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The folks here at Procurious know this, so that’s why we ensure all of our newsworthy announcements, talking points, notable events, and informative videos (along with the latest stories hitting the headlines in the world of procurement) are signposted across all of our social channels.
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A record of our Twitter chat with Xchanging Procurement #Procuretalk.
Last week Procurious took part in a live Twitter interview with Xchanging Procurement (@xchprocurement). During the half hour we talked about everything from social selling to the future of social networks.
We present the dialog in its entirety below, just in case you missed it…
This is a guest post from Jamie Eaton – Head of Marketing & Insight at Comensura.
It might come as a surprise to some, but the cost of temporary workers goes beyond their salary or hourly rate. From ensuring that you have acceptable pay rates and costs in place to standardising expenses, there are a number of steps that organisations can take to ensure they’re getting value for money and they’re not presented with any hidden surprises each month.
By implementing the following measures on pay rates and costs, organisations can minimise costs incurred by a temporary workforce:
Recruitment agencies inform you on the pay rate for each temporary worker, and it’s important that you make this information visible to managers within your organisation. Look at the pay rates for temporary workers across the organisation and ensure they are consistent with those of workers performing similar tasks, and align them with that of permanent workers. This will help reduce any anomalies that might exist, and standardise pay rates to prevent workers demanding a raise based on how others are paid.
Benchmark against local employers
Probe into the pay of temporary roles in the area. Local sources such as recruitment agencies, competitors or the Jobcentre Plus may give you access to how much people are typically paid in the types of temporary jobs that you provide. This will give you a better idea of suitable pay rates and prevent you from paying over the odds.
Align with your employer brand and strategy
Your organisation may look for specific traits in candidates to fill certain roles, which you should abide by when procuring temporary staff. Vacancies are then more likely to be filled by a type of worker that has previously performed well in a similar role. Ensure that you’re offering a pay rate that will attract this kind of person.
Implement authorisation processes for inflation
It’s inevitable that you’ll need to uplift pay rates from time to time, particularly as a response to changes in the job market. The most efficient way of doing this is by using an approval process that consults all the relevant people and ensures that the rise is reasonable.
Temporary worker expenses such as travelling costs and accommodation can sometimes be forgotten about, even though it collectively amounts to a considerable cost. Determine what constitutes acceptable expenses for your organisation and apply it as a standard rate for every temporary worker.
There are many benefits to reap from the use of temporary workers, such as flexibility and the ability to cover permanent worker absences. But without maintaining the overall costs, you risk it being a drain of resources. By putting processes into place that determine acceptable pay rates and costs, you can ensure that you’re getting value for money when procuring temporary staff and that you’re carrying out the process cost-effectively.
Based on a recommendation I got from Julie Egonidis of The Faculty off the back of its recent procurement roundtable series. I caught up with Patrick Vialle of Parmalat Australia to discuss an interesting S&OP (supply and operations planning) project the company has been working on.
Patrick has had a truly international supply chain career, having worked in France, Italy, New Caledonia and now in Australia where he’s employed as the National Demand & Supply Planning Manager for the dairy producer.
For those of you that are unfamiliar with the term, S&OP, put simply, it involves understanding the demand profile for your organisation’s end product and closely linking supply chain (and other functional) activity to mirror this demand.
It’s not just for FMCG
I was keen to get an understanding of how Parmalat was able to connect the dots between its market place demand and the supply and production of its own products. I thought, naively, that due to short shelf lives; S&OP was something that was unique (or at least more common) to the food and FMCG industry. But after chatting to Patrick I began to understand that S&OP is a solid business practice whatever industry you’re in. As Patrick points out, it’s all about being responsive rather that reactive.
Patrick explained how the theory of S&OP can be used by firms that don’t even produce a physical product. If Google, for example, is able to understand the demands that its network is likely to come under over the coming weeks and months, the company can start to make arrangements for the required storage and data processing capacity (their supply) to match these demands, hence avoiding an oversupply or worse, a crash.
Cross Functional by Nature
Speaking of his own experience at Parmalat. Patrick discussed the need for S&OP to be addressed from an organisation-wide perspective. “S&OP is, by definition, a cross functional process” he said. It might make sense that procurement or supply chain lead the project because they have close relationships with the supply base, but stakeholders from every area of the business need to be involved if the project is to be a success.
Patrick explained how the Parmalat team responsible for delivering the project was comprised of a mixture of professionals from Sales, Finance, Marketing, Engineering and Procurement. He also said the team was made up of ‘believers’ (those who were sold on the benefits of S&OP) as well as staff that needed some convincing of the project’s merit. This led to strong debate within the team and gave the group vital preparation for the sort of resistance they would face in the implementation phase.
Patrick went on to discuss that Parmalat rolled out the program initially to one category as a sort of pilot project; this process took about six months to get operational. Once the initial program was returning positive results, the firm looked to roll S&OP out across the business.
It doesn’t have to be Lean
I also questioned Patrick on the ‘lean’ aspect of S&OP projects. I feared that closely linking supply and demand could leave organisations exposed should something untoward or unplanned happen. Patrick explained that S&OP doesn’t need to be lean; you can plan for risks and have buffer stock just like before. “It’s all about being responsive to the different scenarios your business might face and having a plan to manage the impact of each of those situations,” he said.
Parmalat’s program has reaped huge benefits for the organisation. Numerous customer surveys have shown that customer service has improved drastically across the business. Supply is now faster and more reliable. Parmalat has not only become a better supplier, but the firm has become a better customer to its suppliers as they are now able to provide a clearer picture of what they will require and when they will need it.
The S&OP program has improved forecasting accuracy at Parmalat by a remarkable 60 per cent. This has been hugely beneficial in terms of reducing waste and optimising resourcing solutions.
Patrick’s story is another example of the truly innovative procurement work that is being discussed during The Faculty’s Roundtable sessions. If you are based in Asia or Australia and would like to get involved in their upcoming discussions, contact Max Goonan at The Faculty.
With Volkswagen caught cheating on emissions tests and its CEO quitting over the scandal, what can it teach us about awareness and accountability?
The past few days have seen the great and good of the automotive industry waxing lyrical in the broadsheets and providing their take on events.
As the Volkswagen board gathered to appoint Porsche’s Matthias Muller as its new chief executive, and amid alarmist claims that it’s a bigger threat to the economy than the Greek debt crisis, questions are mounting over how much ministers knew in advance.
In light of such damning revelations we can expect reverberations to be felt within supply chains for months (even years) to come.
At the time of writing, US authorities predict the scandal affects over 482,000 diesel passenger cars sold in the States between 2008 and 2015. Affected models include the VW Golf, Jetta, Beetle, and Passat as well as the Audi A3. Damningly each car that violates the US Clean Air Act faces a fine equivalent to £24,000 – which equates to a £12 billion bill in US fines alone.
‘An investor’s nightmare’
Both Deutsche Bank and JPMorgan have downgraded Volkswagen -with DB cutting VW from ‘hold’ to ‘buy’ and slashing the price target target to €130 from €260. While JP downgraded its stance on VW’s preference shares to ‘neutral’ from ‘overweight’, cutting the price target to €179 from €253, saying it cannot rule out additional engine investigations and does not have visibility over the total liability for VW.
Citi said: “The regulators (not only the US ones) hold the key to answer the question of potential impact (not only on VW, but also on the global auto industry). We think regulators may not overlook the matter, given their stress on the compliance with environmental regulations.
“At this juncture, lots of uncertainties remain, but we cautiously view that some ‘spill-over’ to other regions/ auto industry is inevitable. Germany and Korea have already begun a probe into the matter for more scrutiny. Depending on the outcome, it could lead to some cost pressure and tighter regulations.
“VW commands ~25% share in the EU market, so it faces a potentially higher negative impact on sales in EU, if similar manipulations were to be found in the region.”
Kevin O’ Marah – commenting on the scandal for Forbes made the following astute observation:
For supply chain professionals however the VW scandal illuminates two important things:
Awareness of global operations is spiralling upward fed by digital technologies and ubiquitous information visibility.
Accountability for what business does, especially in terms of impacts on health, safety and the environment, is something we need to own.
But who really is accountable?
We doubt that talk of the device was included in VW’s procurement plan… Which raises even more questions – namely: who ultimately came up with the idea, and where did it come from? There has to be a paper trail back to the perpetrator, but again, was the true purpose of the device fudged? As we went to press, news sources are even reporting that a Volkswagen engineer warned the company about emissions rigging as far back as 8 years ago…
As supply chain professionals, we together should take responsibility and own this. The buck should stop with us. Why then, didn’t this happen?
Here’s a selection of other big stories making headlines in procurement and supply chain this week…
Coca-Cola Co. is overhauling its U.S. supply chain
Coca-Cola said on Thursday it plans to sell nine production facilities to three of its largest independent bottlers as it seeks to unload low-margin assets and reduce manufacturing costs in the United States.
The bottlers, Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola USA, will acquire the nine plants, valued at about $380 million, from Coca-Cola Refreshments, which Coke created after buying its top bottler in North America in 2010.
Additionally, Coke said all four entities, along with Coke’s operating group in North America, will form a new supply group to work together on decisions in areas such new packaging launches and ingredient purchases, Coke said. The new group will represent about 95 per cent of the company’s production volume in the United States.
The world’s largest soda maker is facing sluggish sales volumes in the U.S.. It has been selling bottling operations, which partly entail getting its products to retailers, to franchisees to shift away from the capital intensive and low-margin business of distribution.
Chancellor George Osborne announces start of HS2 procurement
Announcing the bidding process for phase one of the project during a trip to China to woo investors for UK infrastructure projects, chancellor George Osborne said that at least seven new contracts would be opened up to companies, with a total combined value of £11.8 billion.
The government is also organising an “HS2 partnering day” to give Chinese companies an opportunity to partner with UK firms on bids.
HS2 will provide high-speed rail services from London to the Midlands, and the North and construction of phase one is due to start in 2017.
HS2 Ltd chief executive Simon Kirby said: “Together we will transform intercity rail travel in the UK, build specialist skills and expertise across the country, create at least 2,000 new apprenticeships and build a legacy to inspire the next generation of young engineers.”
Investors look to sew up Vietnam garment opportunities
There are big changes occurring in Vietnam’s bustling garment industry, as businesses and investors prepare for changes linked to the upcoming Trans-Pacific Partnership.
The agreement being negotiated by 12 countries, including the US, promises radical tax cuts for Vietnam’s garment exports, but only if they use fabric made locally or in other TPP countries, which excludes China.
For the emerging country’s thousands of small and medium-sized garment makers, however, the benefits are less certain. The 25 million garments produced every year at the Ho Guom Garment factory in northern Vietnam all bear the label “Made in Vietnam” but more than half the material used to make them comes from China.
Using the blockchain to fight crime and save lives
Blockchain technology has been described as email for money, but it has the potential to be so much more.
According to Blythe Masters, theblockchain represents a watershed moment in technological history. “You should be taking this technology as seriously as you should have been taking the development of the Internet in the early 1990s,” she said in an interview with Bloomberg.
Blockchain technology is a hyper-secure record of digital events that is distributed among many different computers. The blockchain can only be updated by consensus of a majority of the participants in the system, and once information has been entered, it can never be erased. Blockchain technology is best known for its connection to the cryptocurrency, Bitcoin. It’s what enables transactions to happen without middlemen or a central body, while protecting against duplication and fraud.
The construction and transport industries are beginning to feel the effects of an on-demand economy.
According to popular jobsite Indeed.com, employer demand is now outpacing jobseeker interest in the construction and transport sectors.
While job growth in the construction industry has increased 10 per cent in the last quarter, jobseeker interest in these positions has remained stable since the beginning of 2015. Similarly, Transport has seen a 13 per cent increase in job availability compared to last quarter, while jobseeker interest in these roles has fallen 2 per cent in August from its peak in March.
The figures suggest these industries are amongst the first to feel the impact of an economy that is increasingly reliant on contractors and temporary hires, with an increasing number of tradesmen and drivers branching out to start their own businesses or work on a contract or freelance basis. This trend is more evident for electricians – job searches for electrician including the term self-employed has grown 61 per cent since Q4 2014.
Gerard Murnaghan – VP EMEA, Indeed, commenting on the market, said: “The tightening labour market in the UK coupled with the prevalence of self-employment is likely to accelerate this trend in the run up to and following the introduction of the new minimum wage, which will come into force in April 2016. SMEs and micro firms are major contributors to growth in both of these sectors and the backbone of the UK economy. The wage increase may discourage them from taking on additional, junior staff.
This is a particular concern in the construction sector, which is grappling to attract young talent in an industry which does not generally appeal to the new labour force. For an industry that is reliant on boosting its ranks with new trainees, it is also noteworthy that two thirds of construction apprentices are currently trained by micro firms – a talent stream the industry cannot afford to lose.”
U.K. Industry Employment Trend Highlights – August, 2015
Top Growth in Job Openings (compared to previous quarter)
Transportation +13 per cent Media +11 per cent Construction +10 per cent
Lowest Growth/Decline in Job Openings (compared to previous quarter)
Education – 10 per cent Human Resources -8 per cent Healthcare -2 per cent
Earlier this year, The Faculty Roundtable commissioned an investigation into best-practice benefits realisation, and its researchers have conducted a series of interviews and data analysis to unearth the factors that prevent Procurement’s savings from hitting the bottom line. The results were boiled down to five key hurdles to Making savings Stick.
Manu Khurana, Senior Consultant at The Faculty, believes that procurement organisations need to leverage the enterprise architecture, as all processes used in procurement are inextricably linked with the IT structure.
Reduce your daily work pains by getting to know your bed better…!
It’s 7.46 am and you’re sitting at your desk, your daily planner is chockers and your admin support have already started doubling-up your “must do today… or else” meetings.
Your phone is constantly vibrating like it’s having an epic seizure… because people want to dump their problems on you as quick as they can handpass the footy before getting crash tackled by a 180 kg centre-half back!
And you feel like crap… tired, grumpy, irritable.
Jay, your operations manager walks in and starts going on and on about the latest stuff up on the warehouse floor last night and wants you to deal with it – like… why me?
Your “primitive “part of your brain kicks in and… you explode!
How’s ya sleep going, want some tips?
Your body loves a good routine
Start an evening ritual so that your brain recognises you are getting ready to sleep, get your PJ’s on, clean your teeth at a particular time.
Get up at the same time; even on the weekends… yeah I know that one sucks!
Heard of Jet Lag? You don’t even have to leave home.
Stay up late Friday night, sleep in Saturday morning, Do a “Real” late one Saturday night “coz you’re an 18 yr. old again,
Sleep in till Sunday lunch, then struggle big time when that 5.45am alarm screams at you to get your butt outta bed Monday morning! Fun hey!
Turn you damn TV, Smartphone and Tablet OFF hours before bed!
You know that social media doesn’t stop… there’s always your cousins first born child’s monumental first-steps on YouTube that ya gotta look at. Or your LinkedIn group chatter about ‘the best bully busting tactics”.
Read some fiction, look at a travel brochure, talk to the person next to you… then go to sleep.
Get rid of the Floodlight!
If you read in bed, bung in a 20 watt lightbulb,or better still a fridge lightbulb anything that mimics the power output of a caveman candle.
Lights over 40 watts stimulate our brains and that’s what we don’t want when trying to induce sleep – same reason why electronic blue light-emitting things suck before bedtime.
4. Caffeine – yeah we love it… so just leave it alone!
That’s right… in the mornings only! Especially if you are sensitive to it.
This stuff is wonderful for creating short bursts of energy, but like any drug “what goes up… must come down”. It also messes up stress hormones, so ease up on the late arvo double shots.
This drug can hang around your system for 6-12 hours, so if you like listening to your partner snore, get another short black into you after dinner!
The stuff fish swim in…
Yup, that’s right good ole fashioned water… minimum of 2-3 litres a day depending on what you’re up to.
Liquid in fancy bottles and cans
You know what I’m talking about… it’s the stuff that humankind has taken a shine to over thousands of years – Alcohol.
Yeah sure it can help put you to sleep, but plays havoc big time with the quality and quantity of your sleep. I mean really… have you ever woken up refreshed after drinking?
Do I need to say more… well unless you’re an alcoholic, and that then becomes a whole different conversation?
Who you sleepin’ with?
So your partner is HOT, well lucky you, or maybe you poor thing!
Did they buy the 15 tog duvet and memory foam mattress that slowly roasts you all night long? Waking up sweating, tossing and turning?
Well here’s an easy fix: Buy 2 king singles stick ‘em together, they get the Arctic-proof duvet and “basting” mattress while you happily get a good firm bed with “sensible” cotton blankets.
8. An occupied mind
So this one is a biggy to deal with, because it’s different for everyone and dependent on what’s going on in your life at any given time.
Be it: Marriage probs
Wayward teenage kids
There are lots of techniques around managing thoughts and stress which I’ll cover in a future article.
Unsticking the Velcro from your butt and chair
It’s called exercise, walking, swimming, riding, chasing the kids around the house.
Or trying to put your teenage son down in a classic UFC submission hold on the back yard lawn…. why not, he probably deserved it! This is good for the brain – free feel-good endorphins and it’s legal. Get some today!
Be wary of the big bad wolf…
Think twice about long term use of sleeping medication, be it the stuff your GP prescribes, or your friend’s sister gets from somewhere.
… Or even the nicely packaged bottles from your health products store or local pharmacy. They can make things worse.
So have a think about these tips, try them out, and it will have to be longer than a week or two, and yeah it means changing some parts of your life. But if its help you, then your work colleagues and subordinates will love you a just little bit more and your stress levels will drop like a thermometer in a blast freezer!
One of the highlights of last week’s CIPS Australasia conference was, without doubt, Paul Dobing. The Executive Director of NSW Procurement at the Office of Finance & Services is a familiar figure to those of us involved with The Faculty Roundtable Program, of which he’s a very active member.
Paul’s bursting with energy, and strides up and down the stage rather than standing behind the podium to deliver his insights. He has recently been motivated and inspired (and tanned) by a trip to the Garma Festival in far north-east Arnhem Land and is passionate about Indigenous constitutional recognition.
Paul’s on stage to talk about the future of the profession. He takes the audience through a list of CSIRO’s “Global Megatrends”, including planetary pushback, the pivot to Asia, longer life expectancy and digital immersion. Each of these topics could generate enough material for a conference in themselves, but Paul is making the point that to create competitive advantage for your procurement organisation, these are the sorts of longer-term “horizon themes” you’ll need to be engaged with to support your push into the future. CPOs need to think about what these Megatrends mean for procurement, how we can redesign our models for the future and importantly, what capabilities we’ll need to meet these challenges. Paul points out that just about every audience member is in the midst of some kind of change/transformation program, and asks how we can operate in an increasingly “VUCA” world (volatile, uncertain, complex and ambiguous).
On his own journey to bring his procurement function into the future, Paul has:
created a consulting advisory practice for the wider sector
created a data and analytics team.
introduced a research capability for longer-term thinking, and
None of these reflect “traditional’ procurement functions, but Paul believes they’ll be integral to providing ongoing support to the public sector into the future.
Rather they viewing change with suspicion, Paul’s enthusiastic about emerging organisations that are disrupting traditional business practises. CPOs, he says for example should be embracing the sharing/collaborative economy and seizing upon the opportunities it creates in this space he has recently been working with Tu Share and Sendle CEO James Chin Moody to identify new models of service a delivery supporting government. We should keep ourselves informed of future trends, work out how we can start to engage with them and make sure we’re well-positioned in that conversation to drive competitive advantage. His advice:
Think ahead to the next wave of disruption.
Think about how procurement can tap into disruptive models of supply.
Build the capability required to embrace change.
Shift the risk-averse, rules-based culture traditionally found in procurement teams to a flexible, interpretive culture that can engage with new opportunities.
Hiring the next generation of procurement professionals:
Hiring is increasingly about the values and behaviour rather than technical skills. Members of Generation Procurement, as we like to call Gen-Y here on Procurious, and going to be:
What are you doing to move your procurement function into the complex future?