Stories from The Source – Part Two: Sanne Gruter

The Source Recruitment Consultant Sanne Gruter gives Hugo Britt her top tips for procurement professionals to excel in their next interview.  The Source Interview Tips

Read Part 1 of this series here.

In more ways than one, Sanne Gruter is the international face of The Source. As part of her portfolio she looks after the fast-growing international sourcing part of the business, reaching out to potential candidates in markets including the UK, China and Singapore. Sanne is also ‘international’ in that she hails from Holland, has a partner from Uruguay, and has found a fulfilling and exciting career here in Melbourne, Australia.

Sanne’s academic history is impressive – she holds a Bachelors degree in Applied Psychology, and an International Masters of Culture, Organisation and Management which integrates anthropological, sociological and psychological approaches to identity, politics and cross-cultural co-operation with management and organisation theory. She enjoys the challenges involved in recognising, qualifying and nurturing top talent.

What made you decide to come out to Australia?

I love to travel, and still take every opportunity I can to see the world. I was out here in Australia travelling as a tourist, and of course I loved the sunshine. Melbourne, in particular, really appealed to me as the home of the Australian Open! So when the opportunity came up to join The Source, I took it.

How do you use your qualifications in your day-to-day role as a recruitment consultant?

My knowledge of psychology helps me be aware of the subjective element in almost everything I do. Recruiters need to remember that they’re dealing with real people, who have emotions and agendas. When I work with candidates I always let them know if they’re coming across as too aggressive or lacking in energy. Usually, people don’t know they’re doing it. Basically, I try to teach people to be convincing in interviews.

Is there anything unique about recruiting for the procurement profession?

Absolutely. I’ve found that procurement professionals are master negotiators – candidates want a lot, and they play hard on the salary negotiations. The clients we recruit for are excellent negotiators as well, and we generally find that they’re prepared to wait for the right talent to become available.

Where do you find your candidates?

Mainly through headhunting and networking. We reach out to people we believe are relevant for a specific role to have a very general career discussion. Usually people are happy to be courted and to join our network even if they’re not ready to move until the right opportunity comes along. This ‘hidden market’ has proven to be very valuable, since the focus is on the candidate.

We’ve also found quite a few people through Procurious, both inside and outside Australia. So be sure to log onto Procurious and connect with me! One of the exciting trends we’re starting to see is more and more people making a conscious choice to come into procurement from other professions, such as finance and law. Procurement functions can always use these diverse skill-sets.

What are the challenges in Australian procurement recruitment?

There’s a huge amount of change going on amongst our client companies. Restructuring and redundancies take place all the time, which means we have to keep on top of what’s happening in a fast-changing environment. Another challenge is that Australia is a relatively small market, which is why it’s important for procurement professionals to know the right people and reach out to organisations like The Source.

What sort of salary levels do you recruit for?

Personally, I mostly look after the mid-level space, which could range from $80,000 to $130,000 (AUD), but The Source team works collaboratively across all salary levels. And of course there’s the international recruitment angle too. UK professionals are in high demand in Australia, along with candidates from China and Singapore.

Can you share some tips for creating a winning resume?

Don’t just describe your role when you write your resume. Make sure you keep track of your achievements, and back up your claims with hard figures. Procurement employers like to see proof. For example, if you’ve achieved some excellent cost savings, make sure you include the dollar figure or percentage.

Start with a succinct personal introduction explaining your background, key strengths, and what makes you stand out for the role. You’ll never be shortlisted if you don’t communicate your strengths.

Frequently changing roles can indicate a lack of commitment, so try to stay in a business for a minimum of three years. Of course, sometimes it’s out of your control. If you are made redundant, don’t be afraid to put it in your resume – recruiters and employers won’t penalise you for redundancies because they’re so common.

Can you share some interview tips?

Make sure you’re well-presented. Read up about the organisation and find out about the people who will be interviewing you on LinkedIn. It’s important not to over-prepare and create a “script”, because it comes across as fake.

Remember to back everything up with examples. Think about the key competencies you’ll be asked about, and be prepared to talk about how you’ve demonstrated these in the past. You need to be able to explain what you do.

Do you have any stories of disastrous interviews?

We had a candidate who was asked to give an example of how she can balance priorities. Unfortunately, the example she gave was how she was juggling three boyfriends at once!

Another candidate took the advice to provide clear “evidence” of her achievements much too literally, and turned up at the interview with an enormous stack of printed-out reports and emails. She’d rummage through the pile to find evidence whenever she was asked a question.

Did either of them win the role?

Unfortunately for them, no!

What’s your advice for graduates considering procurement as a career?

Procurement is a good career. It’s growing fast, with heaps of opportunity to add significant value to a company. It’s a really diverse job. From the analytical side of things, to the sourcing experts, stakeholder relationship management experts, risk gurus – there are so many aspects to being a procurement professional.

The Source - Sanne GruterThanks Sanne, and all the very best for an exciting career in procurement recruitment at The Source!

 

 

The Source is a boutique mid to senior and executive recruitment and search consultancy with national reach specialising in the procurement market. For more details, visit The Source.

How to Get the Most from Your Training Budget

During the financial crisis, many organisations slashed their training budget, classifying this business requirement as ‘discretionary spend’.

Rise in the Training Budget

The classification of training as ‘discretionary spend’ is certainly a topic for further investigation on another day. However, as companies began to re-emerge from the cost constraints that governed their businesses in the years following the financial crisis, we are, thankfully, seeing a marked increase in training budgets.

Forbes outlined that corporate training budgets in the US grew by 15 per cent in 2014, the steepest increase in the last seven years, to over $70 billion USD.

Many organisations have cited skills and competency gaps as the key inhibitors to corporate progress. The severe cuts to training budgets during the Global Financial Crisis recovery period have surely contributed to this problem.

Maximise Your Training Budget

However, as training budgets start to creep upwards once again, how can procurement teams ensure that they are getting most bang for their buck when it comes to corporate training?

1. Determine your budget

It’s important to start with some pragmatic goals around what your organisation is looking to get from it’s training program. Once you have done this, you can then set a budget that will allow you to achieve these goals. Setting a firm training budget and objectives also eliminates the possibility of scope slippage and increases in unplanned spend.

2. Determine where to focus

Successful training is targeted training. There is no point in delivering high-level category management training to a workforce that lacks a sound understanding of the basics. Training needs should be identified at a personal level and should make up part of a broader development and HR planning process. Once the focus areas have been determined the task of prioritising can begin.

3. Before going external, look internally

There is likely a wealth of knowledge that lies within your procurement team. Facilitating and promoting knowledge sharing sessions benefits your firm in two ways. Firstly, you save precious money for other training initiatives. Secondly, at the same time you give your team an opportunity to show their skills and expertise to their colleagues.

4. Understand the external offerings

This one seems simple, but you need to do your research. There are numerous procurement training providers out there. Some are good, others not so good. It’s important to understand what your goals are and search for the most effective and well-regarded providers to help you meet these needs.

5. Train one, teach many

This process involves sending one staff member to a training course and holding knowledge sharing or training session when they return. This way, the lessons learned by one staff member can be amplified to your entire team. It’s a lot more cost effective than sending everyone on the same course.

6. Consider the benefits of eLearning

If your training budget is tight, then you need to look for a way to maximise Return on Investment. There is a wealth of training available on online platforms such as Lynda.com and Procurious. Most of this training is free and comes from some of the top names in education. There is also a potential saving when it comes to time out of the office for employees, and on travel and expenses.

7. Measure what happened

Do you want your training budget to increase next year? The quickest way to make that happen is to prove the effectiveness of the training you undertook this year. Investing in people is the quickest route to success, but if you are unable to track and measure these improvements, promoting the benefits of training becomes a far harder task.

These are just some easy steps you can take to ensure that you are getting the most out of your budget, while still providing the required level of training for employees.

Many employees now cite development opportunities as a reason for looking for or starting a new job. It’s important that your organisation isn’t the one missing out, and by ensuring the availability of quality training, you can work to keep hold of your star players.

Test-Tube Meatballs – The Path to Sustainable Dining?

As we continue to waste obscene amounts of food and question the ethics of animal farming, some companies are taking steps to tackle the issue of sustainable dining head on.

Sustainable Dining - Meatball

This week, following an initial successful trial, Asda announced it will be selling its wonky vegetable boxes in hundreds of stores, while Memphis Meats revealed a “cultured meat” meatball at a San Francisco conference.

And, in an effort to bring the idea of sustainable dining to a global audience, The Rockefeller Foundation has launched a campaign called ‘Yieldwise’, which has endeavoured to halve the world’s food loss by 2030.

Asda’s Vegetable Boxes

In an attempt to cut waste in its supply chain, Asda are selling boxes of misshapen vegetables which would otherwise have been thrown away. The boxes contain a variety of veg including potatoes, parsnips, cucumbers, peppers and leeks and are sold at a cheaper price than their regular-shaped counterparts. Currently, 20 to 40 per cent of fruit and veg produced by UK farmers ends up wasted.

In addition to these boxes, Asda has “relaxed specifications” on regulations for carrots and sweet potatoes. This will result in a staggering extra 640 tonnes appearing on our shelves.

The UK alone wastes approximately 15 million tonnes of food each year. Despite households being responsible for around 50 per cent of this, supermarkets can still make a huge difference by stocking our shelves with more diverse produce, and thus aiding farmers too.

Asda’s move, campaigned for by chef Jamie Oliver, is certainly a promising start and with any luck will continue to be well received by customers. 550 stores will receive the vegetable boxes from March, as Oliver continues to try and make “ugly produce the norm.”

Are supermarkets doing enough to make their supply chains more sustainable? Definitely not. But it’s a move in the right direction which will hopefully inspire supermarkets worldwide.

At the end of the day, does the size and shape of your vegetables really matter?

Memphis Meats

Next on the sustainable dining menu is a new method for meat production unveiled in San Francisco last week. Memphis Meats have created a new kind of farming which produces meat without all the drawbacks such as environmental degradation. The company presented, cooked, and served the very first test-tube meatball, complete on a bed of pasta, a process you can watch here.

They claim the process is “healthier, safer, and more sustainable than conventional animal agriculture.” As well as omitting the need to farm livestock, which CEO Uma Valeti believes will be a practice made “unthinkable” by the new process, cultured meat such as this uses 90 per cent fewer CO2 emissions than traditional agricultural methods.

The meat will also be free of antibiotics and other contaminants often found in the meat we currently eat and will cost less energy to produce (23 calories needed per one calorie produced vs. 3 calories needed per one calorie produced).

It certainly seems like a no brainer, even if the idea of lab-grown meat is a little unnerving at first. Valeti believes they can have their products on supermarket shelves within the next five years, so it might not be long until you can try it for yourself!

The Yieldwise Campaign

The Yieldwise Campaign has been launched by the Rockefeller foundation to cut waste in supply chains. It has vowed to cut the world’s food loss by 50 per cent in the next fifteen years.

The initiative will start in Africa, where the loss of fruit and veg is most significant, and will help farmers gain access to the latest and best technologies, including better storage options, and drying to increase shelf life. Cutting post harvest lost by half will yield enough food to feed 1 billion people.

As well as educating suppliers, Yieldwise will also be working with, and challenging, global businesses to encourage them to address and account for the amount of waste within their supply chain. The global economy wastes $990 billion each year on food.

Hopefully this programme, and the work campaigners like Jamie Oliver are doing, can get more people on the sustainable dining bandwagon and help to significantly reduce this figure in the future

We’ve been searching the Internet high and low for the procurement and supply chain headlines. Here are some of the top ones…

UK Procurement Boycotts

  • The UK Government are banning public organisation and council boycotts of Israeli goods because the practice undermines “community cohesion” and Britain’s “international security”.
  • Councils across the UK have been putting pressure on suppliers to cease business with the country because of Israel’s occupation of the Palestinian West Bank and its embargo of Hamas-controlled Gaza.
  • All countries that have signed up to the World Trade Organisation Government Procurement Agreement are required to treat suppliers equally, which is why Matthew Hancock has described the boycotts as “divisive.”
  • Labour, however, has criticised the new anti-boycotts policy as an “attack on democracy”, while the Campaign Against the Arms Trade said it was an attack on “the rights of all local people and campaign groups across England”.

Read more at Local Gov and The Independent

Procurement to Help Fight Zika

  • The global Zika outbreak is now affecting more than 3m people in 33 countries.
  • The virus is linked to microcephaly, a birth defect where a baby’s head is smaller than normal, and, more recently, to the neurological disorder Guillain-Barré syndrome.
  • Governments and businesses are aiming to combat the spread of Zika by investing in nets, fumigators, insect repellents and genetically modified mosquitoes.
  • Procuring mosquito nets has been made easier thanks to a consortium including the Department for International Development (DFID) and the Global Fund to Fight Aids, TB and Malaria (GFATM), who simplified the tender process for mosquito nets, saving around £86.1 million.

Read more at Supply Management

Asda Joins European Marketing Distribution

  • Asda have been in the news again this week after joining the European Marketing Distribution.
  • They become the fifteenth member of the group of national food and non-food retailers in 14 countries across the continent.
  • EMD pools the collective buying power of 250 supermarket chains to improve their competitiveness.
  • According to EMD, Asda will be able to “increase its buying power, generating significant savings from its supply chain which it can reinvest in lowering prices, further increasing product quality”.

Read more at Supply Management

EMEA Region Cargo Theft at 5 Year High

  • The reporting of cargo theft and crimes in the EMEA region reached a five-year high last year, according to the Transported Asset Protection Association (TAPA)
  • 1,515 freight thefts were reported during 2015 to the Association, a 37.4 per cent increase on the figures for 2014
  • The TAPA report suggests that this reflects the growing awareness of cargo crime among law enforcement agencies in the EMEA region
  • TAPA EMEA chairman, Thorsten Neumann, said that this may still only represent a low percentage of the overall cargo crime, as many authorities still report this as commercial property or vehicle crime

Read more at Arabian Supply Chain

Procurious eLearning: Upskill – Any Time, Any Where

eLearning is always better when it’s accompanied by a cheeky glass of wine. We have the tips you need to fit personal development into your busy life.

eLearning with wine

We live in a highly connected world, on the go 24/7 – whether it is spending time at work, having fun with family and friends, getting fit and healthy, or trying to fit in some much needed relaxation time. So the chances are high that personal development and doing training courses outside of work time is close to the bottom of your priority list.

It’s hard to find time to fit in training, but if you’re committed and want to, you can get your procurement training in the comfort of your own home. There are a huge number of eLearning courses, training modules, videos and podcasts that can be found online.

These resources are often created by established universities (think MIT, Harvard and Yale) and other subject matter experts, so you know that the quality is going to be high. And what’s more, the majority of them are free.

Online at any Time

The transition of training courses and professional development from classroom to online has followed much the same path as the way many of us now shop for clothes.

Online clothes shopping was virtually unheard of before the launch of Net-a-Porter in the year 2000. Before then, both men and women were far more likely to buy clothes that they had physically held and tried on in store. Net-a-Porter is now the world’s largest online luxury retailer, valued at over $2.5 billion.

CEO Alison Loehnis, who took over from founder Natalie Massinet in 2015, has been quoted as saying that women tend to order the majority of their clothes during the “wine o’clock” period, that time of day they have a bit of downtime away from work and family.

And there’s no reason why eLearning can’t fill that time of day too. Plus, online learning is much cheaper, and a video on supply chain management is less likely to cause feelings of buyer’s remorse the following morning!

Pick Your Resource

Once you’ve decided what course you want to do, it’s just a matter of finding the online resource for you. If you’re thinking about upping your procurement and supply chain knowledge, where better to look than Procurious.

Procurious has over 80 eLearning resources, including eLearning modules, podcasts and thought leadership videos, all of which are completely free for members.

Want to learn about procurement from the very start? Try the ‘Introduction to Procurement’ series, created using The Faculty’s acclaimed ‘Pathways to Procurement’ program. Check out this sample video on Social Procurement:

Get all the thought leadership and ideas from Procurious’ Big Ideas Summit 2015, from the major risks to the profession, to the future of procurement networking.

Whatever you are looking for, there is something for you. Procurious’ bite-sized training modules have been designed to be short enough to allow you to complete them during your lunch break, while our other resources are the perfect length to enjoy with a glass of wine in the evening. You know, instead of internet shopping…

Why the NFL in London is Really a Supply Chain Problem

Those of you who follow American sports will be aware that after a 21 year hiatus, Los Angeles is getting a National Football League (NFL) team back.

NFL

After the two franchises that were in the greater LA area – the Raiders (now in Oakland, California), and the Rams (who moved to St. Louis, Missouri) – left, there was yearly speculation about which team might move back to LA.

During that time both Cleveland and Houston were awarded franchises while Los Angeles waited. With LA now back in the NFL’s orbit, the league has designs on expanding internationally, specifically to London. These moves began in 2007, starting with one game at Wembley Stadium, with three games played there this season.

The NFL also announced additional games would be played in London through to 2020, and including games at Twickenham Stadium beginning in 2016.

International Expansion

The most obvious international expansion destination for the NFL would seem to be Canada or Mexico, but the reality is that, although games have been played in both countries, neither is equipped to handle an NFL franchise.

Mexico simply does not have the infrastructure or stadia, and though Canada does not have infrastructure concerns, it does have a stadium issue as well. The only stadium that could support an NFL team is Rogers Centre in Toronto, where baseball’s Toronto Blue Jays play, but it would not be considered a premier stadium for the NFL.

While London has an incredible draw to continue the growth of the NFL, there are a number of issues that make moving a team across the Atlantic potentially preclusive. After an analysis of a number of these factors, this is really just a very big supply chain problem:

  • Raw Materials

Effectively the raw material inputs to a sports team are its players and coaching staff. The supply chain issue here is how to get the raw materials to where they need to be processed into the final product. Well over ninety per cent of the players and coaches in the NFL are American, and there may be significant resistance to move to the UK especially if they have families.

There is also the issue of the NFL salary cap, and the cost of living and tax rate in the UK. Given what it would likely take to pay player to live and play in London, either the NFL would have to make their salary cap more flexible, or work with the UK government on a variance to current tax laws.

  • Inventory/Time to Market

This factor is related to the raw materials section, but is an issue that is unique to the NFL and how teams operate. Most teams operate on what is really a ‘Just-in-Time’ inventory model, with very limited stock. Stock constitutes a ten-man practice squad roster, in which teams can develop future players. This is the only inventory the team carries along with its 53 man active roster during the season.

With football being a sport in which injuries occur regularly and the pressures to win are high, teams actively manage their roster throughout the season. On Tuesdays during the season, teams will bring in free agent players for try-outs to determine if they want to sign them to their rosters to replace an injured or underperforming player.

This set-up will be complicated by having to travel to London for a try-out. One solution is for the London-based team to have a US-based facility to accommodate these try-outs. While this solves the travel issue, it has the side effect of increasing costs.

  • Distribution Costs

With a permanent franchise in London, all 32 NFL teams would be impacted to some extent by an increased cost of doing business, specifically with regards to travel costs (the NFL’s equivalent to distribution of its product) to and from London.

This would have particularly high impacts for for games that would otherwise be played on the American West Coast. Under the current NFL scheduling model, each year the London-based team would have to play one game per year on the American West Coast, and potentially at least two games there once every three years. One solution would be to base the team on the West Coast for back-to-back weeks, further increasing travel costs.

  • International Factors

As with all firms that operating internationally, the NFL would have to deal with a new set of laws and regulations that may be in direct conflict with the laws of their native country.

This biggest factor would be with regards to the players’ union, the NFL Players Association (or NFLPA). The players are organised as a union and the NFL and NFLPA collectively bargain the work arrangement under which both sides operate. This collective bargaining agreement covers a myriad of issues from roster sizes to player discipline, to player’s salaries.

Consideration would have to be taken to determine if such an agreement is even enforceable under UK law and, if not, how to be compliant under UK law.

Another factor would be operating with two different currencies, and the potential fluctuations in value. Weakness in the Canadian dollar was a significant factor in professional franchises in Vancouver and Montreal (basketball and baseball, respectively) moving to the United States.

The good news is that the British Pound and the US Dollar have been relatively stable against each other for the past decade, and are widely considered the most stable currencies in the world.

Think Like a Supply Chain

The NFL wants to go to London (in fact in a recent BBC interview a senior NFL executive said they would like to be in London by 2022) and judging by the fan interest in the handful of games played there each year, Londoners want the NFL.

While the challenges above will be difficult to overcome, thinking like a supply chain professional to help solve this challenge will be incumbent if the NFL wants to fully access the London market.

Higher Employment Costs Threaten UK Jobs Figures

Rising employment costs in the UK look set to temper the positive mood around the latest unemployment figures in the country.

Rising Employment Costs

The number of people out of work in the UK fell by 60,000 for the period of October to December 2015, maintaining the decade-low unemployment rate of 5.1 per cent. However, wage growth in the same period was only 2 per cent, lower than its peak during 2015.

Although more than 31.4 million people are in work in the UK, the highest figure since 1971, this has not translated into expected wage rises, despite unemployment figures being their lowest since before the global financial crisis.

Governor of the Bank of England, Mark Carney, has previously said that inflation rates are likely to remain low until global economic growth has picked up, and other price pressures, such as wage levels, are alleviated.

Global Story

A similar pattern in employment figures has also been reported around the world. In the US, unemployment figures decreased to 4.9 per cent, in spite of a sharp decline in the number of jobs being created during the period.

There was a similar story in the Eurozone, with unemployment levels dropping to their lowest level for four years. According to Eurostat, the unemployment rate across the 19 countries in the Eurozone decreased from 10.5 per cent to 10.4 per cent in November 2015.

“Bright Spot”

However, the picture is not entirely rosy on the jobs front. Experts in the UK warned that new government policies coming into force in 2016 could raise employment costs for businesses. This, in turn, could have a major impact on the number of jobs being created.

The Institute of Directors said that the UK’s strong record on employment remained a “bright spot” in an otherwise turbulent global economy. However, they also argued that schemes such as pension auto-enrolment could raise employment costs, ultimately pricing low-skilled workers out of the jobs market.

James Sproule, Chief Economist at the IoD, said: “With pension auto-enrolment kicking in for many small firms this year, at the same time as the apprenticeship levy – essentially a payroll tax – and the National Living Wage, the cost of employing people is shooting up.

“How businesses will respond to these policies remains open to debate, but cumulatively, they are set to cost firms billions and could lead to low-skilled workers being priced out of the job market. The government must be aware of this, and resist any further moves which make it even more expensive to create jobs.”

Stalling Momentum

The IoD’s warning about rising employment costs comes at a time when a number of organisations are already cutting jobs. Over the next few months, both the UK and Europe are set for tens of thousands of job losses across virtually every sector.

Some of the major firms include:

  • Canadian aerospace giant Bombardier is cutting 7,000 jobs globally over the next two years.
  • Virgin Media plans to cut 900 jobs from its UK workforce by 2017.
  • Asda is cutting 200 jobs at its head office in Leeds.
  • Lloyds Banking Group is cutting a net 1,585 jobs and closing 29 branches across Britain.
  • BP is laying off 7,000 more people.

With the global economy already experiencing a slowdown, there is a high chance that these job losses will not be the last. What remains to be seen is how the new UK policies will impact the employment figures one way or the other.

The Quarterback’s Code for Strategic Sourcing

When it comes to strategic sourcing, organisations shouldn’t have to choose between standardisation and flexibility. Good technology should allow for both.

The Quarterback’s Code for Strategic Sourcing

Download GEP’s white paper on the role of procurement in the mobile revolution here.

“Omaha!”

A familiar cry to many, but maybe not to those not especially interested in the sport of Football in the USA (aka American Football back home in the UK). “Omaha!” is the often used pre-snap call of one of the sport’s greats, two-time Super Bowl winner Peyton Manning.

But what does “Omaha!” mean? And if it means something specific, how have the competition not worked it out after all these years?  And how come Manning’s former team are as much in the dark as the rest of us?

Context Is Everything

The truth then, clearly, is that it doesn’t mean anything, at least not anything consistent – either from season to season or game to game or even play to play.  As a placeholder, as a piece of gamesmanship, as a way to test the sensitivity of the hair trigger of the opposing defence, it has proven extremely effective, time and again.

Constantly switching up the sequence of calls and preparations and communications to keep the competition on the back foot is smart game play. But to do that without changing the vocabulary is sporting genius.

Without the need to constantly reinvent the language of the game, the effort can be fully devoted to implementation and execution.  Context is everything, and so by using a standard set of tools, a well-prepared team can snap-to and address each play successfully.

This is, in many ways, a model which is familiar to everyone. From Lego bricks to document boilerplates to groceries, we are very much aligned to the concept of creating a range of different outcomes from a standard kit of parts.

Standardised vs. Customised

It is also a model that business processes aim to emulate, but with varying degrees of success.  Sourcing and contracting are cases in point.  It is always a “nice idea” to have a standard set of processes or questions or clauses or whatever, but the reality is that changing circumstance forces a change in approach and time and again RFPs (and the Ps that result) are created from scratch with little reuse and standardisation.

That’s not without good reason, of course. Too much standardisation is a constraint.  A “take it or leave it” attitude to contracts is rarely a workable strategy in the long term. The need to be flexible, and adapt to changing circumstances, is important.

Nevertheless, there is a happy medium between “out-of-the-box” and “bespoke”. Your choice of procurement software should give you the ability to both select from a standard set and customise what you need – at the same time.

It shouldn’t be a question of having to choose between a boilerplate and a custom-built document. You should have the freedom to select which pieces you want to remain standard and which pieces you want to personalise.

Best of Both Worlds

So far, so obvious, I think.  But if that approach is adopted end-to-end in the procurement operation, enabled by the software, such that each sourcing wave, each program of supplier management, and each category are all consistently structured and arranged, then there emerges a common basis on which success can be measured and best-practice shared and transferred from team to team.

Thus a consistent approach and process needn’t be prevented by the requirement to change strategy or tactical game play. At GEP we develop procurement software that is designed around the principles of simplifying the processes and yet permitting maximum flexibility; two aims which can be seen as mutually exclusive. But we don’t believe they are.

If the software is smart enough we think you should be able to get the best of both worlds – a consistent common vocabulary that allows you to communicate effectively with your team mates, but with the ability to react swiftly and specifically to win every play.

Learn more about state-of-the-art procurement software at www.smartbygep.com.

GEP have shared a white paper on procurement’s readiness for the mobile revolution with the Procurious community. Download it at gep.procurious.com.

It’s Not About Procurement – It’s About Problem Solving

Sometimes a different approach to problem solving is required. This is what CityMart are doing with public procurement groups in cities around the world.

Problem Solving in Procurement

Last month, Procurious reported on a new public procurement initiative in Barcelona, and the organisation at the heart of it – CityMart. The company’s progress has been rapid and it is now setting its sights on its next major challenge.

CityMart’s modus operandi is to encourage cities and public servants to readdress the way they approach public procurement processes. At the root of their model is a commitment to involve the community in the civic decisions that impact the city.

CityMart’s founder and CEO, Sascha Haslemayer, stresses that for too long procurement has been telling its suppliers exactly what it wants, rather than taking a problem solving approach, and working collaboratively with suppliers and the broader community to come up with a response.

Stop Specifying

Haselmayer sums this up brilliantly with an anecdote about the different way two cities approached improving the mobility of their blind residents.

St. Paul in Minnesota spent $4.5 million on speaking traffic lights. Despite being designed and developed by public servants, the initiative was deemed by advocates for the blind as largely ineffective.

Stockholm spent approximately the same amount of money, but went to the market with the issue. This open approach (the city essentially said, “we have a problem around how blind people move across Stockholm”) led to the formation of a project team, which included people from both the blind and technology communities.

This group collectively defined the problem, something that St. Paul public servants elected to do themselves. They then got to work developing a solution that would solve the challenges of the city’s blind people. Stockholm ended up piloting a mobile navigation aid that allowed the city’s blind residents far greater independence in their daily lives.

CityMart Take on the Big Apple

CityMart has a solid track record of crowdsourcing truly innovative solutions to civic problems. You can read more about them on the company’s website.

Success in it’s hometown, Barcelona, as well as in large cities overseas like London and Moscow, has brought CityMart’s innovative problem solving approach into the spotlight. The firm now aims to take on the biggest challenge of all – opening an office in New York City.

CityMart is working with New York mayor, Bill de Blasio, and his Chief Technology Officer, Minerva Tantoco, as they review the city’s procurement processes. A recent initiative to improve Internet connectivity in the city, including turning payphones into Wi-Fi hotspots, proved hugely successful.

The project garnered 69 responses from 52 sources in six different countries, many of whom were much smaller than the suppliers that city hall would have traditionally dealt with.

Jeff Merritt, Director of Innovation at the Mayor’s Office of Technology and Innovation, said that he hoped engaging with CityMart would help the city find solutions or providers it would have otherwise not known about.

“When [people] look at a procurement, they think that the actual RFP is sort of the beginning of the process — and in some ways, by that point in time, a lot of the work has already happened. So the early stage is really working with agencies to identify the tough problems, the problems where they don’t know the solution that’s out there,” he said.

“Our goal isn’t to turn every single procurement into a call for innovation. Rather, it is to identify the areas that we think perhaps a traditional RFP might not be the best way to go, and work in partnership with agencies to really flesh out those problems.”

Merritt concluded, “When we put out a solicitation, our partners in the private, non-profit, and academic sectors can really understand what is the issue that government is trying to solve, and what are their ideas and proposals for addressing it.”

We’ll leave you with a quote from Haselmayer. “It’s not about procurement, it’s about problem solving”. Perhaps there’s something we could all take from that.

Adapt and Survive Through Supply Chain Optimisation

The global nature of business in the modern world makes maintaining the integrity of a supply chain a difficult task. This is where optimisation comes in.

Supply-Chain-Optimisation

Risk and disruption are part of everyday business like never before. The interconnected nature of supply chains exposes every player to consequences from a mistake made in an associated organisation.

Meanwhile, customer demands continue to grow. Expectations of instant delivery, product customisation, the use of socially responsible materials or labour, and the ability to adapt the latest technological efficiencies, are all norms businesses must adhere to in their quest to accrue a loyal customer base.

As a result, the cost of doing business and the level of competition are higher, while the margin for error is thinner.

What is Optimisation?

All of this creates a challenge for maximising efficiency and profits. The answer comes in the form of one of the hottest buzzwords in business right now: optimisation. And what better place to start than the supply chain.

Optimised supply chains are able to adapt to demand fluctuations and help manage costs by eliminating bottlenecks and other inefficiencies. When done successfully, the end result is improved customer satisfaction, along with higher capital, operational and tax savings.

Achieving that requires adopting a global mindset about opportunities, while maintaining a local approach to carbon footprints, value chain planning, infrastructure, assets and technology.

Supply chain managers review service models and product characteristics on a regular basis. Planning should involve identifying goals, examining existing policies and programs, assessing day-to-day operations and developing contingencies.

Optimisation also requires identifying risks, data based forecasting, improving inventory management, collaborating with supply chain partners, and implementing a business continuity plan.

Start with Strategy

Given the broad scope of what a supply chain manager can achieve, a logical first step is to determine what to optimise from both a long-term and short-term perspective.

Examine your business goals. Whether it’s making your business more sustainable, enhancing the customer experience or increasing profits, take into consideration the following:

  • Expanding markets
  • Customer service strategies
  • Product returns
  • Value-added opportunities
  • Product volumes

Supply chain leaders should analyse the full potential of their supply network before attempting to reduce costs across the network.

Supply chain optimisation is an ongoing process. The best supply chain networks adapt to market fluctuations, product performance variations and the integration of new technology.

Operations (short-term) strategy involves the nuts and bolts of your operation. This involves mapping out the management of resources and measurement of performance to help your network achieve its long-term goals. Seemingly small tasks such as workload scheduling, freight consolidation planning, and productivity improvements can make a big impact on your operations.

The Four Main Areas of Supply Chain

Both long-term and operational strategies are based on four main decision areas affecting the supply chain.

  • Location: Taking into account production and distribution costs, taxes, limitations and local content, location decisions are the first step in creating an optimised supply chain. The geographic location of production facilities, stock areas and sourcing points lay the foundation for product flow. This then impacts on access to consumer markets, revenue, service levels, and the overall cost of doing business.
  • Production: Making product decisions such as location of production facilities, transportation and distribution, and customer markets, tie into production strategy. Planning for this involves creating a master schedule covering equipment maintenance, workload balance and quality control.
  • Inventory: Inventory management is integral to an optimised supply chain. Holding costs can equal 20 per cent to 40 per cent of the inventory’s value. Maintaining optimum stock levels at inventory locations can have a direct impact on customer service.
  • Transportation: Transportation efficiency is a vital aspect of a successful supply chain, as it represents more than 30 per cent of logistics expenses. Shipment sizes, routing and scheduling are areas that management has to give serious consideration to, as transportation strategy is closely linked to inventory strategy and geographic location.

When each of these areas is optimised, it should align with your organisation’s broader business goals, from decreasing inventory or delivery time, to increasing profits, product quality and customer satisfaction. As with any strategy you will need a start and an end point. However, your supply chain must continue to evolve even after the end goal of optimisation is reached.

The authors of this article, Joe Schembri and David Rice, both work with Michigan State University and their supply chain management programs. One of the best things about working with these programs is the ability to research a wide variety of industries and how supply chain management affects them.

Maverick Purchasing & KPIs – Your Big Discussions

There’s nothing like a good procurement discussion to get the blood flowing! Themes getting our community this month included Maverick Purchasing and KPIs.

Maverick Purchasing

On our agenda this time, we’re looking at the best ways of dealing with maverick purchasing, and what matters more to procurement’s stakeholders, speed of delivery vs. other product factors. And to top it off, no procurement discussion round-up would be complete without a look at that classic – KPIs.

What do you think is the best way to eradicate “maverick purchasing”?

Maverick purchasing is a topic that gets a lot of column inches, but that organisations have had difficulty stamping out completely. Maverick purchasing can be defined as “when an employee purchases goods, parts or materials for a project, going outside of the accepted buying channels of their organisation”.

The most popular answers focused on the two key issues that underline the ‘why’ of maverick purchasing – procurement’s relationship with the business, and the systems in place for purchasing and contract management.

Building relationships with business stakeholders, and knowing their requirements at the outset, could help to minimise maverick purchasing. As well as this, being able to show the value that procurement can bring to the table, and ensuring an understanding of procurement’s role, were also seen as critical.

It’s also important to remember the technological and systems argument. Within procurement, the likely cause of maverick spend was seen to be difficult to use systems. By making systems user-friendly, and putting the required approvals in place, it can help to minimise out of process practices.

It comes down to handling both people and technology, and not, as one answer said, using a taser. Although, for those of us who have seen this while working in procurement, a taser might actually seem to be the right option…!

To what extent would you agree with the following statement: the shorter the average time to procure, the happier the stakeholders?

Most procurement professionals will heard the question, “when will it arrive?” at some point. The focus in this question was whether or not speed was the most important factor for business stakeholders.

The general consensus from the community was that the shorter the time taken to supply against a requirement, the happier the stakeholder was going to be. However, it was also voiced that procurement needed to be involved much earlier in the process than it normally is, in order to supply goods and service in good time.

The idea that procurement needed to be involved with, or understand, the planning cycles was another piece of the puzzle that is often missing. Having all contracts in a single repository, and being involved in specification discussions before parts were agreed, were two of the solutions put forward to allow procurement to do this.

However, the traditional idea that procurement can only offer two of speed, cost and quality in most situations. The lack of leverage in sourcing activities means that one will be compromised, but stakeholders will still be expecting all three.

Being able to do all three is where procurement can weave “magic”, or otherwise, the function needs to get better at saying no and pushing back.

Procurement KPIs – What do you think are 3 key metrics (KPI’s) to evaluate procurement function?; KPIs other than cost saving?

Key Performance Indicators (KPIs) or metrics for individuals and procurement departments are high on the agenda at this time of year. Ensuring that your team is measured, both internally and externally, against the right metrics is key to both good data and success.

When asked about the 3 key metrics to evaluate the procurement function, the community’s answers didn’t spring many surprises. However, in nearly a third of the answers, savings generated were rated as one of the top KPIs. Although other answers highlighted value as a metric, it appeared fewer times than total spend managed, and shows that even now, procurement is still widely viewed as a savings generating function.

It also shows that, despite the profession looking to move towards value generation metrics, many procurement teams are still measured on this.

Other key KPIs highlighted were:

  • Percentage of on time delivery
  • Total Spend
  • Customer satisfaction
  • Stock Turnover
  • Quality
  • Supplier Consolidation
  • Supply Chain Security & Risk
  • Customer of Choice
  • Procurement Engagement
  • Sustainability
  • Ethics

On the other side of the debate was the question of KPIs other than cost savings, particularly in relation to Capital Investments for Projects. Suggested approaches involved the use of a Balanced Scorecard, including cost, quality, delivery, inventory and sustainability amongst others, and with a focus on reduction of Total Cost of Ownership.

What was seen as important in the answers was communication with internal stakeholders to understand their needs, and let them understand what procurement can offer. Within the Capital Projects environment, the feeling was that this was more about generating value for internal stakeholders, rather than focusing solely on cost.

Do you agree with the answers? If you want to add anything, join in the Discussions on Procurious, where you can find a variety of other questions, or start your own.