Will You Be Your Organisation’s First Chief Sustainability Officer?

For most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business…

By Joshua Resnick/ Shutterstock

What’s the biggest change in terms of the focus and priorities for procurement teams and leaders over the last decade or so? There are a few potential answers to that question, but my feeling is that the whole area of corporate social responsibility and sustainability is a strong candidate for that award.

It’s just over a decade since I last held a full-time CPO (Chief Procurement Officer) role, but I don’t remember issues such as modern slavery, carbon reduction, global warming, plastics or human rights featuring too much in my thinking as a CPO through the nineties and noughties.

But now, it is right up there on the agenda for most organisations, in terms of both procurement priorities and indeed overall business focus.  That’s been driven by consumer demand and a more aware population, with younger people taking the lead on issues such as climate change, as we’ve seen in the UK with major protests and the visit of Greta Thunberg in recent weeks. Firms have become aware of the risks if they mess up on these issues, and that has spread through to shareholder action and sensitivity – a sign that firms really do need to get to grips with this agenda.  

We’ve even seen some CPOs morphing into “Chief Sustainability Officers” in their organisations, or combining the two roles. That’s not surprising when you think about it. The fact is, for most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business.

Certainly, an organisation can look at its own energy and water use, how plastics fit into its packaging strategy, and make sure it is behaving properly with regard to the human rights of its own staff. But if we consider the wider issues once we look at our suppliers, the scope is far greater. For larger organisations in particular, the impact they can have on hundreds or thousands of suppliers, all around the world, almost certainly outweighs anything they could do purely internally.

We can see another sign of how these issues have risen up the agenda with the announcement of SAP Ariba’s “Sustainability Summit” in June. It takes place on Tuesday June 4th, from 9 am to 12 noon, just before the opening of the SAP Ariba Live event in Barcelona that afternoon. There will no doubt be a certain amount of discussion around how SAP Ariba products can help in this area, but the morning is primarily designed to be a very interactive session, with expert panel discussions and small group sessions as well, so participants can pick up ideas from each other as well as from the experts involved.

And this isn’t just about “saving the world”, although there is nothing wrong with believing that we should all do our bit to make the world a better place. There are selfish reasons too for procurement organisations and leaders to position themselves in the foreground for their organisations’ sustainability efforts. From a functional standpoint, the vast majority of us look for purpose in our work, but as we said earlier, younger people are particularly concerned about these issues. So, if you want to attract the brightest and best to your team, it makes sense to show that you are concerned about sustainability and similar issues and that procurement in your organisation is deeply involved in worthwhile initiatives.

It is also clear that because sustainability is high on the corporate agenda, procurement can gain in terms of internal profile and reputation if we are seen to be taking a lead and driving the agenda through our supply chain. I’ve heard a number of procurement executives talking about how topics such as carbon reduction or supporting social enterprises have got them onto the Board agenda, in a manner that day-to-day procurement frankly just didn’t.

Back to the Summit: SAP Ariba Live is the largest procurement event in Europe, we suspect, and numbers for the Summit are limited. So if you are interested, don’t delay and do register now – please contact Miriam Kuritzkes to express interest and for further details.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.  

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Supplier Failure – Are You as Protected as You Think?

Supplier failure and collapse on a massive scale – it’ll never happen to you, right? How do you really think you’re doing to help protect your organisation from the fallout?

By Sergey Novikov/ Shutterstock

London, July 2017. Despite an “encouraging start to the year”, the warnings are coming thick and fast on Carillion. By November 2017, the company has issued its third profit warning in five months and things are looking bleak. And in mid-January 2018, despite the deferral of two financial covenants, the company collapses into liquidation.

In the days that follow, the investigations and enquiries begin. How did a company so integral to so many high value and high profile UK Government projects get into such trouble? Where and how did billions of pounds worth of contracts become over £1.5 billion worth of debt?

And, perhaps most importantly of all, how did numerous civil servants, Government contract specialists and expert financial consultants not see it coming?

2018 – The Year of Demises

The demise of a construction giant will go on to leave an enormous hole for the UK Government to fill in order to continue providing key services across the country such as school meals and hospital and prison cleaning, and ensuring that the 19,500 employees delivering public services are able to be paid.

The final cost to the UK taxpayer is estimated to be more than £148 million, but the knock-on effects will be felt for some time to come. Late last year it was reported that there had been a 20 per cent rise in insolvencies in the construction industry as sub-contractors and small businesses struggled following Carillion’s collapse.

But 2018 wasn’t finished there. Fast-forward a little more than ten months and the unthinkable happened again. Twice. First, one of Carillion’s key competitors, Interserve, issued a warning on the state of its finances and increasing debt predictions to between £625 million and £675 million in 2018.

Then just before Christmas, Healthcare Environmental Services (HES), a key provider in the disposal of medical and clinical waste, closed its doors with the loss of nearly 200 jobs and leaving the NHS and Local Authorities scrambling to ensure that services could be delivered by another organisation.

Where did it go wrong?

If your procurement department was anything like mine, then all three situations dominated conversations for weeks after these public announcements. Beyond the usual, “well, I’m glad that wasn’t us”, and the frantic checking to understand exposure, questions were starting to be asked.

Give a procurement professional long enough and they’ll be able to pick through the wreckage of a broken contract and understand roughly where things went wrong. And frequently, lines are drawn back to the contract or contracts put in place and the overall management of this.

But in these cases, and particularly in the case of Carillion, there was a general disbelief that something like this could have been allowed to happen. After all, how was the overall performance of the supplier missed? And just why, even though it was clear that there were serious financial difficulties, was Carillion awarded more contracts to help bolster its financial position?

Like me, maybe you thought, “I’d like to have seen the procurement process for that one.” Or maybe you wouldn’t…

And probably just as likely, even though you tell yourself that it would never happen on one of your contracts, you go back to check. You know, just to be 100 per cent sure that all your checks and balances are in place.

Checks and Balances

What has subsequently been reported is that Carillion, in conjunction with its appointed internal auditor Deloitte, had been, “”unable or unwilling” to identify failings in financial controls, or “too readily ignored them””. This is where there may be some explanation or sympathy for the procurement process.

In the public sector, as in the private sector, procurement will work in tandem with other departments in its organisation to ensure the robustness of the contract and the suitability of the supplier. As part of public tendering exercises, there are a two stages in which this can happen for Economic and Financial standing assessment.

The first comes as part of the European Single Procurement Document (ESPD). Buyers will outline the minimum financial requirements for the contract, usually linked to contract value, complexity, volume and length, as part of their Contract Notice and ESPD. This can be, for example, a positive outcome for pre-tax profits for the previous 3 years, and/or certain outcomes linked to financial accounting ratios.

Suppliers will confirm that they comply with this and at this stage may provide evidence for this. This is backed up by the second stage for financial checks, the Request for Documentation (RfD). The RfD allows for this evidence to be requested by procurement of successful suppliers as a final check before contract award. These checks then provide the comfort that the supplier has a firm financial footing to undertake the contract.

The key issue here, and in the case of Carillion, is that the assessments are only as good as the information that is filed and provided.

Procurement’s Role and Remit

As with many of the challenges in the public sector, we’re left asking the question of what is procurement’s role and remit in this situation. There needs to be an understanding that procurement can only do so much. However, what they do have the responsibility to do needs to be done correctly.

In the Carillion example, procurement may asked all the right questions, but if the evidence provided isn’t accurate, it still wouldn’t have made any difference. Procurement can put in the ground work up front, before they even get to the stage of requesting responses to ESPDs and the like.

When looking at your next contracts, make sure that you have the following:

  • An accurate specification – this will fully outline the scope of requirements and the supplier’s responsibilities;
  • Estimated project volumes – based on historical usage data where applicable, otherwise linked to the specification requirements;
  • Market analysis – who are the suppliers that are likely to bid for this work? What is the overall market spend like with the top suppliers?; and
  • Understanding of current contracts – which suppliers have won the most business from you recently? Is anyone looking like they may have capacity issues?

Working with key stakeholders across the organisation is critical. Not only will this improve the accuracy of the data that is issued with the contract, but it will also mean that there’s an overall understanding of who is actually best placed to cope with the new package of work. Particularly if one supplier seems like they are overstretching themselves.

Then it’s back to a footing of openness and honesty with suppliers so that any potential issues with financial performance are flagged up well ahead of time. Build that relationship with your suppliers and you may help to head off a situation where it’s your contract on the front page of the newspaper next time.

I’d love to hear your thoughts on this article and the series of articles on the challenges facing public sector procurement in 2019. Leave your comments below, or get in touch directly, I’m always happy to chat!

Procurement Across Borders – Looking Into The Cultural Mirror

A useful tool for developing cultural intelligence is the Cultural Mirror, which plots culture across nine dimensions…

By tankist276 / Shutterstock

As part of our ongoing article series on Cultural intelligence (CQ) we are discussing each of the four individual components of CQ and how they can be applied to effectively work across cultures. In earlier articles we discussed what Cultural Intelligence is and CQ Drive, which is the motivation that individuals have in approaching and interacting with different cultures. Now we move onto the next component which is CQ Knowledge.

CQ Knowledge refers to your own personal knowledge and understanding of other cultures. Differences and similarities between cultures can be assessed in terms of core values, beliefs, norms and behaviour.

A useful tool for developing CQ Knowledge is the Cultural Mirror, which plots a culture on nine dimensions. These dimensions are based on the work of anthropologist Geert Hofstede, Fons Trompenaars and Asma Abdullah that I amalgamated. The Nine Dimensions of Culture provides us with a continuum of values and by exploring each of these and where a culture sits on the continuum, we are able to gain insight into the culture itself and how it operates. It is critical to firstly appreciate where you sit on the cultural mirror yourself.

Here is the Cultural mirror and the Nine dimensions:

We will look at the first three dimensions in this article and understand what they are, how they are applicable and provide some tips on how to navigate these cultural differences.

Dimension One: Relationships – Task

In some cultures around the world the focus in the early stages of interactions is on building the relationship. In these cultures, getting to know the people and establishing trust is much more important than simply achieving the task. Examples of countries on the relationship end of the continuum are Saudi Arabia and Brazil. In other cultures the initial priority is on getting the task done. This is not to say that the relationship is not important, however the focus is primarily on getting the task done before building the relationship. Examples of countries that are on this end of the continuum would be Australia, Germany and Finland. In both situations, the outcome is to get the task done but the approaches are different.

Tips for those coming from a relationship oriented culture working with a task oriented culture:

  • Be focused and clear on outcomes
  • Give clear instructions about the task

Tips for those coming from a task oriented culture working with a relationship oriented culture:

  • Spend time initially building the relationship
  • Invest in small talk to make people feel more comfortable

Dimension Two: Harmony – Control

This is the view of how humans deal with the environment, nature and with people around us. People from harmony based cultures believe we need to live in harmony with nature and have an external locus of control. They believe in concepts such as yin and yang, fate, destiny and karma. Countries which are more on the harmony end of the continuum include Pakistan and China. Conversely, people from control based cultures believe that you are the master of your own destiny. You are in control of your life and you need to control the environment. Countries more towardes the control  continuum  are the USA and Switzerland.

Tips for those coming from a Harmony based culture working with a Control Culture:

  • Be aware that rigorous debate maybe encouraged
  • Be conscious of delivering on timelines

Tips for those coming from a Control based culture working with a Harmony Culture:

  • Be mindful that open conflict is likely to be avoided
  • Learn how to disagree in a polite manner

Dimension Three: Shame – Guilt

 In shame orientated cultures, avoiding a ‘loss of face’ is important. Thus, what others think of you and how they judge you is a strong motivator. Examples of countries which are more on the shame end of the continuum are India and Japan. Conversely, in guilt based cultures, it is more about up to the individual to judge themselves on their conduct. Guilt based cultures include Italy and Argentina.

Tips for those coming from a shame based culture working with those from a Guilt Culture:

  • Allow time for experimentation and brainstorming of ideas
  • Appreciate that candour may be present and encouraged in discussions

Tips for those coming from a Guilt based culture working with a Shame Culture:

  • Encourage participation through group based tasks to remove attention from individuals which may cause “loss of face”.
  • Do not expect public or rigorous debate

For the three dimensions we have discussed, please consider where your cultural preferences are and how that influences your interactions with others from different cultures?

How To Cope When You’re Working For Someone Half Your Age

Increasingly employers are looking to fill their ranks with ‘digital natives’, which usually translates to people younger than you. But how do you work for someone half your age?

By Petr Malyshev/ Shutterstock

Millennials (Gen Y) and Post-Millennials (Gen Z) now make up 40 per cent of the workforce.  So, if you are over 36 years of age you should probably get used to the idea you will one day be working for someone young enough to be your son or daughter.  How you deal with that reality can make a big difference to how happy you are at work and your chances of career progression.

Increasingly employers are looking to fill their ranks with ‘digital natives’ which usually translates to people younger than you. At the same time older workers are staying in their jobs for longer or rejoining the workforce after ‘retirement.’  And while every workforce has always been a mix of the old and the young and everyone in between, for many workplaces how that mix is distributed throughout the organisation has been changing.

In a traditional organisational hierarchy a significant part of the reason you were promoted was because of your length of service. This meant that older people tended to be more senior and young people tended to be lower in the chain of command.  Today this structure still very much persists in government organisations such as the Public Service, Law Enforcement,  the military, Health and Education.  But sheer weight of numbers (of younger workers) and a trend towards less structured workplaces has meant that May-December working relationships between a Boss and their direrct reports is more and more likely particularly in industries where social media capability is a requirement.

Naturally psychologists have a term for this. It’s called ‘status incongruence’ and it means a situation where a person’s status is not what you would expect, in this case, because of their age. 

While the phenomena has been discussed by sociologists since the 1950s, it’s only recently that studies on the impacts for organisations have started to appear. One such study was recently performed by researchers from Naveen Jindal School of Management at the University of Texas in Dallas.  One of the lead researchers, associate professor Orlando Richard told The New York Times the research showed “older workers are not as responsive to [a] younger boss, because they feel he or she shouldn’t be in that position,” and, “[they] are less committed to the company. They’re not as engaged in the job. If they’re close to retirement, they may not leave, but they may not work as hard.”

The study also found that organisations with older workers reporting to younger workers needed to adapt their leadership style to take account of that.  Transformational Leadership is popular among the types of firms likely to experience status incongruence.  But the research suggests this style of leadership in particular is likely to be less successful. 

Transformational leadership requires a leader to work with teams to identify needed change, create a vision to guide the change through inspiration, and execute the change in tandem with committed members of a group.  In order for this to work, the members of the team have to believe in the credentials and ability of the leader.  While that is not impossible where the leader is significantly younger than a team member, it is something that needs to be taken into account in how a leader works with the team.  They will have to work harder to establish their credentials, so that workers can see past their relative youth and develop faith in the leader’s abilities.

It is also something that the organization has to bear in mind when selecting a younger person to lead a team. If that person is not capable of convincing the team that they have the credentials to be there then status incongruence is likely to result in a team which significantly underperforms its ability.

For their part, older workers should focus on not being guilty of reverse ageism.  They need to recognise that age, like gender and race does not define a person’s ability.  They should especially resist the urge to give the leader tips on how they would do the job.  They should strongly resist the urge to say “having done this for years …” and leading with ‘in my day’ is not a good plan no matter who your boss is, but it is definitely a land-mine with a younger leader. 

Instead they should use their experience to help their younger boss in a non-threatening way.  Making yourself and your experience valuable is likely to be a pathway to doing better in any company but this is likely to be especially the case in an organisation that values skills over age.

The 6 Stages Of Your Procurement Job Interview

How to you prepare for (and ace!) your procurement or supply chain job interview?

By Lucky Business / Shutterstock

There is no shortage of general advice available online on how to prepare for and behave in an interview situation, and it’s free. That’s all very helpful, but what about preparing for an interview in supply chain or in a procurement role, how is it different?

1. Before the interview

The basics are the same whatever the role, preparation is vital.  Do research the following:

  • The background of the company, its culture and the industry it is in.  The more information you gather before the interview, the better prepared you will be to answer leading questions during the interview. Be fully prepared to answer the questions “How much do you know about our company?” or “Why do you want to work here?” 
  • The interviewer (or hiring manager).  Who is he or she?  What is their work background and experience?  This will help you find some common ground. 
  • Know your TCO, RFI, P2P, SRM and the rest of the acronyms. Interviewers may use these in conversation. It may unsettle you if you don’t know what they mean.   
  • Make sure you really understand the skills that are required and how much experience is expected. If you don’t quite fit their view of a dream candidate, motivate how you will grow into the role quickly. Think about the types of questions that you can expect and prepare your answers in advance. 

2. At the interview

Job interview formats go in and out of fashion:  you can be asked to do a video or panel interview or even one that includes end-users or stakeholders.  Whatever the format, you need to demonstrate your suitability for the role on offer and how your skills and background will provide tangible benefits for them.  

3. Functional skills

You will probably be asked about your experience and skills in relevant supply chain technology and related tools, e.g. SAP, Oracle, Ariba or other e-sourcing software. You may be asked about direct and indirect categories that you have worked in (make sure you understand the difference) and about your particular expertise in certain commodities or services.  In both these areas be careful not to embellish or over-represent your knowledge or achievements as your interviewer may know a lot more than you do. If you claim that you saved your organization £5 million in spend last year you will need to be able to substantiate it.  Currently, employers are looking for people with specific experience in complex procurement categories. In these types of role they expect candidates to be already familiar with the external marketplace and key suppliers. 

Questions sometimes start with “Tell me about a time when…”, where the interviewer will work through the STAR technique:  

  • The SITUATION 
  • The TASK or problem that arose
  • The ACTION you took
  • What was the RESULT

Prepare multiple examples in advance and rehearse them well so that they tell a story. Be ready for “tell me more”.  Make sure that you demonstrate that you have good critical and analytical thinking skills, are a good communicator, have time management skills, and are flexible, i.e. show that your expertise is transferable to them. 

4. Behavioural skills

Behavioural interview questions are very common in supply chain and are designed to elicit specific and detailed responses about inter-personal and conflict situations which you have been exposed to. How did you handle the issue, what actions did you take and what was the outcome?  Your answers will show that you understand effective ways to deal with suppliers and internal clients.  Listen carefully to any clues the interviewer gives you on what’s important to them so that you can respond by giving your own examples. You need to be able to articulate how you would be able to bring about change and implement improvements seamlessly, where required.

5. Do you have any questions?

An interviewee will almost always be asked this. Understanding how to communicate your interest is very important so have your questions ready.  This is not the time to discuss the remuneration package or benefits that may be offered. Genuine questions about how the company manages its procurement function and how the different elements of their supply chain operate will be welcomed.  If the interviewer is interested in you they will demonstrate it by asking a variation of the following, ‘why our company, why this position and why you?’  This often is your most critical response during the interview process.

6. Where it can go wrong:

Feedback from senior managers and top recruiters says that where candidates fail most is in:

  • Not being fully prepared and having to refer to their CV for details
  • Did not know enough about the company and its operations
  • Did not have the right attitude/did not demonstrate any energy for or interest in the role offered.
  • Could not provide examples or explain how they are suitably qualified
  • And arrived late for the interview!

Displaying a positive attitude and expressing a sense of enthusiasm for the company and the role is an excellent starting point for landing that job. Cultural fit and good inter-personal skills may be the clincher; processes and applications can be taught over time to fulfil gaps in experience. 

Related articles

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Transparency In Supply Chains And Blockchain: What Is The Most Common Trap?

Becoming aware of blockchain’s weak spots is an important first step towards taking full advantage of what the technology really has to offer.


By Billion Photos / Shutterstock

Is Blockchain coming of age in 2019?

Judging by the first half of 2019, it seems that the blockchain hype is finally deflating and there is an overall consensus that it will not save the world (at least not this year…). The growing trend towards pragmatism, which is now beginning to temper people’s expectations, is the best thing that could happen to blockchain. . .  A more down-to-earth approach is welcome because, like any technology, blockchain is not perfect, nor the solution to all problems. It is important to be realistic about its potential and limitations.

In particular, blockchain has limitations that threaten to jeopardise many recent high-profile initiatives to increase traceability and visibility in the supply chain. Despite seeming like the ideal technology to address growing concerns about these aspects, most (if not all) blockchain implementations have an Achilles’ heel: the initial digitisation of data to bridge between the physical and the digital world.

Becoming aware of these weak spots is an important first step towards taking full advantage of what blockchain really has to offer. Blockchain’s real value proposition

There are many potential and valuable use cases for blockchain, especially in Procurement and Supply Chain Mgmt.  

“If you talk to supply chain experts, their three primary areas of pain are visibility, process optimisation, and demand management. Blockchain provides a system of trusted records that addresses all three.” Brigid McDermott, vice president, Blockchain Business Development & Ecosystem, at IBM (source Blockchain and Supply Chain Finance: the missing link!, Finextra)

The most valuable characteristic of blockchain is that it serves as a backbone for “convergence”:

  • For better insights and actionable intelligence: Blockchain is the missing link in Big Data initiatives and the convergence of the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain represents a breakthrough.
  • From an integration perspective: Blockchain-based supply chains allow three different supply chains (physical/informational/financial) to converge into a single digital one.

Blockchain has the potential to converge the two main ecosystems involved in trade finance — the financial ecosystem, which includes banks and suppliers, and the supply chain ecosystem. At the same time, the technology can provide a unified platform for multiple stakeholders, potentially avoiding difficulties that slow down operations” Béatrice Collot, Head of Global Trade and Receivable Finance at HSBC quoted in Blockchain’s Main Strengths Are Transparency and Instantaneity on Cointelegraph

While these features will certainly contribute to improved supply chain transparency, there is still a critical challenge that needs to be addressed: the digitisation of data at the beginning of the process. This crucial step constitutes a fundamental weakness of many current digital supply chains.

Blockchain’s Achilles’ Heel: Mind the Gap!

Traceability and transparency along the supply chain, from raw materials to final products, is a growing concern for organisations. New regulations from governments & institutions, customer expectations, and company’s self-interest in issues like sustainability, incident management, and efficiency, have created the need for an infrastructure to track, trace, and store data in the supply chain.

At first glance, blockchain may seems like the ideal solution. It creates a permanent record of all transactions at all levels of the supply chain, guaranteeing full traceability and establishing trust. So, many companies started to provide blockchain-based means of collecting information in their supply chain with the goal of making it accessible to customers as irrefutable proof about the origin of products and components.

A typical story goes like this: “Thanks to our application, you can take a picture of the QR-code on your product and view the entire supply chain of all components/elements that contributed to the final product you have in your hands.”  

This sounds great in theory, but there is an important caveat:

 “At the interface between the offline world and its digital representation, the usefulness of the technology still critically depends on trusted intermediaries to effectively bridge the “last mile” between a digital record and a physical individual, business, device, or event. […] And if humans […] manipulate the data when it is entered, in a system where records are believed ex-post as having integrity, this can have serious negative consequences.” What Blockchain Can’t Do, Harvard Business Review

The use of blockchain technology gives people a false sense of security because it relies on cryptography and various mechanisms to ensure that information stored on it can be trusted (identity, immutable record, etc.). But, as illustrated above, the digitization step when the information is recorded (a block added) is not protected by this same “guarantee.”. So, it is not because blockchain technology supports and enables a better transparency that it should be blindly trusted by customers or by procurement or supply chain pros.

The solution?

It is undeniable that blockchain is a form of digital trust. Much of the hype surrounding it has been driven by a broader trend in society: the erosion of trust in people and institutions. Blockchain is playing a major role in shifting that trust to technology and software. This explains, in part, why compliance and transparency are the use cases that are priorities for procurement and supply chain pros.

However, it is important to remember that blockchain’s reputation as “trustworthy” can be misleading, especially in the case of supply chain transparency. Manual operations are still part of the initial process of digitizing the data. Therefore, trusting data stored in the blockchain also means trusting that initial step that relies on human activities.

For this reason, building trust in business partners will continue to be a vital part of the procurement function’s role in the future. Introducing digital initiatives will not entirely remove the human element of the job, and Procurement practitioners will need to continue working on establishing trust and nurturing it with suppliers and stakeholders.

Also, from a technology perspective, there are already initiatives to close the gap between physical and digital as much as possible. Interestingly, they focus on physical objects (crypto-hardware) and not just on software. These objects are the child of RFID, connected devices, and blockchain, with the intent to create a convergence between the Internet of Things and the Internet of Value (blockchain) to create the Value Internet of Things (VIoT).

In addition to the human and technological answers that will both contribute to creating a truly integrated supply chain (physical + informational + financial), a third component will remain essential: critical thinking.

Trust and verify!

But wait, the blockchain action doesn’t stop here! Join us on October 15 with blockchain experts Shari Diaz, Innovation Strategy and Operations Program Director, IBM Watson Supply Chain and Professor Olinga Ta’eed, Director of the Centre for Citizenship, Enterprise and Governance in this webinar brought to you by IBM and Procurious. Click here to register for Blockchain: Supply Chain’s 21st Century Truthsayer.

World’s Deadliest Supply Routes: Ice Road Trucking

Are you responsible for sending your people into danger? In a new Procurious blog series, The World’s Deadliest Supply Chains, we investigate the most high-risk supply chains out there…


By James Gabbert / Shutterstock

The intrepid truckers on the temporary ice roads spanning hundreds of kilometres of frozen lakes in Canada and Alaska keep their hands on the door handle for good reason: should the ice crack, they have a split second to leap from the vehicle before it falls into the icy, watery abyss.

For a decade, viewers of the History Channel were given a first-hand view of what motivates these drivers and the perils they face, which include not just a frigid sinkhole but avalanches, whiteouts and hypothermia, even earthquakes and volcanic activity.

Set in Canada’s Northern Territories and Alaska, Ice Road Truckers lasted 11 series between 2007 and 2017.

The truckers’ mission was to supply remote gold and diamond mines and entire small towns with goods in the winter months, when road access is only possible because the lakes have frozen over.

Items included anything from fresh food to mining equipment that would be tricky to transport even on well-laid bitumen.

Featuring nicknames such as “Chains”, “Bear Swensen”, “Polar Bear” and “Hammer Down”, the rough-hewn drivers were often depicted in mishaps such as when they ran off the road or got bogged.

In one episode, viewer favourite Lisa Kelly – one of three female drivers – leaps from her truck amid ominous cracking sounds and a disconcerting build-up of water under her rig’s 18 wheels.

As is the norm for ‘reality’ programs, the series was criticised for overdramatising and promoting reckless behaviour among the truckers – one of them, for example, exclaims “yee-haw!” after driving too fast over a rough patch of road.

The opening sequence showing a truck sinking through the ice was staged at a Hollywood studio in sunny California, using sugar and shaved ice. However, the set-up was based on a real accident at Mackenzie Crossing in Alberta, with the driver apparently not recognising a warning sign that the road was suitable for light loads only.

Some viewers were less than impressed with the skills of the Ice Road Truckers cast. “Who the heck tries to pull out another truck using a chain that has slack in it and then drops the gas [accelerates] and takes off?” asked one heavy-haul driver.

Ventures West Transportation president Glenn Bauer reckons the televised truckers come across as a “bunch of cowboys” (the Alberta-based company hauls fuel to some of the Canadian diamond mines featured early in the series).

He says the only incident he knows about involved road-building equipment falling though the ice. “In reality, it’s very, very controlled,” he told truckingnews.com.

Despite the series’ bent towards entertainment, there’s little doubt that navigating a 70 tonne load over hundreds of kilometres of icy wilderness is inherently dangerous and there have been some fatalities over the years.

Fatalities are rare, though. As a guide, the 27 truckers in the Ice Road Truckers series all lived to tell their war stories, save for Montanan Darrell Ward who died in 2002 aged 52 – in a light plane accident. He was, ironically, on his way to film the pilot for a documentary-style show involving the recovery of plane wrecks.)

One reason for the low fatality rate is that, as with inherently risky aviation, operators are required to follow strict safety protocols.

For instance, trucks travel in convoy (although not too close together) with the most experienced drivers leading, and trucks are limited to speeds as low as 10 kmh. In parts where slush is forming, drivers are advised not to stop altogether lest they get stuck.

The ice roads are not random trails, but can be engineering wonders. One example is the Tibbitt to Contwoyto Winter Road, which spans 595 kilometres from north of Yellowknife into the neighbouring territory of Nanavut.

The width of an eight-lane highway, the road takes 140 workers to build each year and can support 70 tonne, eight-axle articulated trucks.

The famed Dalton Highway in Alaska – spanning 414 miles from Fairbanks to the oilfields of Prudhoe Bay – was the subject of an innovative repair job that itself presented a huge logistics feat.

The massive task involved underlaying 80 kilometres of a vulnerable section of the highway with 1.2 million metres of polystyrene foam strips, to keep the permafrost frosty and to raise the road above flood level.

Apart from a crazy streak, the only formal prerequisites to become an ice-road trucker are completing high school and possessing a heavy commercial truck licence. The truck companies provide the training – not that there is any real substitute for experience.

With no pit stops along the way, the truckers need to be proficient drivers as well as proficient mechanics.

The lure of the lucre is a key motivation, although pay levels vary markedly. Typical remuneration for a season varies between $US20,000 and $US80,000, but harder working truckers can earn up to $US250,000.

The pay levels depend on the distances driven, the type of cargo and the hazard levels.

Despite high competition for relatively few jobs, driver turnover reportedly is very high, with many not returning after their first trip after realising how dangerous the game can be.

A paradox of the ice-trucking game is that while the frigid conditions make for treacherous conditions, warmer-than-expected weather is even worse because the highways are more prone to crack and develop slushy parts.

In the next few years, climate change, rather than ice blizzards and crevasses, may defeat the hardened people of the ice roads.

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain need

Is AI The New Electricity?

For supply chain professionals, the drive to use AI is there. But how do organisations get to the point when AI-enabled supply chain management is the norm?

By kung_tom/ Shutterstock


“Electricity changed how the world operated. It upended transportation, manufacturing, agriculture, health care. AI is poised to have a similar impact. Artificial Intelligence already powers many of our interactions today. When you ask Siri for directions, peruse Netflix’s recommendations, or get a fraud alert from your bank, these interactions are led by computer systems using large amounts of data to predict your needs.”

Andrew Ng – Stanford University – March 2018

According to the results of our latest survey, Procurement 2030, supply chain pros are well aware of how impactful AI could be for their profession. Indeed, 92 per cent of professionals believe the profession will transform by 2030 as a direct result of new technological innovations. And 51 per cent predict that, with the help of AI, supply chain professionals will become an agile group of strategic advisors.

The intention to utilise technology is there. But how do organisations get to the point when AI-enabled supply chain management is the norm?

Getting started, and knowing where to start, is tough going – as with anything new and unknown. We know that many supply chain pros are concerned that implementing AI into their supply chains is a complex step. In fact, our survey takers ranked it as the technology they feared most difficult to adopt. But are their fears unfounded?

We want procurement pros to be pushing the limits on Industry 4.0, and the first to adopt new technologies.

And so, in our latest webinar – How AI Saved My Day Job: Confessions from a Supply Chain Pro we’ll be demonstrating that AI is the real deal by giving you the insider information, the low-down, on what it is delivering right now for supply chain teams.

Webinar speakers

We’ll be speaking with supply chain professionals who are already implementing AI in their organisations and have discovered that AI does provide a demonstrable bottom-line impact across all supply chains structures. Speakers include:

  • Rob Allan – Program Director, Supply Chain Insights Offering Management – IBM
  • Tania Seary Founder – Procurious
  • Connie Rekau – EDI Manager – The Master Lock Company
  • Nickolas Bonivento – EDI Manager – Anheuser-Busch InBev

When is the How AI Saved My Day Job webinar?

The webinar takes place on 15th May 10am ET / 3pm BST. Sign up or log in via the form above and we’ll be in touch ahead of the event to provide details on how to join the webinar live.

How do I listen to the How AI Saved My Day Job webinar?

Simply sign up here and you’ll be re-directed to the Supply Chain Pros group where you can access heaps of related content. You will also join the webinar mailing list, so we can provide you with details on how to access the webinar before it goes live.

Help! I can’t make it to the live-stream of the How AI Saved My Day Job webinar?

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Do I have to be a member of Procurious to access the How AI Saved My Day Job webinar?

Yes. To access the webinar you’ll need to sign up to Procurious. You’ll be joining a community of 30,000 like-minded procurement and supply chain peers and gain access to all Procurious’ free resources. You’ll be joining a community of 30,000 like-minded procurement and supply chain peers and gain access to all Procurious’ free resources.

Could AI revolutionise your supply chain and save your day job – allowing you to make better decisions, more efficiently and in a more repeatable way over time? Let’s find out!

Is Employee Turnover Killing Your Profits?

It’s a good idea to get the bottom of why employee turnover happens and how to limit it.

By KeyStock/ Shutterstock

Employee turnover costs US businesses more than one Trillion (1,000 Billion) US dollars a year.  That represents about 10 per cent of all US corporate profits, so it is nothing to be sneezed at.  It is therefore probably a good idea to get the bottom of why it happens and how to limit it.

According to the latest statistics from the US Bureau of Labor Statistics, the average US business turned over 44 per cent of its employees in 2018 and in some industries it was significantly higher.  It was 87 per cent in the Arts and entertainment and 75 per cent in accommodation and food services. At just under 15 per cent, Federal government agencies experience the lowest turnover.

Gallup research suggests each employee loss costs the business 150 per cent of their salary.  Deloitte Consulting partner Josh Bersin says his research shows that, depending on the position,  it could be as high as 200 per cent by the time you account for hiring, on boarding, training, ramp time to peak productivity, the loss of engagement from others due to high turnover, higher business error rates, and general culture impacts.

Besides those obvious cost cascades there are some less obvious, but no less important costs.  The significant direct costs put real time pressure on an organisation to hire a replacement and get them trained, settled and productive quickly.  The pressured hiring process can often lead to the new hire not being a good fit for the job and leaving (or being let go) within a year, thus compounding the costs.

The Harvard Business Review says that as much as 80 per cent of employee turnover is due to bad hiring decisions.  Similarly Leadership IQ’s Global Management Survey reported that 46 per cent of new employees turn out to be a bad hire within 18 months and only 19 per cent will turn out to be an unequivocal success.  When it came to teasing out the factors behind the failure they found  a lack of technical skills explains only 11 per cent of new hire failures, whereas coach-ability (the ability to accept feedback from bosses) accounted for 26 per cent of failures. 

Employee turnover is very real and very costly, so doing anything at all about it, no matter how small the impact, is likely to be a good investment.  The research suggests that there are some especially important factors that are key to retaining employees (that you want to retain).

Obviously the first rule is don’t rush.  It is important to ease a potential new hire into a job.  Ensure they have a good sense of who they will be working with and what the expectations are well before they are signed on.  This means going beyond the standard probation period clause and pro-actively ensuring compatibility with your culture and team preferably before they start.  Throwing a new hire in the deep end and hoping for the best is likely to be a bad idea.

Pay is also obviously a factor but the research shows that if the only thing you do is throw money at them, you are unlikely to be able to stop a valued employee leaving. While being paid too little for the role will definitely motivate churn, overpaying will not make up for an unhappy workplace.  A workplace survey by Equifax for example found that 44 per cent of workers who leave within a year take a pay cut. They want to get out so bad, the pay is not enough to keep them there. 

Pay does have an effect but it is relatively small. According to Glassdoor surveys, every 10 per cent increase in pay only reduces the likelihood of an employee leaving by 1.5 per cent.  So if you double their pay they are still 85 percent likely to leave. 

On the other hand opportunities for advancement and training are significant factors in employee retention.  Humans like to feel they are getting somewhere. Research repeated shows that role stagnation leads to turnover.  Glassdoor have even put a number on this, saying that every 10 months at an unchanged role increases the likelihood of an employee leaving by 1 per cent. 

According to exit surveys conducted by Gallup, more than half of all exiting managers say that in the 3 months before they left, no one in the organisation spoke to them about how they were feeling about their job or their future with the organisation.  If no-one is talking about your future with the company, it’s easy to come to the conclusion you don’t have one.

Gallup recommend proactive engagement about an employee’s opportunities for growth are key to retaining valuable employees.  They suggest you know the employee’s long term personal goals, allow them opportunities in roles bigger than their past experience and help them to acquire new skills to advance their careers.  In short, treat them as you yourself would like to be treated.  Let’s call that the Golden Rule for Employee Retention.  You could so a lot worse than applying it in your business.


Procurement Across Borders: Advancing Your Drive To Be A Global Player

Tom Verghese provides a list of tips which can be useful in advancing your CQ Drive…

By vectorfusionart / Shutterstock

In my last article I discussed the three associated factors affecting CQ Drive, which are intrinsic motivation, extrinsic motivation and self-efficacy. Each of these components play an important role in understanding your own drive in terms of Cultural Intelligence and how it can be enhanced.

To refresh here are each of the components of CQ Drive.

  • Intrinsic drive is what motivates some people to have interactions with other cultures.  People with intrinsic drive have a deep, personal interest in different cultures and want to understand or experience the different foods, languages and cultural practices of others.
  • Extrinsic drive describes those people that may want to gain experience interacting across cultures to improve their credentials or gain a promotion in their organisation. People with extrinsic drive are motivated by the way in which having interactions with other cultures can benefit them.
  • Self efficacy refers to having the confidence to handle intercultural situations should they arise, especially when you are not in a position to know the best course of action. Often this entails navigating the cues you are receiving and interpreting them to the best of your ability.

A great example of CQ Drive that I noticed recently was the way in which Jacinda Ardern  has been handling the terrible tragedy that occurred in Christchurch, New Zealand. She has exemplified all the elements of high CQ Drive. From my observation, her key drivers have been to understand the perspectives of the communities, particularly the Muslim community and to make decisions that are in the best interest of the people of New Zealand.

She has shown great respect to the Muslim community and their culture by choosing to wear a hijab and spend time empathising with the victims’ families. In parliament she quoted an Islamic greeting to begin the session and has already enacted new laws restricting gun ownership in an effort to ensure that the community at large is safe. In taking these actions she has united the people of New Zealand, overcome a difficult cross-cultural issue and shown great leadership. Jacinda has demonstrated high CQ Drive at the intrinsic, extrinsic and self- efficacy levels through her actions and gained support and respect for her leadership and humanity in doing so. It is very encouraging to see this behaviour in a world leader and provides us with a great example of how we can do better at a personal level in this space.

Here is a short list of tips which can be useful in advancing your own CQ Drive.

  1) Take some unconscious bias tests –Click here

  2) Seek feedback from peers about your interactions across cultures.

  3) Reflect on what guides and influences your behaviours and attitudes toward culturally diverse groups

  4) Welcome opportunities to mentor others as a ‘cultural broker’ and to be mentored yourself.

  5) Seek an interest that you have and leverage on it. Connect with culturally diverse peers who may have an interest in the same topic. You may seek to reach out via social media.

  6) Be prepared to make mistakes and to learn from them.

Being clear about ‘why’ you are choosing to interact with others from different cultural backgrounds helps ease the inevitable tensions or misunderstanding that arise. It provides you with a higher level of self-awareness which is essential in all cross-cultural interactions.