A report released by the Corporate Executive Board in May of this year has highlighted the key reasons procurement professionals leave their roles.
Despite a number of great success stories depicting the fantastic opportunities the function presents and positioning a career in procurement as a ‘job for life’, the study revealed that procurement professionals are among the most likely employees to want to leave their jobs. Only 29 per cent of the CEB survey respondents suggested they had a high intent to stay on in their current roles.
The following chart provides some insight as to the reasons that procurement professionals want to leave their roles.
Increased compensation, benefits and workplace flexibility are motivations to leave that are likely shared regardless of industry, so it is difficult to address these in a procurement specific context. However, CEB has outlined some strategies that procurement managers can follow in order to keep their staff.
“Procurement managers should take time to explain to their employees how and why they are valuable to the company and the function, and seek to show employees how they can fulfil their personal career goals by staying at the company”
CEB also outlined the following characteristics of procurement employees:
Procurement staff are more likely to switch jobs for more senior positions than their counterparts in other parts of the business
The prospect of working with more talented colleagues is a motivator for procurement professionals. This again feeds into the ongoing importance of the need for procurement teams to attract top talent.
Procurement staff are more satisfied with the strategic nature of the work they are doing than staff from other functions. The report showed that procurement employees are less likely to want to change jobs for more engaging day-to-day work than their counterparts from other parts of the business.
It’s grand-final week at The Faculty. The team has been working towards this week for months – there are whiteboards all over the office covered in scribbled plans and brainstorming, the printer has been running almost continuously and the atmosphere here is at fever-pitch. It’s the week of the 8th Annual Asia-Pacific CPO Forum, a 2-day event where we’ll be hosting no fewer than 56 of the region’s top CPOs, with a collective influence over $180 billion spend.
But that’s not all. This week will see no fewer than six major events, namely the Future Leaders in Procurement Forum (FLiP) followed by the Future Leaders’ Dinner, the National CPO Roundtable Meeting, the CPO Forum itself, an executive breakfast with The Hon. Jeff Kennett, and the CPO Forum Gala Dinner – the networking event of the year if you want to mix with the who’s who of procurement in the Asia Pacific.
The events run over the next three days, and attendees have been arriving at Melbourne Airport to be greeted by typical May gloom – overcast with a threat of rain, and temperatures dropping as low as six degrees tonight. No matter, though – we’re prepared for the usual witty comments about our weather from Sydneysiders and other delegates from the sunny north, and we have such an action-packed program lined up that there’ll be no thought of stepping outside the event venues until the end of each day.
I’m going to cover the events through a series of blogs, bringing you the big ideas, themes, news and surprises from the next three days. There’s so much happening that it’ll be impossible to cover it all, so I’ll be sending you the highlights, along with the key take-outs from my colleagues and the attendees. Lisa Malone is here representing the team at Procurious, and she tells me to keep an eye on the hashtags #CPOforum15 and #FLiP15 @TheFacultyHQ.
So, what’s happening today?
There are two major events happening concurrently today, catering to two sets of attendees in very different stages of their careers. At Melbourne’s Park Hyatt Hotel, 32 delegates are gathering for the Future Leaders in Procurement (FLiP) forum. Who are they? They’re category managers, procurement analysts, sourcing specialists and other role-holders from organisations all over the region, and as the name of the event suggests, they’re the region’s future leaders of the procurement profession. Nurturing these top-performers and giving them every opportunity to develop their leadership capabilities, define their career paths and expand their professional networks is an absolutely key part of the much-discussed “war for talent”. The very fact that these 32 rising stars are in attendance today is a fantastic reflection on the organisations they represent – these companies have recognised and rewarded their most talented individuals by making the time and resources available for them to attend. That’s a big deal, when you consider the frenetic pace of modern procurement careers and the rare chances we get to come up for air, focus on ourselves and consider what’s ahead.
The FLiP delegates have a huge day ahead. They’ll be learning from some of the nation’s leading CPOs including Keith Bird (QLD Rail), Andrew Ordish (AMP) and Cindy Dunham (Fortescue), along with experts on the human side of being a leader (team-building, trust-building and understanding customer mindsets) – Dave Lourdes (Evolving Human Potential) and Dan Gregory (CEO of The Impossible Institute and a regular on ABC’s Gruen Transfer). Other big names include Holly Ransom (Chief of Staff to the NAB Wealth Chief Executive and one of Financial Review’s 100 Most Influential Women), who will challenge delegates to smash through their comfort zones and practice big-picture thinking. Laurel Papworth (Forbes Top 50 Social Media Influencers and Educator, UNSW) will guide the attendees through the critical role of social media and its power to drive deeper market insights and foster supplier innovation.
Meanwhile, here at The Faculty headquarters, the biggest players in the business are arriving for the National CPO Roundtable Meeting. The Roundtables for Melbourne, Sydney, Brisbane and Perth meet on a quarterly basis, but this gathering is the only opportunity in the year for all 26 attendees to meet as a group. They’re here today because they recognise the immense opportunities offered by networking with their cross-sector peers, the benefits gained from procurement market intelligence and the unparalleled power of collaborative learning. I’m privileged to be sitting in on their meeting today and I’m aware that up-and-coming procurement professionals such as those gathering at the FLiP forum would give anything to be a fly on the wall in this room. In fact, we’re confident that when the time comes, a number of the FLiP attendees will one day take their own places at this meeting, and that’s very exciting.
The CPOs will be sharing their challenges for the financial year ahead and exploring the critical issues facing them individually and collectively. They’ll be hearing from The Faculty’s Founding Chairman Tania Seary on The Big Ideas Summit that was recently such a success in London, and from Braam Uys (Rio Tinto) on his “Iron Fist in a Velvet Glove” approach to supplier relationship management. We’re expecting some provocative ideas to come out of the group discussions, and looking forward to those “a-ha!” moments where one CPO is able to provide a solution to another’s challenge.
So, the two meetings today have different agendas but there are certainly some common themes that will be tackled by the two groups – leadership, embedding change, raising the profile of procurement and, most of all, networking. The most exciting part of the day, for me, will come at 4.00pm when the CPOs wrap up their meeting and walk the two blocks to the Park Hyatt to offer the FLiP delegates a CPO Mentoring Masterclass. By this point of the day, the “FLiPpers” will be bursting with new ideas, inspiration and excitement about taking their learnings back to their organisations. They’ll get the opportunity to bounce these ideas off the CPOs, or perhaps seek advice on their greatest challenges, or simply discuss their vision for a stellar career path in procurement.
As exciting as the day ahead will be, I have to keep reminding myself that it’s only a preliminary to the main event ahead – the CPO Forum. But I’ll save that for another blog. The CPOs are coming through the door, so I’m going to get a coffee and settle in to find out what the future holds in store for procurement in the Asia-Pacific.
A little insight into the Big work that went into Procurious’ inaugural Big Ideas Summit, as told by the people that made it happen.
Gathering 40 of the world’s most influential thought-leaders for a one-day event in London was a potential logistical nightmare in the making…
Luckily Team Procurious had an ace up its sleeve in the form of its European General Manager – Lisa Malone, who skilfully guided the entire operation to its successful conclusion . Planning began back in the latter half of 2014, speakers were booked, agendas set, media packs distributed, interviews arranged, film crew booked, dietary requirements received and reservations at venues made. Yep, Big Ideas Summit 2015 was spread across not just one, but two venues.
Spend Matters’ Jason Busch joked: “I’m not sure if anyone else who knows the history of the Soho neighborhood also observed the irony of a “procurement” event there – especially one hosted by “Procurious” – but I at least got a chuckle out of it.
“Venues aside – and the Soho Hotel has a truly great small conference facility.” Suffice to say that the irony was not lost on us…!
Fun fact: Big Ideas Summit was originally known as 20:20 – with the idea being 20 speakers in a room with 20 influencers.
Product Manager Jack Slade built a bespoke landing page for the event. The Big Ideas Summit website carried essential information about the day, including featured speakers, topics to be covered, latest news and details for getting involved. A timer counted down the hours to the big day, ensuring that the whole team were kept on their toes…
As the big day rolled around Lisa would do a faultless job of ensuring speakers kept to time and everything flowed smoothly. In- fact we think the word ‘effortless’ was mooted…
On the day itself Procurious founder Tania Seary said: “Through the ideas that have been generated today, we’ve hopefully inspired a new generation of business intrapreneurs to get their creative juices flowing, to start collaborating through networks like Procurious and then start implementing those ideas to achieve change within their organisations and the entire profession.”
Fun fact: Even before Big Ideas Summit began we’d published 30+ stories on the topics and people who were set to appear
Euan Granger, Relationship Manager – Procurious, offered: “For me, Big Ideas represented a great opportunity to make people aware of procurement and Procurious, as well as getting them talking about the future of the profession. It was great to be able to see both sides of the conversation – the first part in the room in London where the room was alive with ideas and discussions, but also to watch what was happening on social media and know there was a huge number of people watching, following and taking part in the discussions around the world. To see the numbers of people following Procurious across the various social media platforms was something special.
I just hope they got as much out of the day as I did!”
Procurious contributor Jordan Early said: “Big Ideas was a blast. It was busy but that’s exactly what I expected when I stepped off the plane at Heathrow after an overnight (and day) flight from Sydney.
The lineup of speakers didn’t disappoint. It’s great to see some procurement conferences are finally moving away from the traditional sale pitch from service provider and CPO patting themselves on the back style of speeches towards discussions that hold real relevance for procurement professionals.
“I spent most of my day scribbling notes in the hall and turning them around into blogs that can now be read on the Procurious platform. I learnt a lot and met some great people and ultimately, isn’t that what events are about?“
Big Ideas certainly caused a buzz across social, just as Euan had alluded to. On Twitter #BigIdeas2015 was mentioned 759 times in 24 hours (reaching a potential audience of 1m+), we saw a colossal 2700+ new likes on Facebook, and our 5000+ strong community made Procurious the go-to place for daring discussions.
As the curtain went down, the action moved across town for a chance for guests to let their hair down.
Those not able to make the day were able to enjoy bowling, drinks and food at The Ham Yard Hotel.
It also provided us with an opportunity to get face-time with some of our biggest supporters and valued community members.
The Faculty’s Max Goonan treated us to some of his highlights from his trip across the pond:
Chris Sawchuk being described as a ‘Dapper Road Warrior’ despite arriving that morning from Chicago.
Max Goonan surviving similar jetlag on any even longer flight from Australia the night before.
Sigi complementing all on how good looking everyone was…
Paul Rakovich (I think it was him) aligning his mid-life crisis Porsche purchase – to the state of the procurement profession..
Rob Nott’s amazing bowling prowess – re-created from his teens…
And the genuine camaraderie amongst participants – all with a desire to be part of a momentum shift in thinking!
In the days since we’ve been hard at work getting all of the videos (keynotes, panels and Big Ideas) onto Procurious for you all to view and share among your peers. The latest uploads can be found on our Learning page.
The Procurious team now have just enough time to recharge their batteries before Big Ideas Summit 2016 kicks off! Keep your diary free next May, and keep your eyes locked to Procurious for further announcements…
The day itself may now be over, but your Big Ideas are still being amplified online. As a Procurious member you can access exclusive video content online – just join the Big Ideas Summit Group page to view.
Got a Big Idea of your own? We want to hear it (provided it’s less that 60 seconds)! Find out more here.
Delivery to your door? That’s all a bit old-fashioned for Amazon it seems, as their plans for delivering customer orders using drones takes shape.
The common thought was that Amazon had intended to use their drones to deliver packages straight to the customer’s door, but details of a patent lodged in the USA has opened up a whole new range of possibilities.
From warehouse to hand
The patent, lodged in September 2014 and recently accepted, allowing details to be published, proposes to deliver packages straight to the customer, tracking their location using data from their smartphones.
The delivery option falls under the previously announced ‘Prime Air’, something that Amazon has been developing for a while now. However, it goes much further than most people expected. Using the Amazon app, the customer would select the ‘Bring it to me’ option, and then wait for their package to arrive from the closest dispatch location.
The patent also reveals plans for the drones to be able to communicate with each other, exchanging information on the weather and traffic conditions in the area. The drones will be designed in a variety of shapes and sizes in order to manage packages of different weights and shapes.
And if you’re worried about the drones crash-landing in your cappuccino while waiting outside your favourite café for that must-read book, fear not. The drones will be outfitted flight sensors, radar, sonar, cameras and infrared sensors to ensure safe landing zones are found and to constantly monitor the drone’s path to ensure it avoided collisions with human or animals.
However, the patent’s acceptance does not mean that US authorities will approve the plans. For a while now, Amazon has been trying to convince the Federal Aviation Authority (FAA) to approve widespread use of drones, as well as allowing them to do further testing and development in the field.
Drones are currently limited to a height of 122m (400ft) and must stay in the pilot’s line of sight. Such have been Amazon’s issues with FAA regulations, that it has conducted much of its testing in Canada. The FAA has also been blamed for the US losing out in drone development, most notably to the UK, where a research centre is being built.
It’s not only the FAA that Amazon needs to convince either. A British Airline Pilots Association survey highlighted that just over half of adults think that drones pilots should have formal training, and that prison sentences should be imposed for endangering aircraft.
While Amazon’s patent raises a number of questions about safety and privacy, it’s clearly a major development opportunity for the supply chain and logistics industries. Direct deliveries to an exact location could prove to be a considerable time and money saver, particularly for people in remote locations.
We’d be interested to hear your thoughts on this development. Is it going a step too far? Do you really want to have drones delivering packages to people wherever they are? Is the convenience worth the potential disruption?
Technological advancements were a hot topic at the Big Ideas Summit, powered by Procurious, a couple of weeks ago. From driverless trucks on mine sites, to technological disruptors in the supply chain, we’ve heard some great ideas. But we want to hear your Big Ideas too – find out how to share them here.
To access all the great content and discussions from the event, join Procurious for free today and join the Big Ideas Summit Group.
Meanwhile, here are some of the big headlines making the news in the procurement and supply chain space this week.
Apple wants to be entirely carbon neutral… one day
Apple wants to create enough renewable energy to power its entire global business, including its supply chain. Chief executive Tim Cook claimed it would take Apple “years” to realise the goal but said it had to happen.
“Apple’s goal is to achieve a net-zero impact on the world’s supply of sustainable virgin fibre and power all its operations worldwide on 100 percent renewable energy,” it said in a statement.
The firm already generates enough renewable energy to power 87 percent of energy use in its stores, offices and data centres, but that figure doesn’t include the supply chain. Apple said its supply chain uses 60 times as much power as its own operations.
Wal-Mart builds Supply Chain to meet e-commerce demands
Wal-Mart Stores Inc. is one of a growing number of big-box retailers building out their supply chains with distribution centers designed to meet the demands of online shopping. The company expects to open four such giant facilities this quarter, as it aims to triple online sales by 2018, to $35 billion from $12 billion last year.
Building fulfillment centers designed to cater to e-commerce, which demands the ability to handle a large number of small orders, can help retailers conduct more profitable online sales, said Brian Kilcourse, managing partner at RSR Research LLC, a retail technology consulting firm.
Each of Wal-Mart’s new facilities will be more than 1 million square feet and hold at least 500,000 items—much larger than its traditional distribution centers for stores, which hold 30,000 to 50,000 items. Wal-Mart opened an e-commerce center in Texas last year, and like that one, the new buildings will use both human labor and automation, such as computer-controlled chutes, to move items.
The goal of Wal-Mart’s new centers is to provide a single place stocked with a wide variety of products to get shipments collected and sent faster, a Wal-Mart spokesman said. Ultimately, analytics behind the shopping software will determine, on the fly, the most efficient way to fulfill the order, the spokesman said.
Vehicle manufacturer Jaguar Land Rover has recognised its top ten direct suppliers at its inaugural Supplier Excellence Awards.
Companies from Corby to Cairo were presented with trophies by actress Joanna Lumley, at a ceremony held in the West Midlands, close to the heart of the company’s UK operations.
Ian Harnett, Jaguar Land Rover Director of Human Resources and Purchasing, said the awards had been instigated to recognise the role supply chain firms played in helping the company achieve its goals.
A total of 10 trophies were presented for performance in 2014: two gold, four silver and four bronze. The awards went to individual plants or facilities, rewarding on-time delivery, continuous quality, accreditation to international and Jaguar Land Rover standards and flexibility to meet the company’s developing needs.
New partnership to transform healthcare procurement in Asia-Pacific
UK and Australia-based company Healthcare Procurement Partners (HPP) has expanded its Asia-Pacific operations with a contract to deliver cost-savings and process improvements for the largest corporate healthcare provider in Asia-Pacific, Fullerton Healthcare Group.
Following an initial program of reducing non-payroll spend for Fullerton Healthcare’s Australian subsidiaries, Brisbane-based HPP will now pursue similar procurement projects in Singapore and Indonesia.
While the terms of the Project Fusion contract between HPP and Fullerton Healthcare Group remain commercial-in-confidence, HPP’s local on-site presence in these key Fullerton Healthcare markets is expected to deliver significant repeatable annual savings by mid-2015.
HPP’s Managing Director, Daniel Williams said: “This promotes the transparent exchange of knowledge about how and where to unlock savings and improve cost-efficiencies, locally and more widely,”
A “teardown” of the product by IHS Technology found the components cost $83.70, compared with the retail price of $349, giving it the lowest hardware costs relative to consumer price of any Apple phone researched by IHS.
IHS said estimated component cost to retail price ratios for other Apple products it had reviewed ranged from 29 per cent to 38 per cent.
The company said its analysis included manufacturing costs of $2.50 but did not include costs such as logistics, capital expenses, research and development, software and licensing.
Kevin Keller, senior principal analyst for materials and cost benchmarking services at IHS, said: “It’s fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost.
So you’ve found yourself a mentor. Congratulations. They have a glittering CV, impeccable corporate track-record and stirring leadership vision. There’s only one problem: you’re terrified of creating an awkward ‘tumbleweed moment’ by asking your corporate superstar a stupid question.
Having a mentor can be one of the most valuable assets for career growth. So while some will tell you ‘there’s no such thing as a silly question’, its also understandable that you want to be smart, poised and considered in front of your career idol and make the most of their (and your) time.
Tomorrow, more than 30 of Australia’s brightest rising stars will gather for Future Leaders in Procurement (FLiP 2015) in Melbourne.
Delegates will have a once-in-a-career opportunity to sit down with some of Australia’s leading CPOs in a master class session to discuss and debate perspectives and seek leadership tips for their own career.
Here’s a list of 9 great questions that will take the pressure off and help you make the most of your ‘hour of power’ with a corporate mega-star:
As a leader, what are the things that only you can do?
Where do you ‘big ideas’ come from, i.e. what is the context in which you feel most inspired?
What are the issues that keep you awake at night?
What is the one behaviour that you have seen derail more leaders’ careers than any other?
What impact has networking had on your career?
Who else would you recommend I connect with?
What tips do you have for working smarter?
What would you do if you were me?
And if you’ve still got time left over (or better still, the promise of a second mentoring meeting), ask your mentor: “How can I help you?”
Most leaders will be accustomed to mentees who are only interested in what they can take away from the meeting, so demonstrate a willingness to create a win:win relationship and recognise you have a unique vantage point too.
What are the best questions you’ve been asked as a mentor?
James Ferguson founder of Supplibase.com thinks the future lies in Social Supplier Management (or SSM for acronym fans).
James imagines a place where we all manage our supplier relationships through reviews, references and recommendations.
London-based professionals may also like to know that James hosts a monthly procurement meetup (don’t worry it’s not in a boardroom, but a local pub…) – you can RSVP and join James at the London Buyers Club here.
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?
This article is part of a series about Hugo’s visit to ISM2015 in Phoenix, Arizona. Today Hugo discovers that Talk Radio and Jazz music have found a home on the exhibition floor…
So, it turns out that it does rain in Phoenix after all. The storm started while I was trundling through the city on the light rail to my hotel just north of downtown, and was at its heaviest by the time I alighted. I didn’t have a chance of staying dry and was soaked to the skin before I’d made it even half the distance. And I really do mean soaked to the skin – sopping shirt, pants, shoes, socks, even the papers in my pocket turned into a pulpy mess. I hurried on, praying that my bag would keep the water from reaching my laptop (incredibly, it did – thanks Crumpler), and sloshed my way into the hotel foyer to be greeted by gales of laughter from the staff behind the front desk. “Man, I’d hate to feel the way you look,” said one wise-cracking security guard.
Anyway. Dry and warm now, and ready to write. The first thing I noticed when I walked into the conference centre this morning was a jazz band in full swing, just like the conference itself. As expected, the crowd was much thicker than yesterday, the stairways and escalators jammed with a slow-moving mass of people. I visited the press room and met some lovely media experts, namely Mike Scott of MCCI Integrated Marketing, followed by Jennifer Shore of ThomasNet and Erin Vadala, Sadie Smith and Dawn Ringel of Warner Communications. To my foreigner’s ears, I thought Dawn introduced herself as “Don” but it’s just those pesky differences in accent again (I’d pronounce it “Dorn”). Don/Dawn invited me to two exciting press conferences (more information to come soon) and I walked out feeling I now had plenty of support and a home base at the conference.
Walking the exhibit hall floor
Downstairs, the wraps had come off the exhibit hall and delegates were pouring through the doors. I spent every spare minute today wandering around the hall, overwhelmed at first by no fewer than 120 exhibitors showing their products and services. I found my way to the pile of bagels and huge vats of Starbucks coffee at the centre of the floor to fortify myself before making my way through the aisles in a methodical manner.
There is such a wealth of information to be found at these exhibitions and I quickly gave up trying to collect all the documents and samples on offer. Some of these companies are offering similar products and competing for the delegates’ business, but one of the first things I noticed was the huge range of services on offer. From travel management to security services, ERP systems to research offerings, credit and staffing agencies, fleet management, universities, media companies, risk management solutions and more. I came to a stop at the booth belonging to PADT Inc. (Phoenix Analysis and Design Technologies), where I goggled at the 3D printer like a country bumpkin seeing his first escalator. Eric Miller, a 3D printing guru, had a rapidly-growing pile of plastic gizmos sitting on the counter that the machine was churning out – little ISM2015 badges, plastic gears and something that looked a bit like a Rubik’s Cube. I decided then and there that I would attend Eric’s session that morning to try to understand a little more about the technology.
I’d noticed a couple of middle-aged gentlemen wandering around in gaudy yellow jackets, black shirts and yellow ties yesterday, and discovered them sitting under a sign for “Manufacturing Talk Radio” in the middle of a live broadcast. They were interviewing one of the exhibitors who was eager to get the word out about his company, asking him questions in that deep, booming voice you only hear from radio folk who’ve spent decades talking into a microphone.
As I walked past the displays, the exhibitors would catch my attention and wave me over to tell me about what they do and what’s on offer. There are so many companies here, most of which I’d never heard of back home apart from the very biggest players. I was particularly impressed by a demonstration given by Kristin Carty of ThomasNet, a very famous name in US procurement. ThomasNet is the modern incarnation of Thomas’ Register of American Manufacturers, a 34-volume buying guide offering sourcing information for thousands of products. It was first published in 1898, meaning that my friendly host Kirsty could point with confidence to 117 years of sourcing and supplier discover knowledge passed down through her organisation. It’s lucky they’ve gone digital since the nineteenth century because ThomasNet now has 700,000 US and Canadian suppliers in its database, split into 60,000 categories. The magic is in the search tool, where Kirsty showed me how to qualify suppliers by location, ownership type (diversity) and quality certifications. Each supplier has a detailed information pack available at the click of a button, including product and capability catalogues, line cards, 2D and 3D CAD drawings, case studies, white papers, photos, videos, news releases, key contacts, brands distributed or manufactured, financial information and more. It’s free to use and it’s in suppliers’ best interests to be on the ThomasNet database and to provide as much supplementary information as possible to help buyers make their choice. I’ll be meeting with ThomasNet again tomorrow as they’re one of the sponsors and key drivers of the “30 Under 30 Rising Supply Chain Stars” initiative – but I’ll save that for another blog.
As I hurried off to the 3D printing conference session, I was again struck by the buzz in the hall. All around me, people were networking, chatting and laughing, yet underneath the friendly atmosphere I was aware that the exhibitors were locking in some major agreements worth untold amounts with those delegates who had the authority to make a deal on the spot. For some, the exhibit hall floor is the focal point and the major reason for attending the conference, with all of the educative sessions an added bonus, while others may see things the other way around.
One of the most incendiary sessions at the Big Ideas Summit saw us gazing into our crystal ball with a view to identifying procurement’s blind spots.
“There are known knowns… There are known unknowns. But there are also unknown unknowns.” – Donald Rumsfeld.
This brilliant distillation of what was quite the complex matter can also be attributed to the disruptors likely to affect both business and procurement. We’re already well versed on innovations like 3D printing and social media, as well as water scarcity and climate change – but what of the blind spots, the things that no one is talking about yet?
What are the issues that have the potential to really shake things up? We turned to the Procurious community for answers and this is what you had to say…
Payments and costs seem to be a hot topic… Chris Smith starts things off by asking: “What about transaction costs for undertaking the procurement, for the user, the buyer and the bidders (winners and losers)? Mike Dunlop agrees, and takes the discussion further: How to best calculate the cost of transactions, the benefit of SRM as a tangible return of investment, the risk / cost of compliance of Procurement Payment cards vs loading a new supplier for low value spends?”
This prompts a reply from Cornelius du Preez who comments: “Measuring and procurement, what a headache. I’m currently doing my dissertation in the area of procurement. Al the reading of past research and case studies are really interesting, but the question that keeps coming up is the ‘How to measure….’ One of the questions I ‘m trying to get to the bottom is, ‘How to calculate procurement’s contribution on the bottom line?’ As there are many variable factors that needs to be considered, further upstream as well.”
We encourage lively discussion on Procurious, and this is exactly what we get here! Mike comes back: “My view is that anyone can negotiate. It is inherent in the human DNA and we all do it every day of our lives without realising it. But not everyone is able to – clearly articulate a specification and ensure all tender responses are like for like, create a valued weighted score card for value comparison, understand the cost of resource through the entire end to end process, look at where to reduce waste and enable people to great more value, contract management and risk mitigation (plus many more excellent tasks).
Mike argues: “In essence Procurement should be able to easily display their value to the company or there is an argument that they shouldn’t be there. With this you can calculate the value benefit from savings, reduced waste and reporting on missed savings. This will then give you a bottom line impact of X that you can compare against the Overhead cost of the department. This would then give you a Return on Investment of the procurement department. You now have your tangible rationale as to the contribution on bottom live vs the cost of return.”
Returning our focus to procurement blindspots, Simona Pop says “it’s prompt payments and how they could really improve supply chain health and our economy as a whole!”
Samantha Coombs believes more focus needs to be put on checks, saying: “I believe the best driver of prevention is proper checks. Ensuring there are policies in place to tackle a variety of the points you mentioned. By carrying out proper supplier due diligence then protects the company’s reputation, the people and importantly the shareholders who invest based on the appropriate management of risk.”
To round this particular topic off, Mark Johnson wanted to highlight Rogue Spending Activities, having seen this over and over in many different industries.
The new Airbus A350 XWB, an extra wide aircraft first delivered in December of last year, was built using over 1000 parts that were produced with a 3D printer.
The airplane manufacturer began a relationship with Stratsys, a 3D printing and additive manufacturing firm, in 2013 in an effort to increase supply chain responsiveness and simplify its internal processes in order to meet strict project delivery deadline for the new aircraft.
The fact that the firm is now utilising 3D printing in its supply chain, means that replacement parts can be produced on-site rather than at an interstate or overseas manufacturer. This drastically reduces lead times, as the requisite parts no longer need to be produced, processed and shipped to where they are needed.
1000 parts may sound like a lot, but in reality it is a tiny portion of what is needed to build an aircraft. However, Airbus’s move suggests that 3D printing is about to start disrupting our supply chains. These technologies have the potential to vastly change the way modern supply chains operate. If implemented properly 3D printing could slash lead times and transportation costs allowing businesses to become more self-sufficient. Stratsys certainly see it that way, defining their approach as a transformative alternative to conventional manufacturing processes.