Do Labels Matter? The Debate That Just Won’t Go Away

Purchasing? Procurement? Strategic Sourcing? Supply Management? As the profession continues to evolve, old labels tend to come unstuck and peel away.

chrysalis labels

Getting Out of the Back Room

It started in the 1990s. Like drab caterpillars transforming into magnificent butterflies, purchasing professionals left their brown cardigans draped over the backs of their uncomfortable chairs in dimly-lit back offices and emerged, blinking, into the bright hub of the business.

No longer a service department, we were suddenly business partners. We talked strategically rather than tactically, proactively seeking to understand what the organisation was trying to accomplish, and find ways to contribute to its competitive advantage.

But, what did we decide to call ourselves?

Almost thirty years later, the only thing that has really been agreed upon is to leave the term “purchasing” behind. Perhaps if there was one global, all-encompassing professional body, the decision would have been made for us, but unfortunately this isn’t the case.

In the U.S., the National Association of Purchasing Agents (founded 1915) changed its name to the National Association of Purchasing Management (1968). It finally became the Institute for Supply Management (ISM) in 2002.

In the UK, CIPS changed its name from the Chartered Institute of Purchasing and Supply to The Chartered Institute of Procurement and Supply as late as 2014.

Across private businesses and government departments there’s a bewildering array of labels and job titles. This, of course, makes the standardisation of job descriptions and salary levels unnecessarily difficult.

Getting Out of the Box

I’m half-way through ISM’s “Fundamentals of Purchasing” guided learning (e-learning) course under the tutelage of Dr Wade C. Ferguson, President, Erv Lewis Associates, LLC. The course begins with some of ISM’s definitions around Supply Management and what the profession actually entails. It led to one of the class (me, actually) asking Wade’s opinion on the term procurement versus supply management.

His reply: “Changing definitions represent the evolution that the profession has gone through. In the company I worked at for over 30 years, we changed our name from “purchasing” to “procurement”, but it didn’t really change anything, as procurement is basically a subset of supply management.

“It’s a necessary and important subset, but if you want to be more encompassing, we prefer the term ‘supply management’. It underscores the recognised breadth of the modern supply chain and the need for coordination and value optimisation.”

Wade argued that the reason for dropping the old label was a profession-wide effort to, “Get out of the box. Out of the myopic purchasing view, to understand what the organisation is really trying to accomplish. When we can do that, we’re perceived as being strategic, not just a tactical cost centre.”

Pigeon-Holed by Labels?

This argument makes sense when you look at ISM’s definition of responsibilities under the Supply Management umbrella:

  • Purchasing/Procurement
  • Strategic sourcing
  • Logistics
  • Quality
  • Materials management
  • Warehousing/stores
  • Transportation/traffic/shipping
  • Disposition/investment recovery
  • Distribution
  • Receiving
  • Packaging
  • Product/service development
  • Manufacturing supervision.

If you wanted to keep things in separate boxes, then I’d estimate that roughly half of the components above belong to Procurement, while the other half belong to Supply Chain.

This separation of responsibility might work in a company where, say, you have a Chief Procurement Officer working closely with a Chief Supply Chain Officer. But why not combine those two roles into one? It’s all interconnected, and it makes sense. And Head of Supply Management could be the label that encompasses the whole picture.

Here’s the thing – maybe, just maybe, the narrowing effect of “Procurement” labels is one of the contributing factors holding Chief Procurement Officers back from that coveted spot at the boardroom table.

Even for those CPOs out there who do in fact have responsibility for the supply chain as well. It’s possible that their very title means that this vast part of their role isn’t actually recognised by the people that matter.

Don’t Abandon the Progress We’ve Made

In a previous article, Procurious founder Tania Seary also called upon the profession to stop worrying about what we call ourselves:

“In my opinion, re-branding procurement is a distraction, especially since we’ve made enormous progress in educating businesses about what procurement does. Rather than having to re-educate the C-Suite about what a Commercial Director or Chief Relationship Officer does, that energy could be better spent actually showing people what we have and can achieve.

In line with why we created Procurious to begin with, we know that the procurement and supply chain profession has struggled to overcome outdated stereotypes, so it’s time we join forces to become collectively valued. By empowering future procurement leaders, we can change the face of the profession from the inside out, rather than worrying about the label itself.”

Things Certain to Change Again

“The only constant in life is change.”

…just as the only quote that the Greek philosopher Heraclitus will be remembered for is the one above.

The Procurement/Supply Management/Whatever-you-want-to-call-it profession has changed so much in the past thirty years that there’s no reason why it shouldn’t change again. By the time we’ve settled our current labels debate, it may already be outdated.

Can Procurement Lead the Fight Against Protectionism?

Protectionism will never produce a win-win situation. And it can be a huge wall for procurement to work around.

protectionism

Few procurement professionals view their role through the lenses of either protectionism or free trade. But the protectionism-free trade dimension is a crucial topic for procurement, so it is certainly worth thinking about the impacts on procurement the world over.

The Oxford English Dictionary defines protectionism as, “the theory or practice of shielding a country’s domestic industries from foreign competition.” Further, protectionism is a mind set as much as formal policy; it is the intentional or inadvertent preference for domestic industries over foreign industries.

Free trade meanwhile is “international trade left to its natural course without tariffs, quotas or other restrictions”.

The translation into procurement is fairly simple. Protectionism is limiting access to domestic procurement markets to foreign suppliers, and the preference for awarding public contracts to domestic rather than foreign suppliers. Free trade is the absence of this.

Protectionism is largely, or partly, illegal between numerous countries with free trade agreements (FTAs), such as the North American Free Trade Agreement (NAFTA), or are part of a trade bloc such as the European Union. But protectionism includes more subtle biases.

Ideas around boosting the local economy, creating local jobs and protecting the local environment are all protectionist when preferred over equal boosts to an economy, job creation, or the environment elsewhere.

Protectionism – A Zero Sum Game

The first strand of this article is that protectionism harms economies, jobs and prosperity, locally and globally, for two reasons.

Firstly, it is intuitive to think that sourcing goods and services locally has positive impacts, creating jobs and economic growth in the local area. But this is a zero sum game.

Protectionism is normally reciprocated. If one country has policy preference for domestic businesses, then other countries respond in the same way, offsetting the benefit. Protectionism may allow Country A to create more local jobs by awarding contracts to domestic businesses. However, when Country B does the same, export jobs in Country A are lost.

No more jobs are created and no additional economic growth is produced by procuring from domestic suppliers. Domestic industries get some short term benefit and exporters lose out.

Should We Really Favour Our Own Country?

Protectionists argue that public procurement in their own country should favour domestic businesses. In the UK, the contract for a large rail project in London was awarded to Germany’s Siemens, ahead of UK-based Bombardier. Cue outrage at job losses in the UK factory because the government awarded to a foreign business.

Unless protectionists believe they deserve double standards, this logic dictates that Bombardier should not have won contracts with Trenitalia, Italy’s main train operator. Nor should British architects have been awarded the contract to build the dome for the German Reichstag.

These created British jobs from German and Italian taxpayers. Hundreds of thousands of British jobs rely on British businesses winning public contracts outside the UK through non-discriminatory competition.

In the USA, incoming president Trump has riled against other countries “stealing” American jobs. However, he does not seem to oppose German, Japanese and Korean car manufacturers employing hundreds of thousands of workers in American factories. But surely the British and American governments’ obligations are to their own workers and businesses?

Maybe so. A country having an obligation to help domestic businesses and workers more than the rest of the world is understandable, but there is not actually any gain. Protectionism also makes British and American citizens and workers worse off.

Reducing Choice & Raising Costs

This leads onto the second reason. Protectionism gives citizens fewer choices of what they can buy and increases their living costs. The belief that protectionism helps local communities at all is flawed.

Free trade allows consumers to have the best goods, regardless of location. In the developed world, the UK is bad at growing bananas and the USA makes expensive toys, so free trade enriches citizens by allowing better bananas and cheaper toys.

Free trade allows businesses and citizens in the developing world to access the best technology and equipment that is not or cannot be effectively produced locally. In essence, protectionism limits the goods that citizens can buy, to everyone’s loss.

Hamstrung by Protectionism?

This has the exact same impact on procurement and the second strand of this article is that the procurement industry is hamstrung by protectionism. Protectionism harms both the procuring entity and ultimately the users of public services.

If a hospital needs new radiotherapy machines, it should procure the machines with the best combination of quality and price. In a world of 7 billion people, the best radiotherapy machines will probably not be made locally, and maybe not domestically.

Basing buying decisions on nationality rather than value for money and effectiveness of the radiotherapy machines hurts cancer patients and increases costs for taxpayers. As protectionism is reciprocated, it decreases consumer choices and increases import costs. This is without even a net benefit for domestic industries or workers.

This conclusion that should therefore be reached is that every protectionist move has pros and cons, but the pros are directly and equally offset by counter-moves, leaving only the cons intact and everyone worse off. Hardly a desirable outcome.

So in the context of the Brexit vote, Trump’s victory and the stagnation in global trade, the case needs to be made now more than ever that protectionism on net harms prosperity. Procurement functions have a large role and responsibility to their organisations, countries and the world to avoid it.

Roll Out the Red Carpet – David Cameron to Deliver ISM2017 Keynote

The Institute for Supply Management (ISM) announces its most impressive keynote to date as registrations for ISM2017 open.

david-cameron

Former UK Prime Minister David Cameron will deliver the opening keynote at ISM2017, it has been announced today.

Cameron will speak about the geopolitical impact of policy and current events on global business. Over 2,500 assembled procurement and supply chain professionals will witness a riveting and eye-opening first-hand account of Cameron’s own experience during his tenure as UK Prime Minister.

With Brexit arguably being the defining moment of his career, Cameron will share his unique understanding of what the result means for US businesses and supply chains the world over, including its effect on globalisation.

Sharing Leadership Lessons

Cameron’s appearance continues a strong tradition of impressive keynote speakers at ISM’s annual conference. He follows in the footsteps of former President and CEO of Ford Alan Mulally, author and introversion expert Susan Cain, former Secretary of Commerce and professor of public policy, Susan Schwab, and former US Secretary of Defence, Robert Gates, as keynote speakers.

Learning and Networking in the Heart of Disney World

ISM2017 will be held at the Disney Coronado Springs Resort in Orlando, Florida, in the heart of Disney World. This surely makes the one annual conference where attendees will be sure to bring their families along! The conference will feature:

3 Learning Tracks – designed to help attendees deep-dive into three large themes over the conference:

  • Economic (Boom or Bust)
  • Business (Top Line and Bottom Line)
  • Professional (Inside and Outside)

As per previous years, all sessions are tagged with ISM Mastery Model experience levels, ranging from Fundamental through to Mastery.  

11 Signature sessions, including:

  • Unleash the magic of transformational supplier Relationships
  • Accelerating your career path with “insides” from procurement leaders
  • How to lead a successful transformation
  • Be a hero in boom times, not just in bust times
  • Shift the focus to change the results: Procurement’s opportunities to grow the top line

73 other conference sessions on overcoming shared challenges, featuring procurement and supply chain experts from around the world. 

Pre-conference training seminars and certifications, including the CPSM Exam 1 now offered onsite at ISM2017.

Presentation of three major awards

  • The R. Gene Richter Scholarship Program, providing scholarships to six students gaining an education in supply management or procurement.
  • The J. Shipman Gold Medal Award, presented to individuals whose unselfish, sincere and persistent efforts have aided the advancement of the supply management field.
  • ISM and ThomasNet’s 30 Under 30 Rising Supply Chain Stars program, recognising young procurement and supply management professionals for their passion, creativity and contributions to supply chain.

Finally, and perhaps most importantly, ISM2017 offers unparalleled face-to-face networking opportunities with thousands of peers from the profession.

Whether you attend ISM2017 to hear from thought-leaders, hone your skills, witness David Cameron’s keynote, network with peers or simply to have your kids meet Mickey Mouse at Disney World, be sure to share your experiences with the online community here on Procurious.

Registrations are now open for ISM2017. Find out more by visiting http://ism2017.org/

Disrupting or Disrupted? Why The Status Quo Won’t Do Anymore

If you’re not disrupting, then you are being disrupted. If procurement doesn’t get to grips with the right technology, then the profession’s future path is uncertain.

innovation

Watch our free webinar, ‘200,000,000 to 1: Using Technology to Find Your Perfect (Supply) Partner’, here.

The current pace of change around the world is unprecedented. Procurement and the wider organisation are quickly recognising that maintaining the status quo will not suffice in staying ahead of the pack.

However, that’s not to say that simply implementing a technology solution will solve every problem. No technology is perhaps better for the long-term health of an organisation, than a poorly chosen technology, implemented poorly.

Procurement 4.0 is a term many of us are using to encapsulate the changes Industry 4.0 is making in the supply chain. Also known as the fourth manufacturing revolution, Industry 4.0 marks the convergence of physical and digital manufacturing capabilities, where increasing automation and computerisation allow us to create so-called ‘smart’ workplaces.

Technology is at the core of the Industry 4.0 changes. Procurious hosted a webinar last week, in conjunction with Oracle, to discuss the critical role technology will play in the evolution and advancement of the procurement profession in this “brave new world”.

Ask the Experts

We invited David Hobson, Business Development Director, Cloud Solutions at Oracle, and Darryl Griffiths, Enrich Director of Delivery and Presales, to help us answer the tricky questions.

The discussion covered four key topics and challenges that face procurement, and provided some solutions as to how the profession can deal with them in the future.

Innovation

“IT is only ever an enabler for change.”

Procurement is under a lot of pressure today to find suppliers who will deliver the ground-breaking innovation that will give their company a huge competitive advantage.

However, real innovation is now coming from smaller, more agile companies, which procurement hasn’t traditionally worked well with. Traditional procurement structures and processes have been designed to work with large strategic suppliers, and are now inhibiting innovation.

We heard:

  • Why most rationalisation and standardisation efforts in the supply base have failed.
  • How the right technology or platform can ensure that performing supplier relationships are fully leveraged.
  • Why the challenge for business is to be able to adapt and apply new solutions and technology for competitive advantage
  • Why highly customised legacy systems, fragmented data, complex integrations and inefficient processes are hindering the digital innovation agenda.

Predictive Analytics

“Increasingly the evolution of the procurement function is to more proactive, rather than reactive.”

Spend management and standardising processes can come across as a pretty uninspiring (yet essential) part of what we do. Technology, innovation and digital strategies are where people want to be, but it all comes undone if we’re not managing risks in the supply chain.

On the table in this topic was:

  • The question of are procurement using the right tools in the right way?
  • The vast array of data available for tracking compliance, and how organisations can best leverage this.
  • How automating non-differentiating processes will free up time for value creating parts of the business, such as gathering insights into changing market dynamics.
  • Why many organisations are still grappling with getting data into a structured and accurate form that they can use for predictive analytics.

Streamline Processes

“Organisations that are effective in integrating data outrank their peers by 70 per cent across revenue and margin.”

If procurement can get its processes frictionless, we could then focus on the sexier, more value-adding, parts of procurement.

Standardised processes are a huge enabler for this. And, of course, technology plays a huge role in helping realise the benefits of standardised processes.

We found that:

  • In the past, often the best the system ever was on go live day, thanks to sporadic, or non-existent updates
  • Few organisations are entirely harmonised across business operations, as result of M&A, divisional evolution and conflicting business demands.
  • People tend to underestimate the complexity of stitching together the myriad vendor solutions as they aim for a more B2C-type interface
  • We will see gaming industry concepts and increasing virtual representation as part of Industry 4.0

Implementation

“The journey to Cloud is often viewed as a when, rather than an if.”

Time and time again, we hear stories about how the business case a software solution hasn’t been realised due to a failed implementation.

Among some of the most common reasons for this are a lack of understanding that this is a change management process, not just a technology roll-out, and cuts to budget for training and support.

Our experts also argued that:

  • Solutions providers need to move from being software companies, to being service companies, or risk losing their customers.
  • Grand technological visions of the past failed as the solutions we too far out of line with the business needs
  • Regardless of solution some common foundations exist for any project success which include rubbish data in means rubbish data out.
  • Change management is vital in implementation, or people will revert to old habits
  • Focus needs to be on proving the tools first to help quickly establish credibility

Watch Now!

These are just some of the highlights from the webinar. You can catch up with the full discussion by signing up here.

And the learning doesn’t stop there. If you have any questions, please let us know below, and we’ll make sure it gets passed along to the experts.

For more information, and to watch the full webinar, visit our dedicated page.

How Can Procurement Break the Chains of Sole Sourcing?

Whether its design specifications, or traditional attitudes, sometimes procurement gets painted into a sole sourcing corner.

single sourcing

This article was first published on Future Proofitable.

I am jealous of those who have never had to deal with true sole suppliers. I think IT buyers will understand me best. It’s just not that much fun. Let’s take a closer look at what sole or single sourcing is, and how best to deal with it.

I will cover the subject in two articles. The first one covers what it is, and the second will contain tips and hints how to deal with these situations.

Spot the Difference

If you there are a few suppliers in the market who you could buy from, but you choose to stick with one supplier (leaner supply chain, eliminated duplicating logistics and management, administration costs), you have a classic single source situation.

If there is only one supplier in the market, and no alternatives, you have a sole sourcing situation.

Real-life Examples?

There are many office cleaning services providers out there in the market. However, for a list of very good reasons, you choose to outsource it to one service provider. That would be single sourcing.

Now, imagine five different suppliers working on your ERP system creation and implementation at the same time, doing the same job for the same part of scope. Not fun.

Or imagine that your supplier comes up with exactly the product you need for your manufacturing process, but patents it and keeps on increasing the price at every opportunity. Even less fun.

How Does It Happen? 

For single sourcing, the option is deliberate choice. There are many advantages to it:

  • You keep the competition, because the supplier can be easily replaced. Negotiation leverage is at its maximum level like this.
  • At the same time, you spend less time for supplier management and supply chain administration.
  • You have consistent quality of items or services delivered. Or, if not, deal with it in one go.
  • You eliminate all non value-adding activities (some examples here).
  • The supplier will be more willing to work with you on various cost reduction or services improvement initiatives.
  • The threat of losing business in the future will be a big motivator to not overcharge you.

There are a variety of reasons why a sole supplier situation can form. Some are more to do with perception and resistance to change, while others are truly sole supplier situations. They can be categorised in three ways.

1. True Sole Sourcing

Where your company might depend on one supplier without any escape routes. For example:

  • Market monopoly – utilities (water, gas, electric); Governmental services.
  • Patents – technical designs; chemical formulae.
  • Lack of supply alternatives.

2. High Exit Barriers

There are situations when due to various barriers (most often financial – switching costs) competitive situations turn into sole supply situations. For example:

  • Equipment investment – when supplier provides plastic granules storage and supply systems; cleaning chemicals’ supplier provides funds for equipment.
  • Digital solutions (and their switching costs) – you may have had big leverage during first negotiations, but once the initial contract period is over you find yourself dependent. The supplier is technically not sole source, but switching costs are so painful that it gradually turns into one way street of constantly increasing maintenance bills.
  • Manufacturing supply chain integrations – this can often happen naturally, or through pre-existing relationships between different tiers of suppliers. Along the way, one supplier is sold to another, or bought out, and a partnership is ended even though production lines are tied together.
  • Industry regulations (or agreements) – for instance, in order to be able to insure cash in a safe, an insurance company might require a specific quality certificate from a very specific certification organisation. In this case, there is really only one option for supply.

3. Pseudo Sole Sourcing Situations

Frequently, evaluating the situation in the business is more about perception and will, rather than based in fact. Identifying these can bring big benefits.

  • Business users’ preferences – surprisingly, there are quite a few categories of spend where business users are permitted to have preferences. Next time you complain about resistance from stakeholders, consider the number of colleagues who work with particular safety equipment, or similar. And yes, over time, people tend to form preferences for brand name products. Implementing any change might be challenging.
  • Historical heritage – the classic “we’ve always done it this way” situation. It always been bought from this supplier, and only this supplier.
  • Business’ requirements – technical specifications, prepared by engineers. Delivery requirements, set by business users. Packaging requirements, defined by operations or logistics or marketing.

 So now you know how these situations may occur. The question is, can you do anything about it? And how? You’ll have to come back to find out more!

Why Procurement Can’t Have Its Head in the Cloud Anymore

Cloud computing is set to dominate every aspect of our personal and professional lives. So why do we still understand so little about it?

procurement head in the cloud

Download ‘Parting the Clouds‘, Smart by GEP’s latest whitepaper, to understand the difference between Cloud Solutions and SaaS Software.

The world’s biggest search engine provides a great window into human psychology, at least of those humans that it’s algorithms decide are sufficiently similar to oneself.

Try it, it’s fun.

Today, if I type “how” it immediately offers me “how…to roast pumpkin seeds”.  Interesting if not immediately an issue.

“Should” suggests “Should…I text him?” Oh, the angst of so many web users! The answer is, of course, no. But will that stop you texting? Of course not.

And “Did” rather disturbingly suggests “Did the killer clown purge happen?”

I’m not sure whatever happen to incredulity and scepticism but people will literally believe anything these days, it seems. And, apparently, the clowns are coming to get us all.

Cloud Computing – Why…?

As so often happens, all of that came about because I got side-tracked while typing another question into my search bar, “Cloud computing, why…”

I was intending to research why a cloud was first adopted as the symbol for the distributed computing concept as opposed to, say a web. But instead I was offered, “Cloud Computing, why…”:

  • do we need it?
  • use it?
  • it matters?
  • is it important?

These are all equally fascinating questions, and clearly asked sufficiently frequently to reach the top of the suggestions list.

Like so many rapid developments in technology such fundamental questions tend to get over-ridden by the pace of change and adoption.

Do we need it? It’s a bit late in the day to ask that question when increasingly we have no choice.

Why use it? Same answer, perhaps.

It matters because virtually every aspect of our lives is in some way connected to it and that in itself answers the fourth question.

Before the most basic of questions can be even asked, the offered answers already indicate some kind of fait accompli.

An even more basic question, that begins “Cloud computing what…” tellingly generates as its top two suggestions:

  1. Cloud computing what…is it? (naturally); and
  2. Cloud computing what…accountants need to know

Well, I wasn’t expecting that.

Cloud Computing – What Procurement Should Know

But it is perhaps an indication of where we are in this particular technology revolution. Cloud computing is set to dominate every aspect of our interaction with the world and traditional ways of doing business are being shaken up and transformed before we can even get satisfactory answers to the most basic of questions.

In our world of procurement the future seems certainly to be in the cloud.  All the software vendors, like ourselves are offering cloud solutions.

But does that mean procurement professionals know everything they need to know about what that means? Is it even relevant? Should you care whether your software is in the cloud or not? Does it matter, as long as it works?

In principal you shouldn’t have to worry about any of it.  But when it comes to making a decision, it’s probably best to be informed.

Cloud, it turns out, is very loosely defined and when selecting a “cloud” solution it’s important to know what you’re actually going to get.  Without a doubt the most important factor is what the software can do for you in delivering maximum value to the organisation. But just as important is knowing what questions to ask to find the best solution for you.

After all, if the internet is to be believed at face value we’re about to enter a new phase dominated by an even more terrifying technology. Clown computing anyone?

Do you know there was a difference between Cloud solutions and Software-as-a-Service? With all the Cloud technology available, sometimes it’s hard to keep track.

Download Smart by GEP‘s latest whitepaper, ‘Parting the Clouds to find out all you need to know.

Could President Trump Make Procurement Great Again?

Not that we’re saying that procurement isn’t already pretty great. But could a new man at the top mean major changes for the profession?

trump great

If you missed the result of the US Election last week, then you must have been on Mars. Or living under a rock/hiding behind your sofa. In an unexpected turn of events, Donald Trump was elected as the 45th President of the United States of America.

And irrespective of your thoughts on both the campaigns, and the ultimate result, it’s clear that there are changes coming. We have no idea what Trump’s first 100 days in office will look like, so much of what we’re seeing is still very much educated guesswork.

But should many of the agendas and policies from the campaign come to fruition, then procurement and supply chains, both domestically in the US, and globally, will be affected.

Automotive Indecision

A great deal of campaign rhetoric from the Trump camp came in the shape of American industry, and American jobs. The President-elect frequently stated he would look to remove the US from the North Atlantic Free Trade Agreement (NAFTA) should he win the election.

If this were to happen, it could potentially boost the US’ ailing car industry. In the past year, 8 new manufacturing plants have been created in Mexico, having been moved from the US for lower wages. Included in this number is Ford, who moved all small car production from Michigan to Mexico in September.

If Trump were to end US involvement in NAFTA, these car manufacturers would be just a few of the organisations with a big decision on their hands. Should they manufacture abroad and risk rising import costs? Or return operations to the US heartlands, and pay considerably higher wages?

However, though it’s easy for America to withdraw from NAFTA, it’s unclear what tariffs would be placed on imported goods. Beyond this, it’s likely to result in higher prices for American consumers (and buyers too), without any guarantee that jobs would return to the US either.

From a global supply chain point of view, it wouldn’t create much change. Mexico will remain an attractive proposition for non-US companies, such as Audi, BMW, and Toyota, none of whom are subject to NAFTA. So concerns the Mexican economy will collapse are unlikely to be realised.

Great Big Business Benefits

However, some big businesses and industries would stand to gain significantly from a Trump presidency. In the days following the election, shares in Oil and Gas companies shot up, following Trump’s pledge to make the US energy independent.

This would mean great exploration of the US mainland, and potentially relaxation of environmental policies put in place by President Obama. This would in turn impact procurement, who would have to bear in mind any changes in longer-term contracts.

Another group to benefit could be the Defence sector. There is likely to be great investment in defence in America, which may in turn move other countries to do likewise. Increased spending could free up previously-stalled projects, and kick off new projects benefitting both procurement and suppliers.

Finally, it’s fully anticipated that infrastructure procurement will be increased. With more money being promised to federal budgets, but greater efficiencies required, procurement will play a pivotal role in ensuring that funds are used wisely.

Investment Nerves

In the hours following the announcement of Trump’s victory, global markets dropped significantly. However, the drop, unlike Brexit, was a temporary one, with nearly every major market reporting an increase by close of trading.

Long-term, however, no-one is exactly sure what will happen. As one media source put it, “Investors are in wait and see mode”. This is likely to continue until the middle of 2017 at least, when formal policies will become much clearer.

strong anti-globalisation message resonated through the Trump campaign, and there are concerns that major investments will be hedged until such times that investors are clearer on what the outcomes might be.

Countries like India have traditionally relied on US investment. Any major policy changes could in turn impact significantly on the linked global supply chain. Whichever way it happens, organisations at least have a while to prepare, with President Trump due to take office on the 20th of January 2017.

What do you make of the procurement implications of the election? How major do you think the changes will be? Let us know in the comments below (procurement/business only, no political views please!).

It’s not been easy with news cycles dominated by other events, but we’ve found some great headlines this week.

GM to Cut Production Shifts in US

  • General Motors are to cut production shifts and lay off 2,000 workers at car assembly plants in Ohio and Michigan.
  • The move comes amid falling demand for passenger cars, and shifting consumer trends.
  • GM is the latest in a series of auto makers taking steps to deal with softer retail sales.
  • Earlier this year, GM announced plans to invest up to $691 million to build new plants and expand current ones in Mexico.

Read more at the Wall Street Journal

Burberry Cuts Product Lines

  • UK luxury retailer, Burberry, is to cut the range of products it offers by between 15 and 20 per cent.
  • The company reported a 40 per cent drop in first-half profits, blaming rising costs for the fall.
  • Pretax profit for the first six months of 2016 was £72 million, compared with £119.5 million in 2015.
  • The company has recently written down a number of assets, as well as incurring major costs for restructuring plans.

Read more at Market Watch

Rio Tinto Suspends Executive Over Alleged Payments

  • Rio Tinto has suspended a senior member of staff following an inquiry into a $10.5m payment made to a consultant on a mining project in West Africa.
  • The company launched an investigation in August 2016 after email correspondence from 2011 was found.
  • The emails showed “contractual payments” made to a consultant providing “advisory services” on the Simandou scheme in Guinea.
  • Rio Tinto has also announced that its selling its stake in the Simandou scheme to another project stakeholder.

Read more at Supply Management

Review Called After Contract Dispute Payout

  • Calls for an urgent review have been made after new details emerged about a £1.25m compensation payment following a contract dispute.
  • Legal proceedings were brought by Triumph Furniture after it challenged a contract awarded to a rival.
  • It has now emerged the Welsh Government was alleged by the bidder to have breached EU rules.
  • The Welsh Government said it was taking the issue “extremely seriously”.

Read more on The BBC

Ask Not What You Can Do for Your Organisation

But what your organisation can do for you. And these tips should point you in the direction of a great employer.

jfk organisation

For a decade or more, the economy has very much been a hiring manager’s market. A number of economic events culminating in the GFC made it increasingly difficult for even the most qualified candidates to find a position. But not anymore.

Thanks to a host of economic upturns, more and more jobs are appearing. Finally applicants can ask: “What can an organisation do for me?”

These days, it is important for employers to consider how they can work to better their workforce. Career management is no longer the sole responsibility of the worker; companies must consider how to lend their employees support.

As a job candidate, you should look for organisations that are eager to learn your goals and aspirations, and provide backing and encouragement to help you achieve them. More specifically, you should search for an employer willing to do the following for the sake of your career:

Understand Your Intended Path

As a human being, you have personal and professional goals. Often, those goals include a specific career path culminating in a prestigious job title with important responsibilities and generous benefits.

From the very beginning of your employment, your employer should be eager to learn your goals and pave the way for you to achieve them.

As you endure the job-hunting process, you should explain your personal and professional plan to every prospective employer. The most promising employers will respond with information on career paths through their organisations, available career-boosting tools or programs, and (most importantly) a commitment of support for your goals.

Those who seem uninterested in your goals will not do anything to help you achieve them.

Adapt Roles and Responsibilities

Though you might not expect an entry-level position to be handcrafted to match your abilities and interests, as you head into your mid-career, your employer should begin adapting your role and responsibilities to suit your preferences and skills.

In fact, ideal organisations will be able to assess your strengths and weaknesses and provide opportunities for you to develop those abilities you will need to enhance your career and achieve your professional goals.

During the interview process, you might ask about the possibility of you gaining a hand in the development of your work responsibilities as you gain experience within the organisation.

Offer Necessary Resources

Regardless of your career goals, your organisation can dramatically improve your chances of success by connecting you with valuable resources.

Perhaps most importantly, your employer should have a programme to support the continued education of its staff. This can be through workplace seminars or tuition reimbursement.

Flex time will help you pursue advanced education, like a master’s of organisational leadership degree, that could qualify you for top positions at your organisation while also improving your skill set for the company.

Additionally, you might look for an employer that boasts a mentorship programme. This way, you can build relationships with important figures at your company and gain career-boosting opportunities.

Be Respectful and Compassionate

It is entirely likely that your goals will change during your career. It’s imperative that you find an employer who won’t disrespect your choice, or react extremely and destroy your opportunities for success.

Employers should recognise the value of investing in employees, who will undoubtedly become valuable assets or allies in their future positions – regardless of whether those positions are inside or outside the organisation.

It isn’t difficult to identify companies who lack compassion for their workers. You can often find evidence of poor treatment on ratings websites like Glassdoor.

Most organisations think first of the profit margins, second of the customers, and third of their employees. In years past, companies had little reason to worry about workers leaving for better jobs, because the potential for finding alternative reliable employment was low.

However, if we expect the current trend of job growth to continue – which it should, given the strength of the economy and imminent retirement of baby boomers – employers must begin to consider the health and happiness of individual employees.

Being kind and supportive, having tools for personal and professional improvement, and remaining flexible in roles and rules are the hallmarks of organisations that treat their workers well. You should keep an eye out for job opportunities with companies like these.

Tiffany Rowe is a marketing administrator who assists in contributing resourceful content throughout the World Wide Web. Tiffany prides herself in her strong ability to provide high quality content that readers will find valuable.

Big Ideas Summit 2016: Big Idea #22 – Revolutionising Financial Services

Crowdsourcing and mobile technology will change the face of Financial Services and how new businesses source funding.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Winds of Change in Financial Services

Chris Hancock, CEO at Crowd2Fund, says that there is a revolution coming in the global Financial Services sector, thanks to the power of community and new mobile technology.

Chris draws on his own experience to explain how this revolution will change how money is lent to businesses. This in turn will help to increase the number of small, agile, innovative businesses getting started.

Catch up with all the delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

Want to find out more about Big Ideas 2016? And maybe what we have planned for 2017? You can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 18,500 like-minded procurement professionals from across the world.

Getting Millennials on Board the Collaborative Procurement Bandwagon

Could the secret to e-procurement adoption success be Millennial engagement? Could more collaborative approaches be the key?

collaborative approach

This article was first published on My Purchasing Center.

No matter how good your e-procurement solution is, its success depends on user adoption. Getting employees to purchase through an e-procurement system is a hurdle that needs to be overcome in any organisation, particularly when it comes to engaging Millennials.

This generational powerhouse is having a major influence on corporate culture and how we interact with technology and communicate with each other.

This generation, which grew up with technology and social media, is accustomed to getting information at the tap of a finger, participating in digital communities, and relying on online reviews and opinions.

And they have come to expect this same level of convenience, immediacy and ease of use with the enterprise technology solutions – including the procurement systems – they use.

Raising Millennial Interaction

Understanding how millennials interact with technology is critical to increasing adoption of procurement systems. And as their significance and numbers in the workplace increase, so too does the importance of recognising their needs.

So how can you effectively engage them? Here are five strategies for increasing Millennial adoption of procurement systems:

1. Make it Relevant

To minimise rogue buying, make sure your system is relevant to the daily work lives of the users. Ensure it is as fast and easy to use and as user-friendly and intuitive as consumer sites. This means offering users efficiencies that resolve challenges unique to their specific roles.

Create a seamless process, enabling users to quickly and easily find what they are looking for and submit travel and expenses on-the-go. By creating these user-friendly systems and processes, you will encourage users to make the best decision possible because it’s the easiest thing to do in the natural course of their work.

2. Leverage Critical Intelligence

Gather knowledge from users across the enterprise to tap into the wisdom of the crowd and promote success. Create your own crowdsourcing environment on your procurement system.

Allow employees to suggest the items they need to do their jobs best so that procurement teams can negotiate the best contracts for those items. Help users save time by creating a system that recognises their needs and serves up the right information at the right time.

Create social opportunities. Consider setting up a reviews section where employees can post and read products and services reviews from their colleagues. This section could also promote corporate social responsibility by allowing them to share information on suppliers with green practices.

3. Instil a Bottom-up Approach

Instil a bottom-up approach to system design, roll-out and management. Empower users to drive and improve the process, instead of trying to control people and force them into compliance from the top down.

By making users active participants in strategic company initiatives, they will have a sense of ownership and feel more engaged. This also ensures you’re delivering a system that meets users’ needs and one that they will like using.

4. Foster Awareness of Actions

Foster awareness across the user base by incorporating gaming and making it fun. The Pokémon Go craze, which has caught on like wildfire, shows the appeal that games have with millennials.

You could create healthy peer competition by showing employees how their efforts compare to their peers, such as who are the smartest shoppers, and who are the most frugal travellers. Recognise them on the system with bronze, silver and gold achievement levels.

Share the visibility you have into spend, and track usage and measurable results across the enterprise so employees can see the value they are adding, how their actions directly contribute to company goals and what others are doing to achieve success.

For example, show the progress your company is making on overall savings goals, user adoption and total spend under management. This will create the mindset that every person who buys goods and services is not only helping to optimise processes that streamline their daily tasks, but also creating spend data that can be used to make better decisions and save money for the organisation.

5. Reward the achievers

In our research, we’ve found that the number-one reason users drop out of a process is because they don’t understand what’s being asked of them and feel their actions are not making a difference.

Create a greater level of awareness by acknowledging company “rock stars” – employees who make big strides toward company goals through consistently demonstrating desired behaviours.

You can reward these individuals through points and badges. For example, “Speedy Approver” for those in the top percentile of the approval cycle. Or “Compliance Champion” for those requesting items that are on contract 98 per cent of the time.

These strategies will help you build a collaborative procurement culture that not only engages millennials, but all of your employees. As users better understand greater company goals and are incentivised to participate, they will gradually shift their spend behaviours to strategic, deliberate approaches that help realise collective goals.

You will not only turn Millennials and other employees into stewards of company funds, but your company will also benefit from the cost savings, and optimised processes that collaborative, strategic purchasing delivers.

Tehseen Dahya is General Manager, North America for Basware, a leading provider of networked purchase-to-pay solutions, e-invoicing and financing services.