All posts by Hugo Britt

Best Procurement Books – Explaining Procurement with Apple Pie

The Faculty’s Hugo Britt shares one of the best procurement books he has found. Did we mention it happens to be for pre-schoolers?!

chook1

“But mum/dad, what is procurement?” How many times have your kids asked you this question, and how often have you struggled to explain your complex role in simple language understandable by a child? The best response to this question that I’ve ever heard is “I do the shopping” – which paints a relatable picture of mum or dad pushing a giant supermarket trolley around all day at work.

The best procurement books should be able to answer that question, and I’ve found a picture book that answers it much better than I can. One of the many books my three-year-old enjoys reading with me at bedtime (hundreds and hundreds of times over) is Marjorie Priceman’s whimsical “How to Make an Apple Pie and See the World”.

Best Procurement Books - Cover
How to Make an Apple Pie and See the World – All Images are copyright to Dragonfly Books

The book is delightfully illustrated, about a little girl in Edwardian times who wants to make an apple pie. The premise is summed up in the first few lines:

“Making an apple pie is really very easy. First, get all the ingredients at the market. Mix them well, bake, and serve … Unless, of course, the market is closed.”

list

The Apple Pie Supply Chain

And this is where this great little book becomes a textbook on Procurement. The little girl packs a suitcase, puts on her walking shoes and takes a steamship bound for Europe and beyond. Along the way, she sources a number of ingredients which will help to make the apple pie:

  • Semolina wheat from Italy
  • Elegant eggs from a French chicken
  • Cinnamon from the bark of a Sri Lankan kurundu tree

kurundu

  • Milk from a good-mannered English cow
  • Seawater and sugarcane from Jamaica
  • And, of course, apples from a Vermont orchard

orchard

She appears to be a master negotiator (or perhaps just very charming), as there’s no mention of money changing hands for any ingredient. Along the way she has to overcome many of the challenges faced in Procurement, such as language barriers and creative means of transport.

The little girl then goes through the exhaustive process of turning the raw materials into the ingredients she needs, milling the wheat into flour, grinding the kurundu bark into cinnamon, evaporating the seawater from the salt, boiling the sugarcane, persuading the chicken to lay an egg, milking the cow, churning the milk into butter, slicing the apples, and finally mixing the ingredients and baking the pie.

process 1

Her reward is to share the delicious pie with all the new friends she made on her journey, including the chicken and cow.

Before my son demolishes a piece of cake or pie, we sometimes pause to talk about this book. It’s fantastic to see him wonder about all the work and ingredients that went into his slice of cake, and he’s even starting to think the same way about everyday objects all over the house, including clothes he wears and toys he plays with.

I give this book 5 out of 5. Do you have any children’s books to recommend that touch on Procurement? What are the best procurement books you have found answering that all important question? Share your thoughts below!

All images above are the property of Marjorie Priceman (and publisher Dragonfly Books). You can purchase How to Make an Apple Pie here: http://www.amazon.com/Make-Apple-World-Dragonfly-Books/dp/0679880836

Hugo Britt is a Research Consultant at The Faculty, helping to support The Faculty Roundtable, an influential group of Australian procurement leaders who gather to share their experiences and insights. 

For more information on The Faculty Roundtable contact Program Manager, Belinda Toohey.

Risk Mitigation – Hope Like Hell It Doesn’t Happen to You

Organisations can plan and strategise for risk mitigation in their supply chain, but ultimately a lot of it comes down to luck.

Risk mitigation

In the words of one member of The Faculty’s Melbourne Roundtable, “There’s a lot of risk out there – you can mitigate all you like but in the end, you just hope like hell it doesn’t happen to you.”

Risk-experts Aaron Cleavely-Millwood (Market Development Manager – Regulatory, Market and Operational Risk) and Nathan Lynch (Head Regulatory Analyst) of Thomson Reuters, visited the Melbourne and Perth Roundtables to take members through their organisation’s global research findings on risk and disruption.

While the Thomson Reuters research focused on disruption to financial services, Roundtable CPOs drew some key learnings from shared challenges around governance, risk, compliance and regulatory drivers.

The Faculty ran its own snapshot survey among its Roundtable members, providing some interesting comparisons between Thomson Reuters’ global, cross-industry study and our local, procurement-focused findings.

Supply Chain Risks

Thomson Reuters’ top four disruption risks revolved predominantly around price:

  1. Raw material price fluctuation
  2. Currency fluctuation
  3. Market changes
  4. Energy fuel price volatility

The Faculty’s findings revealed that CPOs have a slightly different set of concerns:

  1. Supplier monopolies
  2. Market changes
  3. Climatic or natural disasters
  4. Emerging technologies

Risks and Impacts

Price risk is an obvious and ever-present danger and a key part of strategic planning. Cleavely-Millwood gave the example of the 2015 drought in Russia, which saw the price of wheat rise by 41 per cent, and create a huge impact throughout Europe. Spikes such as this (and of course the drop in oil price) cannot necessarily be forecast, but it is possible to plan for and hedge against these events.

Interestingly, social activism was placed at the bottom of both lists. This is surprising given some of the recent disruptions driven by environmental activism in the Australian coal and coal seam gas industries.

The Thomson Reuters presentation focused on fraud risk. This has been identified as a high area of concern for Australian organisations despite increasing regulation. CPOs have to be continually aware of the risks around supplier, contractor and employee fraud, and have plans in place to minimise the damage when fraud takes place.

Increased regulation is a double-edged sword. It will effectively lower the chance of fraud risk and other potentially damaging issues, but will mean CPOs need to spend more time and resources ensuring compliance.

Roundtable delegates were taken through various major pieces of regulation including the UK Bribery Act, the Australian Senate Review of Bribery Laws, the Dodd-Frank Act, and the upcoming Unfair Contracts Act.

The key takeaway – communicate regularly with your internal legal counsel to ensure you keep track of regulatory change.

Effective Risk Mitigation

Our snapshot survey asked members to nominate the most effective risk mitigation measures, with the following results (1 being the most effective):

  1. Building strong supplier relationships
  2. Creating a risk-aware culture
  3. Improving market intelligence
  4. Improving IT and data analytics
  5. Increased sharing of information

The Faculty’s advice for managing risk:

Due diligence can take place through three levels of risk assessment:

  • Ensure you thoroughly investigate new vendors.
  • Regularly perform risk assessments of existing vendors to check if anything has changed.
  • Ensure you have visibility of your suppliers’ suppliers, and their suppliers, and so on, until you’re confident that there are no major risks several layers down the supply chain.

Inspirational Words from Women in Procurement 2016

The Faculty’s Hugo Britt shares some inspirational words and thought-provoking ideas from the 2nd Annual Women in Procurement conference. 

Women in Procurement 2016 Inspirational Words

Back in March, I attended Quest Event’s 2nd Annual Women in Procurement conference in Melbourne, representing Procurious as the event’s media partner.

Literally within minutes of the conference being opened by NBN Co’s Chief Procurement Officer Coretta Bessi, I was scrambling to keep up my note taking as a flood of ideas, inspirational words and thought leadership came from the podium. And this pace didn’t let up over the two days of the conference.

Why run a conference exclusively for women in Procurement in Australia? Because the numbers are dire.

According to Jigsaw Talent Management’s Trends in Gender Diversity, the average split in the Australian national workforce is 54 per cent to 46 per cent in favour of men. But in the Procurement profession specifically the numbers are much worse – 63 per cent to 36 per cent in favour of men. Let’s not also forget the widening gender pay gap – currently averaging 17.1 per cent.

All of these figures point to an urgent need to drive change through a gathering of minds such as that seen at Women in Procurement.

Rather than try to summarise the content of the key speakers’ presentations, I’d like to share what I took as the most inspirational words and thought-provoking quotes from the conference.

Coretta Bessi, CPO, NBN Co.

“Ask yourself every day: ‘What am I doing today that will make me better tomorrow than I was yesterday?’”

Kelly Irwin, Head of Procurement Australia and NZ, Holcim

“Have the courage to leap out of your comfort zone.”

“A boss depends on authority, but a leader depends on goodwill.”

Jonathan Dutton, Director, JD Consultancy

“The secret to success in procurement is staying relevant to the vision.”

“Corporate Social Responsibility has the potential to change the fabric of our decision-making in procurement.”

Dutton’s four big critiques of modern procurement:

  1. An unproductive focus on cost
  2. Organisational isolation with no customer focus
  3. Glacial pace of procurement processes
  4. Acting without enquiry and not asking WHY.

Margaret Ruwoldt, University of Melbourne, speaking on the “Working out Loud” movement

“Hierarchical boundaries are much more permeable in a networked world. You have personal development opportunities that didn’t exist five years ago.”

“’Working out Loud’ is ‘How to Make Friends and Influence People’ meets the internet”

“Don’t wait to be plucked from the crowd – make yourself stand out.”

Jackie Aggett, Head of Procurement, Laing O’Rourke and The Faculty Roundtable member

“Courage, for me, means believing in myself, and believing my ideas are worth sharing.”

Sharon Hoysted, Procurement Manager, Supplier Management, Boeing Aerostructures Australia

“Diversity and inclusion are key to fostering a culture of innovation in your business.”

Nelli Kim, Senior Supplier Management Specialist, Telstra International Group

“If you can get through the self-doubt and give something a try, it’s a win.”

“What are YOU doing to personally manage your development?”

Professor Margaret Alston, Monash University

“Australia’s gender pay gap has grown to 17.1 per cent differential. This is simply not equitable. To achieve the same wage in Australia, women would have to work 64 days extra per year.”

Jennie Vickers, Director Australia and NZ, IACCM

“Don’t be defined by your job title or you’ll find yourself disappearing.”

“Make the case and articulate the benefits of supplier relationship management.”

Honey Meares, Procurement Manager, Supply Strategy, Genesis Energy

On clarity of purpose: “It’s important to know what you are trying to achieve.” 

Sarah Collins, Chief Procurement Officer, NSW Roads and Maritime Services

“Don’t try to change everything at once – rather, concentrate on starting the momentum.”

You can check out the full programme for the event here.

Hugo Britt is a Research Consultant at The Faculty, helping to support The Faculty Roundtable, an influential group of Australian procurement leaders, who gather to share their experiences and insights. The Faculty will be hosting their ninth Asia-Pacific CPO Forum, the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level.

For more information on The Faculty Roundtable or CPO Forum, contact Program Manager, Belinda Toohey.

Can Introverts Really Thrive in Procurement?

While many aspects of modern business, including key skills, seem to favour extroverts, Susan Cain argues that introverts have as much to add and value to give.

Value of Introverts

 “There is zero correlation between being the best talker and having the best ideas.”

Don’t miss Quiet Revolutionary”, Susan Cain’s keynote speech at ISM2016.

There are almost certainly introverts in your procurement team – whether it be yourself, your boss, or your colleagues, a third to half of the population are introverts. Susan Cain’s game-changing book The Quiet Revolution champions the introvert cause and goes into detail about how workplaces are designed to benefit extroverts – but what about introverts in Procurement?

What is an introvert?

First up, it’s important not to confuse introversion with shyness. Shyness is about fear of social judgement, while introversion is about how you respond to stimulation. In Cain’s words, “Extroverts crave large amounts of stimulation, while introverts feel at their most alive, most switched on, and at their most capable, when they’re in quieter, more low-key environments.”

We all fall at different points on the introvert/extrovert spectrum, but 21st-century workplaces are predominantly designed for extroverts and their love of stimulation. A culture that celebrates action over contemplation, open-plan offices, constant noise, and (worst of all) endless group-work, means introverts are often forced to pass as extroverts in the workplace rather than be themselves.

Groupthink versus creative solitude

“Groupthink” means that we can’t be in a group of people without unwittingly aping their belief. Groups follow the opinion of the most dominant or charismatic person in the room, even though, as Cain emphatically states, there is zero correlation between being the best talker and having the best ideas. This reveals a serious flaw in the way workplaces, schools and even the legal system (think about what happens in the jury room) see group-work as the best way to get positive results.

Solitude is essential to creativity and productivity. Team members should be able to generate their own ideas by themselves, free from groupthink, then come together as a team to talk them through, while ensuring no single person dominates the discussion. Cain points out that collaboration is important, but we need to recognise that freedom, privacy and autonomy matters.

Rather than constant group-work, workplaces should encourage casual, chatty, café-style interaction where people can share their creative ideas. In Cain’s words, “we need to work together, but the more freedom we give introverts to be themselves, the more likely they are to come up with solutions to unique problems”.

Introverts make better leaders

In a culture that prizes extroversion, introverts are routinely passed over for leadership positions, despite the fact that they make the best leaders. Here’s why they’re a better choice for leadership roles:

  • introverted leaders are generally more careful and are less likely to take outsize risks
  • introverts are much more likely to let employees run with their ideas, whereas extroverts can’t help but put their own stamp on things
  • people recognise that introverts step up because they are driven to do what’s right, rather than because they enjoy directing others or being in the public eye.

What does this mean for Procurement?

As most CPOs would agree, Procurement is a “people skills” job. This means that alongside core skills such as supply market research, analysis, category and contract management, introverted Procurement professionals must be comfortable with networking, influencing, stakeholder engagement, supplier relationship management and negotiation. The best advice is to play to your strengths rather than try to be something you are not.

Extroverts love negotiating, – the thrill of the contest, thinking on their feet and coming out on top – but having to negotiate can make introverts very uncomfortable. Again, it’s not about shyness, but rather about finding yourself in a high-stimulus environment, with pressure, fast decisions, and no time to reflect in solitude to come up with creative solutions. Here are some suggestions for introverts to overcome their fear of negotiation by playing to their strengths:

1. Does the negotiation really have to be live? Carrying out a negotiation by email may be slower, but will allow you to make considered decisions rather than blurting out a rash offer in a moment of high pressure.

2. In a live negotiation, use the power of silence. A meaningful pause can make the person across the table so uncomfortable that they start to gabble to fill the silence.

3. Plan ahead. Use your solitary time to do your research and plan so thoroughly for the negotiation that you will be prepared for anything.

4. Listen. Have you ever had one of those conversations where the other party knows what they want to say and doesn’t appear to listen to you at all? Introverts make much better listeners because they don’t feel the need to dominate the discussion. Active listening makes people feel valued and will enable both parties to find common ground.

Susan Cain has a powerful message that resonates not only with introverts, but will be enormously valuable to extroverts who want to understand how to help their introverted colleagues thrive. Attendees at ISM2016 will learn how to create a better workplace Yin and Yang between introversion and extroversion, and join Cain’s Quiet Revolution.

Susan Cain

Time is running out to register for the biggest and best supply management conference on earth – ISM2016 – from May 15 to 18 at the Indianapolis Convention Center. More than 100 breakout sessions will feature some of the BIGGEST names in supply management, including Apple, Google and Coca-Cola. Get all the information you need to register on the ISM website.

Generating Big Ideas Through Hackathons

Generating tangible big ideas within organisations can be a difficult activity. More and more organisations are using ‘hackathons’ to facilitate big idea generation.

Picture of Tech Hackathons

It’s interesting how language evolves to turn a word with negative connotations into something positive. The word “hack”, for example, has traditionally put fear into the hearts of the staunchest CEO. Just ask the management of hacked dating website Ashley Madison, or any of the big banks that channel a significant amount of their budget into building hacker-proof systems.

Yet large corporations all over the world are now embracing the concept of the ‘hackathon’. It’s something of a deceptive term, because rather than actual hacking (subverting computer security), the activity involves organisations making enormous amounts of data available to competing teams of analysts who then brainstorm solutions to specific problems.

Why Call Them ‘Hackathons’?

There are three possible reasons. Firstly, the word ‘hacker’ has come to symbolise a generation of intelligent and disruptive young people who know how to leverage technology to create meaningful change. Secondly, the activity itself usually involves a significant amount of data mining.

Finally, the phrase “there’s a hack for that” means that someone has come up with a smarter way of doing something, demonstrated by the increasing usage of terms such as ‘life-hacking’ or even ‘parenting hacks’.

Hackathons generally take place over a whole day or even longer, usually in a big space buzzing with engineers, analysts and other boffins. Participants leave their corporate attire at home and come dressed for comfort rather than style, prepared for a long and exhilarating day fuelled predominantly by coffee and sugar.

Every organisation runs hackathons in their own way, but the concept usually remains the same. The participants (hackers) are organised into teams with mixed skill sets, then are given a list of key technical challenges that the organisation currently faces.

The organisation then gives access to any data or information required to solve these problems, and the hackers get to work. At the end of the hackathon, the teams present their solutions and the organisation picks the winners.

Corporate Hackathons

One of Australia’s major corporate hackathons, Unearthed, is a 54-hour event run by some of the region’s largest resource organisations. Competing teams are given access to Big Mining data – specifically, transport, logistical, geospatial and geological proprietary data.

At the most recent Unearthed event, one of the teams worked out a way to integrate technology into tray trucks that detects when boulders are too large for rock crushers and sounds an alarm to prevent potential blockages. The organisers estimated that this idea alone would save millions of dollars for the sector, with the problem analysed and solved in a mere 54 hours.

Perth-based CPO Jackie Harris is hosting an internal hackathon in her organisation to solve some key challenges for 2016. “It’s all about understanding the barriers to innovation and stimulating ingenuity in the team. There are so many small-scale changes we can make in our supply chain that will have a huge impact on our bottom line.”

Harris gives the example of the complexities involved in working out the optimal deck space utilisation on a cargo ship. Through a hackathon-type event, there is now a piece of software that maps deck space and provides the solution for you. “Our organisation is lucky in the sense that we are data-rich and have a strong analytics team”, says Harris. “Hackathons are a fantastic way to showcase this team and bring their ideas to the fore.”

In the Procurement space, a hackathon is a fun and effective way to engage your suppliers and generate innovative solutions. Invite your suppliers to send their best and brightest to compete ‘live’ against their peers, come up with the most innovative solution to your operational challenges, and win the contract.

Not convinced? What you need to know is that hackathons:

  • create solutions to ‘unsolvable’ problems.
  • are fun, engaging and social events.
  • provide a focused environment to solve operational challenges without any distractions.
  • encourage a culture of healthy competition.
  • (most importantly) stimulate innovative thinking in your organisation.

Hugo Britt is a Research Consultant at The Faculty, helping to support The Faculty Roundtable, an influential group of Australian procurement leaders, who gather to share their experiences and insights. The Faculty will be hosting their ninth Asia-Pacific CPO Forum, the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level.

For more information on The Faculty Roundtable or CPO Forum, contact Program Manager, Belinda Toohey.​

If you’re interested in finding out more about the Big Ideas Summit on April 21st, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

Stories from The Source – Part Two: Sanne Gruter

The Source Recruitment Consultant Sanne Gruter gives Hugo Britt her top tips for procurement professionals to excel in their next interview.  The Source Interview Tips

Read Part 1 of this series here.

In more ways than one, Sanne Gruter is the international face of The Source. As part of her portfolio she looks after the fast-growing international sourcing part of the business, reaching out to potential candidates in markets including the UK, China and Singapore. Sanne is also ‘international’ in that she hails from Holland, has a partner from Uruguay, and has found a fulfilling and exciting career here in Melbourne, Australia.

Sanne’s academic history is impressive – she holds a Bachelors degree in Applied Psychology, and an International Masters of Culture, Organisation and Management which integrates anthropological, sociological and psychological approaches to identity, politics and cross-cultural co-operation with management and organisation theory. She enjoys the challenges involved in recognising, qualifying and nurturing top talent.

What made you decide to come out to Australia?

I love to travel, and still take every opportunity I can to see the world. I was out here in Australia travelling as a tourist, and of course I loved the sunshine. Melbourne, in particular, really appealed to me as the home of the Australian Open! So when the opportunity came up to join The Source, I took it.

How do you use your qualifications in your day-to-day role as a recruitment consultant?

My knowledge of psychology helps me be aware of the subjective element in almost everything I do. Recruiters need to remember that they’re dealing with real people, who have emotions and agendas. When I work with candidates I always let them know if they’re coming across as too aggressive or lacking in energy. Usually, people don’t know they’re doing it. Basically, I try to teach people to be convincing in interviews.

Is there anything unique about recruiting for the procurement profession?

Absolutely. I’ve found that procurement professionals are master negotiators – candidates want a lot, and they play hard on the salary negotiations. The clients we recruit for are excellent negotiators as well, and we generally find that they’re prepared to wait for the right talent to become available.

Where do you find your candidates?

Mainly through headhunting and networking. We reach out to people we believe are relevant for a specific role to have a very general career discussion. Usually people are happy to be courted and to join our network even if they’re not ready to move until the right opportunity comes along. This ‘hidden market’ has proven to be very valuable, since the focus is on the candidate.

We’ve also found quite a few people through Procurious, both inside and outside Australia. So be sure to log onto Procurious and connect with me! One of the exciting trends we’re starting to see is more and more people making a conscious choice to come into procurement from other professions, such as finance and law. Procurement functions can always use these diverse skill-sets.

What are the challenges in Australian procurement recruitment?

There’s a huge amount of change going on amongst our client companies. Restructuring and redundancies take place all the time, which means we have to keep on top of what’s happening in a fast-changing environment. Another challenge is that Australia is a relatively small market, which is why it’s important for procurement professionals to know the right people and reach out to organisations like The Source.

What sort of salary levels do you recruit for?

Personally, I mostly look after the mid-level space, which could range from $80,000 to $130,000 (AUD), but The Source team works collaboratively across all salary levels. And of course there’s the international recruitment angle too. UK professionals are in high demand in Australia, along with candidates from China and Singapore.

Can you share some tips for creating a winning resume?

Don’t just describe your role when you write your resume. Make sure you keep track of your achievements, and back up your claims with hard figures. Procurement employers like to see proof. For example, if you’ve achieved some excellent cost savings, make sure you include the dollar figure or percentage.

Start with a succinct personal introduction explaining your background, key strengths, and what makes you stand out for the role. You’ll never be shortlisted if you don’t communicate your strengths.

Frequently changing roles can indicate a lack of commitment, so try to stay in a business for a minimum of three years. Of course, sometimes it’s out of your control. If you are made redundant, don’t be afraid to put it in your resume – recruiters and employers won’t penalise you for redundancies because they’re so common.

Can you share some interview tips?

Make sure you’re well-presented. Read up about the organisation and find out about the people who will be interviewing you on LinkedIn. It’s important not to over-prepare and create a “script”, because it comes across as fake.

Remember to back everything up with examples. Think about the key competencies you’ll be asked about, and be prepared to talk about how you’ve demonstrated these in the past. You need to be able to explain what you do.

Do you have any stories of disastrous interviews?

We had a candidate who was asked to give an example of how she can balance priorities. Unfortunately, the example she gave was how she was juggling three boyfriends at once!

Another candidate took the advice to provide clear “evidence” of her achievements much too literally, and turned up at the interview with an enormous stack of printed-out reports and emails. She’d rummage through the pile to find evidence whenever she was asked a question.

Did either of them win the role?

Unfortunately for them, no!

What’s your advice for graduates considering procurement as a career?

Procurement is a good career. It’s growing fast, with heaps of opportunity to add significant value to a company. It’s a really diverse job. From the analytical side of things, to the sourcing experts, stakeholder relationship management experts, risk gurus – there are so many aspects to being a procurement professional.

The Source - Sanne GruterThanks Sanne, and all the very best for an exciting career in procurement recruitment at The Source!

 

 

The Source is a boutique mid to senior and executive recruitment and search consultancy with national reach specialising in the procurement market. For more details, visit The Source.

Corruption Perceptions Index – A Procurement Must-Read

The Corruption Perceptions Index (CPI) is a must-read annual report for procurement professionals that source internationally.

Bribery

Why? Because with a greater focus on risk, you need to know if your supply chain is contributing to the serious corruption problems, endemic in so many of the world’s poorest countries.

Clean vs. Dirty

There’s a running joke in Paraguay about the country’s entrenched corruption problem, exposed and broadcast year after year by Transparency International’s Corruption Perceptions Index (CPI). With a score of 130 out of 168, it’s one of the most corrupt countries in the world, but locals say that the reason it didn’t come in last is because “somebody must have bribed the judges”.

Corruption-Map

Transparency International ‘Corruption Heat Map

Highlights from the report include the top ten “cleanest” countries. It’s important to note that no single country anywhere in the world is corruption free:

  • 1. Denmark
  • 2. Finland
  • 3. Sweden
  • 4. New Zealand
  • 5. Netherlands, Norway
  • 7. Switzerland
  • 8. Singapore
  • 9. Canada
  • 10. Germany, Luxembourg, UK

It’s no surprise that the lowest-scoring countries include war-torn states that have suffered from decades of conflict, such as Iraq, Syria and Afghanistan.

  • 150 – Burundi, Cambodia, Zimbabwe
  • 153 – Uzbekistan
  • 154 – Eritrea, Syria, Turkmenistan, Yemen
  • 158 – Haiti
  • 159 – Guinea-Bissau, Venezuela
  • 161 – Iraq, Libya
  • 163 – Angola, South Sudan
  • 165 – Sudan
  • 166 – Afghanistan
  • 167 – North Korea, Somalia

Other interesting results include the USA in 16th place; Australia slipping to 13th place; Greece improving its performance to reach 58th place (in all likelihood due to international scrutiny during the Greek financial crisis); and China in 83rd place.

Exporting Corruption

Northern European countries were ranked as the “cleanest” states, most free of corruption. However, Transparency International suggests that their records aren’t as clean as the scores would indicate, and it’s all down to sourcing from corrupt countries:

“The OECD Anti-Bribery Convention, adopted in 1997, requires each signatory country to make foreign bribery a crime for which individuals and enterprises are responsible. The Convention is a key instrument for curbing the export of corruption globally because the 41 signatory countries are responsible for approximately two-thirds of world exports and almost 90 per cent of total foreign direct investment outflows.

“Foreign bribery is not an abstract phenomenon; it has damaging consequences in the form of contracts not going to the best qualified suppliers, prices often being inflated to cover bribe payments, environmental requirements not being enforced and taxes not being collected.”

The CPI report shows, however, that half of all OECD countries are violating their international obligations to crack down on bribery by their companies abroad. This includes the cleanest countries identified in the report, such as Sweden (3rd place), which is facing allegations that it paid millions of dollars in bribes in Uzbekistan (153rd place).

Procurement’s Role

Procurement professionals who source internationally have the power to halt the flow of cash moving from the cleanest to most corrupt countries, feeding the corrupt states and locking the world’s most vulnerable people into a cycle of impoverishment.

Here are three steps you can take, as a procurement professional, to ensure you do not source from a corrupt state:

  1. Be informed – read reports such as the annual CPI and research the countries you are dealing with.
  2. Understand the OECD Anti-Bribery Convention, and remember that individuals can be held responsible.
  3. Lobby your government to put in place legislation that will steer the profession away from corrupt, immoral or illegal sourcing activities. There has been some excellent progress in this area internationally, such as the US Congo Conflict Minerals Act 2009, or the UK Modern Slavery Act 2015.

Reusability – Getting to Space Just Got a Whole Lot Cheaper

Take a fresh look at the consumables in your supply chain.

SpaceX Falcon9

On December 21, 2015, SpaceX’s Falcon 9 made history. After successfully delivering 11 communications satellites into low-Earth orbit, the nine-engine booster rocket returned safely to Cape Canaveral, landing dramatically on a jet of fire.

Less than a week later, SpaceX founder Elon Musk tweeted that the Falcon 9 was “back in the hanger … no damage found, ready to fire again”.

Reusability the Key

Placing satellites into orbit is no mean feat, but the astounding, history-making part of this operation was landing the booster. It’s all about reusability. Until now, putting a rocket into space has been prohibitively expensive due to the single-use aspect of launching. In his detailed explanation of Musk’s vision, Tim Urban of the website Waitbutwhy compares single-use spacecraft to air travel:

“Imagine the current air travel industry with one key difference: an airplane works for one flight only. Each flight is on a brand new plane, and after the flight, passengers exit into the terminal and the plane is broken down into scrap metal and possibly-reusable parts that are sent off to be refurbished for use in a future plane.

An airplane costs around $300 million to build. So in this new model, in addition to paying for the crew’s time and fuel, airlines have to spend $300 million extra each flight to build a plane. How would that change things?

First, there would be very few flights available—the schedule would be limited by the pace of plane production. Second, the price of a round-trip ticket between Chicago and San Francisco would now cost about $1.5 million per person. For economy.”[1]

Musk himself has stressed that reusability is the key to making human life multi-planetary:

“If one can figure out how to effectively reuse rockets just like airplanes, the cost of access to space will be reduced by as much as a factor of a hundred.  A fully reusable vehicle has never been done before. That really is the fundamental breakthrough needed to revolutionize access to space.”[2]

Here’s how they did it: https://youtu.be/sSF81yjVbJE.

Reducing the Costs

So how will SpaceX’s achievement affect the costs of getting to space? With a human mission to Mars as the ultimate goal, back in 1989 NASA estimated it would cost $450 billion to send 4-6 astronauts, about $100 billion a seat. This was upgraded in 2004 to $50 billion, or $10 billion a seat. Musk has a per-seat goal of $500,000, 20,000 times less than NASA.[3] That’s less money than an average home loan in Australia.

The huge reduction in costs will be brought about through a combination of revolutionary improvements, including low-cost propellant, making the return propellant on Mars,[4] and having approximately 100 paying passengers per flight. The biggest saving, however, will be through the rapid reusability of rockets, where the only costs involved are maintenance, life-support and refuelling.

The closest NASA has come to reusability was through the now-retired Space Shuttle program, which was able to land the spacecraft itself but not the booster, costing over $200 million per astronaut.

What About Your Supply Chain?

The Falcon 9 story is inspirational in the sense that SpaceX has achieved something that the world’s best aeronautical engineers said could never be done. The single-usage problem has been unsurmountable for decades, but SpaceX solved the puzzle and other organisations will soon follow suit.

The message here for procurement professionals is to take a fresh look at the consumables in your supply chain that could possibly be reusable. Whether the article is as expensive as a rocket booster or as cheap as office paper, it’s worth reconsidering whether items really are only suitable for a single use. Reusability is good for the bottom line, good for the planet, and will help put humans on Mars sooner than we think.

[1] http://waitbutwhy.com/2015/08/how-and-why-spacex-will-colonize-mars.html/4#phase2

[2] http://www.spacex.com/news/2013/03/31/reusability-key-making-human-life-multi-planetary

[3] http://waitbutwhy.com/2015/08/how-and-why-spacex-will-colonize-mars.html/4#phase2

[4] Propellant can be created using Mars’ CO2 atmosphere and the H2O frozen in the soil.

Stories from The Source – Part one: Tony Megally

The Source General Manager Tony Megally speaks with Hugo Britt about how to get yourself noticed by a top recruitment firm.

Albert Street

As with most 21st-century offices, we have an open-plan layout here at The Faculty. The team is spread across the first floor of a sun-filled, goldrush-era building in the heart of Melbourne. We have minimal partitions and senior management sits right in amongst their teams. One notable exception to this layout, however, is The Faculty’s sister organisation – The Source.

The Source is a boutique recruitment firm specialising in procurement and, due to the intriguingly confidential nature of their work, sits in a corner of the building separated from the rest of us by a glass partition. The small team beyond the wall always look incredibly busy, and when they do emerge, it’s usually with a phone glued to the ear, carrying out intense-sounding conversations in hushed tones as they pass my desk.

What goes on behind that mysterious portal? What are the particular challenges involved with recruiting for procurement? I interviewed three members of The Source team to find out, beginning with its new General Manager, Tony Megally.

So, Tony, tell me about yourself. How long have you been in recruitment?

My career in recruitment kicked off in 1999, and let me tell you, things were very different back then. We didn’t have smartphones, barely had email, no voicemail to reach people, and you were very lucky if you had any kind of database to work with. I remember the majority of my time being spent faxing resumes through to clients.

What’s “faxing”?

I’m going to assume you’re joking. Recruitment back then was nowhere near as proactive or strategic as it is nowadays – it was highly reactive and transactional. I initially worked in a volume market with the focus on recruiting for short-term, temporary assignments. I’d get a call from a client on a Friday night, for example, asking for 10 temps by the following Monday. Not easy.

What exactly has changed in recruitment over the past 15 years?

Recruitment has become a more sophisticated industry. It’s no longer so transactional and is now highly relationship-focused. We support clients to build their businesses through great talent and increasingly act as guides to candidates throughout their entire careers. That’s the beauty of recruitment – you get to follow people’s careers and watch them grow. I placed graduates back in 1999 that have now become senior and executive leaders, and in the best cases they’ve become clients themselves.

What about changes in the procurement space?

Just like recruitment itself, the procurement profession has moved away from its traditionally transactional function and is increasingly commercial-focused and strategically positioned. Things are evolving fast – the challenge for us at The Source is to keep ahead of the ever-changing expectations that organisations have in regard to the role of their procurement functions.

What levels of seniority do you recruit for at The Source?

We recruit from CPO down to the specialist level, but personally I look after the senior to executive space. This involves a broad salary range: about $150k to $350k (AUD). Clients work with us typically when it’s a hard-to-fill role, or when there’s a confidential restructuring going on and they can’t advertise. We’re in the mix – we’re searching for and networking with procurement talent all the time. Basically, clients want to partner with us to gain access to our talent pool.

How can candidates get the best out of their relationship with a recruiter?

It’s important for both sides to be as transparent and upfront about their expectations. We’ll share all the details about the client’s brief to help you secure the perfect role, but we need candidates to share as much as possible to help us promote them. It’s good to be aware that recruitment takes time. While an analyst-level could be placed within one to two months, executive placements can take six to twelve months.

Do you work mainly with advertised roles, or “headhunting” top talent?

Most of our time is dedicated to nurturing what we call “passive talent”. That means we get in touch with professionals who may not necessarily be active in the job search but are open to considering opportunities in the near future. It’s all about developing and maintaining relationships – we take a very long term view.

What makes a stand-out candidate in your view?

I look for evidence of commercial acumen, strategic agility, a relationship focus and of course a strong people focus. These soft skills make people stand out. Candidates need to be good networkers (through organisations such as The Faculty) and be able to demonstrate strong business partnering both internally and externally.

Stability is important, for example in Category Management you’ll need to prove you’ve been through an end-to-end strategic procurement lifecycle or in the case of Senior Leaders, you’ll talk to your strengths in change management and business transformation. Both of which usually take about two to three years.

So two to three years is the minimum period you should stay in an organisation?

In my view, yes. But the flipside of that is when we see someone who has sat in a role for ten years and hasn’t progressed their career, that doesn’t usually suggest drive and ambition.

Got any tips for preparing a CV and attending an interview?

The best CVs are kept simple and list stand-out quantifiable achievements. Keep track of the things you’ve accomplished.

You can never do enough research before an interview. Read everything on the company website, search for key individuals on LinkedIn, review company financial statements (easy to access for publicly listed organisations), reach out to networks. There’s no excuse for not being prepared for the “what do you know about us” question. Interview preparedness is an indication of how organised you will be on the job.

Thanks Tony. It sounds like you’re a key person to know in the Australian procurement profession.

I’d encourage anyone who’s interested in a confidential career discussion to get in touch with The Source, whether you’re actively seeking a new role or would just like to start the conversation about your career future.

The Source is a boutique mid to senior and executive recruitment and search consultancy with national reach specialising in the procurement market. For more details, visit The Source.

The Procurement Professional Twelve Days of Christmas

What do you want from your suppliers for Christmas?  12-days-of-christmas-thumb1-f

In the spirit of the season, here’s a Procurement professional’s Twelve Days of Christmas:

On the twelfth day of Christmas, my suppliers gave to me:

Twelve new-signed contracts

Eleven costs avoided

Ten tenders pending

Nine on-time deliveries

Eight service improvements

Seven ways of working

Six demand reductions

Five innovative ideas!

Four value-ads

Three free pens

Two risks assessed

And a brand new SRM strategy!

Merry Christmas!