How to Manage Supply Chain Risks From the Coronavirus Outbreak

Are you being proactive in managing risks to your business from the coronavirus?

supply chain risks


The death toll from the coronavirus has reached more than 2,800 and the number of confirmed cases has exceeded 80,000. 

Beyond the enormous human toll, the effects of the coronavirus and the efforts to control its spread are being felt throughout the world’s supply chains. 

Factories in China are facing staff shortages. Or they are electing to remain closed to protect their workforce. Airlines have suspended flights to China. 

However, there is an indirect result of the necessary steps being taken to contain the outbreak. Restrictions and regulations designed to control the spread of the virus could have an adverse impact on cargo leaving and entering ports all over the world. 

Delayed Effects

And while some of the impacts have been immediate, other latent effects will not be felt for months.

This will hit:

  • manufacturers and retailers who rely on affected products and labour
  • logistics haulers expecting to transport the material
  • and, ultimately, the end consumers.

This crisis demonstrates the increasing complexity – and global nature – of supply chains and the imperative need to manage risk within this complex supply chain. 

Compare the current outbreak with that of SARS in 2003. It is striking to see how quickly coronavirus has eclipsed SARS in the number of infections. It took the coronavirus only 2 months to infect 75 per cent of the total number infected by SARS over a 9-month period. 

The crisis also shows how much China has developed in terms of population and establishing itself as a key cog in the world’s economy.

There is a danger of coronavirus becoming a major global issue if not controlled closely. So, what can organisations do to prepare themselves for these impacts?

Many leading organisations have developed programmes to manage and deal with supply chain disruption. But this situation is a unique challenge for even those organisations with advanced risk management programmes. 

Regardless of the level of sophistication in an organisation’s risk programme, all organisations can take steps to monitor their supply chain. This will help them to for the impacts of the epidemic.

3 Key Steps to Manage Risk

1. Know where your supply chain is located

Identify those countries that are currently at high risk and map your supply chain against these affected areas. This mapping should include evaluating key tier 2 and tier 3 suppliers as well as key logistics hubs that could be impacted.

2. Continuously monitor changes

Understand that the crisis is still unfolding and the true impacts from a supply chain disruption perspective may not reveal themselves for months. Establish a process to monitor other regions outside the infected areas that could be impacted.

Are ports outside the infected areas being impacted through disruption or through new regulations to protect against transmission of the virus? Are suppliers struggling financially without access to the Chinese markets, jeopardizing their viability?

3. Diversify the supply base

Like a financial portfolio, look for opportunities to rebalance and diversify the supply base to minimize the risk and take actions to qualify these suppliers in the event they are needed.

Need for Proactive Risk Management

This crisis underscores the need for organizations to establish and maintain effective proactive risk management programmes for their supply chain. 

It is impossible for organisations to anticipate these types of outbreaks. But an effective risk management programme, complete with processes, tools and data can lessen the impact. And the time it takes an organisation to recover.

Learn more about the challenges and steps necessary to build an effective and proactive Supplier Risk Management programme in this research “Integrated Risk Management: A Playbook for Procurement” from The Hackett Group.

How To Lead Differently This Year

What can we learn about leadership from the rugby field? A lot, it seems…


Have you ever headed into a supplier negotiation and joked you’re ‘going out into battle’? Ever finished a successful project, and said ‘you’re kicking goals’?

There are few physical similarities between our procurement desk jobs and the rugby field. But the way we lead our teams should be exactly the same, says Sir Clive Woodward, former coach of the England rugby team and keynote speaker at Procurious’s Big Ideas Summit.

Woodward, who coached the England side to its historic 2003 World Cup victory, believes that sport and business has more in common than we think.

‘There’s no difference between sport and business,’ he asserts. ‘In both, you need to create champion individuals and a successful culture.’  

And if anyone would know, it would be Sir Clive. 

Not only is he one of the world’s most revered rugby coaches, he’s also had a successful career in business. 

Prior to coaching, he worked for nearly two decades at Xerox in various leadership positions, as well as managing his own leasing company. Now, one of the things that he does is run a software company that helps leaders – in business and in sport – build culture-critical skills at scale.

For Sir Clive, creating a winning culture might come easily. But, as anyone who’s recently led a team will know, achieving ‘success’ in this age of mass transformations, technological change and unstable environments can be quite a challenge. 

To help, Clive has 5 ‘big ideas’ he uses to help leaders and teams achieve big things. 

1. It starts with respect

Winning and maintaining respect, according to Sir Clive, is one of business’s greatest challenges. Yet at the same time it’s a great opportunity. 

Sir Clive says that contrary to popular opinion, respect isn’t won simply by attaining a certain job title: ‘You don’t get respect simply because you’re the leader. Just because I’m the head coach or the chief executive doesn’t mean people are going to respect me.’ 

Instead, Sir Clive says that we all need to focus on the quality of our actions. 

This is particularly important for high performers, who are always striving for better: ‘You get respect because of what you do and by the quality of your actions over a sustained period of time.’

2. Talent and egos 

On talent in general, Sir Clive thinks that it’s definitely a leader’s job to try and hire the most talented people.

But what managers need to realise, he says, is that sometimes the most talented people aren’t the easiest people to work with: 

‘Everyone’s different, you can have mavericks, egos. There’s no simple way of doing it – if you employ the most talented people, sometimes they’re not the easiest people.’

But, he reminds leaders, this is part of the job that while not easy can still be managed:

‘As a manager, it’s my job to work with them [talented people, even if they aren’t easy]. The best way to manage them is on a one-on-one basis, explaining to them the philosophy and that we need them to be totally part of that process and that we’re trying to make them better at what they do.

‘I’ve not met anyone talented who doesn’t want to get better.’ 

3. Teachability

While talented people may (or may not) be easy to work with, they do need to be teachable, says Woodward. 

He says that an individual’s willingness to learn is critical when it comes to building winning teams: ‘The ability to accumulate knowledge around their role gives people an awareness of what they need to do to continually improve on what they already have.’

Knowledge, though, is not simply academic learning, Woodward asserts. It’s much more than that: ‘Knowledge is a passion for seeking any kind of self-development. It’s not simply collecting diplomas.’ 

4. 100 things, 1% better

To create a winning procurement team, you need talented, teachable people. But their talent is only a baseline – says Sir Clive.

And you need to be constantly improving them to improve performance. Contrary to popular belief, this ‘improvement’ need not involve seismic shifts in any particular area. 

Woodward says that you’re better off focusing on micro-improvements in a number of different areas: ‘Building on several areas in a small way frequently yields dramatically better outcomes. If you go into every aspect of what you do and break it down and improve those things by 1%, it all adds up.’ 

This philosophy has worked particularly well for Sir Clive in rugby: ‘In rugby, we understand all the parameters – we break it down into as much detail as possible and try and do every bit of it slightly better than anyone else.’ 

And, as in rugby, in business you can’t simply improve and then stop.

Constant performance improvement needs to become part of your culture: ‘You have to always be [improving] and just because you’ve improved something one day doesn’t mean you can’t improve it the next. It has to be the ethos of everybody.

‘Everybody in that team has the obligation, if they think we can do something better, they need to hold their hand up and say it.’ 

5. Innovation can come from anywhere 

Procurement teams are increasingly expected to be innovative. But who is responsible for that innovation? 

Everyone, according to Sir Clive, even people outside procurement, as they may bring different perspectives: ‘[When you’re looking for new ideas], it’s important to canvas the input of independent third parties in order to pool as much knowledge and ideas as possible.

‘These ideas can come from anywhere, not just leaders. Using other people you like and respect and [who] are bright enough to look in can give you amazing new thoughts and ideas.’ 

As appealing as this sounds, Woodward does concede that it can be challenging within organisations, although ultimately necessary: 

‘[Introducing new ideas] can be potentially troublesome, particularly when there is an already entrenched way of doing things. 

‘There’s no easy answer to that, there’s no magic fix. The only easy answer is to sit down, explain to your team, even in one-on-ones and then empower them to get involved.’

Sir Clive Woodward is the keynote speaker at the Procurious Big Ideas Summit in London, due to be held on 11 March 2020. Tickets are sold out, but you can secure a digital delegate ticket here (free for a limited time).

How To Figure Out Your Next Leader Before Accepting A New Role

How do you really know what your manager might be like, beyond the surface-level impressions you get at an interview? 


Few of us think that when we change jobs, a new job is all we’re getting. With any move, we’re replacing everything.

Suddenly, we’ve got new colleagues to befriend. New rules and processes to adapt to. And, most importantly, a new manager.

This can be a blessing, or, as I’ve argued before, a curse – in more ways than one

After all, 75% of all people resigning are leaving their bosses, not their jobs.

But how do you know, from the outset, what you’re getting yourself into? How do you really know what your manager might be like, beyond the surface-level impressions you get at an interview? 

You ask!

One of most common mistakes I see candidates making is treating a job interview as a one-way street, thinking it’s simply an opportunity for the organisation to get to know them. 

But that’s only half of it – and not even the most important part. A job interview is your chance to see whether the job and business you might enter align with your values. And whether your manager will help or hinder you in your career aspirations. 

Clearly, though, ascertaining this when you’re the one being interviewed can feel uncomfortable. 

So if you want to do so in the most discreet yet professional manner, here are my top tips for figuring out your manager during the interview process.

1. Ask about work style

When it comes to work, people’s preferences can vary greatly. Some of us feel comforted when our manager sticks close by us, reviewing all of our work and helping to guide our decisions. 

Others want the exact opposite – we’re completely autonomous and we only want to contact our manager when there’s an issue we legitimately can’t solve. 

Whatever your preference, it’s critical you know what your manager wants, so you can discuss it. So in your job interview, ask your potential manager about their working style. Ask questions such as: 

  • How much input would you like into my work? 
  • What’s the approval process for decisions?
  • Or simply – What’s your working style? How can we best work together? 

Doing this will help you understand their style and whether you can compromise. Or whether things simply won’t work. 

2. Discreetly ascertain expectations 

Many candidates stumble when it comes to asking about expectations in an interview, especially if they want to ask about flexibility or work-life balance.

How do you do so and still ensure you look committed to the role? 

The answer is complex, and there sometimes isn’t one correct way to approach it. However, when broaching this subject, I’ve often found it helps to do so indirectly. Here a few things you can try: 

  • Discuss the benefits of work-life balance in your old role: Even if this balance was non-existent, try saying something like: ‘In my current (or previous) role, the business advocated for work-life balance and that helped my team perform better. What’s your approach with this?’ 
  • Enquire about the working arrangements of the team: Asking about the working arrangement of the team you’re entering can be a great way to figure out if flexible work arrangements are common are not. Consider asking something along the lines of: ‘What is the team’s schedule? Is everyone in the office on certain days or for certain hours?’ The answer should give you a clue as to whether everyone works full-time, in-office – or whether flexible work is more common. 

3. Understand whether they’ll drive your career and development

In an ideal world, your manager should be your biggest champion and your biggest confidant. They should sing your praises, develop you and help you solve problems. 

But understanding whether they’ll do this for you can be a challenge. It takes more than them just being a ‘nice person’ to help you get ahead.

To see how invested they are in your career and development, try asking the following questions: 

  • Tell me about the careers of those in my team: Asking about the careers of those at your level (and a few levels above) can give you a clue as to how your manager may have helped them get there. Ask questions such as: ‘How did they get to where they are now? What opportunities were they given? What was your role in helping them get there?’
  • Feedback and feedforward: Asking about professional development opportunities in an interview should be a given. But beyond that, you’ll need to understand how your manager will develop you. To understand this, ask them about feedback. How often will they be giving it? Will it just be at a performance review, or more regularly? 

4. Learn about your boss’s boss 

In and of itself, learning about your manager’s manager is a good idea. It’s likely they’ll drive strategy and culture for the broader team, so it’s critical you understand them. But beyond this, they can also give you insight into your own manager. 

When enquiring about this, ask broad questions so it doesn’t look like you’re trying to get too personal. You can ask questions such as: ‘What do you like about this business?’ And then get more specific, such as: ‘What do you like or admire about management in our team?’

Hopefully, you’ll start to understand the management style of your manager’s manager and, by association, what your own boss likes or expects. 

5. Get insight into challenges, opportunities and plans 

No business is ever perfect – and neither is any manager. Even the best managers can struggle in stressful situations, and it’s almost inevitable their staff may feel the heat as a result. 

To see what you might be up against in this respect, try asking the following questions: 

  • What’s been most challenging in this role?’ Understanding this can give you an insight into how often your manager feels under strain in the role, and as a result, how often you might expect to be stressed as a result. 
  • What challenges lie ahead in this role?’ Not understanding the ‘roadmap’ for your role, team and manager when you’re interviewing is a fatal mistake. If you’re entering a bumpy or uncertain road, you need to be prepared. 
  • What opportunities do you foresee?’ Opportunities are just as important as challenges, so make sure you ask about these. If your manager can see and describe plentiful opportunities ahead, you’ll know that they’re the type of manager who is often on the lookout, which is a great thing. 

Are there any other discreet or not-so-discreet questions you ask to understand a manager before you take a role? Have the answers you’ve received given you insight, or have things changed when you’ve settled into the business? Share your experiences below! 

Tony Megally is the General Manager of The Source, Australia’s leading procurement recruitment and executive search firm. If you’re looking to hire in the procurement space, or alternatively, you’d like to have a confidential chat about your next role, please contact Tony on 03 9650 6665 or via email on [email protected]u.

How To Get Buy-In From Others

Ever had a great idea that’s fallen flat? You’ll need buy-in from your stakeholders before anything can properly get off the ground.

When was the last time you had a great idea that you felt went unheard? If it’s frequently you’re not alone. More often than not it doesn’t matter how good our ideas are – if we can’t get buy-in from the people that matter – then we’re wasting our time.

Whether you’re trying to influence stakeholders, speak compellingly in front of an audience, convince others of your ideas in a meeting – or even persuade your spouse or children to try something new, the ability to get ‘buy-in’ from those we are trying to influence is the difference between success and failure.

Real Buy-In? Thinking, Feeling, Believing

So let’s start with the most common myths – real buy-in has nothing to do with how loud you can be, how great your idea is, or even how confident you are of being right.

The key instead is to be crystal clear about one thing – what you want your audience to think, feel, believe or do different tomorrow than they did today.

And, to effectively do this, you’ll need to craft a message based on what your audience are currently thinking, feeling, believing or doing right now.  

How you go about this depends on who your audience is, however it is possible to get a good read on the think, feel, do, believe in any situation.

For example, as a procurement professional, you might want to invest in some research. Select a few key players within your organisation and ask them out for coffee. Then ask them some simple questions around what their biggest challenges, pain points or questions are in relation to your space.

What value do they currently think your department provides? Do they see opportunities to gain even more value from what you know? What would make the biggest difference to their ability to include you in other important conversations?

Once you’ve been through the exercise a few times, break it down: Right now, what are the perceptions about your space? What value do they believe it brings to their world? What’s the gap between what they are doing right now and the actions you want them to take?

Two Ears, One Mouth – For a Reason

When you know this information, it is much easier to craft an argument that will actually convince. Rather than target shooting in the dark and hoping something will land.

However here’s the key – you have to actually listen. By listening I don’t mean nodding in all the right places and waiting for your opportunity to speak. I mean asking questions, clarifying, staying curious and trying to fully place yourself in their world.

This is not only 100 per cent more likely to create a space in which the other person will open up and give you important information. It also leads to one of the key rules of ‘buy-in’ – that people support the ideas they helped to create.

When you listen to someone’s perspective – and then create an idea tailored to their needs – not only do you win their attention but also their trust. That person will then more than likely become and advocate for both you and your ideas in the future. This means the next time you walk into the room ready to present, you’ll have a hidden asset already sold on both your knowledge and commitment.


It doesn’t matter how good your ideas are, without stakeholder buy-in they won’t get any traction. Can you improve this? Check out this other article here.


Collaboration for Change

The truth is that if you take any form of influence – they all boil down to one thing. The attempt to change what another person thinks, feels, believes or does. However, as successful influencers, we first have to start by taking a step back. Understanding the points of view we are trying to change – and then collaborating on better solutions.

So the next time you have a great idea – at work or at home – before jumping to present it in all its glory, start first by listening. Then rather than opponents you need to convince, you’ll have an army of collaborators helping to push it across the line.

Julie Masters is a globally recognised expert in influence, authority and thought leadership. She is the CEO and Founder of Influence Nation and Founder of ODE Management – responsible for launching and managing the careers of some of the worlds most respected thought leaders. Julie is also the host of the soon to be launched weekly podcast Inside Influence. An exploration into what it takes to find and own your voice – and then use it to drive a conversation, an idea, an industry or a Nation. To subscribe check out iTunes or http://juliemasters.com/inside-influence/.

10 Critical Skills Your Procurement Team Needs Right Now

And how to get them in less than ½ an hour, with a $0 training budget

As procurement leaders or influencers, we all know that upskilling is critical to our success and that of our team. And with the skills required to succeed in procurement rapidly shifting from a technical focus to more soft skills, it can be easy to feel overwhelmed by what’s required and how to achieve it. Common concerns we all experience are: 

Where do I even start with training? 

Who will pay for it? 

Can I (or my team) afford the time away from our day jobs right now – or ever? 

One of the world’s most celebrated thought leaders on human performance, Sir Clive Woodward, believes he has the answer to all of these questions – and it isn’t as complex as it seems. Sir Clive, who shot to fame after coaching England’s rugby team to their infamous victory over Australia in the 2003 World Cup, believes that when it comes to training, we get it all wrong. Instead of focusing on a few areas intensely, he says, and diverting all of our resources to them, we should instead focus on doing many things, 1% better. For example, instead of putting your team through a technical training course that might take months to complete, you could focus on a number of short, soft-skill focused sessions that will lift your team’s capability in a number of areas in a short amount of time. 

But what might this look like? We surveyed a number of influential procurement leaders and managers, and gave them an interesting challenge: How would you upskill your team in half an hour or less, with a $0 training budget? 

Here’s the skills they told us were most critical – and more importantly, how they’d rise to Sir Clive’s challenge and do multiple things that 1% better. 

1. Customer focus skills

The problem

In days gone by, procurement was seen as an internally-focused, cost-saving function only. Not only were customers not our focus, but in many ways, we sometimes felt we worked against them; with the finance team putting relentless pressure on us to slash costs, regardless of the impact on our end customer. Now? This couldn’t be further from the truth. 

Yet still, given that the focus on cost and risk is ever-prevalent, it can still be hard to step outside of our own perspective and put ourselves in others’ shoes, says Keith Bird, former CPO and General Manager – Commercial of Queensland Rail and Managing Director of The Faculty, a procurement management consultancy. 

‘A customer focus is critical,’ says Keith, ‘Because in procurement, a customer focus equates to increased value delivered.’ 

The quick upskill solution 

But how do you get your team to see that? One great way is to do an empathy mapping exercise, where you map your customer’s experience with your service, and try to understand their pain points (and what you can do about them). 

There’s tonnes of empathy mapping exercises available on the internet that can be completed within half an hour or less. Here’s one from Atlassian you can try right away.

2. Category management skills 

The problem 

Keith Bird, Managing Director of The Faculty and lifelong procurement specialist, acknowledges that category management remains a critical skill within the procurement profession. And, according to Keith, it certainly is one that requires honing: 

‘We all know there’s a lot of work that goes into managing any given category. From industry reviews to spend analysis, it can be a time-consuming – yet critical – exercise.’ 

The quick upskill solution 

Yet when it comes to upskilling, says Keith, the secret may not be what you think. Instead of focusing on developing the skill of category management itself, some quick wins can be gained from how category management is discussed with anyone outside of the procurement team: 

‘Many procurement professionals that I’ve seen feel the need to extensively detail their category management activities to their stakeholders. This is not only not necessary, but stakeholders find it confusing – it isn’t what they want.’ 

According to Keith, one of the best skills that can be gained from a category management perspective is how it’s presented to stakeholders: 

‘When you’re speaking with stakeholders, you need to talk their language, which, usually, is in commercial outcomes. How is your category management going to deliver them the outcomes they need?’ 

‘Discussing your activities, or rather, not discussing your activities and talking in outcomes can be a monumental win from a category management perspective.’ 

3. Problem solving skills 

The problem 

Problem solving skills are an attribute often left off job descriptions, but with procurement only increasing in complexity, they shouldn’t be. In fact, so critical are problem solving skills, that the World Economic Forum rates them as the number one skill we all need to thrive in 2020 and beyond. 

Acquiring them doesn’t have to be difficult, says Euan Granger, Senior Strategic Buyer at Soil Machine Dynamics and key contributor to Procurious, the world’s largest procurement professional network. In fact, sometimes it’s simply better to take a break from the professional nature of our workplaces, and step outside our comfort zones with a fun activity. 

The quick upskill solution 

One that Euan has used many times and recommends is the simple ‘marshmallow and spaghetti’ challenge. For this exercise, you’ll need to purchase 20 sticks of dry spaghetti, a roll of tape, a ball of string and a marshmallow. Then, set your team a challenge: Build a free-standing tower using the materials provided! 

Whenever Euan has used this activity for his team, he always recommends that they go away and think about how they can use the skills they’ve learnt in their job. 

‘It’s not so much about who does it or doesn’t do it, but more about working together to solve a problem, and thinking about things in a different way. We always need that approach when solving new problems.’ 

4. Negotiation skills

The problem 

As procurement professionals, we all know that negotiation is both an art and a science. In any given negotiation, we’re always delicately balancing the needs of our organisation, risks, costs, sustainability and the expectations of the supplier. It certainly isn’t easy – and it certainly requires great focus and dedication to execute. 

The quick upskill solution 

Even if you’re already a skilled negotiator, there’s always more you can learn, says Ron Brown,’ former General Manager at MMG Mining and lead consultant at The Faculty. One great way to upskill your team on this is to do the ‘Price of $1’ exercise, a simple exercise that shows how important preparation, communication and a solid command of facts is in a negotiation.  

Here’s how to run the exercise: 

  1. Have two people/players sit back to back, but far enough apart that they can’t hear each other
  2. Select a third person as a ‘go between.’ This person goes to the other two players and asks for their bid (the problem being neither player knows what they’re bidding for). 
  3. Bidding starts. Bidding can start at as little as 1 cent. Each player has three bids in each round if they want, and they can decide not to bid higher than the other player. 
  4. At the end of three bids, one player is awarded the round. Complete three rounds. At the end of three rounds, explain to players that they were bidding for $1.

‘The results of this exercise are always pretty interesting,’ Says Ron. ‘In that often, people end up bidding far more than $1, for that $1. The actual winner is the one that has spent less over the three rounds.’

‘What it teaches you, really, is that a desire to win can drive us, and how crucial information can be to overcome this.’ 

5. Commercial acumen 

The problem 

Commercial skills, or more accurately, commercial acumen, is one of the most essential attributes for any procurement professional or leader, says Keith. There’s a few reasons for this, he believes: 

‘Over the years, we’ve had a lot of shrinkage in companies, meaning that pretty much every procurement team is now expected to do more with less.’ 

‘This means that there’s an increasing pressure on every single person, from those at the top to new graduates, to show they’re adding commercial value in everything they do.’ 

But what does ‘commercial value’ mean? Keith says that it’s far more than just simply an ability to understand financial basics: 

‘Commercial value is way beyond simply profit and loss. It’s an ability to understand the whole value chain more broadly, for example, it’s not simply the “cost of acquisition” from a procurement perspective, but the value of that acquisition or product to the whole business.’ 

The quick upskill solution

Given the broad and complex nature of commercial acumen, Keith believes this can be a hard area to train. A great place to start, though, is to align your job, and more broadly, the strategic priorities and activities of your function, to those of the organisation’s C-suite. ‘If what you are doing wouldn’t matter to the CEO,’ Says Keith. ‘Why are you doing it?’ 

One great way to put this into action is what Google calls ‘OKRs’ (Objectives and Key Results). When creating OKRs, you create a set of audacious, measurable goals that put your stakeholders/customers first, and align those with your organisation’s priorities. You then follow up your OKRs regularly; checking in monthly to see how you’re going. 

There’s lots of templates and tools on the internet that can help you set up OKRs. Atlassian have developed some great downloadables on this, or you can try these ones from Rework.

6. Supplier relationships

The problem

With supply chains becoming more and more complex, relationships are now not just important, but critical, in everything we do in procurement. Yet managing them has never been more challenging – we’ve got to coordinate tens, if not hundreds of moving parts that may include multiple vertical and horizontal dependencies; all poised to break at any minute if we don’t get things right. 

The quick upskill solution

Given the complex and often personal interdependencies between supplier relationships, often learning from others with experience is the only upskilling solution, says Keith Bird, Managing Director of the Faculty. To do so, joining an industry networking program can provide unparalleled benefits. 

One such program is The Faculty’s own Roundtable program, which connects and facilitates collaboration between the top CPOs across Australia. 

‘Using our program,’ Says Keith. ‘I’ve seen some of our partners begin, and also navigate exceedingly complex supplier relationships that wouldn’t have been able to do otherwise.’ 

The Faculty’s roundtables are free for member organisations. 

7. Stakeholder management

The problem

Every single person in procurement has come across issues with stakeholder management at one stage. While it’s easy to blame individuals, though, often issues arise from a lack of information – and ultimately, it’s easy for a stakeholder to get frustrated and hard for them to see the value procurement add when they simply don’t know what’s happening. 

The quick upskill solution

The issue with stakeholder management, says Ron Brown, lead consultant at The Faculty, is that often, it’s just impossible to know who knows what. ‘So you’ll often find that there are people hiding in plain sight that are clueless and getting frustrated, yet you assume they know everything. Or worse, you assume they don’t need to know.’ 

One way to overcome this is to build out what’s called a RACI board (Responsible, Accountable, Consulted and Informed). To do this, you’ll need to: 

  1. Select one of the big categories for your procurement team
  2. Write a list of stakeholders on post-its. Remember to include everyone who will be involved in the category from beginning to end, no matter how tenuous the link. 
  3. Then map out the board, moving everyone around to create a map of whose involved, who knows what, and critically, who needs information and might not be getting it. 

‘Keeping stakeholders appropriately consulted and informed is a great first step in stakeholder management,’ says Ron. 

8. Digital skills 

The problem

In 2020 and beyond, there’s simply no hiding from digital. In our personal lives, we’re using it every day, and more and more, we’re doing so in our work lives as well. Increasingly, all large organisations are undergoing massive digital transformations, if they haven’t already, and procurement will need to play a big part in these, from a supplier to an implementation perspective. In short: if you haven’t got digital skills, you need to get them, pronto. 

The quick upskill solution

But what is ‘digital’? Where do you ever start?!? While the prospect sounds daunting, it needn’t be, says Euan, Procurious contributor. There’s literally millions of free resources online, and a great place to start is with a brand that’s synonymous with the internet itself: Google. 

Google’s Digital Garage provides a plethora of free, expert-level training on digital, on a range of topics that include everything from the digital business security to the basics of coding. You can check out their entire offering here.

Keith Bird, Managing Director at The Faculty, also believes that seeking out a digital mentor can be a great way to upskill: 

‘Admittedly, digital isn’t my forte, so I’ve expressly sought out a digital native in our business who can teach me. A mentoring relationship can really be between anyone; it doesn’t have to be an older person mentoring a younger person’ 

‘It’s more about a person with expertise mentoring someone who doesn’t yet have that knowledge.’ 

9. Technology 

The problem 

We’ve been hearing the same message for some years now: technology is fast replacing jobs! Artificial intelligence (AI) is coming! But those that usher these warnings are in fact a bit behind: there’s already a significant amount of AI in most systems we use, so the challenge now is to learn how to work with it. 

There’s no doubt that technology is evolving – and fast. We all need to keep up to date with the latest, but what’s the latest? And how do we keep up with it?

The quick upskill solution 

For all the latest in technology, says Keith Bird, Managing Director at The Faculty, you can’t go past industry podcasts. 

Keith recommends joining Procurious to keep up with the latest, or alternatively, listening to The Art of Procurement podcast.

10. Finance

The problem

Many outside of procurement might say that procurement and finance work in tandem – but from inside procurement teams, things often look quite different. In fact, when we’re trying to focus on strategic value, our relationship with finance can look a little strained, especially if the value we’re adding can’t immediately be quantified on the bottom line. 

The quick upskill solution 

For some skills, Euan Granger, Procurious contributor, says, ‘there’s no substitute for some good, old-fashioned peer-to-peer learning. And when you’re trying to learn about finance, there’s no better place to go than, well, finance.’ 

If you haven’t facilitated such a session before, Euan recommends, then try the following: 

  1. Get finance and procurement in the same room – this is key. 
  2. Get finance to do a toolbox talk on the key terms and metrics that matter to them – and how procurement can impact these. 
  3. Ask any questions and air any concerns – build the relationship and agree on ways of working moving forward. 

‘You’ll be surprised at what can be achieved in one simple meeting,’ Says Euan. Often being in the same room talking about what matters to each other is all that it takes for walls to come down and bridges to be built.’ 

 More skills, more solutions 

With procurement increasing in complexity, we all need to focus on rapid upskilling to continue to add value and stay relevant. To hear from the greatest minds in our industry, plus hear more of Sir Clive Woodward’s game-changing performance suggestions, join us at Procurious’ Big Ideas Summit 2020 on March 11 in London. 

Can’t make it? We’re currently offering digital delegate passes for free. Grab yours here now.

Contributors

Keith Bird, Managing Director of The Faculty. Connect with Keith on Linkedin here.

Ron Brown, Principal Advisor at The Faculty. Connect with Ron Brown here.

Euan Granger, Procurious Contributor. Connect with Euan here.

Want more? 

Want to learn more about in-demand skills in procurement, and all the other exciting developments and big issues our industry is facing this year? Join us to hear from Sir Clive Woodward and a stellar lineup of other speakers and industry leaders at our Big Ideas Summit. Digital Delegate tickets are currently available at no cost (for a limited time). 

If you’re interested in accessing market-leading industry insights and networking, express your interest in joining The Faculty’s Roundtable Program here. 

Will They Still Want You, When You’re 64?

How can you make sure you’re not overlooked for jobs and other opportunities if you want to keep working in your 60s and 70s?


When Paul McCartney wrote “When I’m Sixty-Four” as a teenager, he probably thought he would be retired in his mid-to-late 60s.

Instead he has continued to work well into his 70s and will be 78 when he takes to the stage at Glastonbury 2020.

McCartney is not alone: things have changed since 1967 when the Beatles released the hit on the album Sgt. Pepper’s Lonely Heart Clubs Band.

Today more than 1 in 10 of those aged 65 is still working and the number is set to soar.

The scrapping of the default retirement age (which makes it harder to put us out to pasture) and an increase in the state pension age (which is set to rise to 67, and then 68), means growing numbers will be working until they are nearly 70.

There is only one problem: who will employ us?

Employment drops off from the age of 50, making the lyric ‘Will you still need me?’ take on a whole new meaning.

We all need to mind the age gap

While a lucky few might have quit the ‘rat race’ because they can afford to retire comfortably, many of the 3 in 10 in the 50-64 age group who are not in employment are not out of work through choice – the majority might not be able to work due to ill health, disability or caring commitments while others may struggle to find work because of their age.

Even among those still in employment, many are working part-time or in jobs that do not reflect their expertise and experience.

So how can you remain relevant in a world of work that still does not always value the wisdom of age?

De-age – from an early age

Age discrimination is illegal. But it happens – even if it is not deliberate but a case of unconscious bias.

So it is important to appear younger than you are if you do not want to be written off.

As it is easy to search for information about you online (yes – nearly every employer now checks out candidates before inviting them for interview), start thinking about what information is being posted about you or that you are posting yourself well before you hit 50.

  • Never, ever put your age or date of birth on any job applications, CVs or social media profiles. Employers cannot ask your age, so don’t let them find out.
  • Get rid of anything on your CV and online professional profiles that screams ‘ancient’. Change your qualifications from O Levels to GCSEs. Change your polytechnic to its new university name. Delete jobs from the 1980s and early 1990s.
  • Clean up your social media profile and change your settings to private. A series of postings of you at your 55th or 60th birthday might inadvertently lead to a recruiter thinking you are ‘past it’.
  • Also change your mindset. If you ‘think’ you are no longer able to go for that new job or that promotion, other people will think the same, too. One in 4 professionals over the age of 55 believe it’s too late to change things according to research from Think Forward Consulting – they are wrong. You just need to overcome the fear of rejection that often comes with age.

Get your words right

Job adverts often specify that candidates need to be ‘hungry’, ‘ambitious’, ‘energetic’, ‘driven’, ‘innovative’, ‘dynamic’ or other words automatically associated with youth. Include a few of these in your job applications and your personal statement to reflect the fact that you still have the passion to succeed.

At the same time avoid descriptions that sound ‘ageing’. Stating that you have ‘decades’ of experience is unnecessary. It is far better to detail what you have achieved not how long it took you!

Emphasise your adaptability

In a world of constant change, adaptability is a key skill yet one that is not always associated with more mature members of the workforce.

So, make a point of highlighting ways in which you have adapted to – or perhaps anticipated – change. Managing a transformation project, changing career path to reflect a change in the market or demonstrating how you have been innovative, will all prove to potential employers that you can ‘move with the times’ and remain relevant.

Show you can learn new skills

Forget the saying that ‘you can’t teach an old dog new tricks’ and prove that you can learn new skills. Make a habit of doing courses in the latest technology, remain inquisitive about new developments in your sector and demonstrate that you have a curiosity about the future – it will show the enthusiasm that employers are looking for (and associate with younger members of staff).

Have a Plan B (for business) . . .

One of the most popular ways to remain in employment later in your career is to employ yourself.

In fact, the number of self-employed people aged 65 years and older more than doubled between 2009 and 2017.

You can start with a sideline (provided it does not conflict with your day job), grow your venture and then do it full-time if it’s a success – or enjoy it as a part-time role if you plan to flexi-retire.

. . . Or be a master of your own destiny

While employers are often reluctant to hire more mature staff as full-time permanent employees, the same does not apply to consultants, contractors, freelance project managers, interim managers and non-executive directors: they are hired for their expertise, so the longer they have been being doing the job the better. In fact, 2 in 3 interims are aged 50–70+.

While you will have to give up the day job to start in one of these roles, the pay can often more than compensate for the lack of job security. Interims, for example, earn £500 to £1,500 a day. See the Institute of Interim Managers for more information: https://www.iim.org.uk/knowledge/.

So if you’re planning to carry on working well past when you’re 64 and into your 70s, like Paul, follow these tips to get your plans in order and make your profile attractive.

‘Often The Right Way Isn’t The Easy Way,’ – Sustainable Sourcing From A World Leader

Whether or not your business is prioritising sustainability right now, there’s no doubt that it will be the focus for many of us in 2020 and beyond.


As we all well know, executing on sustainability can be challenging. Is it even possible to have full supply chain transparency? How do we manage the requirement to be sustainable against risk and cost savings? Almost all sustainability initiatives, while well-intentioned, can be fraught with complexity. 

While this may be the case for many of us, one person who believes that sustainability isn’t as complex as it seems is Chris Fielden, Group Supply Chain Director for Innocent Drinks. Innocent Drinks is a revolutionary health drinks company that gives an incredible 10% of their profits to charity. Beyond this, Innocent focuses on sustainability throughout every part of their supply chain, from creating a plastic bottle that’s made from 100% renewable material to developing a carbon neutral factory. 

Prior to his keynote at Procurious’ Big Ideas Summit, we sat down with Chris to see how he helps drive such incredible sustainability achievements at Innocent: 

Live your values – and incorporate them into your business model

Have you ever looked at a corporate values chart and thought to yourself, ‘those don’t really seem to matter here?’ Many of us feel the tension between aspirational values and lived values, but one of the reasons Chris thinks that Innocent is so successful in sustainability is because they don’t do this. 

Chris believes that sustainability can’t simply be a ‘tick box’ but it needs to be front and centre of a business’s genuine value set if they want to achieve it. On this, Chris says:   

‘Innocent drinks is a values-led business, absolutely. We believe in [and live by] sustainable capitalism. We hire people against those values.’ 

‘Often the right way [to do things] might not be the easy way, but we do things the right way anyway because we truly live our values.’ 

Even beyond this, Chris says that sustainability needs to be incorporated throughout an organisation’s entire business model: 

‘Here at Innocent, we’ve incorporated sustainability into our entire business model through becoming a B-Corp.’  

Give your people freedom 

Sustainability is often about pushing boundaries and doing things that haven’t been done before. So, in order to achieve that, Chris thinks you need to give your people creative freedom – and this is exactly what’s happened at Innocent. 

‘[The carbon-neutral factory idea] came about primarily because we told our people not to accept no. We told them “don’t accept it when someone says it can’t be done.” In all aspects, we try not to constrain our people.’ 

Not limiting people also applies to the suppliers you work with, says Chris. In fact, when you don’t give suppliers limitations, you can sometimes achieve things you never would have imagined. When planning Innocent’s carbon-neutral factory, Chris gave his suppliers an unusual challenge – which yielded an unusual (yet highly beneficial) result: 

‘With the carbon-neutral factory, we said to the contractors we employed – just geek out and tell us what you would do if you had unlimited funds and no restrictions.’ 

‘Doing so meant that it actually turned out cheaper than we budgeted and the solution is ever better!’ 

Giving their people and suppliers freedom has meant that Innocent’s new carbon-neutral factory,  to open in Rotterdam in 2021, is truly one of a kind. Costing over $250 million, it will incorporate initiatives such renewable energy, sustainable water use, and resource-based waste management. Its Rotterdam location will also mean considerable C02 is saved, as the drinks are produced close to where ingredients arrive, saving trucks over 13,000 trips a year. 

Not being afraid to fail 

Despite Innocent Drinks being a relatively large company (it recently surpassed £10 million in donations alone), everyone works hard to cultivate an entrepreneurial spirit, says Chris. And a big part of this is not being afraid to fail. 

‘Failure is a big part of what we do. We only have to be 70% sure of what we’re doing. And failure has led us to where we are – we’ve doubled in size because we’re not afraid to fail.’ 

This can sometimes be hard to stomach as a procurement professional, Chris thinks, as we’re trained to mitigate risks. But Chris insists that Innocent still do this: 

‘We do have risk registers so it’s not as if we’re being cavalier!’ 

Where to from here? 

With Innocent being at the forefront of all things sustainability, it’s hard to imagine what Chris might still want to achieve. But there’s always more, says Chris, and ultimately, he’d like to see more businesses taking an active role in helping the environment: 

‘I would love to see more businesses doing more – but we can’t wait for politicians to mandate this. The impetus needs to come from us.’ 

Ultimately, Chris has an important message for all procurement professionals out there: 

‘If you put sustainability at the heart of your agenda, then know this: you can make a difference very quickly.’ 

What are you doing to drive the sustainability agenda at your business? Let us know below. 

Want to learn more about exactly how Chris is driving the sustainability agenda at Innocent, and how you can do the same? Chris is speaking at the 2020 Procurious Big Ideas Summit on March 11, and you can hear all of his insights through becoming a Digital Delegate. Grab your free pass here.

The One Where Friends Taught Procurement How To Negotiate

The six main characters in Friends may have given us a lot of laughs over the years, but they can also teach procurement professionals a few things about the fine art of negotiation. 


In this article, we look back on seven episodes in which Rachel, Ross, Phoebe, Joey, Chandler and Monica showed procurement what to do and (more often than not) what not to do when negotiating with suppliers. 

1. Having a back-up plan (or two)

In The One With The Proposal, Phoebe reveals to Rachel that she has a pact with Joey to get married if they’re both still single at 40. When Rachel tries to secure Ross as her back-up, he reveals that he is also committed to Phoebe, who rightly points out ‘it’s good sense to back up your back-up!’

A single-source supply situation is a dangerous place for procurement professionals to find themselves. Firstly, it doesn’t account for any risk factors such as trade tariffs, political and economic instability or natural disasters that could gravely impact the efficiency of your supply chain. Secondly, no matter what your benchmarking data tells you about costing, having one supplier puts procurement in a vulnerable negotiating position, particularly when the time comes for contract renewals.

2. The importance of being realistic

In The One After Vegas, Rachel and Ross accidentally get married following a particularly big night out in Sin City. And Ross, desperate to avoid his third divorce in two years, embarks on a ludicrous campaign to convince Rachel to stay married to him. During their negotiation, he first points out the proximity of the ‘Mrs’ and ‘Miss’ checkboxes on forms, (‘How is this going to affect you? … It’s right next to it!’) and then proceeds to offer her all the gifts from the wedding registry.

Before entering into negotiations, procurement professionals must clearly define their strategy, be realistic about their expectations and treat their suppliers fairly. Pushing your suppliers too hard can be counterproductive and destroy the potential value to be gained in long-term strategic relationships.

3. Being flexible

In The One With Ross’s Denial, Monica and Chandler attempt to negotiate what to do with their spare bedroom. Monica dreams of a beautiful guest room whilst Chandler wants to create an old-school arcade. The discussion ultimately reveals Monica’s unwillingness to compromise on anything related to the apartment’s interior. 

Rigid supplier onboarding can be time-consuming and costly, particularly for SMEs. Similarly, inflexible payment terms might eliminate certain suppliers who depend on fast payments. For procurement to successfully engage with a diverse supplier base and drive innovation through their suppliers, processes need to be adaptable and accommodating.

4. Controlling your temper

In The One With Ross’s Wedding, Ross and Emily’s parents squabble over wedding costs, a conversation that eventually descends into a sparring match (‘I could kill you with my thumb’). Ross is forced to intervene and mediate the discussions, threatening both couples with ‘no grandchildren!’ if they cannot reach an understanding.

Focusing solely on costs during a negotiation is a recipe for conflict. In today’s world, procurement depends on long-lasting and meaningful relationships with suppliers to drive creativity, sustainability and efficiency. When tensions are running particularly high, it might be worth bringing in a mediator or involving senior leadership, but this is not a decision to be taken lightly by procurement – the basis of your supplier relationship will determine its future dynamic.

5. Doing your homework

In The One With The Embryos, Chandler and Joey agree to get rid of their pet chick and duck if they win the lightning round of Ross’s quiz. Rachel and Monica end up losing the game (and their apartment) simply because they don’t know Chandler’s job title (‘he’s a transponster!’)

It might be tempting to save yourself preparation time and come to a supplier meeting unprepared with the intention to ‘wing it’. But be warned, it will come back to bite you when you’re unable to answer key questions, stalling for time, and don’t have your BATNA (Best Alternative to a Negotiated Agreement) prepared. 

To guarantee the best outcome, it’s important to do your homework and understand the supplier’s aspirations, weaknesses and objectives. Negotiation expert Erich Rifenburgh recommends that your preparation time should be at least three times longer than the time spent in the negotiation itself. 

6. Being efficient

In The One With The Jellyfish, Ross reveals he never finished reading a letter from Rachel that outlined her reconciliation terms. ‘I was tired, and you had rambled on for eighteen pages . . . front and back!’ The letter’s complexity and ambiguity results in the couple breaking up (yet again). 

If you’ve reached the end of a negotiation and the terms are unclear, or some of the participants are dissatisfied, something’s gone wrong.

Ideally, both parties will walk away with complete clarity on the agreement in terms of costings, deliverables and timelines, which should all be reconfirmed at the end of a negotiation. Procurement professionals must also question whether the final agreement has longevity and be certain that no value has been left on the table.

7. Knowing your limits

 In The One With The Ring, Chandler identifies the perfect engagement ring for Monica and is determined to secure it at all costs. When another shopper snaps the ring up first, Chandler and Phoebe go to huge lengths to negotiate its return, unwilling to compromise on an unsuitable alternative. 

Being flexible doesn’t mean being a pushover, and it certainly doesn’t mean giving in to pressure or abandoning your company’s values or protocols for the sake of a quick negotiation win. To deliver top-quality products and services, procurement professionals must know their limits and stick by them, without compromising on maintaining supplier relationships. It’s a fine line to walk, but the payoff is worth it. You’ll earn respect from your suppliers, maintain integrity and keep your internal stakeholders happy.

Get in touch with UNA to discuss how a Group Purchasing Organisation can leverage the power of bulk purchasing to negotiate on your behalf. 

What Do Women – And Men – Really Think Of Valentine’s Day?

We offer a woman’s and a man’s-eye view of the Feast of Saint Valentine …

You want how much for those flowers?! Love it or hate it, Valentine’s Day has become part of the global calendar and good luck ignoring it. 

Shopfronts are dining out on the day, while emails advertising spray tans with headlines like ‘Fake it for Valentine’s Day’ are sliding into your inbox. 

But we want to pop a different spin on it. A woman’s perspective on the day up against a man’s perspective. And while Emily and Dave don’t speak for everyone, you may see yourself in some of their thoughts.

Woman’s-eye view: A day of celebration and (very) high hopes

I secretly love this day and if I ever pretend I don’t or that I’m ignoring it, it’s only out of self-preservation. 

You see, unlike Dave below, I am not married. I am single. Valentine’s Day can serve as a reminder that you’re not with anyone and the only flowers you’re buying are ones ‘to you from you’.

I am a die-hard romantic. The Notebook to me is still the best movie of all time (forget the fact she cheats on her fiancé). And Titanic will never sink in my heart.

So it only follows that I have high hopes for this one day of the year.

Last year I was given the loveliest bunch of flowers by a guy I was seeing with a note in French (yes, he was French). I doubt that will be bettered this year.

But I live in perpetual – unrealistic! – hope that the guy I went on a few dates with recently . . . whom I’m not overly into . . . will suddenly have a moment and think, yes I want to spend $90 on roses for Emily and get in touch with her colleagues (whom he does not know at all) to find out where she works and at what desk. So the flowers can be delivered to her right there.  

Okay, in reality the chances of that are slim.

So I thought why not take matters into my own hands and be the ‘giver’. I mean, who said that was just a man’s job?

Women as the givers

I got ahead of myself recently and went out with a guy a couple of times, decided we were certainly going to end up together and proceeded to order his Valentine’s Day gift from Amazon a whopping four weeks ago. 

Yes, I did that. 

He was a doctor working with heart surgeons. So I found a lunch bag with ‘Live organ for transplant’ on it. The idea was to have it delivered to him with a six-pack of beers in it with ice on top. 

I would have him come to reception at his work to collect it and when he opens it and sees ice on top (like a real organ would have) he would freak out . . . and then suddenly find the beers and think it was literally the best (and most memorable) Valentine’s Day gift ever.

But after date four recently I decided it wasn’t meant to be – and now my colleagues have to open the work fridge to see a ‘Live organ for transplant’ lunch in there every day.

As I said, I’m a die-hard romantic. Here’s hoping for the flowers and even if that doesn’t come about I still have my ‘live organ lunch bag’.

Love, Emily x

The man’s-eye view: The day of the year on which more people break up than any other 

I don’t wish to throw a wet blanket on what has become a global celebration of love and romance, but Valentine’s Day – otherwise known as the Feast of Saint Valentine – does nothing to whet my appetite, or make my heart flutter.

My friend Kev has a restaurant in New York, and he maintains that Valentine’s is every restauranteur’s nightmare. A sea of two-top tables waiting for couples who barely speak to each other at the best of times but feel obliged to have that special night out together. 

Kev says that the sight of couples holding hands across the table and gazing longingly into each other’s eyes is as rare as hen’s teeth in his gaff. Comparatively very little food or booze is ordered and invariably one person is left to pick up the bill or storm out without paying.

Apparently, more people split up on Valentine’s Day than any other day of the year.

The best thing about Valentine’s Day for me was the birth of my youngest daughter, Saskia. I love her to bits. 

The downside of her joining us on 14 February is that she insists on being taken out for dinner on that night. 

I have tried to persuade her to have two birthdays (a bit like the Queen) just to avoid the misery meal. Not a chance.

Romantic meals – no thanks

So we’ll be in TGI Fridays (certainly not my choice) in Guildford, Surrey, UK – witnessing young people with soon to be arthritic thumbs communicating with friends who are not in the room rather than enjoying the company of the person they are about to split up with. What fun!

I do enter into the spirit of Valentine’s Day, however, and remember to buy a card and some flowers for my wife – who has a heart of stone and always forgets. 

No, please, I am not craving sympathy. The end of 14 February for me will be spent in the company of talkSPORT Radio and a bottle of 12-year-old Macallan!

So, in the words of the song from The King and I, ‘good luck young lovers wherever you are’ – or something like that!

Love, Dave x  

So where do you fit in? Do you agree with Emily or Dave? And what are your plans?

Whatever you do today, enjoy it. And remember that love in any form is something to be celebrated.

How The Coronavirus Will Impact Your Supply Chain And What To Do About It

What key steps can you take limit the potential effects of the coronavirus on your organisation?


In China on 9 February the world received news it didn’t want to hear.

The number of confirmed deaths from the coronavirus has now overtaken that of the 2003 severe acute respiratory syndrome (SARS), with more than 1000 casualties. 

In addition to that, the virus is spreading at an alarming rate. There are now more than 40,000 confirmed cases. And this number is increasing as much as 20% every day.

While the virus is terrifying from a public health perspective, it’s also alarming in terms of your supply chain. Wuhan, China, the epicentre of the virus and now a city in total lockdown and complete disarray, is one of the world’s largest industrial hubs. 

Here’s how the coronavirus is affecting global supply chains – and what you can do about it. 

Production delays and factory closures

If you’re currently manufacturing anything in China, especially in the Wuhan area, you can expect significant production delays.

Fashion fit innovation company Alvanon, who manufacture dress forms in China, has issued a statement saying: 

‘We expect at least a four-week delay on physical goods that have already been paid for. Our factory is currently closed, and while we are doing all we can to minimize delays, we currently do not know when it will reopen.’ 

Currently, all public gatherings in Wuhan are forbidden. All factories and public places are closed. The flow of goods in and out of the area has come to a halt. 

Reduction in freighting capacity 

The coronavirus is now confirmed in more than 23 countries. And the world’s airlines are responding by cancelling flights to and from China. 

Airlines all over the world have ceased some or all of their China freight routes. 

Sea freighting is also likely to be affected. If you have goods in transport from China, there may be significant delays in them leaving major ports. And when they do leave, there’s a risk that crew will become ill on the journey. 

People movement

Freight is not the only thing that needs to come and go out of China. People also do, for business or leisure. 

The restrictions on flights will start to impact business agendas.

Many international companies are shutting down their offices in China and restricting all travel. 

Commodities market and the broader economy

From a supply chain perspective, what’s most concerning about the effect of the coronavirus is the already devastating impact it is having on the commodities market and the broader economy. 

As one of the world’s largest consumers of commodities, decreased demand in the Chinese market has now caused many commodity prices to slump. Copper has fallen 12% and crude oil 10%. The Bloomberg Commodity Index has taken a 6% hit. Analysts expect these decreases to continue.

Economists warn that the impact on the economy more broadly could also be dire. They believe that the fallout from the virus will be significantly worse than the SARS epidemic. 

The Chinese economy is much larger than it was then. But it’s also weaker, due to the continued US trade wars. 

China’s GDP growth is on track to slow (at least) in the first quarter, and analysts aren’t sure it will recover. This will, in turn, affect exchange rates and emerging markets. 

Developed economies are also expected to suffer. The downturn in Chinese tourism is expected to impact Australia’s economy to the tune of $1 billion.

What should you do? 

How can you manage the risk coronavirus represents for your organisation? 

Justin Crump, Procurious consultant CEO of Sibylline, a world-renowned risk management consultancy, recommends that procurement takes the following actions immediately.  

1. Understand cascading supply chain consequences

‘You need to understand more than just your suppliers,’ says Justin, ‘as it will be second-order problems that bite when you think you’re okay.’ 

To do this, Justin recommends you dig further to understand supplier dependencies.

A great way to do so might be to survey your suppliers. Test their exposure to the virus, and then try and mitigate any issues early. 

2. Stockpile if you can 

It might be too late for some, but Justin recommends that everyone who is able ‘tries to stockpile while you still can’. 

This is difficult for those practising just-in-time manufacturing.

But Justin thinks that if you can still action this advice you’ll benefit – as oil prices are substantially lower due to a steep fall in demand. 

3. Invest in resilience

Procurement should never be reactionary when it comes to risks, Justin reminds us. ‘But now, more than ever, you need to invest in resilience.’ 

Justin believes this ‘resilience’ needs to come in multiple forms.

For example:
• look into alternate suppliers – and move now to get ahead of your competitors
• consider impacts on staff, families and customer relationships 
• think long-term about how travel and freighting might be affected

4. Consider the bigger economic picture 

It’s tempting to focus on the now, Justin says. But it’s important to consider the bigger economic picture and how you might need to mitigate that risk (if that will even be possible). 

5. Appraise the effect on international relations

All large businesses depend on international relations to a degree Justin says, ‘so the effect on international relations shouldn’t be underestimated’. 

Justin thinks it’s important that we don’t rest on our laurels and just assume business will continue as usual.

‘What I see happening is that China is quietly blaming the US in some circles for the outbreak, calling it a deliberate attack,’ he says. ‘Likewise, the US is using this to encourage businesses to pull out of China. 

‘China blaming the US feels like more of an insurance policy to deflect criticism from the regime, but still . . . it’s a reminder that the global network is under threat.’ 

So bear in mind Justin’s analysis and consider taking these 5 steps to limit potential supply-chain difficulties resulting from the coronavirus. 

What effects are you seeing on your supply chain from the coronavirus? How are you managing risk? Tell us in the comments below. 

Interested in more hot tips on how to improve your supply chain approach and get more productive? Join the Procurious community of 37,000 members where you’ll find daily inspiration.