Black Friday over as Nestle reveals darkest of supply chain disclosures

Another week, another procurement scandal. It came as quite a shock when Nestlé self-vilified and admitted to slave labour within their supply chain.

Slavery

Whether you’ve heralded them for their honesty or condemned them for not doing enough, we can at least be glad that the issue of slavery within supply chains is once again at the forefront of people’s minds and being addressed. 

In other news, The Digital Market place has launched G-Cloud 7 and we’ve made it through another Black Friday (thank goodness). 

To get you up to speed or just to refresh your memory we’ve compiled a succinct summary of a week in procurement. 

1) Nestlé admits to slavery within its supply chain

Nestlé has self-disclosed the presence of slave labour used to catch fish in Thailand that ultimately ends up in its supply chain. It’s a bold move from the organisation and has been widely regarded as a positive one-  both to hold their hands up and admit fault and to endeavour to put something in place to ensure it stops happening.

Nestlé launched a year long internal investigation last December, after a number of their fish products were linked to unregulated working conditions. 

Verité, a non-profit organisation whose mission is to ensure “that people around the world work under safe, fair, and legal conditions” were commissioned by Nestlé to produce a report for this investigation and interiewed over 100 people. One worker told the organisation “Sometimes, the net is too heavy and workers get pulled into the water and just disappear. When someone dies, he gets thrown into the water.” 

It is rare for a company such as Nestle to report on such negative findings and not surprising that their move has been applauded. Mark Lagon, president of the non-profit Freedom House, a Washington-based anti-trafficking organization has described the move as “exemplary” and he is not alone. 

Others have been more cynical. Does Nestles implementation of an “Action Plan” to tackle this issue prove their genuine engagement with and commitment to ending slave labour and improving working conditions across all of their supply chains?

Articles referenced:

http://www.verite.org/research/promoting-responsible-labor-practices-fishing

http://www.theguardian.com/global-development/2015/nov/24/nestle-admits-forced-labour-in-seafood-supply-chain

http://in-cyprus.com/all-companies-have-slave-labour-in-supply-chains-tesco/

http://www.theglobeandmail.com/report-on-business/international-business/european-business/nestle-admits-slave-caught-seafood-present-in-its-supply-chain/article27445511/

2) Did you succumb to the pressure of Black Friday?

Black Friday is a fairly established tradition in the USA and fast becoming so in the UK (and other countries) with an estimated  £810 million spent in 2014. For retailers and supply chain managers Black Friday coupled with Cyber Monday (who knew that was a thing?) presents a logistical nightmare- and you thought being the shopper was the stressful part? 

Shops are expected to be well-stocked, well-staffed and well-run. We live in an age where selling out is absolutely not an option and supply chain managers need to prepare accordingly with contingency plans in place. 

Articles referenced:

http://www.supplychaindigital.com/supplychainmanagement/4176/Planning-for-Black-Friday

http://www.supplychaindigital.com/supplychainmanagement/4168/Supply-chains-under-pressure-as-Black-Friday-looms

3)  UK Government launches G-Cloud 7 

On Wednesday 25th November, G-Cloud 7, which caters to suppliers selling cloud-based services, went live and the government announced the 1,616 suppliers who have been appointed to the framework (an 11.2% increase in suppliers from February’s sixth iteration).

Government frameworks are time and cost effective for both public sector organisations and those supplying to them, excusing the need for individual procurement contracts. The 

A Digital Outcomes and Specialists (DOS) framework, the first of its kind, has opened for submissions in the hope of making the procurement of technology services ever more efficient and fair. This framework is set to go live in April 2016 and will allow public sector organisations to compare and buy digital inclusion training services and assisted digital support. As with G-Cloud frameworks, organisations will be able to “buy services more quickly because they don’t have to run a full OJEU (Official Journal of the European Union) tender.”

The Digital Market Place has explained the reasons for launching the DOS: “Suppliers told us that the application process for the Digital Services framework was demanding. Buyers told us that they wanted to evaluate suppliers against their specific needs. The need for digital services across the public sector are so diverse that we decided the most appropriate place for in-depth evaluation of a supplier is at call-off stage, against the specific buyer problem.” Because suppliers will be able to informally respond to buyers before competition starts, the process will allow the buying process to be “open, fair and transparent.”

Articles referenced:

http://www.cloudpro.co.uk/leadership/5597/g-cloud-7-goes-live-with-new-services-in-digital-marketplace

http://central-government.governmentcomputing.com/news/g-cloud-7-goes-live-as-procurement-reforms-continue-4736146

https://assisteddigital.blog.gov.uk/2015/11/19/digital-training-and-support-framework-is-open-for-submissions/ 

https://digitalmarketplace.blog.gov.uk/2015/11/20/themes-from-supplier-responses-to-draft-documents/ 

4) Renewable Energy Procurement

 – China RE100,  an initiative committed to 100% renewable electricity, held a workshop to educated business on renewable energy procurement. 

– “The gathering brought together representatives from a variety of associations, companies and financial institutions and sparked discussion around ‘Financial Models and Risk Management for Corporate Renewable Energy Procurement’ in China.”

– “Corporate demand for renewable energy is rapidly increasing in China, now the largest investor in the market worldwide – in 2014, the total amount of investment increased by $US89.5 billion. “

-“Wang Weiquan, Deputy Secretary of CREIA spoke of renewable energy policy and legislation in China, and Peng Peng, Policy Lead of CREIA went into further detail about tariffs, subsidies and direct purchase options for renewable power in China.” 

– Discussed options for a greener and more sustainable society.

Articles Referenced

http://there100.org/re100

http://www.theclimategroup.org/what-we-do/news-and-blogs/businesses-learn-about-renewable-energy-procurement-in-beijing/

5) MSPs to call in IT firms after criticism of public sector procurement system

The Public Audit Committee will take evidence from Scottish Government permanent secretary Leslie Evans in two weeks’ time after claims were made claims there is “something very wrong” with the procurement system in central government. 

https://www.holyrood.com/articles/news/msps-call-it-firms-after-criticism-public-sector-procurement-system

The 99 Names You Can Call a Procurement Professional

And can you guess why #30 is my favourite?

buyer_personas

This article was first published on LinkedIn.

It would appear (some) people in Procurement are very sensitive about their job title!

So, what’s the difference between job titles?

Not a lot by the looks of it; call yourself what you want when you want! No doubt, with many, it is an image issue. With others it’s trying to capture the essence of the job.

The fascination is the likely impact on non-procurement people who must be confused about the nature of the procurement role. Some see it as an administrative role, not engaged in any policy or strategic decisions. Others see it doing what Procurement is told to do by others who can select suppliers, negotiate and deal with contracts far better than Procurement.

A Definitive Answer

If you are looking for a definitive answer as to what to call a Buyer you will be seriously disappointed.

There isn’t one.

I’ve been doing research into job titles for a project we’re involved with – and checked our client database and a quick google – and came up with these 99 different titles. Proliferation is the word, or perhaps obfuscation (an increase in the muddying of the waters – did you see what I did there?).

You might see why I like #30 so much ;)!

Set out below is a range of job titles used by Procurement professionals. As you’ll see there’s no commonality in them and they may clash with role descriptions other employees have who have nothing at all to do with Procurement. If you’ve come across any other Procurement job titles, let me know or add them in the comments.

That’s if you can get through the 99 here…

  1. Head of Procurement
  2. Chief Procurement Officer
  3. Head of Category
  4. Procurement Director
  5. Resourcing Director
  6. Category Acquisition Director
  7. Procurement Lead
  8. Resourcing Lead
  9. Category Acquisition Lead
  10. Procurement Partner
  11. Resourcing Partner
  12. Category Partner
  13. Category Sourcing Lead
  14. Category Sourcing Partner
  15. Procurement Manager
  16. Resourcing Manager
  17. Category Acquisition Manager
  18. Sourcing Manager
  19. Category Sourcing Manager
  20. Strategic Procurement Lead
  21. Head of Procurement Operations
  22. Head of Procurement Strategy
  23. Chief Category Officer
  24. Sourcing Specialist
  25. Resourcing Specialist
  26. Procurement Specialist
  27. Procurement Operations Manager
  28. Head of Procurement Projects
  29. Vendor Manager – Procurement
  30. Buyer
  31. Senior Buyer
  32. Sourcer
  33. Principal Procurement Specialist
  34. Service Delivery Manager
  35. Procurement Business Partner
  36. Resourcing Business Partner
  37. Procurement Consultant
  38. Executive Buyer
  39. Executive Procurement Manager
  40. Manager – Procurement
  41. Executive Category Sourcing Manager
  42. EMEA Executive Sourcing Leader
  43. Global Program Manager – Employer Branding
  44. Principal Delivery Consultant
  45. Strategic Procurement Manager
  46. Resourcing Advisor
  47. Sourcing Advisor
  48. Category Acquisition Advisor
  49. Lead Buyer
  50. Head of Projects – Category Acquisition
  51. Procurement Marketing Manager
  52. Resource Consultant
  53. Graduate Buyer
  54. Procurement Advisor
  55. Programme Manager
  56. Programme Lead
  57. Manager – Category Systems
  58. Internal Buyer
  59. In-house Buyer
  60. Global Category Selection Manager
  61. Corporate Buyer
  62. Technical Buyer
  63. Corporate Procurement Lead
  64. Technical Procurement Lead
  65. Category Buyer
  66. Lead Sourcing Consultant
  67. Executive Category Acquisition
  68. HR Manager – Procurement
  69. Lateral Buyer
  70. Lateral Procurement Manager
  71. Deputy Head of Procurement
  72. Director – Executive Procurement
  73. HR Purchasing Specialist
  74. University Purchasing Consultant
  75. Hybrid Buyer
  76. Direct Buyer
  77. Indirects Buyer
  78. Direct Procurement Specialist
  79. Category Sourcing Lead
  80. Category Scout
  81. Relationship Manager
  82. Director – Strategic Resourcing
  83. Category Identification Manager
  84. Procurement Strategy & Planning Manager
  85. Procurement Team Lead
  86. Procurement Team Leader
  87. Supplier Relationship Manager
  88. Category Attraction Consultant
  89. Procurement Officer
  90. Procurement Consultant
  91. Category Specialist
  92. Category Consultant – Executive Search
  93. Procurement Agent
  94. Procurement Executive
  95. Procurement & Engagement Manager
  96. Project Purchaser
  97. Category Attraction Specialist
  98. Lead Category Scout
  99. Resourcing Associate

If you think I’ve missed any of your favourites (and no doubt I have), please let me know in the comments – it would be good to grow the list and get your view.  Always learning!

 

Procurious Big Ideas Keynote #1 – The Chefs in your Procurement Kitchen

The Big Ideas Summit’s first keynote was delivered by Sigi Osagie, coach and author of Procurement Mojo.

Sigi’s focus was on the people side of procurement, and he spoke passionately about how, while processes and technology are critical enablers for procurement success, ultimately it’s people that make the real difference.

Watch the full keynote here.

See all the keynotes and panel discussions from the Big Ideas Summit, plus Big Ideas from our 40+ Influencers.

Like this? Join Procurious for FREE and meet like-minded procurement professionals from across the world.

Are We Still in Love with Black Friday?

With Thanksgiving over, consumers and businesses now turn their attention to the start of the festive shopping period – beginning with Black Friday. But are people falling out of love with this shopping day?

Black-Friday

Originally an American phenomenon, Black Friday is the semi-official start of the festive retail period. There’s no consensus as to why Black Friday is called Black Friday, although one compelling theory is that it represents the day where retailers start to earn a profit.

It’s easy to see why that might be the case. In America alone, approximately 249 million people will purchase something on Black Friday, with the total spend in 2015 estimated at $50.9 billion. Black Friday first appeared in the UK 2 years ago, and total spend this year in the UK is expected to exceed last year’s total of £1.5 billion.

Give it a Miss?

Despite the obvious draw of low priced goods at a time of year when many are budgeting for Christmas, some have begun to look upon Black Friday as a symbol of a highly consumerised society and something that adds stress in an already stressful part of the year.

From needing to be in line well before midnight to get the best deals, to the big name brands not being on sale at all, and the potential to get caught up in unsavoury scenes similar to those that played out in shops across the UK last year, there are compelling reasons for giving the shops a miss on Friday.

Alternatively people will look for other options, such as shopping online on Friday (where many retailers have the same, if not better deals), or choosing to wait until Cyber Monday to make their purchases.

Retail Fatigue

It also appears that retailers are beginning to fall out of love with Black Friday too. Far from boosting profits, statistics have shown that many retailers actually lose money on Black Friday, with sales not being sufficient to outweigh the slim margins they have to cope with. It’s also believed that increased transactions are as a result of consumers waiting for these sales, rather than purchasing earlier in the year.

Even Asda, owned by Wal-Mart (attributed with introducing Black Friday to the UK), has decided that they will give the sale day a miss this year, citing customers’ “shopping fatigue” and electing to spread out their seasonal offers over a longer period of time.

Supply Chain Strain

Organisations that aim to maintain high customer service levels for online operations face having to hire additional employees and increase logistics capabilities to keep up with demand.

Organisations need to ensure that their supply chains are up to scratch, with consumers likely to go elsewhere if products are either out of stock or unable to be delivered in good time. And if supply chain issues have been present during the year, customers may not return to the retailer at all, in spite of the deals being offered.

Being able to cope with increased demand, and being flexible enough to react to changing trends, is key for organisational supply chains. This includes being able to assess demand in real-time and potentially move stock between locations in order to satisfy customer wants.

The End for Black Friday?

In spite of all this, it’s unlikely that Black Friday will cease to exist entirely. Retailers who have their strategies well planned and the ability to meet customer demand, will want to remain in a good position to take a share of the billions of dollars spent.

However, as more organisations extend their Black Friday sales, either by starting earlier in the week, or extending them over the holiday weekend and beyond Cyber Monday, it is possible that it might be the last we see of these sales in their current format.

Is your organisation having a Black Friday sale? Are you involved in ensuring the supply chain is able to meet demand? Get in touch and tell your story.

4 Tips for Managing Your Supply Chain Career

My first hands-on experience serving as a link within the supply chain came very early in my career.

blog_beet fusion_career_2

This article was first published on Beet Fusion.

After flipping burgers for a year at age 15, I decided to take an afternoon job at a garden centre chain in California. When school was dismissed, I would head to the nursery to water the plants.

While watering, I decided to read all the labels and learn as much as possible about the wide array of greenery and flowers the company sold. After a while, I was able to help customers find the plants they needed and design the optimal set-up for their gardens. This led to a promotion to category buyer, and eventually associate manager.

I enjoyed my time working as a buyer, but it was very stressful. Excel sheets from various growers covering availability cluttered my desk. On-site supplier visits, daily truck deliveries with fresh product and quality control were all tasks I had to juggle. Then there were the external factors such as weather and competition. On top of all that, I was studying full time for my bachelor’s degree in Business Administration.

Working as a link within the supply chain is no easy task, especially in today’s fast-paced, operating environment where customers want everything yesterday, and competitors are waiting in the wings for a supply chain slip-up. That being said, it is safe to conclude that a career in supply chain can be rewarding and exciting, especially with buzzwords such as industry 4.0, smart factories, same-day-delivery and digitisation floating around.

By no means, at the ripe old age of 30, do I consider myself a career expert, but perhaps these four tips can start a conversation on the topic and help someone find their way up (or onto) the supply chain career ladder:

1. Get your feet wet

For me, this phrase was literal. While watering the plants at the garden center, I had no idea I would be promoted to category buyer (but my socks were soaked by the end of the day). This experience, however, piqued my interest in supply chain, and I haven’t looked back since. In essence, I would encourage anyone thinking about a career in supply chain management to just jump in.

There has never been a better time to get involved in this fast-paced, innovative industry in need of some fresh talent. Your first job will not necessarily be your dream job, but it is important to use any and all job opportunities as a learning experience.  A great place to start your supply chain career and learn the ropes would be in a buyer or material planner role.

2. Be a sponge

Whether you are new to a company or have 30 years of experience at the same firm under your belt, there is always a chance to learn something new. A quote I like to keep in the back of my mind is, “Experience isn’t everything: it is possible to do something incorrectly for 30 years.” In essence, it is important to approach your career with an open mind.

Soak in your experiences like a sponge. If you have a bad manager, learn how you do not want to act when you reach a management position. If you are in management, be open to ideas from your staff. Always be looking for ways to expand your knowledge and expertise.

Within the supply chain industry, this could come in the form of master’s or bachelor’s degree programs or various certifications available to industry newcomers and professionals. Another exceptional method for expanding knowledge is engaging in online communities and being active across social media. There are some excellent sources of information that offer great insights into supply chain strategy.

3. Be the change you want to see

Nobody wants to be around a complainer. There is certainly a time and place for constructive criticism, but constant complaining and griping could create tension within teams. Instead of joining the complainer choir, start putting the change you want to see in motion.

There are many stakeholders along the supply chain within an organisation. Production teams strive for the efficient use of equipment. The sales team makes short-term delivery commitments, but the purchasing department didn’t buy enough material for the production process, so the delivery has to be pushed back. All of this is happening while top management is wanting to see a reduction in costs and increased liquidity. Therefore, warehouse managers are cutting back stock, but this will certainly have an impact on availability. With everyone working toward their own goals, it is no wonder tensions run high along supply chains.

In order for things to change, someone needs to be the first person to reach his or her hand across the table. Instead of complaining about the procurement manager who once again ordered too few screws, as the production manager, try inviting your colleague out to lunch to discuss some of the planning issues. Start working on developing goals that can be achieved together and that bring the company forward as a whole.

4. Know your operating environment

Managing a career can look a lot different depending on where you are in the world. After 6 years in the garden centre industry, I decided to study for my master’s degree in Germany (my wife is German). During my studies, I became fluent in the German language and got acquainted with the German culture. I quickly noticed some major differences.

While studying for my bachelor’s degree in California, everything seemed like a competition and a lot of emphasis was placed on individual achievement. In Germany, it was all about team work (at least at the university I attended). Another difference I noticed, while searching for a job in Germany after my graduation, was that more emphasis was placed on education and certification. In Germany, it seems as though you can get a certificate for everything. It is these accolades that employers want to see, whereas in the U.S.A., more emphasis is placed on practical experience.

You don’t have to be working in a different country to apply this tip. Understanding your operating environment is just as important when you are working for an international company. If you are sent to check-in on a certain supplier overseas, spend some time getting to know the culture before you arrive.

Closing Thoughts

When it comes to career advice, there is a lot I need to learn, especially since I have approximately 75 per cent of my career still ahead of me. Furthermore, there is still a lot to learn when it comes to supply chain management.

However, based on my experience to date, I have found that an eagerness to learn something new on a daily basis can go a long way toward advancing a career. Being a positive change agent who is willing to tackle new challenges will also open many doors along the way. And finally, understanding your operating environment will help you avoid embarrassing moments, and may even land you a job overseas.

Why Thanksgiving is a Happy Holiday for Business

Just in case you didn’t know, today is Thanksgiving! In honour of this holiday, we take a look at the numbers behind the day.

maxresdefault

It’s getting towards the end of the year, the real crunch time for businesses and supply chains as they head towards the festive period. For supply chains in America (plus all the other organisations supplying to the USA at this time of year), Thanksgiving represents an additional challenge to be accounted for at this time of year.

Looking solely at Thanksgiving itself (more on Black Friday tomorrow…), it’s clear that businesses have plenty to be in good cheer about.

Talking Turkey

It’s estimated this year that a staggering $2.8 billion will be spent this year at Thanksgiving on food alone. That’s nearly $9 for every person currently living in the USA. Over 51 million turkeys will be eaten today, around 20 per cent of the total number of turkeys raised in the USA in 2015.

These numbers go on:

  • Over 51 million turkeys will be consumed on Thanksgiving
  • This equates to around 20 per cent of the total number of turkeys raised in the USA in 2015
  • The average cost of a family Thanksgiving dinner is over $50 for the first time ever
  • The average cost of a single turkey has increased by $1.39, to $23.04 (a 6.4 per cent rise from 2014)

Travel Woes

Businesses and supply chains will be ready far in advance of this week, with all the required stock already at its final destination, ready to be picked up by consumers. And this is just as well, given the increased level of traffic on the roads:

Even although most Americans say that Thanksgiving is the worst time of year to be travelling, 46.9 million of them will be travelling for the holiday. And, due to falling petrol prices, 42 million will be driving. In 2014, the average length of trip was a 549 mile round-trip.

Tradition vs. Today

Thanksgiving has come a long way since the first celebration, held by the founders of the Plymouth Colony, back in 1621. In nearly 400 years of celebration, just about the only thing left of “tradition” is the turkey. Check out this great infographic from History.com to see the changes:

Thanksgiving-infographic-final

All that is left to do is to wish you all a Happy Thanksgiving from the Procurious team!

Small Firms Plan Grand Designs on Overseas Markets

58 per cent of UK small to medium-sized firms are planning to enter new markets in the next two years.

SMMT-manufacturing

In a further sign of economic optimism, well over half of UK small to medium-sized firms (SMEs) plan to enter new markets in the next two years with the manufacturing sector leading the way, according to a new study by Albion Ventures, one of the largest independent venture capital investors in the UK.

Evidence of an export-led recovery is provided by the fact that one-in-three (34 per cent) SMEs are looking to break into new markets overseas of which 19 per cent are casting outside the EU and 15 per cent within the single market.  This is higher than the 30 per cent targeting untapped domestic markets.  A further one-in-six (15 per cent) small businesses plan to grow through launching new products and improving their online services. 

New Markets for Manufacturing

The third Albion Growth Report, designed to shed light on the factors that both create and impede growth among over 1,000 SMEs, shows that medium-sized companies are more likely to be looking to expand into new markets (77 per cent) than small businesses (53 per cent).

In sector terms, three-quarters (75 per cent) of manufacturing firms are planning to enter new markets, the highest of any sector and also top for expansion within the EU at 28 per cent. Businesses in media, marketing and advertising (68 per cent) and IT/ telecoms (56 per cent) were second and third respectively.

Entering new markets is not without its challenges; in fact over half (52 per cent) of firms who have taken the plunge reported experiencing problems, the biggest were lack of expertise (13 per cent); too many regulatory obstacles (13 per cent); strong competition (12 per cent); and lack of demand (12 per cent).

Companies in the education sector were the most likely to encounter problems (61 per cent) when trying to enter new markets, followed by those in manufacturing and transportation & distribution (59 per cent and 57 per cent respectively).

Focus Outside the UK

Patrick Reeve, Managing Partner at Albion Ventures, said: “The search for new markets among small businesses is gathering pace with much of the effort focused outside the UK.  Given the EU’s continuing economic travails, it’s of little surprise that other overseas markets are proving more popular. 

“Breaking into new markets is easier said than done and all too often small firms lack the necessary expertise to overcome established competitors.  This is an area where external equity investors such as Albion can provide valuable hands-on support; for those small firms who get it right, conquering new markets can have a transformational impact.” 

On a regional basis, London-based SMEs are the most likely to enter new markets in the next two years with 66 per cent followed by those in the South West (62 per cent) and Scotland and the North East (59 per cent). Small firms in Wales are the least inclined to break into new markets with only 50 per cent planning to do so.

Buyers Under the Duvet

In this first of a series of five articles, I consider the bedrock skill of our profession and consider whether we rely on it too much. feet-684682_1280

Firstly, some readers may be CPOs, Senior Category Managers, Global Vendor Managers or other similar title, for the purposes of this series of articles I’m simply referring to us all in our derivative term; buyers.

My experience of having worked closely within procurement teams of many small and large organisations – some award winning, others developing, is that I observe that the primary focus of buyers is principally on one thing. It is ironic therefore that my belief is that it is this same one-dimensional focus that holds back many procurement teams from tackling the age-old problems in our profession.

A Story of Failure?

These are the topics which we read about with countless repetition in professional publications; failure to be heard at the top of the organisation, failure to attract and/or retain top talent, failure to be seen as adding significant value, failure to be seen as anything other than a support function.

While many readers may argue with some of the topics on the list as incorrect for your own organisation, my experience is that there are very few, if any, procurement departments that could state with authority that they are not working on any of the topics set out above.

The buying process is governed by process, which in turn is often governed by a system – this is especially true within the public sector. This list of do’s and don’ts constrains swift action and creative thinking – all of course, “for the good of the organisation”.

Or is it?

My assertion is that, while necessary, the existence of process constraints makes it ever easier for buyers to remain in their comfort zone – to remain under the warm embrace of their duvet, too scared to poke a foot out in to the cold air outside of “the process”. Instead, they beat a hasty retreat back to the core competence of procurement namely, negotiation, which delivers an unwholesome, self-satisfaction of their own procurement targets, but which leaves stakeholders needing more.

Often, too, it is very blunt, poorly executed negotiation in which buyers seek their solace. Under the comfort of the negotiation duvet some buyers perform superbly well using all manner of techniques before and after the main negotiation event. Others flounder a little before concluding swiftly with a mediocre result for both parties – often beating a single item – normally price, before leaving both parties under-fulfilled.

Satisfying others, first.

For the high performing buyer, in order to resolve the exemplar list of topics that I set out in the first paragraph the shackles of “process” need to be made invisible when viewed from the businesses perspective.

A challenging yet empathic approach is required throughout the often ignored early and latter phases of the procurement process to avoid prematurely jumping “under the duvet” to negotiate the wrong thing(s) with the wrong supplier(s). Buyers too often spend too little time on managing specifications and the drivers of demand, before beginning to negotiate great deals, the value in which quickly ebbs away following poor contract management.

It is the job of the high performing buyer to invisibly navigate through the quagmire of procurement process and do’s and don’ts and still deliver fantastic levels of satisfaction to the business – leaving them desperate for more interaction; to robustly challenge what the business thinks it wants and differentiate this from what it needs in order to add value.

Leaving Savings Behind

It may surprise many of you to learn (as it did me) that perhaps the most effective procurement team I worked within had no savings targets. Upon being asked “so how do you show your value?” they answered, “why do we need to show value?” A telling answer later complemented by the explanation that their business (a division of a global brand with annual revenues of €500m+, by the way) would never enter in to a project of any kind without procurement being represented.

The impact of their previous success was a department unhindered by spurious savings targets. Instead the interaction between procurement and the business was truly mature with both parties seeking to maximise the satisfaction of the others. The procurement personnel were intrinsically part of the business who together strived for value creation.

Please don’t misconstrue my message. I am not suggesting that readers run back to the office and tear up their savings tracker or process manual, at least not yet. But I am suggesting that careful consideration is taken to ensure you are correctly targeting the complex, multi-dimensional objectives of the business and not simply self-satisfying.

To badly coin a well known quote (Hunter. S. Thompson) and song lyric (The Killers) are you business? or, are you procurement?”. And do you know how to develop the behaviours of your team to being not merely a process driven cost cutter, but a creator of value? 

Jim Willshaw

Jim Willshaw (MBA, MCIPS, MIIAPS) is an experienced procurement professional acting as a consultant, speaker, coach and trainer to leading organisations all over the globe.

How to Build a Network of Procurement Evangelists

Procurious were lucky enough to attend and present at The Procurement Summit in Manchester last week. While we were there, we sat in on an interesting (and very funny) keynote from Chris Barrat.

chief-evangelist

Chris was talking on the subject of how procurement can build a network of “evangelists”, people who champion the function and help spread the word about the good work being done in organisations.

Procurement hasn’t always enjoyed the best organisational reputation, or the best relationships with other business functions, and this can make the process of finding and developing evangelists difficult.

Barriers and Perceptions

Chris’ first aim was to get the attendees to provide some context on the main barriers to developing evangelists within organisations, as well as forming a view on how procurement was perceived in organisations. The latter, in particular, threw up some surprising responses.

Among the barriers were all the classic external views on procurement:

  • Procurement is too process oriented
  • There is a lack of understanding about the function and the value it adds
  • People don’t see the bigger picture, only the spend in their ‘silo’
  • The idea that “shopping is easy”

This is nothing that seasoned procurement professionals haven’t heard before. What was more surprising were the terms volunteered by the audience when they were asked to sum up the procurement function in their organisation.

Yes, the word “blocker” was at the top of the list, but the attendees also added in the terms “professional”, “expertise” and “aligned”. While it’s unusual to find such positive terms used, it’s certainly good to see that some procurement functions are highly regarded in their organisations.

Building Your Evangelist Network

Chris then went on to offer a three-step process of how to build a network of evangelists. The process was built on the idea of getting procurement themselves to believe that they offered a valuable service, and then building their organisational reputation step-by-step on top of this.

  1. Get Your House in Order

The first step revolved around three questions – What do you stand for? What is your brand? What do others see as your brand? – and built on the concept of procurement as a service provider.

“Engaging people is critical when providing a service” – this was a clear message and measure of success for procurement at this stage. People care about the service they have been given, and the ‘how’ and ‘who’ of the service is more important that it’s ever been.

In order for people to be evangelists for procurement, they need to know that the people they are dealing with are competent, but also actually want to work with them. Chris used the “Likeability vs. Competence” four-box model to demonstrate this point. You can read more about the model here.

Once procurement departments had got their own house in order, they could then take the next step.

  1. Be More ‘Bourne’

Yes, this did mean Jason Bourne. No, it didn’t mean cutting a swathe through the organisation getting rid of people you don’t like.

Being more Bourne meant being on a mission – knowing what needed to be done and being proactive in your aims. There were three key aspects to this step:

  • Name names – find the 3-5 key people you need to get onside as evangelists; focus on them
  • Be an Eagle, not a Vulture – find and see the opportunities, don’t just want for them to present themselves to you
  • Less is more – do fewer things, but do them well; focus on your key people and what their angle is and interests are

It was clear passivity is not an option at Stage 2!

  1. Tastier Carrots, Nastier Sticks

The final stage of the process was all about how to motivate others and how to communicate procurement’s message. Chris’ point was that people are naturally motivated away from (through fear or risk), or towards (through rewards) something. It’s down to the individual in procurement to work out which will be more effective.

No matter the method, carrot or stick, that was used, it was critical that it was done properly and meaningfully. All rewards to be given, or threats to take things away, need to be relevant for each individual. This will help to drive home the idea that procurement is serious and needs to be seen as such.

Returning to the concept of procurement as a service, Chris emphasised the need for candid communication – if you can’t do something, then say so. People will appreciate it more than coming back to them in the future to tell them it isn’t actually possible.

It all seems easy when it’s laid out like that. While it might not be as simple in reality, the general consensus leaving the room was that it might be a good starting point for some procurement organisations, as part of a larger strategy.

You can read articles by Chris on Procurious, and we’d love to hear from you if you have implemented this, or a similar strategy, and what the results were.

IQ, EQ, DQ or SMQ – Which Quotient Leads to Success at Work?

We’ve all sat tests at school, whether exams to achieve qualifications, or internal tests to determine which classes we should be in.

IQ or EQ

These tests, although we didn’t know it at the time, were a way of testing our IQ. However, this is a hugely simplified way of assessing a concept that is inherently complex in nature.

Some people excel academically, while others go on to great things, even although they don’t necessarily have any academic qualifications (think Richard Branson). Whether this is down to IQ, or EQ, no-one can be 100 per cent sure, but it’s worth looking at in more detail.

IQ – How ‘smart’ are you?

For those of you that don’t know, your IQ (intelligence quotient) is derived from a series of standardised tests that designed to determine how ‘intelligent’ you are (or aren’t).

For years, IQ was used by schools and businesses to determine how smart someone was. The first application of the test was delivered in 1905 by Alfred Binet to assess the intelligence of French school children.

In the 1980’s however, it was decided that this examination method was too narrow and wasn’t painting a fair picture of how an individual would perform in real life.

Smart isn’t everything

People had realised that being smart didn’t necessarily mean you’d be good at your job. There are other things to take into account, for example, how you work in a team or group environment. So the EQ (emotional quotient) measure was developed.

This test was designed to evaluate a person’s emotions (a fairly loft ambition), to understand how the person thinks rather than what they know and to determine how they might act in certain situations.

This area of psychology is fascinating, particularly the way that people are scored or compartmentalised in order to predict their performance. Given the response to the recent discussion topic on the Myers-Briggs scale it seems this is quite a widely held view.

Social Media Quotient

More recently, it has been interesting to read about the social media quotient (SMQ), and the role that it might play in an individual’s effectiveness at work. While it is far less developed and tested than EQ and IQ, SMQ is likely to play a critical role in evaluating individual performance at work over the coming years.

Social media is already an important part of our professional lives and it’s relevance is only going to increase. How people understand and interpret this space will impact their effectiveness at work. The good news is that it’s much easier improve your SMQ than it is to improve your IQ or EQ. It really just takes a little bit of effort on your part.

Get to know the different social media tools that are out there, what the best way to apply them professionally is and you’re already off a great start. There is a quiz here that can help to determine your current SMQ and a more rudimentary checklist here.

If this topic interests you, you could consider reading about digital quotient as well. Digital Quotient, was developed by McKinsey as a way to evaluate an organisation’s (rather than a person’s) digital capability, including their areas of strength and weakness. You can find more information on this here.

Good luck developing your SQM! If you need any help, want to organise a workshop, or use Procurious’ brand new social media “PRISM” tool, just get in touch!