YOUR Big Ideas: Big Data In Procurement

David Hulsen is co-founder of RFP365 – a dynamic software application that makes the entire RFP (request for proposal) process collaborative and streamlined.

 

David’s Big Idea for procurement is leveraging 21st century technology for vendor selection.

Blink and you’ll miss it as David’s video lasts a mere 39 seconds – happily conforming to our 1 minute challenge. It just shows you don’t need to agonise over a lengthy speech. Well done David!

Want to add your voice to the conversation? We want you to share your point of view and ideas with the community by creating a video no more than 60 seconds long. What’s your Big Idea?

Chris Lynch: Big Ideas In Big Companies

“The lemon’s been well and truly squeezed… but how do we break through the next layer of cost paradigms?”

Watch our second Big Ideas Summit keynote (part 1 of 4)

Watch Chris’ keynote in FULL here

Keynote speaker Chris Lynch (CFO, Rio Tinto) spoke about fostering a culture of “intrapreneurship” within large organisations and understanding that the bigger your idea is, the more resistance it will face.

However he went on to state that by persisting with your idea, taking ideas from other sources, including suppliers, and showing the outcomes, you are more likely to succeed.

Procurious members can find Chris’ full keynote here. Not a member yet? Register for free.

Watch: See more Big Ideas from our 40 influencers

CIPS David Noble shifts a few paradigms

CIPS David Noble speaking at Procurious Big Ideas Summit

David Noble, Group Chief Executive of The Chartered Institute of Procurement & Supply (CIPS) took the stage at the Big Ideas Summit to shift a few paradigms.

Every organisation relies on buying things to run their business and as buyer you’re in an extremely powerful position. But because buyers often operate behind the scenes, many people aren’t aware of procurement and supply as a career choice.

CIPS is not just UK-based. The membership spans the globe. You can find Institute members in 150 different countries. It brings everyone together to share news and ideas through member events, networking opportunities and discussion forums.

The profession is not just all male. Half of the 114,000-strong community worldwide  is female. At a student level Singapore now has more of a female skew than male.

At CIPS nearly half the senior staff and board is female.

The membership was primarily seen as kindergarten – now this may have been true maybe 20 years prior, but things have changed.

We are in a sea change.

David says that we are in a sea change, therefore we must understand our business environment and what the Institute is doing about it.

Only 1/3 of CEO’s believe P&S professionals are ready for the strategic challenges ahead.

CIPS has set about doing work to define the future profession. And it is clear from the results of its survey that the profession has come-of age. Now it’s time to ‘raise your game and raise your voice,’ to ensure that procurement becomes pivotal to organisational success and value delivery, with a key role to play at the highest levels.

Let’s start selling this profession better by becoming the story tellers of our success.

Top buyers are in huge demand around the world and can achieve extremely high positions within companies.

Driving value is like driving change. To drive change is never easy so you need to persevere, and have dogged determination. You are able to add value not just from cost reductions, but also from the innovation and creativity you can bring to the role. And because of procurement’s involvement across the whole value chain, you could not find any function with such a unique position in any organisation.

ISM2015: 3D Printing and what it means for procurement

This article is part of a series about Hugo’s visit to ISM2015 in Phoenix, Arizona.

3dprinting

3D printing has been around for 35 years – that’s a lot longer than I’d realised. I was a bit puzzled by this, as to my knowledge people have only been talking about the technology for five years or so. Eric Miller of Phoenix Analysis and Design Technologies tells me that he’d been trying to get the press to pay attention to 3D printing for 20 years, but it wasn’t until “some idiot in Texas printed a 3D plastic gun that blew up in his face” that people finally started paying attention.

I’ve chosen this session to get myself up to speed about the technology basics and try to understand what it’s going to mean for the procurement profession. Miller talks about a “revolution” in prototyping and manufacturing. He says a lot of people are excited by 3D printing but warns against regarding it as a magic box. These printers aren’t the transporter from Star Trek made real, they’re not going to bring every off-shored job back to the US, and they’re not simply about pushing “print” and getting a part – there’s a lot of work that goes on before and after the print. What they are good for, Miller says, is making prototypes, low-volume and custom parts, and tooling creation. They’re a fantastic way to enable low-volume distributed manufacturing – for example, if I create a prototype plastic toy in Australia, I can simply send the computer model to my company’s multiple plants all over the world so they can print exactly the same product.

Why is 3D printing such a big deal?

  • It’s equivalent to the leap from the printing press to desktop printing. A 3D printer means we no longer need tooling or specialised machines to create things.
  • You no longer need to be a manufacturing expert or own lots of equipment to create an object.
  • The industry is growing fast: there’s been 27.3% compound annual growth in the industry over 26 years, 33.8% from 2012–14. This is counting industrial systems only and doesn’t take into account hobby printers (yes, people have hobby 3D printers in their homes).

How does it work?

First of all, you create a mathematical representation of a solid object (a computer model). Miller shows us a mathematical model of a teapot in a CAD or “faceted” (triangle graphics) file. These models can be created by the user or downloaded, then you send it to the printer to make a solid “printout” of that object. The layered manufacturing process begins – the printer takes the mathematical model, its computer slices it into multiple thin layers and the “hand” builds up the object one layer at a time. It can cut the layer, deposit the layer, glue the layer, harden the layer, fuse the layer and more. Miller encourages us to think of this in contrast to the usual way of manufacturing – forging, extruding, machining, moulding and casting.

Different technologies

This was the cool part of Miller’s presentation. In my ignorance I thought there was only one type of 3D printer, but he rapidly ran through no fewer than eight different technologies, namely:

  • Layered Object Manufacturing (LOM) – described above. This was the printer type on display at the ISM2015 exhibition hall.
  • Stereolithography (SLA) – the first commercially successful technology, involving a fairly nasty chemical that hardens when exposed to an ultraviolet laser.
  • Fused Deposition Modelling (FDM) – plastic is extruded through a heated nozzle like a glue gun.
  • Binding: clear or coloured glue is printed onto a bed of powder – powder types include plastic, sand, gypsum, metal and ceramic.
  • Polyjet: prints layers of liquid photopolymer which is then cured with a UV light. Can jet multiple materials in a single print but requires constant upkeep or clogs after every use.
  • Selective Laser Sintering (SLS): uses a laser to sinter particles together and uses powder to support. Great for large, durable parts.
  • Direct Laser Melting (DLM): like sintering, but more powerful. Uses laser to melt particles together and can use an electron beam (ARCAM). Very high uptake in the aerospace industry.
  • Direct Energy Deposition: blows powder into the focal point of multiple laser beams (very cool).

Miller notes that many executives are pushing their engineers and supply chain experts into 3D printing, and advises that you don’t just rush out and buy a printer. Do your research, get advice and find out which printer is right for your organisation.

What’s the future hold for 3D printing?

This is where it gets really exciting. Miller pictures large-scale 3D printers that could create on-demand emergency housing in developing countries or disaster relief, body parts (scaffolding for stem cells and laying down tissue) and personalised medicine such as printing orthopaedics (this could happen today but insurance companies won’t pay for it). He imagines a 3D printer in every school and one at every neighbourhood copy centre. We’ll have 3D printed clothing, 3D printed food, nano-scale devices, and more.

Advice for supply chain professionals dealing with 3D printers

Miller stresses that the first thing to remember is that it’s really no different from any other manufacturing process, with the same rules and requirements applying. This means that supply chain professionals need to establish quality and traceability standards, which can be difficult without understanding the 3D process, planning for it and controlling it. He advises that engineers may try to use this technology to bypass procurement, as parts will be made at the point of use rather than in a distant factory. Scheduling is a big issue, with time needed before the print to prepare the mathematical model and ensure the product has a professional finish afterwards. To be cost-effective, 3D printers need to be run near full-utilisation (i.e. continuously), which will need careful planning.

One foreseeable problem caused by 3D printing is the theft of intellectual property. If a company was able to steal a mathematical model of a branded product such as a Disney toy, this would be a major IP breach. You’d no longer have cheap copies of branded products on the market, but the exact same product printed identically. Miller talks about a Phoenix golf-club manufacturer who hired PADT to create the mathematical representation of a new golf club design, and sent along a security guard to watch the entire process and ensure the file wasn’t copied or leaked. Miller feels that firearms printing isn’t really an issue – it means there will be more unregistered and untraceable firearms on the market, but it’s not as if this isn’t already a problem in the US.

As the session ends I pull out my phone. One of the nifty ideas in play at ISM2015 is the use of QR code feedback cards that you can scan with your QR reader and rate the session. Miller gets top marks.

Founded in 1915, the Institute for Supply Management (ISM) is the first and largest supply management association in the world. A not-for-profit association with 47,000+ members and 140+ affiliated organizations around the globe.

Telstra director honoured with prestigious procurement award

Richard Allen receives The Faculty’s ‘CPO of the Year’ title.

Chief Procurement Officer (CPO) at Telstra, Richard Allen, was last night announced CPO of the Year by leading procurement consultancy The Faculty.

Awarded at the Asia-Pacific CPO Forum’s annual gala dinner held at the Eureka89, Melbourne, Mr Allen was chosen from a shortlist of top performing CPOs in the region.

Sponsored by WORKWEAR Group, part of Wesfarmers Industrial & Safety (WIS), the award highlights the importance of the CPO role in organisations by recognising CPOs who hold strong functional and technical expertise, realise commercial outcomes, demonstrate leadership influence and leverage the value of procurement across their businesses.

Responsible for all outsourcing decisions at Telstra, encompassing both local agencies and overseas partners with a procurement spend in excess of $12 billion, Mr Allen is credited with making a significant contribution to the telecommunications company’s customer-focused strategy over the past four years.

Richard was nominated by Robert Nason, Group Executive, Business Support and Improvement at Telstra, who said: “Richard has been instrumental in Telstra’s transformation over recent years, and his commercial leadership has helped Telstra strengthen its customer service offering,”

“He’s introduced innovative service evaluation, to measure and increase advocacy within Telstra’s suppliers, recognising that they are often our customers, too,”

“Richard’s also led a widespread rationalisation of our supplier base, reducing it by 30 per cent, which benefits both our business and our customers.”

Another innovation introduced by Richard was his ‘reverse sourcing’ initiative where he achieved a 90 per cent change in payment terms from suppliers, which has unlocked a significant incremental cash benefit to the business.

Mr Allen’s ability to lead the procurement function through an extensive domestic change program and make a significant contribution to Telstra’s transformation is what captured the judging panel’s attention.

Judging Panel Chair it is Dr Karen Morely said: “The change Mr Allen has made at Telstra is a perfect example of how procurement can support a company’s value proposition whilst also keeping a close eye on costs.”

“Richard’s ability to broaden the role of procurement across the business and reap such strong rewards is the result of his functional excellence, leadership, commercial capabilities and personal drive.”

The Faculty’s Founding Chairman Tania Seary said: “Making a tremendous impact on one of Australia’s largest corporations and driving real change across the business is far from simple – yet Richard has shown that his technical skills and leadership combined are a perfect formulae for success.

“The Faculty congratulates Richard and the procurement team at Telstra for all their achievements over the past four years, and hope that others in the industry learn from their excellent results.”

Established in 2012, the CPO awards program, a flagship initiative of The Faculty, was created to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

WORKWEAR Group General Manager, Chris Jones, said that while procurement is one of the fastest growing professions in Australia, awards like CPO of the Year recognise the crucial impact procurement can have on business outcomes.

“The CPO role is not just about sourcing and purchasing, but includes building or protecting brand reputation, mitigating risks and help companies deliver on their value promise.”

For more information on the Faculty’s CPO of the Year Award, please visit here.

Electrolux has 6500 people working on Big Ideas today

Big Ideas? How’s this for a Big Idea? On 11 May, thousands of Electrolux employees across the world began a 72-hour innovation-fest designed to develop new ideas for the future of fabric care. 

Electrolux iJam

The initiative, named iJam, is a crowdsourcing event where employees are encouraged to collaborate with one another online to come up innovative product improvement solutions that can be integrated into Electrolux’s business.

The event is facilitated through software platform that connects employees across the globe. The program enables participants to raise ideas, collaborate with one another and to comment on and promote the ideas that are raised.

While all ideas generated are fed into the company’s product development team for consideration, there are also winners! Once the 72 hours is over, a team of product developers will select the 20 best ideas, which along with 10 ideas voted in by participants, will be presented to the company’s management team for consideration. The management team will then select the three ideas it believes have the strongest commercial impact and will commit resourcing to further developing these ideas.

Last year’s iJam project had over 6500 participants, generated over 1500 ideas, 8700 comments were posted and 11,500 votes were cast. As a testament to the success of the initiative, two of the three winning ideas from last year’s iJam are now in mainstream development at Electrolux.

While iJam is reserved for internal employees, the firm runs another initiative, the Electrolux Design Lab, which drives innovation through external crowdsourcing initiatives. The Design Lab encourages design students from across the globe to contribute product ideas and developments to Electrolux.

This cross-functional approach is a great example of how innovation can be implemented even in the largest of organisations.

The ideas that are generated through this initiative have already undergone a significant vetting process. Ideally, a person comes up with an idea that is reviewed by someone from marketing, someone from product design, some from procurement etc. etc. Based on the feedback gained, the ideas are altered, meaning that by the time they reach the management team, each idea has already been exposed to a fair level of criticism and cross-functional thought.

It’s a great idea. I look forward to hearing the results of their work!

Got a Big Idea of your own? We want to hear it (provided it’s less that 60 seconds)! Find out more here.

As a Procurious member you can access our exclusive Big Ideas Summit video content online – just join the Group page to view.

How the UK General Election will affect digital trade

Katie Gallagher, managing director at the North’s leading independent digital trade association comments on the result of the UK General Election and how it is going to effect the digital sector in the North.

Polling_station_6_may_2010

“The coalition certainly brought in some good initiatives for tech and digital businesses, most of which until recently were focused on London. However this changed dramatically in the run-up to the election where there was borderline hysteria from all political parties about tech and the North.

“I hope that the Tories will continue to invest in the North and understand just how vital our technology sector is to job growth and the wider economy. It’ll be interesting to see how the Tech North initiative pans out, considering it was a Lib Dem initiative all along.

“While the last Government did introduce computer science into the curriculum, they also introduced several controversial reforms which were actually at odds with the desire to create work ready students with vocational, hands on experience.

“David Cameron has said his party will create more apprenticeships, and whilst we admire this ambition, digital technology apprenticeships have not been as successful as hoped, particularly in the SME community. The infrastructure still isn’t right to get enough quality talent from schools into digital apprenticeships, so I hope the new Government will look to change this. We really need to get digital education right this time and tackle this skills gap once and for all.

“I’d also like to see additional investment in promising start-ups. While we did see the introduction of some helpful finance products under the coalition, there’s still number of decent tech businesses that are struggling to access the finance they need to grow. Cameron has been known to champion UK start-ups, so I hope this remains a priority.  

“It was a challenge for us to make sure industry voices were heard in the right places with the last Government. I hope that the new Government listens this time and realises its approach to digital, skills and economic growth needs to be joined up, and the best way of doing that is from a business-led, bottom up approach.”

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Why design eats discipline for breakfast

Dan Gregory shared his views on fostering innovation, lifting team engagement, understanding customer mindsets and exploring what makes you tick as a leader.

Dan Gregory

Driving change is about two things: Discipline and Motivation. Right? Wrong, says Dan Gregory, President and CEO of The Impossible Institute and regular on The ABC’s Gruen Transfer. 

Leaders, personal trainers and new-age coaches, strive to motivate us in order to lift performance, while high achievers and perfectionist Virgos turn to punishing self-discipline to achieve their goals.

Discipline and motivation are great, but the problem with both is they are only ever intended to be used in short bursts, to effect short-term change.

“No one – not even the impossibly perfect Michelle Bridges – is disciplined in every aspect of their life, every moment of the day,” reminds Gregory.

And what happens when these short measures fail?  We feel let down, we blame the people involved (often ourselves) rather than the strategies we’ve chosen. (Anyone who has ever been on a diet knows this feeling!)

Speaking at the Future Leaders in Procurement Forum (FLIP 2015) in Melbourne on 12 May, Gregory offers his own personal example: 

“Last year I decided I wanted to spend more time at home. I was driven I was disciplined.  But at the end of the year, when I looked back on my own ‘on time performance’, no matter how meticulous I was about turning off the computer at 5pm, it never made much difference.”

“And here’s the design flaw,” says Dan, “I live one hour’s drive from work. That’s two-hours per day and an extra 10 hours a week,”

Procurement professionals will already be doing the math:  This equates to 52 extra (long) days a year, which is very nearly an annual total of an extra 2 months a year away from home!”

Motivation won’t solve that problem.  Discipline can’t solve that problem.

This is a design failure. 

Forget cheesy motivational slogans, or brutal self-discipline. If Gregory simply moved the office half an hour closer to his home or vice versa), he would almost effortlessly gain an extra month a year at home.

And here in lies the real problem – we don’t design for failure in our lives or in our industries. 

Aeronautic engineers are a different breed: They build failure into their designs and processes. 

Citing the example of Captain Richard de Crespigny and the miraculous landing of badly damaged QF32, Gregory notes that in most cases, even if half the engines go down, the A380 just about refuses to fall out of the sky.

Stop and think for a moment what would happen to your business if 50 per cent of your customers went elsewhere, or half of your workforce didn’t show up?  

Sobering, no?  

Gregory’s advice to Procurement leaders is to start by thinking about where you’re applying discipline… and where design would achieve a better, more lasting outcome.

“Design the process to fit the people, not the other way around,”

“The real key is how long you need the change to endure,” says Dan, “Because in the long run, design will always trump discipline.”