5 Crippling Beliefs Keeping Suppliers in the Poor House

Suppliers may feel they don’t get treated fairly in the procurement process. But are there actions they could take to attract procurement’s attention?

Customers and Suppliers

This article was first published on LinkedIn.

Before the jackpot of the internet, purchase research involved, for me, accessing supplier directories such as Kompass (who are still going strong), putting up with pesky sales reps with inadequate brochures extolling the virtues of their products/services, trawling exhibitions, and leaning on colleagues and contacts.

Now, not so much. Although I’m still leaning on colleagues and contacts!

A while back I was involved in putting together a Preferred Supplier List for a bunch of equipment spend categories. The starting point was finding ‘someone’ to research suppliers online globally.

Here’s what drove me bananas as I tried to collate a long list of suppliers to invite to enter a procurement process:

1. A belief that ‘build it and they will come’.

Getting on that front page of Google is critical. Of course, I’m a professional and searched and searched pages. I was focused on finalising, quickly, my long list of ten or twenty suppliers, per category. Those early pages were my key hunting ground.

2. A belief that the lingua franca of international business is [insert local language].

Are you wanting to sell your goods internationally? Language content options are a must have. I’m being open. If there wasn’t an English option I moved on. Maybe a missed opportunity for me – and definitely a missed opportunity for an aspiring supplier.

3. A belief that website content full of fancy jargon and TLAs* will get the sale.

Tell me in ten words or less what you offer and who you help. Right up front on your first page – front and centre. I’m happy to take a deep dive into the details later on my ‘journey’, but for now I just want assurance you sell the category of equipment I’m interested in.

4. A belief that it’s all about social media engagement.

Contact details – your phone number and email. Please. Everywhere, every page, very visible, consistent and definitely including an email address, which, ideally, is a local market email addresses that doesn’t say info@. Make it as easy as possible for people to contact you directly.

By the way, thrilled with all those Instagram and Pinterest and other social media followers – how’s that working out for you? And while I’m here, are we absolutely sure about that contact form? I can see why YOU want my name, role, company, email, phone number, I’m just not so sure what’s in it for me.

5. A belief that having a unique, quirky website design will really drive business.

Let’s talk website design, which is not my thing. I’m just a victim of it from firms all over the world. When I’m buying internationally for a major client, I don’t want quirky (ok, maybe I’ll be accommodating if I’m buying creative services or wanting local supply chain).

Mainly, I’m craving surety that this website reflects an international supplier. Give me a nice clean corporate-looking website – make me feel comfortable and open to trusting you.

Am I asking for too much? Really? Please note, this is not an exhaustive list!

Action: Go have a look at your website, right now, and see if the 5 beliefs stand scrutiny. Your website is (probably) the first contact for your target customers – make it easy for them.

After all, you don’t want to end up in the poor house.

*TLAs = three letter acronyms; in fairness, Procurement’s not short of them either!

How Technology Can Drive Supplier Collaboration Goals

Supplier collaboration basically means that your goal is to communicate better, and work more closely, with suppliers for the best possible project execution.

Supplier Collaboration

According to Deloitte’s 2016 Global CPO Survey, one of the main goals for CPOs is to increase supplier collaboration. What is interesting, and slightly uncomfortable, is that the study also found that 60 per cent of CPOs do not have a clear digital strategy. To me, it seems that when you talk about communication and collaboration, technology is the the clear answer.

Collaborating involves many ideas that ultimately result in a partnership that works better together:

  • Communicate better, faster and more effectively.
  • Create a simpler procurement process between partners.
  • Define clear expectations from the beginning.
  • Share performance data for improvement.

Tactical solutions for these are seemingly very easy. But you can tackle these goals one by one, or face them all by considering the digital options you have. Many people believe increasing supplier collaboration can be accomplished by being more available, or just simply sharing more information. It isn’t just what you do, but how you do it.

Connectivity is Everything

There is a very real opportunity with procurement technology to solve your collaboration problems. Technology connects people in a way that was impossible in the past. Continuing to use old methods to communicate will hold you back on your collaboration goals.

Look at it this way. It’s already difficult to communicate internationally, so improve the way you communicate by eliminating the polluted email accounts. New procurement technologies are developing collaborative features such as live chatting.

What will really allow you to collaborate better is being easily accessible to suppliers and being able to connect to quickly. In turn, all your project communication is redirected onto your system rather than being spread thin in between emails, phone calls, and post mail.

Define a Simpler Procurement Process

Rather than saying “work better together”, you should be working towards making your entire procurement process simpler in order to collaborate better.

The complexity of working in procurement is extremely challenging, and even more so as CPOs try to implement new strategies to optimise operations. Organisational skills are very important for procurement professionals, so leveraging technology to help manage the complex processes can be incredibly valuable. You ultimately become a low maintenance customer to your supplier.

Even the smallest tasks, like simplifying document sharing can eliminate frustration. Create a hub for project related documents which can be updated, rather than engaging in the email document attachment dance.

You should think of the idea as redefining the way you do things to eliminate lengthy tasks and replacing them with short ones. Your team and suppliers would appreciate simpler processes, allowing you to both finish routine tasks quickly and reduce lead times.

Establish Clearer Expectations

With many options coming out into the procurement technology market, it is less valuable to try and tackle your challenges one by one. So if your goal is supplier collaboration, you should consider ones that allow you to invite suppliers to be a user.

A workflow management system that gives access to your suppliers can really close the gap. With access, suppliers can see your workflow, their role in the project, and keep track of progress.

Sometimes it is difficult to communicate compliance issues and other important information regarding the partnership and the roles suppliers play in the projects. Using technology to document clear expectations optimizes clarity on both ends. Suppliers understand what is expected of them and you can feel more comfortable knowing that. It opens the door for trust.

Data is Your Friend

Performance data is very simple to gather when automated. Giving constructive criticism should be an important component to your supplier collaboration strategy. Suppliers need to know key areas for improvement so that they are aware of your expectations and given a chance to better their service.

The most accurate and effective way to show performance is to provide data. Collecting scorecards regularly can keep track of trends that can tell you if your SRM is working. Awareness is only going to help your partnership so you need to collaborate to make sure you both are working towards improvement.

There are many options for procurement organisations, but essentially, the type of system you choose to deploy depends on your main goals. It’s time we stop looking for quick fixes and look for opportunities in technology to meet our goals.

If you’re looking to improve your supplier collaboration, Winddle is a collaborative solution for sourcing and procurement that can absolutely help make your goals a reality.

What’s Your Big Idea? Tell Us in 60 Seconds or Less

Once again, we’re on the hunt for YOUR Big Idea – what are the things only you can say?

What's Your Big Idea?

We believe everyone has a unique vantage point in the industries, communities and businesses they work in. At the Big Ideas Summit 2016, which takes place on 21st April,  we will be asking our speakers and attendees to record their ‘Big Ideas’ live on camera for the whole of our Procurious community to see.

This was a huge success last year and if you’re keen to see some of the videos from 2015, head over to the learning section for some inspiration.

Where Do YOU Come In?

Procurious wants you to share your ideas with our community by creating a 60 second video. It’s super easy to do this on your computer, laptop or phone – whatever works for you! We’ve provided some more detailed advice below on how to submit your Big Idea.

You can make the most of your unique position as both a procurement professional and Procurious member by telling us what you think is the next Big Idea that will change the face of the procurement profession, based on some of the amazing experience and insights you have.

Your video will help to generate interest and discussion on your Big Idea, give you the chance to share your wisdom with a global procurement community, and provide you with a platform to amplify your thoughts, and turn you into an influencer. We will also be using your submissions to help guide the conversations and discussions at Big Ideas 2016.

Need Further Encouragement?

Why not have a look at one of last year’s videos.  Bertrand Maltaverne had a great Big Idea to share with us and we’re certain you do too!

How to Submit Your Big Idea

We don’t mind if you film your submission on your phone, tablet, laptop or PC. However, to help you out we’ve compiled a list of some of our recommended methods for reaching out.

Once you’ve completed your film, you can reach us by email (Procurious@Procurious.com); on Twitter (@procurious_) or via Google Drive or Dropbox (using Procurious@Procurious.com).

Record Your Big Idea

Probably the easiest way to record your video is to use the camera on your phone, laptop or PC. We’re not expecting a Hollywood-style production, just so long as we can see your face, and, just as important, hear your great idea.

If you’re struggling to record it on your phone, get a friend, family member, colleague, or trustworthy stranger to hold it for you! Remember, we’re only looking for a 60-second video, so know what you’re going to say, and practice a few times.

Once you’ve finished, and saved the video to your device, you then have a couple of options for sharing them with us.

Email

Want to submit your video using a good old-fashioned email? We’ll absolutely accept that!

Attach your video to an email with the subject line ‘My Big Ideas Video’ and send to Procurious@Procurious.com.

In the body of the e-mail, give us a one or two sentence synopsis of your Big Idea so we can upload this information to the website too.

Google Drive or Dropbox

Is the video file size too large for e-mail? Then why not share it with us on Google Drive or Dropbox. Both systems are free to use and are simple to set up.

For Google Drive, get started using these instructions, upload your file, and then click to share with Procurious. You can use Procurious@Procurious.com for this too.

For Dropbox, you can find all the information you need here. Again, upload the video file, and then share it with us.

YouTube

Alternatively, if you have always dreamed of being an Internet star, you can use YouTube.

  • Head over to https://www.youtube.com/upload and either select a readymade video to upload, or hit ‘Webcam capture’ to film your piece on the spot.
  • Select ‘Start recording’ to get the camera rolling (remembering to tick ‘Allow’ should you be prompted by YouTube’s Privacy Settings)
  • When done press ‘Stop recording’ followed by ‘Continue’.

Don’t be daunted by filling-out the ‘Basic info’ – all that’s required is a title, short description, and some tags. For your title we’d suggest using something along the lines of: My Big Idea is… [insert here]

In order to make your video easy to find, we’d recommend using the #BigIdeas2016 and Procurious tags – but feel free to add more!

Click ‘Publish’ when you’re happy and remember to send us the YouTube URL when it’s live.

After that, you can sit back, relax and watch your number of views rocket!

Questions

If you have any questions (and we mean, any questions at all) about creating your video, sharing it, or what we plan on doing to it, please get in touch. One of the team will be able to talk you through what you need to know.

We can’t wait to go through all of your submissions and hear your Big Ideas for Procurement.

So…what are you waiting for? Get recording!

Tackling Technology and Risk: The Blockchain

The rise of digital payment systems has brought the blockchain into the public consciousness. But can blockchain be used to aid supply chain transparency?

Blockchain Technology

Just shy of ten years ago, technological innovation and the supply chain might have been considered strange bedfellows. Now they go hand in hand. But as technology advances at an ever-increasing rate, it makes sense that supply chains the world-over are also becoming increasingly complex as a consequence.

However despite the numerous advantages brought about by this envelope-pushing, we must remain vigilant and alert to the increased risks such new avenues afford us.

Recent years have seen a rise in both the adoption and implementation of digital payment systems and so-called “crypto currencies”. Such innovations in payments have removed the need for traditional, physical currency, as well as the bricks and mortar institutions that process them.

Bitcoin – A New Way to Pay

Bitcoin is but one example that’s fast revolutionising the payment industry. Bitcoin is a digital currency that’s been heralded as both an innovator and disruptor in yearly tech trend reports.

Bitcoin is effectively a peer-to-peer system. Its users can carry out transactions without the need for a middleman, but all activity is recorded and verified by the blockchain. Think of blockchain as a ledger and you’re halfway there.

Bitcoin has given the blockchain an early success with its 15+ million bitcoins already in circulation. But with a limit of 300,000 transactions per day (a ceiling that’s fast-approaching), we have to wonder – is there a future for a digital distributed database format?

It’s worth noting that the blockchain isn’t owned or operated by a singular body – hereby distinguishing it from a conventional ledger system. Instead, each network node stores its own copy of the blockchain, so whenever a transaction is made it is first recorded in one place, before being transmitted to other nodes that make up the database.

The “block” comes from the name given to accepted transactions. The system checks approximately six times per hour for new ledger activity, and to determine if a bitcoin amount has been spent.

Bitcoin & Blockchain

Blockchain – Bigger than Bitcoin?

Putting bitcoin’s reliance on the blockchain aside for a moment, various figures have spoken out about its potential to transform not just payment systems, but improve the delivery of services and assure the supply chain of goods.

Nothing if not an encouraging sign, a report from Mark Walport, the UK Government’s Chief Scientific Advisor, made proposals that the Government itself should explore applications for the burgeoning technology.

Walport said: “Distributed ledger technologies have the potential to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services.”

Records ultimately lie at the crux of the blockchain. So a technology that serves as an incorruptible ledger, and one that can trace each and every interaction, could prove extremely valuable in areas where accountability is key.

Gordon Donovan, Procurement & Supply Chain Manager for Metro Trains, has previously been quoted on Procurious suggesting the development of a ‘supplier wiki’ in order to build knowledge of the entire supply chain.

Blockchain technology could indeed be used to increase transparency, but there would be considerable work required in advance of opening this up, thanks in no small part to the highly complex nature of organisational supply chains and the numerous suppliers involved.

Blockchain network

A Chain is Only as Strong as the Weakest Link

If this reliance on blockchain is going to come to pass, more work needs to be done around trust and security – a fact that hasn’t gone unnoticed by bitcoin’s most vocal critics.

With high visibility services like Twitter, the BBC, and both the global networks for Xbox and PlayStation, all being taken offline by distributed denial-of-service (DDoS) attacks, what crippling effect would such activities have on the blockchain?

Moreover it wouldn’t be too much of leap to suggest vulnerabilities could lead to ‘botnets’ taking control of nodes to reveal the identities of the parties involved in transactions.

But is all of this worry warranted? It would certainly seem so if the letter penned by bitcoin’s high priests is anything to by. The open letter informed the community at large of an action plan to reach a consensus on improving bitcoin security.

“We have worked on bitcoin scaling for years while safeguarding the network’s core features of decentralisation, security, and permissionless innovation” – it began.

“We’re committed to ensuring the largest possible number of users benefit from bitcoin, without eroding these fundamental values.”

In order to achieve these aims, 30-plus bitcoin developers organised two workshops (in Montreal and Hong Kong respectively) to try and carve out a scalable path for the cryptocurrency’s future.

If we’re not looking for a repeat of the Silk Road scandal, let’s just hope they came up with a solution…

Is it possible for blockchain and bitcoin technology to transform the future of digital payments and aid supply chain transparency? Let me know your thoughts.

30 Under 30 – Recognising Supply Chain Rising Stars

ThomasNet and the Institute for Supply Management have announced their annual 30 Under 30 Rising Supply Chain Stars for 2015.

30 Under 30

Delivering more than $10 million in cost savings, spearheading a new global distribution model, and driving a startup’s exponential growth are among the outstanding personal achievements of young professionals today named winners in the ThomasNet and Institute for Supply Management (ISM) ‘30 Under 30 Rising Supply Chain Stars Recognition Program‘.

“These young professionals are leading by example for a new generation in the procurement field by demonstrating the huge accomplishments possible,” said Mark Holst-Knudsen, President, ThomasNet. “They are true role models for how millennials are paving a new path in supply chain management.”

Ahead of the Curve

Founded in 2014, the 30 Under 30 Rising Supply Chain Stars programme is designed to recognise individuals who have demonstrated leadership, innovation, collaboration, and other outstanding attributes.

This programme provides role models and illustrates supply chain and procurement as a viable and exciting career choice. Millennials are expected to comprise 75 percent of global employees by 2025.

“Our new best and brightest stars are ahead of the curve in recognising supply chain as a natural fit for their expertise and values,” said ISM CEO Tom Derry. “Applying their leadership skills, technical know-how and passion for making a difference, they are helping revitalise the industry in tangible, far-reaching ways.”

With an average age of 27, the 2016 supply chain superstars span industries ranging from manufacturing to education, financial services, medical devices, information technology, oil and gas, and government. Many are driving improvement in areas that matter to them and benefit society, such as sustainability.

Megawatt Star

30 Under 30 - Amy Georgi
2015 Megawatt Winner, Amy Georgi

Recognised as this year’s Megawatt Star: Amy Georgi, 30, a program manager in supply chain acquisitions and integrations with Fluke Electronics, a Danaher Company, based in York, Pennsylvania.

Each rising star will receive a one-year membership to ISM; admittance to ISM2016, May 16-18 in Indianapolis; and a free THOMASNET.com Supplier Discovery Lunch and Learn session for them and their colleagues. In addition, Georgi and her nominator will win an all-expense-paid trip to the ISM conference.

For profiles and photos of the winners, please visit www.thomasnet.com/30under30.

About Institute for Supply Management

Institute for Supply Management (ISM) serves supply management professionals in more than 90 countries. Its 50,000 global members manage $1 trillion in corporate and government spend annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business®, its highly regarded certification programs and the ISM Mastery Model™. For more information, visit: www.instituteforsupplymanagement.org.

About THOMASNET®

THOMASNET’s flagship product, THOMASNET.com, is industry’s go-to platform for supplier discovery and sourcing for OEM and MRO products, as well as custom manufacturing services. This free platform serves procurement professionals, engineers, plant and facility management and other buyers from corporations, educational institutions, government agencies, the military and small businesses. It also serves manufacturers, distributors, and service companies throughout North America who want to get found by these buyers.

Big Ideas Summit 2016: Innovation Without Boundaries

The global conversation begins now! Register for the Big Ideas Summit on April 21st on Procurious and join procurement leaders as they share their insights.

Big Ideas Summit 2016 Logo

From drones to social networking, what new technologies and trends will transform procurement/supply management, and how can today’s leaders harness them to drive innovation?

Virtual Think-Tank

On April 21st 2016, 50 of the world’s most influential procurement and supply chain thinkers will tackle these questions and more during the annual Big Ideas Summit, the world’s first digital forum focused on procurement, powered by Procurious.

Through this virtual, think-tank event, Procurious’ 12,000+ members will have the chance to interact with these senior executives, thought leaders and CPOs, and gain insights into the future of procurement. All are invited to participate by registering on Procurious, the leading free online business network for procurement and supply chain professionals, and then joining the Big Ideas Summit group on the platform.

“Our goal is to inspire a new generation of business intrapreneurs—people who can think outside the box — who will lead change even in times of ambiguity,” said Tania Seary, Founding Chairman, Procurious. “By giving the global procurement community a place to connect, discuss and learn together, we hope to seed an innovation movement that knows no boundaries.”

New Era for Procurement

Sponsored by the Institute for Supply Management (ISM), The Hackett Group, IBM and Coupa, the Summit will feature several provocative sessions on the trends that will take procurement into a new era:

  • Thinking the Unthinkable: How the global business environment is changing, how to spot trends and disruptions, and the “unthinkables” that organisations are already preparing to handle.
  • Rethinking the Possible: What is the “true cost” of doing business in the fashion industry? How are drones and 3D printing morphing the way we work? Presenters will address today’s mega-trends, from ethical supply chains to the Internet of Things.
  • The Conversation Century: With social media breaking all boundaries for collaboration and influence, the profession must master new “rules of engagement.” Learn how to use this channel to attract and retain the best and brightest talent, and to maintain a career edge.
  • Procurement’s Blind Spots: Benefit from real-life examples of how procurement is applying key agile capabilities in everything from leadership to information-driven performance. Then be part of a CPO debate about procurement’s blind spots, and how risk mitigation will prepare the profession for the future.

Thoughts Leaders and Experts from a range of high-profile, global organisations, taking part in these discussions include:

  • Tom Derry, CEO, Institute for Supply Management
  • Christopher Sawchuk, Principal & Global Procurement Advisory Practice Leader, The Hackett Group
  • Gabe Perez, Vice President of strategy and market development, Coupa
  • Elizabeth Linder, Politics & Government Specialist, Facebook EMEA
  • Lucy Siegle, Journalist and broadcaster, The Observer
  • Peter Holbrook, CBE, Chief Executive, Social Enterprise
  • Dapo Ajayi, Chief Procurement Officer, AstraZeneca

Get Involved

The Summit is more than a one-day event – the conversation has already begun. Members of Procurious are being invited to challenge the speakers – and each other – with hard questions, contribute to Discussions on the event’s key themes and topics, submit their own Big Ideas for consideration by their peers, and read exclusive, advance insights from keynote speakers and influencers.

It doesn’t matter where you are in the world, Procurious wants the global procurement profession to help shape the agenda. On April 21st, members will be able to exchange ideas about the proceedings, shared by video, and get involved in real time via social media, on Twitter, LinkedIn or Facebook, using the hashtag #BigIdeas2016. Members will also be able to access more rich content in the days and weeks after this gathering.

The first annual Big Ideas Summit, which debuted in 2015, brought 5,000 virtual delegates together, and generated more than one million tweets. Join the global movement now. Visit bigideassummit.com and register today.

Tweet this: Join the global conversation with your Big Ideas for #procurement at the @procurious_ #BigIdeas2016 Summit, April 21 www.bigideassummit.com

About Procurious

Procurious is the world’s first online business community dedicated to procurement and supply chain professionals. It’s a hub to advance your career, develop your skills and expand your global professional network. With 12,000+ members across the globe, Procurious aims to empower procurement leaders to connect, collaborate and take a more innovative professional outlook.

Think of Procurious as a professional network, news and knowledge hub, learning and career center, all in one place. Join now at www.procurious.com – it’s free to register and participate.

The Early Bird Catches the Procurement News Worm

In a fast-paced world, being first with the procurement news can mean the difference between being in the know and being left behind.

First with procurement news

Read Tania’s first article on the importance of networking and your personal brand here.

Too many procurement professionals spend their careers in closed networks. They stay in the same profession, peer group, company, or industry, associating with people they already know. In these safe, closed networks, it’s easier to get things done because we’ve built up trust, and know all the shorthand terms and unspoken rules. It’s comfortable because the group converges on the same ways of seeing the world that confirm our own.

Life in a closed network is easy.  It’s safe.  It’s comfortable.

But unfortunately these gentle words are not synonymous with career advancement. If you want to keep growing and get ahead in your career, you need to be challenged, and be a challenger, within your ‘tribe’. You need to be first with the procurement news, be able to quickly digest the information, and interpret what it means for your organisation.

Open or Closed Case

When we were designing Procurious, the team had a lot of heated debates over whether we should have an open or closed network. That is, should it be closed exclusively to highly pre-qualified procurement professionals, or open for the whole world (aka. recruiters, consultants, sales professionals) to join.

Luckily my team convinced me to keep our network open, and it’s been an important part of our success story.

When you become part of an open network, you are exposed to multiple groups. Unlike your peers in closed networks, you gain access to unique relationships, experiences, and knowledge. You get to hear from thought leaders and industry experts, and learn about their diverse opinions on the hot topics in procurement.

As a result of being exposed to thinking outside your ‘tribe’, you gain a more accurate view of the world. In fact, some research shows that people with open networks are better forecasters than people with closed networks.

Leverage Your Networks

While Procurious members may not be the first to hear new information, they can be the first to introduce information to their network. As a result, they can leverage the first mover advantage.

For example, as a member of Procurious you may be the first in your company to become aware of a major supply chain disruption. Although the whole Procurious community is aware of this event, you could be the first person in your company to share the procurement news and start planning your response.

What’s more, you could use your network to gain further information on the disruption, and leverage their expertise to help solve the problem. You will be amazed how the community responds with alternate suppliers, solutions, on the ground contacts! In our Discussions section you will see there has already been hundreds of questions asked, and thousands of answers provided by procurement professionals all around the globe.

Let’s face it – procurement issues are now global business issues. The nature and complexity of procurement and supply chain challenges mean that they are too big for one person alone to solve.

To come up with the best ideas we need many, diverse perspectives.  By involving more views, life and career experiences, demographics, and cultures, we can access these perspectives. Through our Procurious network, we increase the pool of talent and therefore ideas that are working to solve problems.  Let’s call it collective problem-solving.

Collective Muscle

If our procurement network on Procurious gets into the habit of collective problem solving by supporting each other by sharing the procurement news, and with information and advice, it will soon become an instant reaction – a community reflex. And if we keep repeating that action, then we will build community muscle.

So when bad things happen, or when we’re looking for solutions to big problems, we turn first towards thinking that we’re going to solve it in a community way, through our network!

Apparently there are more than 3,500,000 procurement professionals in the world. But there are probably less than 500,000 who we can readily identify.

Many procurement professionals are working in isolation, unaware that there is a whole universe of knowledge and professionals available, to help them do their jobs better and learn more effectively.

There are so many problems we can solve together, so much we can do to promote our own careers and the profession – if only we use the power of connection and leverage our network – there is very little that we can’t achieve!

This blog is part of a speech Tania made at the eWorld Procurement and Supply Conference in London on 2 March 2016. Stay tuned for further insights from Tania and the Procurious team from eWorld.

Is Your Company’s Product Responsible Enough to Buy?

Is your company’s procurement ‘responsible’ enough? Which pressures and stakeholders are the most powerful ones for your company?

socially responsible procurement

According to a 2012 study by Procurement Leaders, 61 per cent of organisations are driven by end-customers. Governments and regulations represent the second-most influential pressure that organisations face, followed by 48 per cent of organisations that embed CSR principles in order to meet employee expectations of working for a responsible company.

The above underlines that if you do not have CSR activities in place in the procurement function (and the company in general), then you take the risk that your end-consumer will abandon your brand. Conversely, there is also a business opportunity, as consumers are becoming increasingly willing to pay a premium for CSR labelled products.

What does responsibility mean?

Responsibility, or in procurement terminology Responsible Procurement Management, can be divided into 3 main categories: environmental, social and economic.

Practically speaking, Responsible Procurement is about defining a set of mutually compatible requirements, specifications, and criteria that favour protection of the environment, social progress, and economic development. You do this by identifying resource efficiency, improving the quality of products and ultimately by optimising costs.

In short, you could say that Responsible Procurement is about increasing a company’s profit, improving its strategic supplier relationships, and strengthening its brand, while remaining vigilant towards competitors and revolutionising their procurement strategy.

What does this mean to your company?

From an environmental point of view, your company should ensure that natural resources that are extracted and processed into goods and services are consumed in a more efficient way – getting more out of less. By changing the way we produce and consume goods, we can still limit the impact that climate change is bringing about.

From an economic and social perspective, your company has to ensure basic human rights and economic development, regardless of age, gender, nationality, religious belief or economic status.

How could your company get started with the journey?

Risk in Responsible Procurement is the probability that there will occur violations of the company’s or its key stakeholders’ values and perceptions. Determining a company’s risk profile is specific to each particular company.

Some companies will choose to focus on suppliers where the company has some bargaining power, or suppliers who have a strategic importance to the company. Others choose to target all of them.

Creating the risk profile must then take into account the following:

  • Risk level: Is it a strategic or an operational risk?
  • Probability: Indicate the probability of the risk occurring. Do you consider this as high, medium or low risk?
  • Impact: What impact on the organisation would there be in the event of the risk occurring? Again use high, medium or low.
  • Risk treatment: You should indicate the appropriate treatment for the risk. This could be: avoid risk, reduce or control probability, reduce or control the impact, transfer risk or accept risk.
  • Owner: The owner is the person who is accountable for taking action or carrying out the risk treatment.
  • Current status: Detail the current status of the risk. For example, has vital information been gathered?

Start managing your risks

Following the risk assessment the next natural step will be to look for ways to manage the risks. Risk management options will be particularly affected by the following factors:

  • What bargaining options does your company have over your suppliers?
  • Is your company a major customer or just one among many?
  • Who are the drivers of the value chain; is it producer or consumer-driven?
  • To what extent are subcontractors used, and how big a role do they play in the manufacture of products: for example, in situations where the supplier is a wholesaler, it may be necessary to identify the actual manufacturers.
  • How many financial and human resources is needed to work with it?
  • How far back in the chain will it be necessary to manage the risks?

Don’t give up – though the picture must be right

When Procurement Leaders carried out their research in 2012, they asked participants how important CSR was currently in their respective organisations. 42 per cent of the respondents said it was ‘Very Important’, while 38 per cent said it was ‘Important’.

When asked about how long their CSR policy had been in place, 36 per cent stated 1-3 years, while 30 per cent stated 4-6 years. What was clear from the research was that nobody wanted to be left behind, nobody wanted to be seen as a laggard in this field. Appearances matter.

The most important message is, though, that the actions you take must be equal to the picture you draw to the public.

International Women’s Day 2016 – Pledging Parity

As the world gets ready to celebrate International Women’s Day, there is an ominous warning that progress towards gender parity has slowed.

International Women's Day Celebration
Image Courtesy of http://www.happypics99.com/

According to a report produced by the World Economic Forum at Davos earlier this year, gender parity is now unlikely to be achieved until 2133. This represents even slower progress for parity than had been predicted just 12 months previously, with 2095 the estimated timescale.

Pledge for Parity

It is against this backdrop that the official theme for International Women’s Day this year is Pledge for Parity. The concept behind the theme is that every individual has the ability to make a change, whether it is in highlighting imbalances, helping girls and women achieve ambitions, or create more balanced cultures.

Since launching the campaign a little over 2 weeks ago, over 14,000 people have made an individual pledge. However, this is by no means enough. For the target of 2030 to be achieved, both the International Women’s Day organisation, and the UN, are looking for more people to get involved. You can make your pledge here.

Gender Bias in the Workplace

Procurious has written in the past about the major imbalances between the sexes in the workplace. Although more women than men enrolling at university in 97 countries, in just 68 of these countries do women make up the majority of the skilled workforce. Only in 4 do they represent the majority of leaders.

There is an on-going challenge to organisations to get more women involved in traditionally male-led professions, such as engineering. Career stereotypes, discussed heavily during International Women’s Day 2015, persist, made very clear by last year’s #ilooklikeanengineer campaign on social media.

And the situation is worse when it comes to the wage gap too. According to the WEF report, women now earn on average what men were earning 10 years ago, with men still earning twice as much as women. In country leadership, 50 per cent of countries have a female leader, but only 19 per cent of parliamentarians are female.

Onus on Organisations

In the UK, the Institute of Directors’ (IoD) Lady Barbara Judge, the first female chairman of the Institute in its 110-year history, has called on organisations to make changes. Specifically, to support efforts to increase the number of women in executive leadership positions.

Her recommendations include shaking up recruitment practices, and introducing gender-blind applications; creation of part-time and job-sharing executive roles; and introducing mentors and role models to champion women in senior roles.

She also said, “The remarkable success in increasing the number of women on boards in the UK over the past six years shows how enthusiastically businesses have embraced their role as champions of female progression. Now, we must channel this progress into tackling the next item on the agenda – getting more women into senior, executive, decision-making roles. The onus must be on employers to do everything they can to harness their female talent. After all, it is a business’s loss if it fails to make the most of half their workforce.”

However, it is not about introducing quotas, as has been suggested by some. Gender-balanced leadership expert, Dr. Karen Morley, has spoken extensively on this subject, giving recommendations to businesses to achieve their “critical mass“, but also why affirmative action is not the solution.

Make a Difference

Beyond making a pledge, there are a number of ways you can get involved with International Women’s Day celebrations.

  • Events – Throughout the week there are events around the UK, and around the world, focusing on the celebrations. Find out if there is an event near you, and get along to it.
  • Raise Your Voice – If you are a witness to gender imbalance, tell someone about it. Whether it’s discrimination in the workplace, or impingement of rights, only by speaking up and shining a light on this can a difference be made.
  • Social Media – Can’t make it to an event? Make sure to follow all the progress on the 8th on social media. Follow International Women’s Day on Twitter, LinkedIn and Facebook. Share your thoughts by using the hashtag .

And if you need any more persuasion to get involved, look no further than Procurious’ own Tania Seary. Tania is major advocate for equality and has frequently highlighted the females who have influenced her career. You can read her thoughts here and here.

Why Automation Can Help Procurement Achieve Its Goals

Automation is frequently talked about in manufacturing, but rarely in the field of procurement. Could it be the key to helping procurement achieve better outcomes?

Automation and Robotisation

Download GEP’s white paper on achieving P2P Excellence through Procurement and Finance alignment here.

Czech writer Karel Čapek was the first person to use the term “robot”.  In his 1920 play “Rossum’s Universal Robots”, he conjured the image of synthetic humans, carrying out the tasks that original humans no longer cared to do, yet remaining largely happy in their work. For a while.

Inevitably things went South, so to speak, and the robots learned to resent their drudgery.

Stories of automation leading to unforeseen misfortune are at least as old as Goethe’s 1797 poem, “The Sorcerer’s Apprentice”. Yet automation remains a goal, if one that is not without challenges.

Automation in Procurement

Automation is often seen as a good thing, because it accelerates processes (sometimes) and frees up valuable human resources (sometimes). In the context of manufacturing, introducing automation has been hugely successful because of the requirement for a production line to continually repeat identical tasks within exact specifications. Automation is therefore understood to be just that, the effective ‘robotisation’ of a process.

In a sense this is also desirable in Procurement because a good percentage of the tasks and processes are repetitive and of the same type. However, that is not the same as being identical, and it is often less than desirable to force a range of different variants into a single model.

Thus, what we need is the acceleration of the process and the reduction in administrative overhead but still maintain the unique aspects of each event in the process. This is where automation gets tricky.

Importance of the ‘Right’ Process

From the perspective of software design, the practitioner must be able to automate those parts of the process which are identical time after time, and permit the customisation of those parts that are unique, whilst accelerating the whole.

This is where an understanding of Procurement (and associated processes) is key in the design and implementation of the software.  As one of our senior project managers put it, “It is not a good idea to use automation to accelerate a broken process.”

What he means by that is this: whereas in manufacturing, the process of machining a particular widget by hand is already the ‘right’ way to do it, and automation simply repeats the task; in Procurement it cannot be taken as read that the sourcing methodology, contracting process or requisition-to-invoice workflow, are in any way the ‘right’, most efficient, or best, way to go.

In reality, then, for procurement software to provide a solution it must involve not only automation, but transformation. Using the imposition of an automating technology to review where the challenges in the current manual processes lie is a vital part of any such program. That way the eventual automation of the task will be more accurate and, ultimately, more useful.

Accounting for Whole Process

Another key consideration is best made with a manufacturing analogy again. If the entire process from raw material to finished goods is automated, then the rate of arrival of the end-product at the packing and shipping station will be considerably greater than in the pre-automation set up. If account hasn’t been taken of the impact ‘downstream’, then one can foresee the conveyor belt of products backing up and overflowing.

In Procurement this can be a real issue. Accelerating the order-to-invoice process is all very well for purchaser and supplier, but if Accounts Payable are periodically swamped with invoices to be paid, there can be significant impacts on administration overheads and, indeed, cash flow.

Furthermore, an accelerated sourcing process only works if the suppliers are on board, and a super-efficient bid-to-contract process will only work if the company’s attorneys buy in to it.

Thus automation is far from being a matter of “install software, use software, improve efficiency, get ROI”. Get it wrong and it can be a matter of “install software, use software badly, make matters worse, stop using software, can project, start again”.

But get it right and the “automation” program can see dramatic impacts on time to reach savings goals, supplier engagement and performance, and cash flow management downstream.

GEP have produced a white paper on the challenges facing the marriage of convenience between Procurement and Finance which explores these ideas further. You can download it here.