Four Ways Brexit Has Rattled CPOs

With Brexit headlines continuing to dominate the daily news, what have been the biggest lessons for procurement leaders on how to approach geopolitical risk?

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As cross-party Brexit talks collapsed, stockpiling reached its highest level since records began in the 1950s. A final decision on Brexit looks like it has, yet again, been thrust into the distance. But by now chief procurement officers (CPOs), those charged with ensuring businesses have enough raw materials and goods, have learnt to live beyond politicians’ promises. 

Procurement teams have begun to view geopolitical risk as an unwanted yet permanent factor. It’s no longer just the prospect of Brexit that has procurement officers grappling with greater risk in their jobs. Any emerging geopolitical risk poses potential obstacles for global supply chains, which over the past few decades have become tightly interwoven. 

Lesson 1: Uncertainty is certain 

Procurement chiefs have learnt quickly that they cannot count on politicians. But they can control the steady flow of goods and materials to their organisations by risk-mapping and establishing alternatives. 

Dairy Crest, a manufacturer of British food brands, approved additional suppliers, extra sources of material and alternatives by identifying pinch points in the supply chain, ensuring greater flexibility. 

CPO Chris Thomson reviewed the stock management processes in terms of ingredients and packaging, factory planning processes and customer order to stock processes. All these processes had been in place for many years and were effective, but Brexit made it necessary to revisit all systems and processes. 

“It’s been quite an interesting experience to have a serious situation like this to open your eyes again and to challenge some of the existing business processes,” he says. 

He is not alone in his approach. Neil Butters, head of procurement at Inprova Group, says: “Before you think big, think small. I’d been trying to understand geopolitical risk and Brexit and other areas, and trying to work out how that impacted my organisation. What I ultimately decided to do was to take a fresh view of my organisation and the risk factors, and map them out.” 

Lesson 2: Revisit systems and processes 

“Brexit has forced many CPOs and their teams to look again at their suppliers, local sourcing plans, local versus international, and start to make some decisions about what their future supply should look like,” says Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS). 

Indeed, CPOs have been evaluating their supply chains at a more granular level. Many procurement teams have looked at what happens in the supply chain beyond the first contact with their own company. The view is if they can understand the risks posed at that distance, then they will be able to manage them before there is a direct impact on their business. 

“We haven’t fundamentally changed our sourcing approach. What we have done is put a lot more emphasis on our category management in our processes, and a lot more emphasis on how far up the supply chain we understand what’s going on,” says Dairy Crest’s Mr Thomson. 

Localisation might help some businesses, but switching to UK suppliers doesn’t always solve the problem. Establishing new suppliers has its own challenges and is rarely a seamless process, particularly if you are sourcing a strategic supplier. 

According to research by CIPS, almost a quarter of companies it surveyed were looking for alternative non-European Union suppliers. But the study also showed that half of British companies would struggle to find the suppliers and skills they need in the UK if they were forced to bring parts of their supply chain back home post-Brexit. 

“Anybody who approaches their suppliers in business as purely a transactional thing misses the opportunity to work special situations and to work closely together to manage whatever it is thrown at us. We treat our suppliers really as part of the business,” says Neil Ginger, chief executive of Origin, a UK manufacturer of aluminium doors and windows. 

Lesson 3: Stockpiling can’t solve everything 

Filling up warehouses with raw materials and medicines is a short-term solution. Stockpiling is an option for some, but many do not have the facilities to store surplus stock and those with perishable goods simply won’t be able to. 

Longer-term stockpiling won’t fix the challenges companies face over trading with EU customers and suppliers. Moreover, the additional costs of paying for the stock and then paying for warehousing that stock can be crippling, particularly for smaller businesses with fewer resources. 

Earlier this year, door and window manufacturer Origin began stockpiling aluminium extrusion from its supplier based in northern Spain in preparation for Brexit and disruption at the border. In total, the company stockpiled around £750,000-worth of materials, which is not an insignificant amount of money to add to your inventory. And then Brexit Day never came. 

“Beyond the things you can’t control, you’re just trying to stay as flexible as you possibly can. We bought more material to make sure we could see ourselves through some very short-term disruption at the border,” says Origin’s Mr Ginger. 

Lesson 4: Ditch the silos 

CPOs have become more rounded business people as a result of Brexit. They have had to work more intensively with other teams within their organisations, and have had to explain what they are doing to the board to ensure the business can keep functioning and fulfilling customers’ orders. 

Like many companies, Dairy Crest set up a cross-functional leadership group focused on medium to long-term Brexit planning. In addition, the company established a standalone cross-functional group focused solely on preparing for Brexit Day. They based their business planning on a hard Brexit, the worst-case scenario for many businesses. 

“We really focused our efforts on planning for the worst case and knowing that if it didn’t turn out to be the reality, we would be in a sensible position,” says Dairy Crest’s Mr Thomson.

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times.  

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Time to Tune into the Real Social Network

Procurement has not only great power, but also great responsibility to help drive social change. And embedding social value in tenders is only the start.

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“No fundamental social change occurs merely because government acts. It’s because civil society, the conscience of a country, begins to rise up and demand – demand – demand change.”

Former Democratic Vice-President Joe Biden

Where does the real value of a contract lie for public sector organisations? Is it in achieving a low price for goods, services or works? Or in savings in the ongoing management of a contract? Could it be in maintaining critical services for vulnerable people? Perhaps in creating innovative solutions to issues that improve the lives of all citizens in a Local Authority, or wider, area?

The truth is that it is all of these things and more. Fundamentally, the delivery of services are the lifeblood of public sector organisations and the contracts, be they for goods, services or works, are the foundation of this. But where, in the past, there may have only been a focus on cost and quality, the expectations on and in procurement have changed markedly.

The change is shown in how procurement approach the nature of the total value of the contract. Not just the cost and quality, but what it actually delivers for wider society beyond the scope of requirements. Call it social value, call it social benefits, procurement are front and centre for organisations looking to embed this wider value into their contracts.

Fair Work and Community Benefits

The Public Services (Social Value) Act 2012 was introduced in order to ensure that public bodies consider how the services they commission and procure might improve the economic, social and environmental well-being of their local area. However, it won’t be until later this year that contracts placed by central Government in the UK will have a mandatory requirement for social value considerations.

And this is where part of the issue lies in putting social value considerations into procurement processes. This regulation was only suggested and introduced in response to the collapse of Carillion, with the aim of “restoring trust between government, industry and the public”. Up until this point, any social value considerations had only been a consideration, rather than a mandatory evaluation criteria.

All this means that there are a considerable number of procurement professionals in the UK who have never put social value into their tenders or contracts. Any new measure, as with anything else, will require extensive training for buyers at a time where resources are stretched thin and training budgets are nigh-on non-existent in many cases.

However, there are a number of public bodies, particularly north of the border, who are already doing this. In 2015, the Scottish Government unveiled new guidance on making Fair Work Practices in public procurement. This included considerations on the Real Living Wage and made it a requirement for procurement to consider this as an evaluation criteria for each tender they undertook.

Now, nearly all Scottish Local Authorities have Fair Work Practices as an evaluation criteria in all procurement exercises. At Glasgow City Council, for example, Fair Work Practices has a defined weighting of 5 per cent, alongside Community Benefits as either as an evaluated (weighted at 10 per cent) or non-evaluated criterion.

Benefits for ALL to See

For procurement, Community Benefits and Social Value come in two main guises – what we expect from our suppliers; and what we expect from our purchasing. If procurement truly wants its suppliers to get tuned into this social network, then they need to be leading from the front. This means not only mandating it in contracts, but also engaging with Social Enterprises and running social projects of our own.

Investment in Social Enterprise will help to grow an already thriving sector which employs around 5 per cent of the UK workforce and is worth £60 billion towards UK GDP. The Big Issue, The Co-Op, Jamie Oliver’s ‘15’ restaurant are among the most well-known of these organisations.

(On a personal recommendation, try ‘Street and Arrow’ in Glasgow or ‘Streat’ in Melbourne and you’ll be doing your bit to support social enterprise!)

Beyond this, there are great examples of how large organisations are taking steps further to support social enterprise and add social value to contract. Liverpool Victoria is building extensive work with social enterprise into all of its procurement processes and is encouraging its own suppliers to get involved too.

Time to Grow your Network

Now it’s time for you to get involved and to make sure that you join your fellow procurement professionals in changing the world, one tender at a time. There are a couple of easy steps you can take and you don’t need to start big to get things up and running.

First, search out all the information and guidance you can find on social value, social enterprises and embedding this in procurement processes. Then find out whether or not your organisation is evaluating Community Benefits or Fair Work Practices as part of their tenders. Is it a mandatory criterion? Do your stakeholders even know about it?! Look to see if there is scope to add this, even starting with it as part of a wider question.

Finally (for now at least) you can start to look at contracts that could be performed by a social enterprise. Common ones include office supplies, coffee and catering, but the full list is much longer than that. There’s even provisions in the Public Contracts Regulations (2015) for run tenders for supported businesses only, which could put you well on your way to making a real difference in procurement.

After all, it’s what we’re here to do!

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!


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Are You In The Right Job?

The average working life is more than 3,500 days, so that is a long time to spend doing the wrong job. The sooner you switch, the easier it is. So how do you begin?

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If you dread going to work in the morning, get a sick feeling every Sunday night, or spend hours sitting at your desk desperate to be anywhere else, then it’s obvious that you should find a different job.

However, is it really the career path that’s wrong for you?

Perhaps you are doing the right job, just in the wrong place… or with the wrong people.

If you work in a toxic environment or with the boss from hell, there is no need to make a drastic career change. All you need to do is find the right employer.

You don’t have to hate your job for it to be the wrong one

However, not everyone who is in the wrong job is miserable. Many are just not fulfilled or energised by what they do.

Nearly nine in ten UK professionals are considering moving jobs right now, according to CV-Library – and they want to move for a range of reasons from career progression to a pay rise.

Only one in ten (13 per cent) of UK employees are actually unhappy at work according to research by recruiters Robert Half UK.

Although that is still 4.3 million people nationwide, that a lot less than the number wanting to leave for pastures new.

So, don’t assume that you have to hate your job, for it to be the wrong one.

Simply ask yourself this: “If I am still working in this type of job in 10, 20 or 30 years’ time, will I look back with regrets that I had not done something else – or be happy to have done a job I loved for so long?”

The average working life is more than 3,500 days, so that is a long time to spend doing the wrong job. The sooner you switch, the easier it is. So how do you begin?

Step 1: Take the test

Before jumping into another job, it pays to work out what career path you should be on.

Many of us fall into a particular career and often end up accepting a role because we were offered it, rather than because it was the job of our dreams.

One of the most highly regarded tests is a Myers & Briggs personality test. If you have never taken one, you can pay for one online (myersbriggs.org) or do a similar free test such as 16personalities.com or humanmetric.com.

Whichever test you take, it’s important to be honest – then read through the results to gain a better understanding of what types of careers could suit your personality. Giving some thought to your strengths and weaknesses is a great way to reassess why you do what you do.

If you are an extrovert, who is intuitive and relies on your feelings when making decisions, then being stuck behind the scenes in a process-driven, methodical, technical role, might understandably make you miserable. Or if you are naturally quieter and more reserved, being thrust into the limelight and forced to make presentations, might be your idea of hell.

So if you are the proverbial ‘square peg in a round hole’ it is time for a change.

Remember, it is much easier to change your job than trying (and failing) to change your personality – after all, one is what you do, the other is who you are.

Step 2: Don’t get stuck in analysis paralysis

If you are in the wrong job, you probably spend a lot of time thinking about what else you could do – but are then deterred because you don’t have the qualifications/ don’t have the experience/cannot afford to retrain/ cannot afford to step down the career ladder…. and so on.

It is easy to come up with dozens of reasons to stay where you are.

That means you will inevitably stay just there.

So stop thinking, start doing. Talk to people who are doing the jobs you are interested in, join a networking group for that industry sector, seek out others who have made a career change – and step out of your comfort zone. Once you can visualise a new job for yourself, it will be easier to start making the change.

Also visit careershifers.org for some inspiration. When you read other people’s stories you will realise they were all just as terrified of making the wrong career move…and once you discover how they overcame their fears to find a more fulfilling working life, you will realise that it is possible to do something that makes you want to get out of bed every morning.

Also do a 360 – ask people you trust what career they see you doing. They may say ‘I always imagined you as a teacher’ or ‘Why aren’t you in marketing, you love being creative and persuading people about your ideas’. Remember, to listen.

Step 3: Try before you buy (into a new career)

Before handing in your notice, and taking up one of these new career paths, give it a try.

Take two weeks off and find someone to work shadow. Volunteer in the sector. Use LinkedIn to reach out to those working in roles you are interested in and talk candidly about their careers.

If your personality tests show you would make a great teacher, but you really think you would lack the patience to deal with dozens of children every day, give it a go – volunteer as a reading partner or to help run a school club. You will still find out if this is something you are going to love – or hate.

The other drawback of a career change to something more fulfilling is that many rewarding roles are low paid.

The solution? Stick with the day job, and have a side-hustle doing something you really enjoy. So, if you have always wanted to be an artist, illustrator, cook, actor, gardener, photographer or fashion designer, then do this part-time while seeing your day job as a means of funding your dream career.

At least that way, you won’t have any regrets when you look back on your working life – instead of a “I could have been” you will be an “I was”


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

Do Fringe Benefits Increase Productivity?

Does employee happiness improve productivity and which types of workplace benefits produced the greatest productivity gains?

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Until we are all replaced by robots, there are very few businesses where employee productivity is irrelevant.  It is self-evident that fringe benefits which increase employee happiness and reduce stress are likely to increase productivity.  But until now there has been very little hard data around this concept.

A recent series of studies by the University of Warwick, Department of Economics, looked at whether employee happiness improved productivity and, more specifically, if they do, which types of workplace improvement produced the greatest productivity gains. 

The series of experiments was based on creating ‘happiness shocks’ in one group and not doing it in a matched group.  Both groups were then asked to perform a series of easy mathematical additions under time pressure.  They were paid about 50c for every correct answer, so there was incentive to take the test seriously.

Everyone was also asked to provide their most recent school level results in mathematics and do a separate mathematical reasoning test so that adjustments could be made for individual mathematical ability. The time-pressured mathematical test was designed to simulate the type of work done in typical white-collar job in a precise and measurable way. 

The happiness shocks in the first two experiments were created by showing the group a 10-minute movie clip of a well-known comedian performing comedy sketches.  Based on their own assessment, on average people shown the clip were 1 point (on a 7 point scale) happier than people not shown the clip.  In an attempt to make the happiness shock more closely reflect real-world examples, in the third experiment the participants were given chocolate, fruit and drinks instead of being shown a clip. They were given 10 minutes to consume whatever they wanted.  This was equally effective in raising the mood of the participants.

All three experiments showed that the happy people were more productive than the people who weren’t shown the clip or given treats.  Both groups were paid for their answers, but the happy group shown the comedy clips attempted 10 per cent more problems and got 10 percent more correct answers after adjusting for mathematical ability. 

The researchers analysed those results in detail and found that the improved outcome was entirely due to attempting more problems. The happy workers were more motivated to put in more effort. The improved mood did not make them smarter or better at maths. If they were bad at maths before the experiment, they still were when they were happy, they just attempted more problems and so had a greater chance of getting correct answers.  And the same was equally true of those that were good at maths before they started. The improvement was uniform across all ability levels.

The improvement was approximately doubled in the experiment were the ‘happiness shock’ was snacks. Interestingly one of the experiments involved not telling the participants that they would be paid for correct answers.  It made no difference to the outcome.

The researchers also tried a variation where they attempted to see if recent ‘bad life events’ in the participants real life showed up as having any effect on their happiness and their performance. In this experiment, no ‘happiness shocks’ were given, and they were asked to perform the timed task after they reported their self-assessed level of happiness.  After the test, they were individually asked if they had, at any time, experienced one of more of: close family bereavement, extended family bereavement, serious life-threatening illness in the close family or parental divorce.

People who had reported one of the ‘bad life events’ within the last three years were measurably less happy and less productive.  They were at least half a point lower on the 7 point happiness scale, they made 10 percent fewer attempts at the maths problems and got around 15 percent less correct answers.  The more recent the ‘bad life event’ the lower their initial level of happiness and the worse they did on the test. If it happened more than 3 years ago, it made no difference to either happiness or performance.  When they looked at how people who had suffered bad life events had gone in the other experiments they found that the ‘happiness shocks’ were just as effective at improving their performance.

When the researchers separated out the results by the type of event experienced, they found that ‘parental divorce’ probably didn’t qualify as a ‘bad life event.” It had no effect on happiness or productivity and in some instances actually improved both. 

These are obviously not real-world experiments, but they do a reasonable job of simulating the effect of delivering happiness to a workforce.  Happy workers try harder and do more immediately after receiving a ‘happiness shock.’ And their cash reward for the work, their pay, had little effect.

Translating those findings into the workplace suggests that if an employer provides “extras” which the majority of their workforce regard as a treat, the workers are likely to be at least 10 per cent more productive.  As long as the cost of that benefit is less than the measured productivity increase, then employers would be mad not to do it.


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6 Recruitment Mistakes To Avoid

Here are six pitfalls to avoid in order to create a better recruitment process for all involved.

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Creating a better candidate experience seems simple enough and creating an experience that continues to improve is even better. Recruiters are often under tremendous pressure to recruit top candidates from hiring managers, organisational objectives, and the competitive landscape. Below we discuss six pitfalls recruiters can avoid to create a better recruitment process for all involved.

1. Posting Vague Job Descriptions

Posting a generic job position can ensure that a large pool of candidates applies. What it doesn’t ensure is that the candidates’ skill sets will accurately align with the functions of the position. A vague job description is a problem for both the hiring manager and candidate, as it effectively means that either someone’s time is wasted during screening and interviews, or a candidate will be hired for a position that doesn’t match their skills.

2. Not Engaging Hiring Managers/Operations Team Leaders

There are functions of a human resources department that need to be sealed off from the rest of the company. For instance, compensation, firing, promotion, etc. However, recruitment shouldn’t be as confidential. Recruiters should engage with hiring managers and operations leaders to build job descriptions and create recruitment processes that create an optimal candidate experience and hire the best talent available.

3. Creating a Time-Consuming Application Process 

An extensive application process is perceived as a strategy for recruiting only the most serious and interested candidates. Is it though? Front loading information gathering into the online application process will get you just that – people who are good at sitting at the computer and applying for jobs. What it doesn’t confirm is if the human behind that computer is the person best suited for the position you’re filling.

4. Having an unprepared interviewer 

An unprepared interviewer can send a “disturbing signal” to the candidate, leaving them turned off by the experience and the brand. Recruiters should conduct prep meetings, provide sample questions, and confirm interviewers are aware of the entire process and desired results before an interview is conducted.

5. Failing to Stay in Contact for Future Opportunities 

Failing to engage a quality candidate who was not given an offer is an enormous waste of resources. Sometimes great candidates don’t receive offers simply because there was a better-suited candidate for the position. If there is mutual interest, there should be a process in place to remain in contact with them for either future opportunities or current openings they may fit into.

6. Not Soliciting Candidate Feedback 

There is always room for improvement. Giving candidates an opportunity to provide feedback on the recruitment process gives recruiters some valuable insights which could help improve the process you currently have in place.

This article is written by Phillip Gold of empireresume.comand was originally published on vervoe.