceutical purchasing

The Beyond Group AG (“TBG”) will be launching its 2015 Productivity-in-Pharma Think Tank, building on the success of their 2014 gathering of minds of senior procurement leaders in the industry.

Productivity Think Tank from the Beyond Group

Kicking off in Frankfurt Germany on April 21, three separate day-long sessions (concluding in September) will help frame the discussion of what is the future of Procurement within the Pharma industry over the next several years.

Drawing together a select group of procurement professionals representing 15 of the world’s leading Pharma companies, TBG and its partners (EY [Ernst & Young], Korn Ferry, UBS, and others) will deeply explore the issue of “Transforming the Procurement organization to become a recognised productivity engine”.

The 2015 series promises to be the most intensive, content-packed, and insightful of this groundbreaking series.

Contrasting with the traditional conference environment, TBG’s Think Tank gatherings offer ‘learning collaboration’ through in-depth & insightful exchanges among industry peers, academics, thought leaders and practitioners. These intensive sessions build upon experience, expertise, and research in a closed-door environment where executives can really get into the detail of their challenges and aspirations. From this gathering of minds, TBG publishes key findings, generates new research and creates a close community of leaders who explore the biggest opportunities to develop Procurement’s role.

Conceived by Giles Breault and Sammy Rashed, principals and co-founders of The Beyond Group AG, the Think Tanks have quickly evolved into a new model where “content is king” and outcomes are published and presented to the wider procurement community. Some of the feedback gathered from previous participants include:

“The Productivity Think Tank concept is a great opportunity bringing together a focused group of international peers around a relevant topic. Half-way between a symposium and structured meetings with peers, the Think Tank combines the benefits of both worlds with deep analysis, strong networking, useful outcomes, and applicable takeaways”

“It’s a mix of academic expertise, real world experience and cross-industry best practices which allows us to collectively create solutions that fundamentally change the way we look at procurement and value its contribution”.

This year’s European series is limited to a maximum of 15 member companies. It will be followed a new series for the North American region this fall and expanding to the Asia market in 2016.

For more info please contact us at info@beyondgrp.com or visit our website at www.beyondgrp.com.

Hey! Procurement – make your customers “feel the love”!

Important lessons from Gustave H and the Grand Budapest Hotel

What can we learn from The Grand Budapest Hotel?

A quick office survey revealed that no matter how much the boss likes it, ‘The Grand Budapest Hotel’ is not exactly everyone’s idea of a great movie.

However, the adventures of Gustave H; a legendary concierge at a famous hotel from the fictional Republic of Zubrowka between the first and second World Wars – provides a lot of great (quirky, yes) insights into what constitutes exceptional customer service.

In the procurement world we often refer to those we serve to please as ‘stakeholders’… but let’s face it, they are our customers and all the old-fashioned principles such as “the customer is always right” apply.

Of course we want to do more than serve – we want to become a trusted advisor. But time and time again, ‘stakeholder engagement’ and the ‘soft skills’ re-appear as the number one skill that CPOs need their team to develop, in order to achieve that ‘trusted advisor’ status.

So in the spirit of ‘sharing the love’ this Valentine’s Day, here are some of my customer service learnings from working with clients, customers, stakeholders and alike during the last two and a half decades.

5 ways for procurement to make sure communities “feel the love”

Know your RFQs from your Ps and Qs

Nothing sells like credibility.  If you are going to put yourself forward as an advisor, you need to know about both about the professional service you are offering (procurement) and your customer’s business.  Knowing neither or only one or the other, is not going to build enough confidence for your customer to engage with you.  You need to ensure you have adequate procurement skills, as well as understand the business you are in to make the grade.

Make sure you get through to the second round

The analogy here to a boxing match is not accidental.  I have had some very tough first meetings with my customers. Let’s face it, not everyone always wants procurement’s ‘help’. A large part of our profession’s heritage has been about convincing our stakeholders about the value we can deliver.

From my chilly desk in Pittsburgh over a decade ago, I can still clearly remember being yelled at down the phone from my business unit customers in Iowa and Texas.  One CPO screamed, “If you want my team to spend their precious time on some corporate scorekeeping folly, then get your a** down here on a plane and explain it.”

Gustave H provided a light bulb moment for me about these aggressive experiences:

“Rudeness is merely an expression of fear. People fear they won’t get what they want. The most dreadful and unattractive person only needs to be loved, and they will open up like a flower.”

I can’t say that any of my customers have ever “opened up like a flower”, but they have definitely mellowed from their initial opposition.  Once you prove you can deliver, they’re putty in your hands.  But you have to be resilient and work through this initial push back – get them to the point where they really start to engage and invest in you as a professional who can help them on their journey.

Know what they want; know what they don’t want

When my best practice procurement company, The Faculty, is helping procurement teams to become more customer-focused, we talk about the five false assumptions about customers:

  1. Customers know exactly what they need
  2. Customers will tell you what they need without being asked
  3. If you ask, customers will tell you everything they need
  4. If customers tell you everything they need, you will understand completely
  5. Just because you know what your customer needs, doesn’t mean you’ll be able to convince others in your team

Procurious blogger, Jordan Early, shared with me some really interesting research from Deloitte’s Ajit Kambil, who researched how new finance chiefs often undertake listening tours to understand what their key stakeholders want.

He observed that what stakeholders say they want “may not express their entire universe of so-called wants”. For example in our world, a business-unit leader may say he needs better information and support from procurement. But his true want may be “to be really listened to” by the procurement organization; or he may want procurement to “help support the personal initiatives he believes will advance his career.”

Kambil also suggested that knowing what key stakeholders do not want is as important as knowing what they want. When I was working in procurement within a large organisation, I used to present three potential contract award scenarios before we kicked off a sourcing project. This quickly revealed how the customer would react to different award decisions and helped bring on the conversation about what they didn’t want early on in the process.  It saved a few (but not all) tears at the end of the project.

Knowing what customers truly do or do not want begins by asking questions. However, it is often difficult for stakeholders to clearly articulate what they do and do not want. This is where you really need to call on all your business experience (and hopefully your supportive boss and/or mentor) to help you truly understand your customers’ needs.

Oh, and then you need to deliver. That’s the easy part… right?

5 ways for procurement to make sure communities “feel the love”

DHL talk key packaging trends of 2015

Ahead of the UK’s biggest packaging event later this month Paul Young – Head of Packaging Services at DHL Supply Chain, shared his thoughts on future packaging trends with Procurious. 

DHL packaging innovations

Taking place at Birmingham’s NEC on 25-26 February 2015, Packaging Innovations 2015 will bring together the very best in the packaging and print industry from right across the globe.

Now in its tenth year, the expo will be home to  over 350 exhibitors specialising in all aspects of packaging from materials and design, to machinery, new technologies and equipment.

Here’s what Paul had to say:

 What innovations are enabling new capabilities for packaging?

From the use of new substrates to digital technology, a number of innovations are enabling new capabilities for packaging. Edible and dissolvable packaging are becoming more prominent as companies focus on their environmental agendas, whilst QR codes have created packaging capable of communicating with the consumer in a more interactive way.

It’s important that packaging solutions should fit the product and company values. Creating edible cups, for example, will emphasise a brand’s environmental credentials and reduce waste, whilst packaging that incorporates a digital element can engage consumers with the wider brand on multiple platforms.

What are the key packaging trends of 2015?

A study commissioned by Tetra Pack found that 89 per cent of consumers prefer to buy products in recyclable packages. This is therefore a key trend for 2015. As consumers are increasingly aware of environmental concerns, they wish to make efforts to cut down on their personal environmental impact.

Digital print is another trend to watch. Currently, labelling has been the area most impacted by digital print, however as the quality of products has significantly improved we expect to see more packaging created in this way over the year.

Is sustainable packaging high on the agenda for many customers? 

Sustainable packaging has a number of benefits for customers. It allows customers to demonstrate their environmental credentials and improve brand perception as well as reducing unnecessary, non-recyclable wastage.

Computer manufacturer Dell, have been using bamboo to ship 70 per cent of their laptops and packaging multiple products in the same box where appropriate. This strategy aims to save Dell US$18 million between 2008 and 2018 as well as generating substantial environmental benefit.

Are there any new ways in which packaging waste is being reduced in the manufacturing process?

Minimising the packaging size for any given product reduces packaging waste during the manufacturing process. Recently, Chainalytics, a supply chain consultation and analytics organisation, reduced the size of packaging for a prepared food product by one eighth of an inch and in doing so eliminated 146 tonnes of paper and cardboard annually.

Creating custom sized boxes for less-than-full-case orders is another way in which packaging waste can be reduced with smaller boxes able to compactly hold products, thus eliminating excess wastage.

Which new technologies are increasing packaging efficiency?

Technology, such as ‘on-demand’ packaging equipment, creates custom sized packaging and significantly improves packaging efficiency.

Office giant Staples has been using this cutting edge technology to create 6,000 to 8,000 custom sized boxes each day so that 30 per cent of the orders the company ships are now custom sized. As well as enhancing the consumer’s experience of the package, this has enabled Staples to accommodate more orders in each delivery, transporting products with increased efficiency.

What mistakes are companies [still] making when it comes to choosing their packaging strategy?

Companies are much more aware of the importance of packaging however some mistakes are nonetheless made. For example, online retailers often do not consider the impact of the packaging they choose for specific products. This can lead to potentially harmful situations for the consumer, for example, liquids packaged in basic cardboard boxes, highlighting the need for effective, product specific packaging.

Many companies still need to be aware of what packaging strategy is most advantageous to their business. Whilst sustainable packaging is of importance to many consumers, re-usable packaging may instead reduce waste further and reap financial better benefits.

Generation ‘Why’? Debunking the Millennial Myth

Professional Services firm, PwC estimates that by 2016 almost 80 per cent of its workforce will be Millennials. In light of this frankly staggering statistic we would like to dispel some of the myths that surround the ’next generation’ of procurement professionals.

The rise of the Millennial workforce

Who are the Millennials?

A Millennial is the term attributed to someone born between the early 1980s and early 2000s. You might also know them as ‘Generation Y’.

The stereotype

In recent years Millennials have garnered much criticism from their baby-boomer counterparts. The New York Post even went so far as to label them ‘the worst generation’ ever.

If you believed everything you read in the mainstream media, you’d see Millennials as a generation of entitled, delusional, lazy workers with a penchant for replacing traditional social interactions with a series of web enabled applications.

However, these presumptions that a Millennial workforce is one that is constantly looking for a new job, requires extended holiday leave, possesses an inflated sense of ability and prioritises work-life balance over remuneration, are neither fair nor accurate.

The reality

A recent study by SAP (a German software producer) has gone some way to dispelling the myths attached Millennials, claiming that the ‘next generation’ of worker shares more with the rest of the workforce than many of us first thought.

The study points out that Millennials are in fact no more likely to prioritise workplace ethics, work-life balance or salary expectations in a different way to any other generation.

The report provides the following stats to support these claims:

  • Competitive pay is the biggest motivator for job satisfaction for both Millennials (68 per cent) and non-Millennials (64 per cent).
  • The second biggest motivator for job satisfaction for both groups was a merit based reward system and bonus structure. (55 per cent Millennials, 56 per cent non-Millennials).
  • Despite what stereotypes suggest, fewer Millennials (29 per cent) reported that achieving work/life balance would contribute towards professional satisfaction than did non-Millennials (31 per cent).
  • Similarly, more non-Millennials believe that ‘finding personal meaning in work’ is important (17 per cent) than did Millennials (14 per cent)
  • A meagre one-fifth of each group suggested that making a positive difference in world impacted their job satisfaction.
  • In other stereotype-breaking findings, more non-Millennials (23 per cent) are considering leaving their job in the next six months than are their Millennial counterparts (21 per cent).

Whether our preconceptions were correct or incorrect, the Millennials have arrived. They are the largest generation ever and they possess the greatest collective largest purchasing power in history. What they believe, how they work and the way in which they interact will matter.

Disclaimer – This article was written, edited and posted by a Millennial.

5 ways for procurement to make sure communities “feel the love”

The words “love” + “procurement” aren’t often seen together, but here at Procurious we’re hard at work changing the face of procurement.

As part of a Valentine’s Day special, our founder, Tania Seary (who has a long-standing love affair with all things procurement), is exploring ways that procurement professionals can ensure everyone they touch can “feel the love”.

5 ways for procurement to make sure communities “feel the love”

At Procurious, we’re very social (both on and off the field). You usually hear us talking about the benefits of social media, but this time we’re talking about the benefits of getting involved in social procurement… that is – using your corporate spend power to award contracts, to social enterprises and local businesses to generate social benefits beyond the products and services required.

Feel the power

There is enormous untapped potential for social procurement to act an agent for social change – our profession can make a huge impact!

Social procurement creates jobs and opportunities for people who may have struggled to find work and can also reinvigorate depressed or marginalised communities.

Not only are we helping our communities “feel the love”- but we’re also helping our own company. Spending money with community groups and social enterprises improves our own company’s staff engagement, brand equity and enables us to do something that is truly socially good without compromising financial return to shareholders.

So now it’s not only the corporate sponsorships and social responsibility teams who get to help those in need – procurement can also make a huge contribution to the community.

Choose your weapon

Embedding social procurement into your existing procurement framework will require some changes.  And, as we know, change isn’t always easy, so you’ll need to be both creative and patient. According to Dr Ingrid Burkett from the Centre for Social Impact in Sydney, you have four options (“weapons”) for initiating social procurement within your organisation:

    1. Contract – The most obvious approach is to incorporate social impact requirements into tenders, new or existing contracts, or evaluation criteria.
    2. Policy – You may choose to use policy to ensure you meet your social procurement objectives – these can include requirements such as percentage of spend for social impact, meeting statutory or regulatory requirements and local supplier spend commitments.  For example, many mining companies use a policy approach that mandates each of its mines must have a documented strategy for local procurement that is endorsed by the senior leadership team.
    3. Supplier – Directly engaging with suppliers who have a mission to deliver social value is one of the most common approaches to social procurement.  Many social enterprises have independently integrated themselves into corporate supply chains by winning tenders without specific consideration to social value.  In fact, without being deliberate about it – you are probably already procuring from social enterprises.
    4. Market (supplier) development – If you want to work with social enterprises but there are none operating in the category required, you will need to innovate.  For example, in planning the establishment of the Diavik Mine in Canada, Rio Tinto developed local suppliers capable of meeting their expected future business requirements through training, local employment initiatives and by stimulating contracts for these businesses.

Be credible and creative

Once you have worked out the “how”, the next step is obviously to choose the most credible social procurement options to suit your company’s business objectives, profile and culture.  Try to be creative about the “best fit” for your organization.  The best example I have heard of was a major retailer, who sponsored a bike maintenance service at their national headquarters.  Unemployed youths were engaged to learn how to fix bikes and earned their way to a trade certificate, while employees were encouraged to get fit and ride to work and help reduce carbon emissions!  How many boxes can be ticked with one initiative?

Get your CEO into the picture

Literally… if the category and social enterprise you have selected ticks all the boxes for your organization (strategy, mission, other initiatives etc.), then use your marketing nous to convince your corporate affairs and media executives that the CEO should do a site visit and understand the company’s commitment to the selected social enterprise.  Make sure there’s a photographer there (mind you, I’m sure your company’s PR gurus will have this covered) as this is exactly the type of material that gets featured in annual reports.  Perfect.

Persevere

Social procurement is not “business as usual” – it presents unique challenges and opportunities for both the buyer and the seller.  Successfully introducing anything new into a large organization is difficult.  The greatest challenges to introducing social procurement is having enough people and time, identifying appropriate categories of spend and gaining organizational commitment.

For social procurement to be effective there needs to be a truly enabling environment:  this includes senior management support, the right tools and infrastructure to support it, establishment of effective supplier networks and increased community and government recognition of its importance.

So, do you know how to “show the love” to your communities?  What’s your story?