All posts by Euan Granger

Is Brand Paranoia Stifling Debate on Social Media?

More and more people enter the world of social media every day, each with their own thoughts, opinions and values. Surely this is a recipe for open debate? Perhaps not.

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True, you see plenty of heated conversations on social media – people airing their views on a host of subjects, from television programmes to films, restaurants to products – but all too often they descend into arguments, instead of a proper debate.

Argument vs. Debate

Take the Scottish Independence Referendum in 2014 as an example. Social media was full of posts from both sides’ supporters, but in many cases these posts only contained campaign rhetoric, rather than hard facts, and frequently resulted in personal insults being thrown around.

When we talk about debate, we mean what you might have learned at school or university – two sides with structured, well-informed and well-supported arguments for or against a topic, which were presented and listened to respectfully, even if you didn’t agree with it.

Social media platforms seem to be set up perfectly for this to happen. Take the concept above, add in a global audience, all with different facts, figures and experiences, and you should have the recipe for quality, informative debate.

But this sort of debate is so seldom seen on social media. Why?

Personal and Professional Brand

The rapid growth of platforms like Facebook, LinkedIn, Twitter, et al., have enabled people to have a publicly visible account of their CVs and career histories, likes and dislikes, thoughts and opinions and pictures of their favourite things.

From a personal point of view, this is great. Our most meaningful social networking interactions happen within a group of friends, most of who will probably shares these interests in some way.

However, taken from a professional point of view, you have a diverse group of users and stakeholders, all of who have access to this public information, and who are able to link you as a person to all of these accounts.

Try as you might to remain anonymous, or limit your public exposure, as soon as you have a social media account, you are there for everyone to see. And in a professional sense, this means your peers, colleagues, managers, right up to the CEO and owner of the organisation.

Brand Paranoia

Like it or not, your public digital face represents your organisation. What you post, Tweet or share could potentially be attributed to both you and your employer. Even the ‘magic’ words, “My views are my own”, used as an attempt to separate individual and organisation may not stop people making the connection.

And there are plenty examples, like this one, of an employer taking a hard line if they think their brand is being misrepresented or negatively impacted by association.

The key here is brand. Whether it is personal brand, something that has taken on a much greater relevance in the digital world, or organisational brand, people are very (and rightly) concerned about how their brand is perceived by the public.

For organisations, it could mean the difference between retaining and losing customers. For individuals, it could damage their chances of landing their dream job, thanks to an errant post on a social network.

A friend recounted a story to me about how she had been contacted by a colleague regarding a post of hers that was “out of the norm”. It turned out it was her son who had posted, while logged into her account. No harm done, but an object lesson on the reach of social media.

Bringing Debate Back

However, I think this has all gone a bit too far. For sure, I would expect to be hauled over the coals by my manager if I insulted someone on Twitter, which was then associated back to the company.

But engaging in a real debate with one or more other parties, where an argument is built around facts, and everyone is treated fairly, where’s the harm in that?

Procurious has over 9000 members in its community, with another 20,000+ followers across its various platforms. The chances are high that not everyone will agree with me (even about this article), and that’s great.

We want to stimulate debate – it’s one of the best ways to learn and develop as a person and a professional. The Procurious Discussion forum is a great place to start, and everyone can get involved.

So the next time you see a point that someone has made on social media that you don’t agree with, and you can back up your opposing point, don’t shy away, post and start a dialogue. You never know what will come of it.

Future Proofing Procurement – Social Sourcing and Supplier Networks

Traditional procurement processes and methods are being overtaken and replaced. While they still have a role to play, how can you make sure your procurement organisation is ready to meet the future head-on? tech-913034_1280

A few weeks ago, I was involved in a Twitter chat on behalf of Procurious on the subject of social media, supplier networks and social sourcing. It got me thinking about how procurement can prepare for an expanding strategic role in the coming years.

Social media is well established for connections and networking for individuals, and forward-thinking procurement teams are ensuring that their brands are positioned to take advantage. But where should they be going next?

Supplier Networks

Supplier Networks are built on the premise of using social media to create a pool of organisations, which have the same or very similar requirements, and combine resources in order to achieve favourable rates on large-scale purchases.

The favourable conditions are not just for the buying organisations. Suppliers who are part of the network are able to access more organisations, combine orders (allowing for more efficient manufacturing or production processes) and reduce their own costs too. Think of this as a ‘win-win’ situation.

It was on this thinking that Innovo was created. Innovo is a free online business-to-business (B2B) marketplace for all goods and services. The platform aims to connect buyers and suppliers on the basis of requirements.

Buyers outline what they need and suppliers are notified when buyers are looking for their products. The site then facilitates volume sharing between buyers, rebating savings for bulk purchasing across the group, and enables suppliers also to share volumes and reduce their own prices.

While not directly linked to the ‘traditional’ social media platforms, sites like Innovo are facilitating online relationships and allowing procurement to both add value for organisations through improved supplier relationships, but also deliver savings for the bottom line.

Social Sourcing

Social sourcing is defined as buyers or purchasing organisations using social media platforms, such as Twitter and LinkedIn, to access a wider supplier market, where new solutions, supplier innovation and alternative products can be found.

What may be holding procurement back in this regard is the need to be open in a public environment with requirements or products issues. While this is not something that has been widely done in the past, there are a few organisations that are using social media to good effect in this regard.

This openness tends to be around lower value, non-critical products currently, but the possibilities of using this more widely will grow as more organisations become comfortable with it.

Currently there are a few examples of good practice in the market, but we’ve highlighted two of the best here.

  • LV= (Liverpool Victoria): The UK-based financial services organisation realised that they could use social media to share issues and ideas and attract responses from a wider community of small to medium sized suppliers.

This approach, seen as less formal and more flexible, has enabled LV= to have more collaborative discussions with a much wider community and benefit from innovative thinking.

  • GE and Quirky: General Electric and Quirky, a crowd-sourced innovation platform, to create a new platform to enable innovation. The platform enables crowd submission of new products and small-team designs, giving suppliers access to GE and GE a ‘renewable’ source of crowd innovation.

These smaller organisations also have the advantage of being able to access retail relationships that would have been difficult previously, as now they have the support of GE.

(Note – Quirky filed for Chapter 11 bankruptcy this year. However, their innovation journey continues on Wink.)

Securing Procurement’s Future?

Procurious are big advocates of using social media as part of the procurement process. Through conversations we have been having with procurement professionals around the world, as well as technological and industry experts, we believe that these are the conditions the majority of procurement will be carried out in the future.

Adopting a new approach to procurement is a big transformation for organisations, however, in order to ensure that procurement remains relevant, adds value for organisations and retains a strategic presence, the profession needs to keep up with the times.

The benefits of social media are there to see – you don’t need to jump in with both feet straight away, but can ease into it slowly in order to make a smoother transition. Our challenge to you would be – what could you be doing differently in your procurement process? Why not be the one to take the first step and ultimately get ahead of your competitors and up your social media game.

If these organisations are leading by example, what is yours doing? Is your organisation future-proofed? We’d love to hear more from you if you have a great example to share!

4 Reasons Why L’Oréal is Winning the War for Talent on Social Media

Because you’re worth it…

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We talk a lot on Procurious about using social media to ‘win’ the war for talent. More frequently, organisations are using social media in this respect, but some are using it more effectively than others.

The Role of Social Media

So how can procurement organisations ensure that they are attracting the best talent and having a better perception than their competitors in the recruitment market? Social media may provide an answer.

Having a positive presence on social media can help organisations to promote themselves, their opportunities and the benefits for potential employees if they join the company. Visibility is the key, but it needs to be done right in order to have the best impact.

One organisation doing it right is The L’Oréal Group.

What L’Oréal Is Doing Right

The L’Oréal Group is the world’s largest cosmetics company, headquartered in France. With an annual turnover of €20.3 billion, a presence in 130 countries, 27 global brands and 68,900 employees, the Group has good reason for wanting to attract the best talent.

But in an increasingly crowded market, L’Oréal has managed to make itself stand out from the competition on social media by tailoring its approach in the following ways.

And, although these campaigns have not been directed at procurement specifically, there are some good takeaways for procurement teams to consider.

Presence

The L’Oréal Group has a major presence on social media in its own right, but has also chosen, as many other large organisations have, to dedicate pages and accounts to careers and job advertising in multiple countries.

What’s more, these pages are run as the main accounts are and pack just as much of a punch in terms of followers.

That’s a huge community, accessing regular posts, Tweets and videos and hearing the L’Oréal message.

Uniform Branding and Naming

The beauty of the L’Oréal pages is that they are uniform in branding and design on all pages, accounts and profiles. The branding helps to give each of the sites a professional feel and make them immediately recognisable for potential employees.

The accounts and pages are also easily searched for, with the naming conventions for them following a simple pattern, where the platform and location are called out clearly; e.g. facebook.lorealusa.jobs

Activity

One of the key tips Procurious gives for having a great personal brand on social media is to keep your accounts active. There’s no use having all those followers if you aren’t saying anything to them.

The L’Oréal accounts and pages are regularly updated with new job opportunities, information, videos and blog content (like this) to keep people interested. Part of this includes unique insights into what you might get up to at work and why L’Oréal is a great place to work, which brings us on to our next point.

Employee Advocacy

There’s very little that can say more about the strength of a company as an employer than testimonials from its own employees. And L’Oréal has made sure that their social media accounts show plenty of these.

Like this one from LinkedIn:

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Or this one from Twitter:

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Getting your employees to talk positively (and genuinely!) about your organisation sends a strong message to potential employees and may tip the balance for them.

And the result?

Two campaigns that bore fruit for L’Oréal came one each from Facebook and LinkedIn. Using a combination of approaches on social media, including an app to allow employees to share listings across their own networks, L’Oréal benefited from:

  • “Optimised” performance and return on investment and higher than average click through rate
  • Higher than average conversion rates from adverts
  • A higher percentage of qualified resumes than when traditional methods were used
  • Substantial savings on recruitment fees for hiring

And as the organisation’s networks continue to grow, there’s no reason to think that this level of success won’t continue. It’s just up to other organisations to try to follow in L’Oréal’s footsteps.

Is your organisation up to the challenge?

The Collaborative Economy – The New Globalisation?

New organisations, new social media platforms, great connectivity – all of these are expanding the wealth of knowledge and skills that individuals have access to. As this continues, are we looking at a shift in the nature of global trade?

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Ten years ago, I sat in a business lecture debating why globalisation was a good thing, and why organisations needed to be alive to the possibilities of being able to source any item, at any time, from anywhere in the world. Although I won that argument, I couldn’t have known how the world would change in the intervening decade.

Globalisation and Trade

At the time, I was young, idealistic and thought large, dominant global organisations couldn’t be a bad thing, no matter what my debate opponent said about local economies and global trade. I should say that this was also back when I drank coffee from the red, blue and green chain companies, before realising local, independent providers had them beat…

Now, reports are suggesting that traditional globalisation, the trade between countries, is decreasing. Some forecasts show that, for a third consecutive year, growth in global trade will be lower than overall economic growth, while others highlight that international capital flows are worth 10 per cent of what they were in 2007.

While it may be true that globalisation in a traditional sense may be on the wane, there is a new form of globalisation on the rise.

The Collaborative Economy

Cross-border trade is changing thanks to technological advances and increasing interconnectedness of subject matter experts and those who require specific skill-sets that they don’t already have access to. This is the Collaborative Economy.

Sites like Upwork (a combination of two pioneers of the collaborative economy, Elance and oDesk) allow organisations to ‘hire’ independent talent for one-off or short-term jobs, filling a requirement or skills gaps, without having to hire a full-time employee.

The difference in this case is that the individuals offering their expertise to meet business requirements are frequently in a different country or in a different time zone, but able to leverage technology to provide a service.

There are an estimated 80 million ‘sharers’ in the collaborative economy in the USA, as well as over 23 million in the UK and over 10 million in Canada. And with conservative estimates of investment totalling $25 billion, it appears that we are just scratching the surface.

Procurement Professionals without Borders

Procurement is very much at the start of its journey when it comes to the Collaborative Economy, but the potential is enormous. Asset sharing and transfer of knowledge could enable procurement to work across borders and access knowledge, all while reducing costs associated with travel and adding value through accessing best practice and reducing risk.

Online sharing platforms, such as FLOOW2 can assist with supply chain transparency and reduce overheads by facilitating the sharing of assets. And could we end up seeing this go one step further, with procurement professionals themselves being shared between organisations? It’s not as far-fetched as you might think.

This isn’t consultancy – this is freelance procurement. When asked about my ‘Big Idea’ for procurement, I voiced the opinion that in the next decade people wouldn’t work for one organisation or in one place, but on multiple projects and in many teams, dependent on the required skills for the job.

It has taken less than 6 months for others to talk about the same subject – how long before talk becomes reality? I’d be interested to hear what you think and if you would set yourself up as a procurement freelancer. Let’s start a debate – maybe someone else will win this time!

Attitude vs. Skill and Being 25 Again – Your Procurious Discussions

It’s been a while since we wrapped up some of the discussions on Procurious, but the questions and answers have still been coming in thick and fast.


This month, we’ve selected three of our most popular discussions, covering topics including attitudes and skills of procurement professionals, eSourcing and the chance to revisit our career choice.

What is more important, the right attitude or the right skill set?

This question really caught the eye of the community and has great resonance in procurement and supply chain given all the recent talk of talent gaps and recruitment struggles.

For many employers, finding the right person is more than the skills and experience that they possess, but ensuring that the candidate will be a good cultural fit. But which of these is more important?

The common consensus in the community was that, in a straight choice, it was attitude, rather than skill, that was more important. James Ferguson struck a chord with the belief that “new skills can be taught, attitude can’t”.

The right attitude allows the right skills to be learned more readily, with the individual willing to learn and helping with the overall development of the team too.

However, Darren Niblo and Monica Palacios had the opposite stance. Darren argued that attitudes could change over time, while Monica stated that it was dependent on the seniority of the individual, with executives needing the skills (i.e. understanding the environment) in order to succeed.

What’s the first thing that comes into your head when you hear the word ‘eSourcing’?

This is another hot topic, with procurement increasingly moving towards working electronically with new technology. However, a lack of clarity can sometimes inhibit the use of technology or systems, even when they seem very straightforward.

The most popular answer from the community was from Samantha Coombs, whose definition of eSourcing was “Procure-to-pay all in one platforms, with bolt on contract management blocks as and when required”, also stating that the process was “revolutionising procurement globally”.

Other key themes associated with the concept of eSourcing were:

  • Efficiency
  • Centralisation
  • Driving savings for the business
  • Repeatability
  • Collaborative and easy for both sides
  • Innovative

Two answers also highlighted the networking opportunities eSourcing presented, either speaking to an existing contact or inviting new/unknown suppliers into the RFx process.

And one thing we can all agree on is that it is a positive move away from endless printing, photocopying and envelope stuffing!

If you were 25 again, would you follow the same career path?

 

Posed by Procurious’ own Jordan Early, the question comes from the Procurious interview with ISM CEO Tom Derry.

Tom told Procurious, “If I was 25 again, I couldn’t think of a field that I would personally find more fascinating than a corporate career in procurement and supply chain.”

Perhaps unsurprisingly for a community of highly motivated, intelligent and progressive procurement and supply chain professionals, the verdict was unanimous – we would all make the same choice given our time again.

With more people actively seeking a career in procurement, the number of individuals ‘falling’ into the profession is decreasing. And with the opportunity to be an architect of change and drive business efficiency, mentor new entrants and push forward the boundaries of the profession, why wouldn’t you want to work in procurement!

Once again, we’d like to thank you for being part of our community and sharing your knowledge with your peers and colleagues.

If you have a burning question you would like answered, head over to the Discussion forum and pick the brains of your fellow professionals.

How to Achieve Award Winning Procurement – Learn from the Experts at Lloyds Bank

In the latest in the series of articles on the CIPS Supply Chain Management Awards winners from 2014, we look at Lloyds Bank.

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Lloyds Banking Group is a financial services group with millions of UK customers and with a presence in nearly every community. A household name on the high street, the Group thrives based on how well it serves customers, on relationships within the communities that it serves and on helping Britain prosper.

Whether through retail banking, financial services or investments, there are probably few people in the UK who haven’t interacted with a part of the Lloyds Banking Group during their lives. What many people may not immediately associate with the Group is a very successful procurement function.

However, over the past three years, and against a backdrop of great public scrutiny and a recovering economy, the function has played a key role in the successful achievement of Lloyds’ overall business goals. Under the banner of ‘Simplification Sourcing’, a procurement programme was developed with the aims of reducing cost to the bank and improving the overall capability of the procurement function.

The function achieved their goals, but also put measures in place to ensure that the changes and processes would be sustainable in the future. Last year, the team was recognised with the CIPS Award for the ‘Most Improved Procurement Function’.

Andy Collopy, Operations and Property Sourcing Director, talks to Procurious about what the award means for The Group Sourcing team within Lloyds and what’s next for the function.

How did you get started in procurement?

It’s the old cliché but I kind of fell into Procurement back in 1996 as part of an organisational change. I moved from a Logistics role into Procurement and have never looked back. I remember the conversation as if it were yesterday – “We are removing a layer of management in Logistics, Andy, so your job has gone. We think you would be good at Procurement. Do you want to give it a go?” The rest, as they say, is history.

Procurement hooked me in from day 1 when I completed my first deal, negotiating the new pallet contract. I soon realised the power of Procurement when I saved the company more money in an afternoon’s intensive negotiation than I had in 2 years in Logistics through incremental efficiency.

What prompted you to submit a nomination for the award?

The main reason was that the timing was right.

Lloyds embarked upon a Simplification journey in 2011, which ran until the end of 2014 (we are now in Simplification 2 – the sequel!). We felt as though we had achieved a great deal in the 3-year programme, and getting recognition for this from external sources, as well as from our internal stakeholders, was an important part of recognising our achievements.

I have always been a fan of the CIPS/Supply Management awards since I was part of the GSK team that won the Best Use of Technology award back in 2003. I also had the honour of being on the judging panel in 2009, and saw all the hard work that went into both the submissions and judging. I was keen for us to compete against the best.

The CIPS/Supply Management awards evening is always a great evening too, to recognise great work that the function does and catch up with old colleagues.

What is the ‘Simplification Sourcing’ programme?

Simplification Sourcing was the brand name for the programme. There were 9 key elements to the Transformation programme:

  • Vision & Strategy – Set out the 3yr strategy for Group Sourcing as part of the overarching bank strategy to be “Best Bank for Customers” and “Helping Britain Prosper”
  • Internal Client Management – Ensure that everything we do in Group Sourcing is closely linked with our internal clients’ goals and objectives through strong relationship management, with financial benefits interlocked into the Business Units P&L
  • Business Sourcing Process – Execute sourcing activity through an integrated process that starts with business needs, marries this with the supply market capability to deliver an optimal outcome for the bank in terms of competitive advantage, risk management and responsible business
  • Supplier Management – Apply segmentation to effectively manage all our suppliers from a basic risk and conduct assurance perspective, as well as work with our strategic suppliers to deliver value beyond the basic contractual terms
  • Contracts & Legal – Working seamlessly with Legal to deliver an end to end contracting process that ensures correct terms are used, negotiated and stored
  • Sourcing Transactions – Enabling the “Right Way to Buy” through user friendly Requisition to Pay processes and compliance management
  • Risk & Quality Assurance – In an increasingly regulatory environment, providing control on all aspects of Procurement from basic supplier assurance to checking the quality output of sourcing plans and supplier management rigour
  • People – Building human capability through tailored learning & development programmes, as well as key talent management and succession planning
  • Change Management and Communications – Embedding sustainable change through a co-ordinated change and communications programme to ensure that key messages and deliverables land with colleagues, stakeholders and suppliers

Has it lead to greater collaboration between procurement and the rest of the business?

Definitely. I do think that we had a real need in Lloyds to change the bank, both in terms of how we serve our customers, as well as fundamentally restructuring the cost profile of the bank. This sense of purpose galvanised people around a common goal, and Group Sourcing under Michael Whitby’s stewardship seized this opportunity to play a pivotal role in the future success of the Group.

The past 3 years has elevated effective third party spend management to being one of the key levers in the bank’s forward success. We find now that we have created the ‘pull’ factor with our stakeholders, as they understand what we can do for them. Our aim now is to keep this momentum and build upon it.

What was the most critical part of the plan for procurement?

Given the need to fundamentally restructure the cost profile of the bank, a key element of the plan was to deliver significant savings in the third party spend profile. Group Sourcing achieved £560m savings over the 3-year period. The key part of this was the interlock with the business’ bottom line, which saw a 16 per cent reduction in the Group’s cost base over the period, which was a key commitment given by the bank to the City back in 2011.

This achievement should not be under-estimated, given that in many organisations I have worked in; Procurement struggles to justify its savings to key stakeholders such as Finance. This is not the case at Lloyds. This credibility has created the space to allow Group Sourcing to start to influence the wider agenda of the Group.

How have you ensured that the success you have had is sustainable?

A key part of the programme delivery was to ensure that what was created was enduring. From a process perspective, we achieved this through robust change management at the time and built the key infrastructure to be able to monitor progress moving forward and address any potential deterioration. Performance Dashboards exist for all the main elements of the sourcing process e.g. contracts, supplier management.

The more challenging element has been embedding cultural change with our colleagues in Group Sourcing. Behavioural change is a key challenge in any organisation from my experience and it takes time.

In developing the capability of the team to meet the targets we set ourselves, we have focussed on the softer skills of influencing, engagement, relationship management and authentic leadership, as well as the traditional elements such as negotiation and effective project management. This work is never done however we have seen a step change in a number of our colleagues over the past 3 years, which has been great to see.

What’s next for the function?

A good rest! No, only joking. As I mentioned earlier, as we closed out our successful Simplification 1 programme at the end of 2014, we quickly ramped up for Simplification 2. Some of this involves sustaining what we achieved in Simplification 1, but we are also looking at new elements.

While Lloyds has always focussed on its customers, our intensity to get this right under our key aim, which is to become the “Best Bank for Customers”, means that we are increasingly looking at how to achieve this. Procurement is beginning to play a key role here, bringing market insight from our strategic suppliers to the Group to stay ahead of the competition.

This can be seen in a number of ways such as suppliers helping Lloyds re-design its processes from a customer perspective i.e. end to end customer journeys, to bringing new and innovative ideas to the Group to support the ever growing Digital Banking agenda.

Where do you see the future of the profession as a whole and how can social media play a role?

This is a really interesting question. I often read articles that say Procurement won’t exist in 10yrs time as a distinct function, or category management is as strong as it ever was. My sense is that being in a position to leverage the market, and blending this with stakeholder intimacy is the most effective formula.

Third party spend continues to grow as a percentage of the overall cost base of most corporations, so the need for effective Procurement will not go away. So we are in a good place in my opinion.

I sometimes have interesting conversations with senior stakeholders, where they are willing Procurement to take the lead, yet often see reticence from the function. My view is we need to be more confident in our capability as I was all those years ago in that first pallet deal!

In terms of social media, Procurement is a laggard here. I do think that we need to up our game and embrace this medium, especially with our suppliers. This area has so much potential, and we need to push our technology partners to come up with innovative ways to interface with suppliers in both an open and confidential way, given the nature of what we do.

For more on the CIPS Supply Management Awards, and the Procurious Knowledge Partnership with CIPS, visit our website

The Devastating Effect of Unsustainable Palm Oil

Palm oil is one of the most widely used products in the world, but its increasing demand has led to large-scale, unsustainable plantations, causing devastation to large parts of growing countries. Indonesia is one such place.

Deforestation

Earlier this year, Jordan Early wrote an article for Procurious in which he asked whether or not it would be possible to get to the stage where all palm oil would be produced sustainably.

Jordan cited the example of PepsiCo, one of the high-profile organisations using palm oil in a number of its products, and Sum of Us, who were highlighting the potential unsustainability in the PepsiCo supply chain. PepsiCo have since stated that they are working towards sustainability, but other large organisations are lagging behind.

This got me thinking, not about criticism or finger pointing, but education on this subject for procurement professionals. So that’s what I’ve decided to do here.

The Product

Palm oil comes from the oil palm tree, a crop that is grown exclusively in the Tropics. What makes it a popular crop to grow is the high yields it produces in comparison to other vegetable oils and the lower cost to growers.

While the oil’s most common use is as a cooking oil in developing countries, it is also used in a number of household products – from lipstick and soap to detergents and even ice cream. Increasing demand has led to increasing global production, with plantations spreading across Asia, Africa and Latin America.

Replanting with oil palm trees is a good option for many farmers and landowners, not only because of the higher yields, but also due to incentives offered for producing the crop for export. The Indonesian Government has been reported in the past as offering tax incentives and interest rate subsidies.

Effects of Unsustainable Growth

However, this growth has also led to unethical practices, creation of an unhealthy monoculture in some countries and widespread deforestation, leading to loss of habitat for a number of endangered animals, as well as land and livelihoods for indigenous and local populations.

It has been reported recently in Indonesia that thousands of hectares of peatland are under threat, due to companies clearing the land for oil palm plantations. The deforestation has polluted local water supplies and the situation is likely to worsen when the companies burn the ground to reduce the soil acidity before planting the oil palms.

In addition, local villages that have relied on the peatland for a source of water in dry seasons and a livelihood are struggling and face the prospect of being moved on from their home.

Part of the issue comes from a lack of strong regulation when it comes to licenses and permits for plantations. It’s felt by many in Indonesia that new regulations need to be issued by President Joko Widodo, as current ones offer no legal consequences for contravention.

Changes to be made

In spite of all this, it’s hard to argue against the idea that palm oil has had a positive effect on the economies of countries it is grown in, particularly when planting has been conducted in a sustainable fashion.

In 2008, as the demand for palm oil increased steadily, Indonesia exported $14.5bn worth of palm oil products. The country has also seen more than $20bn worth of investment from banks and financial institutions since 2008.

And there appears to be a change happening at an organisational level too, with Wilmar International, the world’s largest trader of palm oil, announced a ‘No Deforestation, No Peat land, No Exploitation policy’ – a move that many hope will encourage other traders and refiners to follow suit.

The Role of Procurement

As with many aspects of sustainability and ethics, the role of procurement is to ensure that supply chain practices are conducted at the required high standard. For palm oil production, it is about ensuring that strong practice around sustainability, including deforestation and ethical issues such as the treatment of local populations, are fully enforced with all suppliers.

It is a matter of both organisational and personal responsibility to ensure the practices and behaviours are correct. Consider taking the CIPS Ethics Test on an individual basis and opening dialogue with your suppliers to ensure that they understand what your organisation expects.

There may also be events in your region you can attend, similar to this one at the Melbourne Law School, which look to generate discussion on topics like regulation of the palm oil industry and what can be done to help countries like Indonesia.

If you are interested (and a procurement professional in Asia), you can contribute to a new book that is due to be published next year. Sustainability in the Asia Pacific’ intends to open the discussion of ‘pragmatic perspectives’ in sustainability accounting to support corporate decision makers in improving corporate sustainability management practices. Check out the website to see how to contribute.

Do you source products containing palm oil? Have you seen any good you can share? Or bad practice and how you dealt with it? We’d love to hear from you and get a dialogue going in this area.

I’d like to thank Dominic Gray for helping me with my understanding of this topic and providing sources of information.

How to Achieve Award Winning Procurement – Learn from the Experts

Henderson Global is a leading independent global asset management firm. The company provides clients access to skilled investment professionals representing a broad range of asset classes.

Henderson Global

In 2011, Henderson Global’s third party spend was valued at over £100m. However, there was no formal procurement function, with individual business areas conducting informal sourcing activities. The decision was made to create a centralised procurement function, with the aim of delivering value, increasing control and reducing risk.

The department was formed in early 2012 and handed some stiff objectives to prove its worth. It took just three months for the team to deliver significant value and savings and, in 2014, it won the CIPS ‘Most Improved Purchasing Organisation – Start-up’ award.

Nykolas Bromley, Head of Procurement at Henderson, talks to Procurious about his and the team’s journey to this award and plans for the future.

How did you get started in procurement?

After university, I applied to be a trainee buyer on the Tesco Graduate Programme. I assumed that I would end up working in one of the grocery categories, but was offered a place in their procurement function instead. I’ve worked mainly in indirect procurement ever since.

Tell us about getting the department up and running and what your successes have been?

Rather than spend months analysing and strategizing, we initially targeted quick wins in order to demonstrate that procurement can generate an immediate return on investment. By delivering benefits so soon after the function was established, we gained credibility and opened the door to involvement in much larger and more complex projects. In the three years that have followed, we have built out our systems, policies and processes, and focused heavily on developing capability within the team.

What prompted you to submit a nomination for the award?

We were genuinely proud of what we had achieved and felt we had a good story to tell.

What will the award do for you and your team?

Winning a Supply Management Award has raised the profile of the department both within the organisation and the wider procurement industry. The award is proudly displayed in the office, and should the need arise, I expect it will be easier to recruit new talent into an award-winning team.

What has been the most challenging aspect of being in a start-up/greenfield department?

Henderson celebrated its 80th anniversary in 2014, and for most of that time had existed without any form of central procurement. This created something of a communication challenge, whereby stakeholders were often unfamiliar with typical procurement terminology and processes. The steep learning curve worked both ways, as having moved from the retail industry, the language and acronyms of investment management were entirely new to me too.

Do you have any advice for someone in a similar situation?

There will always be a degree of resistance from some quarters in an organisation with no tradition of formal procurement. However, there are also likely to be areas of the business that are crying out for assistance. My advice is to concentrate on the stakeholders that want your help first. Even though they may not be the most strategic or highest value projects, it’s a great opportunity to build up allies, advocates and success stories.

What are your key aims for 2015?

This year we will complete the implementation of a new Purchase-to-Pay tool, which will transform the way that we manage our purchasing and payables processes within Henderson. This is a substantial change-management initiative, and a successful roll out of the tool is a key priority for the function.

What do you see in procurement’s future and how can social media play a role?

We are a small team with low staff turnover, so we try to utilise our external network to keep in touch with developments and best practices in the wider procurement industry. Tools that provide access to potentially thousands of procurement experts and facilitate knowledge sharing are invaluable in our situation, and in advancing the profession.

How to Achieve Award Winning Procurement – Learn from the Experts

Procurement and Supply Chain Management Professional of the Year – Fabienne Lesbros, CPO, Britvic Soft Drinks

fabienne

Fabienne Lesbros started her procurement career in 1991 on the Channel Tunnel project. Since then she has worked across a number of sectors and industries, procuring for well-known companies such as Future Electronics and GlaxoSmithKline, before being appointed CPO for Britvic Soft Drinks in 2010.

Britvic has an annual global spend in excess of £1.1 billion, with suppliers in over 40 countries. Since 2010, Fabienne’s team has achieved great success in both savings and value creation, but has also led the way in sustainability, innovation and education.

In 2014, Fabienne was awarded the CIPS ‘Procurement and Supply Chain Management Professional of the Year’. Of her career she says, “My passion for the profession is stronger than ever, fuelled by a changing world focussed on sustainability, responsibility, innovation and the digital age.”

Fabienne talks to Procurious about her continuing journey and where she sees procurement in the future.

How did you get started in procurement?

Like a lot of my peers, I ‘fell’ into procurement at the start of my career. I had finished my studies and procurement was the first role I got. Again, like many of my peers, I didn’t really understand what procurement was or what the job entailed.

I started as an analyst in the procurement department as part of the channel tunnel project for Eurotunnel and I loved it from day one. I’ve always thought that procurement was a fascinating profession to be part of. You work with one of the few functions where you have contact with all parts of the business. You can touch so many things – the scope for procurement is immense.

What is your proudest achievement in procurement so far?

About a year ago, our CEO (Simon Litherland) spoke to the city about Britvic and how procurement was one of the key pillars to deliver the company’s strategy going forward.

This was a big achievement as it showed how much the procurement team was valued by the business. In many organisations, procurement simply doesn’t have that level of focus, although this is changing as more and more organisations realise that procurement is one of the most powerful tools at their disposal.

Similarly, getting the award from CIPS has to be right up there as one of my proudest achievements, both from a personal perspective but equally from a team perspective. I see this award as just as big an achievement for them.

What prompted you to submit a nomination for the CIPS award?

I hadn’t intended to submit a nomination for the award at all. However, a friend of mine from the CIPS Fellows said that I should and kept asking me until I applied!

The way it works is as follows: you write the submission yourself, but a lot of documentation comes from peers about your work, line manager testimonies and recommendations from colleagues and people you have worked with throughout your career.

After you have submitted the paperwork, a pre-selection takes place and people are informed if they get through to the next stage. If you are selected, you are given a month to prepare a presentation to be delivered to a panel of industry experts.

The key success factor in this part of the process was the ability to communicate, specifically being able to consolidate your message into something clear, concise and pitched at a business level. Of course getting it right first time is essential! This was a challenging exercise preparing 6-7 slides to cover a 20 year career to date.

However, this is no different to everyday procurement activity – one of the main areas I look to develop my team in is the ability to avoid procurement jargon and get their message across by tapping into business issues through the language of the wider organisation

What does the award mean to you and your team?

What the award gives to the team is a great external benchmark and recognition, which then leads to more gravitas internally and the ability to influence the business agenda at pace. People start to understand procurement’s role in more depth and realise that they can reach and surpass their own business objectives by collaboration with us.

Procurement can unlock the potential of the supply base to directly deliver the needs of the business rather than getting lost in the complex world of third party supply chains, which if handled incorrectly can have serious detrimental impact to an organisation.

Quality leads to recognition, which in turn leads to trust and building this trust means our business partners rely on and want to work with procurement for a quality output.

It of course works externally too, as suppliers clamour to work with an award winning team.

What is the most challenging aspect of being the CPO in an organisation the size of Britvic? And the best thing?

The most challenging aspect is the high number of initiatives that the organisation has running at any one time – we are an ambitious organisation and that means there is lots to do!

As commodity experts there is always a lot of pressure on procurement to avoid volatility and equally the cost consciousness agenda that runs through the organisation means our Indirect Procurement team is at the forefront of this – challenging but that’s the way we like it!

The advantage is the size of the company – we are not a behemoth and the closeness to the product that procurement has means we can act with pace. You can see the immediate impact on the bottom line that your decisions are making.

It’s also easier to get round all the business partners and you are able to do more of that face-to-face.

One of the best things about being CPO is being in charge of the coaching and development of the team. I find it very rewarding to develop the team and to see individuals achieve things that they didn’t previously think would be possible – we are nothing without a team that has development opportunity, ambition and talent.

What are your key aims for 2015?

Professionally, I am trying to get the team to develop greater engagement with the commercial and sales teams. The engagement often stops with the marketing or operations teams, but I believe that there is a lot to get from engaging on the commercial side.

They understand the competitive edge, trends and where future products might be heading. I’m pushing the team to work in this area, which will be a big change in terms of engagement, as it doesn’t really happen at the moment. I think you need to do things in a collaborative way and work very cross-functionally.

After all, sales can help procurement on getting into the mind of a seller and vice versa – it’s a trick many organisations miss, which could really strengthen supplier and customer negotiations and relationships.

How can procurement become more strategically involved in organisations?

For me, it’s all about understanding the business needs, adding value and not doing procurement in a silo. This goes back to the engagement with other parts of the business.

The procurement team doesn’t speak in procurement terms to other teams; they try to speak their language. You engage the business better by speaking in IT, marketing or operations terms to those other teams and understanding what their key drivers are

You constantly need to understand what the business’ needs are. You fulfil a need from the business, but finding a need that the business never knew it required in the first is far more powerful: this is how procurement adds value to the business.

Procurement can be seen as part of the team and can bring so much functionality into the business. It’s the only team that can touch everything internally and externally every day.

What do you see in procurement’s future and how can social media play a role?

You can look at this from two angles, the first being the impact from social media on the supply and demand for goods and services. We live in a world of multiple social media streams, which has completely changed the way we interact with our consumers.

This is at the forefront of our marketing strategies which ultimately impacts us all – for procurement reacting to customer preferences and rapid changes in trends means we have to be quicker than ever in dealing with the supply base and sourcing innovation to match our needs. We have more information at our finger tips to inform us of supplier performance/preferences and this will only accelerate over the next 5 years.

Secondly, I look at social media from a perspective of developing the profession. Procurement is not a profession that is really on people’s radar, you don’t see procurement anywhere in terms of being a career. Kids don’t come home from school and tell their parents that they want to be a buyer!

We need to establish procurement as a profession in the same way as law and accountancy, and make people in schools and universities aware that there are careers in procurement out there.

Social media can help this happen. Engaging with schools, showing them what procurement is and how to qualify, what careers are available and what you can do in procurement – all of this can be shown on social media.

How can we engage with the next generation of procurement professionals?

As with the previous question, we need to show procurement as a profession. There should be programmes in schools about it, have universities linked up with CIPS to offer information and qualifications and courses in procurement and then for companies to create graduate programmes where they can.

The profession needs people. At the moment, we don’t have enough people with the right skill sets. Procurement should be a profession for which there should be a degree/professional accreditation, the same as being a lawyer or an accountant.

It’s vital for procurement to become a recognisable profession. It’s becoming too critical to organisations not to have people coming naturally from a professional stream.

The iCar cometh: Is Apple about to diversify its supply chain further?

First the iMac, then the iPod, iPhone, iPad and the smartwatch – is the iCar next?

Will we see driverless cars on the roads of our future?

It might seem a bit far-fetched to think that the company that has revolutionised the way we communicate would expand into the electric car market, but reports in the past week suggest that we might see an Apple car as early as 2020.

Although much of this remains speculation (Apple are refusing to comment on any of the reports), there seems to be strong evidence that the tech giant may be getting ready to enter a completely new field.

Head-hunting

Apple has reportedly brought on board senior executives from both Ford and Mercedes-Benz to head up a new team at its HQ. Moves have also been made to hire employees from Ford and Tesla in the fields of car safety, renewable energy, battery and hybrid technology and car software systems.

As ever, none of this has come without issues. Elon Musk, the owner of Tesla, has been quoted as saying that Apple has been tempting Tesla employees with huge signing bonuses and salary increases, while A123 Systems, a battery technology company, is reportedly suing Apple for ‘aggressively poaching’ its senior engineers.

Busy Market

So, will Apple diversify its supply chain further? With the organisation rumoured to be spending $1.7 billion building a plant with Japan Display to allow it to produce its own OLED displays, is there funding available to bring a car to market inside 5 years?

There are a few big players in the electric car market to contend with. Alongside Musk’s Tesla, arguably the innovation leader, automotive giant Toyota is currently top of the tree with its Prius and Lexus brands. Other notable competitors include Nissan, Porsche and Daimler, with either fully electric or hybrid vehicles.

With traditional manufacturers taking more notice of new entrants, the electric car market is wide open for innovation. Even if it took Elon Musk sharing all his designs to try to prod competitors into action.

User Experience

However, entering into this market with a vehicle is very risky. Sales of electric cars are low and margins are tight, leading people to question why anyone would want to get into the market right now. Instead, Apple may choose to focus on the user experience, something that it already has a strong reputation for.

Procurious has reported on recent developments in driverless, autonomous or technologically enhanced vehicles. As there have been for Google, there would be opportunities for Apple to develop user systems that could be fully integrated into cars. This would mean Apple was using its existing expertise, and therefore lowering its exposure and risk.

This would also open up the possibility of a partnership with one of the established players in the market, sharing innovation and development costs, plus opening up a new market for Apple. Just think how marketable a car would be with a fully integrated Apple operating system.

Even without the ‘iCar’, Apple can certainly play the role of disruptor that it does so well, and maybe bring the rest of the industry along too, to the benefit of the consumers. These are exciting times in the car industry and we wait with interest to see the next move.

Japan Display – http://finance.yahoo.com/news/apple-spend-1-7-billion-163417908.html

Innovation – https://hbr.org/2015/02/what-happens-if-apple-starts-making-cars

Meanwhile in related news:

Qatar inks deal for Doha Metro driverless trains

  • A consortium of five companies has signed an agreement to build and deliver a full-automated driverless metro system in Doha. The group consisting of Mitsubishi Heavy Industries, Mitsubishi Corporation, Hitachi, The Kinki Sharyo Co and Thales said it has received a letter of conditional acceptance from the Qatar Railways Company for the systems package for the metro project which is slated for completion in October 2019.
  • The package calls for turnkey construction of a fully automated driverless metro system. Included are 75 sets of three-car trains, platform screen doors, tracks, a railway yard, and systems for signaling, power distribution, telecommunications and tunnel ventilation.
  • The package is also expected to include maximum 20-year maintenance services for the metro system after its completion.

Read more at Arabian Supply Chain.com

West Coast port nightmare may start to end

  • More than seven months after the previous contract expired June 20, and after more than three months of alleged work slowdowns by West Coast longshoremen that contributed huge delays in moving containers, a tentative deal between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMI), which represents West Coast ports and terminal, was at last reached over the weekend. “Normal” port operations were said to have started back up Saturday night.

  • The tentative agreement came just three days after US Labor Secretary Thomas Perez arrived in San Francisco to broker a deal with the help of a federal mediator who had joined the talks six weeks earlier. An agreement on the last remaining issue – a rather obscure one relating to use of arbitrators to settle disputes – was successfully resolved, leading to the agreement.
  • The contract, however, will still need to be ratified by rank and file union workers and all the companies and entities represented at the ports and terminals by the PMI. Reports are the union vote may not be held until sometime in April.

Read more at Supply Chain Digest

Companies wasting billions every year by not sharing supplier information

  • Global companies are wasting more than $30 billion (£20 billion) a year because they do not share information about suppliers, according to business information provider Achilles.
  • It says only a third of global firms across the UK, USA, Spain, Brazil and Nordic countries work collaboratively with other similar businesses to manage information about suppliers. This is despite 88 per cent of them saying domestic and international ‘arms’ of their company require the same details from suppliers in terms of health and safety, environment, quality, sustainability and ethics, according to a survey of supply chain professionals from 300 large businesses across the oil and gas, manufacturing, construction and utilities sectors.
  • Achilles chief executive Adrian Chamberlain said: “It is much more efficient when whole industries agree common standards required of all suppliers in terms of health and safety, ethics and compliance, then share the administrative burden of collecting, checking and auditing information,”
  • He added there was no need for firms to be nervous about sharing supplier information, as it was not commercially sensitive.

Read more at Supply Management

Citi and Etihad Airways sign supply chain finance partnership

  • Citi, the leading provider of cash management and trade services in the MENA region and Etihad Airways, the national airline of the United Arab Emirates, today announced the signing of an agreement to provide a Supply Chain Finance (SCF) solution to pay select suppliers.
  • The innovative financing program will enable Etihad Airways to unlock liquidity and pay its suppliers almost immediately through funding provided by Citi. It also offers a highly customised structure that will cater to the airline’s supplier segment across the globe, and will facilitate access to liquidity across businesses of all sizes.
  • James Rigney, Etihad Airways’ Chief Financial Officer, said: “Our suppliers are an essential part of the success of our business and we are happy to provide the tools that offer new credit and liquidity sources and accelerate their access to cash flow.

Read more at eTurboNews

In surprise move, Honda Chief to step down

  • Honda Motor’s chief executive, Takanobu Ito, will step down in late June after six years in the top post and be succeeded by Takahiro Hachigo, a low-profile engineer with global experience, the company said in a surprise announcement on Monday.

  • Honda, Japan’s No. 3 automaker, behind Toyota and Nissan, has hit a rough patch during the past year with quality problems that have led to multiple recalls of its popular Fit hybrid subcompact, which Mr. Ito said this month could have been caused at least in part by an aggressive sales target. Such self-inflicted setbacks were compounded by multimillion-vehicle recalls to replace airbag inflators made by a top supplier, Takata, that have so far been linked to six deaths, all in Hondas.

  • For the past three years, Mr. Ito, 61, a feisty former supercar engineer, has shaken up Honda’s tightly knit supply chain as the automaker has sought to trim costs and find more cutting-edge technology. “I think this move is an attempt by Honda to tread a different course, with someone who upholds harmony,” said Takaki Nakanishi, an auto analyst and chief executive of Nakanishi Research Institute.

Read more at The New York Times

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