All posts by Procurious HQ

Closed for business: US West Coast ports shutdown amid dispute

Supply chains across America are facing up to six months’ disruption after 29 ports on the US West Coast, including the two busiest ports in the country, were partially shutdown over the weekend.

US docks face 4-day shutdown

An on-going dispute between the Pacific Maritime Authority (PMA) and the International Longshore and Warehouse Union (ILWU) over contracts and working conditions, has led to major delays in the loading and unloading of cargo.

The disruption reached its peak on Sunday morning, with approximately 34 container ships anchored along the Californian coast waiting for access to the ports of Los Angeles and Long Beach.

Labour Dispute

The PMA and ILWU have been locked in contract negotiations since the end of June last year, when the previous contract ended.

Unfortunately, relations between the two parties have soured, with the PMA accusing the ILWU of a deliberate slow-down of work in recent months, something that the ILWU has attributed to changes in practices by the shipping companies. With neither side willing to back down, negotiations have stalled.

In response to the slow-down, the PMA took the decision to suspend port operations for six weekend and holiday days in February, stating that they were unwilling to pay the high overtime rates for weekends and holidays when productivity was so low.

With conservative estimates placing the cost to the US economy at $2 billion per day, President Obama has sent Labour Secretary, Tom Perez, to get negotiations back on track and a deal in place.

Supply Chain Pressures

However, even if a deal is agreed soon, it could take anywhere between two and six months for port activities to return to normal levels. This would then lead to a far greater impact on supply chains already experiencing severe delays to deliveries of a wide range of goods, including agricultural produce, car parts and clothing.

Exports of fresh produce to Asia have been heavily impacted, with many US suppliers now looking to domestic markets for sales as other customers cancel orders. There are also concerns that many retailers will be unable to stock spring clothing lines, leading to lower incomes over March and April.

In the car industry, both Nissan and Toyota have been forced to airfreight parts for US manufacturing operations due to the disruptions. Honda has also confirmed a slow-down in US production due to shortages of parts normally shipped from Asia to the West Coast.

Lack of contingency

There are concerns that many of the companies affected don’t have the necessary contingency plans in place to mitigate the risks of the disruptions. It is felt that many were unprepared for the dispute to last as long as it has and that it has left companies exposed to the delays.

Although some companies like Nissan and Toyota have been able to take steps to mitigate the disruption by using other transportation methods, others have not been able to act in the same way, compounding the delays in the supply chain.

One high-profile victim of the dispute is McDonalds. As Procurious reported earlier this year, the disruption at the coastal ports lead to shortages in produce exports and rationing of fries in Japan. This was a contributing factor to the company’s first full-year loss in the region in 11 years.

For more on this story, follow these links:

http://www.supplychaindigital.com/supplychainmanagement/3831/What-happens-if-the-US-ports-keep-closing

http://www.usatoday.com/story/money/cars/2015/02/14/asian-automakers-parts-cars-port-strike/23380041/

http://www.ft.com/cms/s/0/2be1ed0a-b23a-11e4-80af-00144feab7de.html#axzz3Ru37cVTq

Read on for the other procurement and supply chain stories making the headlines.

Heathrow Airport procurement director offered exec committee place if he ‘reshaped’ function

  • Ian Ballentine, procurement director at Heathrow Airport, was offered a seat on the executive committee if he could “reshape” the function within a year of joining the firm.
  • Ballentine joined the firm in November 2012, and in late 2013 he joined the committee. He said: “I took the job here because the previous chief exec said: ‘I need someone to come on board and really reshape procurement for what I think it can become in an organisation, and if within a year you can demonstrate you can do that then I will give you a place on the board’.”
  • Ballentine started out in charge of procurement for the operations division of Heathrow, but following his success his role was widened to include the remaining IT and construction divisions in a new merged function. His work revolved around changing perceptions of procurement as being “bureaucratic”, “slowing things down and not adding value” to “really demonstrating the savings off the bottom line”.

Read more at Supply Management 

Food chain is an easy target for criminals, says safety chief Alan Reilly

  • Food fraud is still seen as an easy target for criminals and the authorities are not organised enough to tackle the criminals, the outgoing Food Safety Authority of Ireland(FSAI) chief executive Alan Reilly has said.

  • Prof Reilly said food companies must have a threat assessment procedure in place to identify where the food supply chain could be vulnerable to fraud.

  • “The longer that food chain, the more things that could go wrong and the more opportunities for criminals to get in and do things like food substitution and animal species substitution, to bulk out products, to dilute down high-value products like olive oil and so on,” he said.

  • “The food chain is still seen as an easy target for criminals. There is big money to be made in food fraud and at the present moment I don’t think we are organised enough to tackle some of the criminals out there. It does need co-operation across all the agencies of the State, gardaí, customers and the food regulators have to work together to tackle the problem.”

Read more at The Irish Times

BT’s ‘near-monopoly’ on rollout of rural broadband sparks concerns

  • Plans to put a publicly-funded £45.5million superfast broadband contract on to the open market were abandoned after BT refused to bid and left only two potential bidders, a leading member of the project team has revealed.
  • Commissioning group Connecting Devon and Somerset had said last year it would launch a tender process which would take coverage up to 95 per cent of all properties.
  • A previous £94 million contract with BT only promised that 90 per cent of businesses and residents across the two counties would see data transfer speeds increased by 2016.

Read more at Western Morning News

Church charity to research FTSE 100 supply chain slavery links 

  • A church-based charity is to lead research aimed at uncovering potential links between human trafficking and the supply chains of FTSE 100 companies.
  • The study by Us, with the help of Finance Against Trafficking, Ecumenical Council for Corporate Responsibility (ECCR), and Rathbone Greenbank Investments, is motivated by concerns the companies may inadvertently become involved in human trafficking through links with suppliers around the world.
  • Rachel Parry, global relations director for Us, said: “We want to see FTSE 100 companies better informed to help them ensure there is as little risk as possible that their supply chain is somehow touched by the traffickers’ trade.”

Read more at Supply Management 

Supermarkets should encourage small suppliers, not bully them

  • The news that the grocery industry watchdog is investigating Tesco over its alleged mistreatment of suppliers is unlikely to have shocked many. Supermarkets aren’t renowned for treating their suppliers well – particularly those small businesses that don’t have the muscle to put up a fight against unfair contracts and late payments. And as margins shrink in the groceries sector, the supply chain represents an obvious target. The insolvency specialist Begbies Traynor reckons as many as 100 food and drink manufacturers could go bust this year because of the supermarket price war.
  • The irony is that all the evidence suggests consumers are looking for more choice in their supermarket shopping – not ever more brands of washing powder or baked beans, but new products and new product categories. The supermarkets need more innovative smaller suppliers offering artisanal products, not fewer, yet their behaviour is driving firms out of business.
  • Research sponsored by the online grocer Ocado underlines the point. Its poll of shoppers, conducted by YouGov, found that 38 per cent actively seek out small label products when they’re in the supermarket and that 51 per cent rely on their supermarket to introduce them to new products. A third said they were more likely to shop in a supermarket they believe is supportive of smaller businesses.

Read more at The Independent

Kimberly-Clark names SVP global supply chain

  • Kimberly-Clark Corporation has appointed Sandra MacQuillan, 48, to the newly created position of SVP, Global Supply Chain. MacQuillan joins K-C from Mars Inc., where she served as Global Vice President, Supply Chain for Global Petcare. She will be joining K-C in the second quarter.
  • With her appointment, MacQuillan will have global responsibilities for procurement, transportation, continuous improvement, sustainability, and quality, safety and regulatory operations. Labor relations and workforce issues across product supply will also be coordinated at a global level. She will also lead the company’s Global Supply Chain Council, which will be comprised of supply chain leaders from across the globe, and will build the next generation of supply chain capability at the company. She will report to Thomas J. Falk, chairman and CEO, and become a member of K-C’s global senior leadership team.

Read more at Consumer Goods Technology

The CIPS Risk Index Explained

Following on from our review of the Purchasing Managers Index (or PMI) last week, Procurious continues its look into procurement performance indicators. This week we are focusing on the CIPS Risk Index. 

CIPS Risk Index

The CIPS Risk Index is a tool developed by CIPS and powered by Dun and Bradstreet (D&B). It has been designed to give procurement and supply chain professionals a country-by-country understanding of the risks that exist within their supply chain.

The index is generated through a number of unique assessments that are undertaken by D&B’s economics team and provides an individual country-based score for 132 countries. CIPS suggests that these country-based scores can be aggregated to indicate overall supply chain risk.

For procurement professionals that want to understand the details behind the high level risks pointed out by risk index, CIPS provides monthly Country RiskLine reports and more detailed quarterly Country Insight reports. These reports provide a more in-depth look into the political, economic and social risks present in countries and how these impact purchasing activities.

When calculating the index, D&B takes into account the following categories:

  • Short-term economic outlook.
  • Long-term potential
  • Market potential
  • FX risk
  • Transfer risk
  • Business environment quality
  • Business continuity
  • Insecurity/civil disorder risk
  • Expropriation/nationalisation risk.

To find out more about the CIPS Risk Index click here.

What’s procurement like in your part of the world? – South Africa (Elaine Porteous)

Cape Town - Pixabay

Procurious showed you its map of the world last week, marked with where all our members come from, and asked what procurement was like in your part of the world.

Following on from looking at Scotland, Italy and the USA, Elaine Porteous tells us what procurement is like in her home country – South Africa.

Elaine is a freelance consultant, published writer and editor of business articles for various on-line and print media, specialising in Supply Chain, Procurement, Logistics and Career Management.

She has previously shared her knowledge on a number of these topics in guest blogs for Procurious.

Read her full story here.

How do you think procurement differs in South Africa, as opposed to elsewhere in the world?

I think we have a unique situation and a lot of challenges. Firstly, we have an historical situation that is being addressed partly through Broad Based Black Economic Empowerment (BBBEE). The aim is to redress some of the imbalances of the past and broaden the base of suppliers through preferential procurement and sourcing locally for defined commodities.

Skills are scarce, particularly in the public sector where there is a lack of capacity and inadequate planning and budgeting. We are struggling with managing conflict of interest, limiting fraud and tackling corruption. The good news is that there are government initiatives afoot to improve risk management and make substantial improvements to their processes. Our Government CPO is implementing an e-tender portal shortly to tighten up tender processes.

Procurement in the private sector is alive and well; there are many organisations that are developing their staff and applying best practice, not only in the multi-nationals.

Do you know how many other procurement professionals are in South Africa?

I would estimate more than 10,000. CIPS has 2295 members in South Africa and more than 16,000 members across Sub-Saharan Africa.

How did you get started in procurement?

Like most people, by accident! I was cruising along as an HR business partner in a big multinational when the HR Director was tasked with launching a procurement function.  He nominated me to come along for the ride and the rest is history.

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

The procurement function is growing in stature and slowly getting more traction and visibility in organisations.

There is a very active community of procurement people, from both the public and private sectors, who engage extensively on LinkedIn.  Also, there is a small band of enthusiastic specialist recruiters that ply their trade there and on Twitter.

We have an on-line marketplace that is hosting a Procurement Africa e-Conference, in association with CIPS, shortly.  This may be a first for Africa. Many procurement professionals are avid networkers and attend the various conferences and events in the procurement field.

Why did you join Procurious?

It was refreshing to find a platform for us to interact on a wide range of subjects without having to belong to a formal organisation or have to put up with lots of advertising and sales pitches.

What are you hoping to get out of the network?

I like to keep up with global trends in supply chain and to hear other’s opinions on the topics of the day in the procurement field.

I’m really interested in helping young procurement people advance their careers and advising them on what the options are and importantly, how to get there.

How are you going to get your peers involved?

I see Procurious going from strength to strength.  I will use my networks to introduce others to this great resource.

More on the South African CPO Tender portal here.

Read more of Elaine’s writing for Procurious by following these links:

https://www.procurious.com/blog/life-style/your-job-role-might-be-obsolete-by-2020-will-you-be-sustainable

https://www.procurious.com/blog/life-style/influencing-skills-can-be-learnt-start-now

https://www.procurious.com/blog/life-style/should-you-ever-rehire-an-ex-employee

Meeting of minds in pharmaceutical purchasing

The Beyond Group AG (“TBG”) will be launching its 2015 Productivity-in-Pharma Think Tank, building on the success of their 2014 gathering of minds of senior procurement leaders in the industry.

Productivity Think Tank from the Beyond Group

Kicking off in Frankfurt Germany on April 21, three separate day-long sessions (concluding in September) will help frame the discussion of what is the future of Procurement within the Pharma industry over the next several years.

Drawing together a select group of procurement professionals representing 15 of the world’s leading Pharma companies, TBG and its partners (EY [Ernst & Young], Korn Ferry, UBS, and others) will deeply explore the issue of “Transforming the Procurement organization to become a recognised productivity engine”.

The 2015 series promises to be the most intensive, content-packed, and insightful of this groundbreaking series.

Contrasting with the traditional conference environment, TBG’s Think Tank gatherings offer ‘learning collaboration’ through in-depth & insightful exchanges among industry peers, academics, thought leaders and practitioners. These intensive sessions build upon experience, expertise, and research in a closed-door environment where executives can really get into the detail of their challenges and aspirations. From this gathering of minds, TBG publishes key findings, generates new research and creates a close community of leaders who explore the biggest opportunities to develop Procurement’s role.

Conceived by Giles Breault and Sammy Rashed, principals and co-founders of The Beyond Group AG, the Think Tanks have quickly evolved into a new model where “content is king” and outcomes are published and presented to the wider procurement community. Some of the feedback gathered from previous participants include:

“The Productivity Think Tank concept is a great opportunity bringing together a focused group of international peers around a relevant topic. Half-way between a symposium and structured meetings with peers, the Think Tank combines the benefits of both worlds with deep analysis, strong networking, useful outcomes, and applicable takeaways”

“It’s a mix of academic expertise, real world experience and cross-industry best practices which allows us to collectively create solutions that fundamentally change the way we look at procurement and value its contribution”.

This year’s European series is limited to a maximum of 15 member companies. It will be followed a new series for the North American region this fall and expanding to the Asia market in 2016.

For more info please contact us at [email protected] or visit our website at www.beyondgrp.com.

DHL talk key packaging trends of 2015

Ahead of the UK’s biggest packaging event later this month Paul Young – Head of Packaging Services at DHL Supply Chain, shared his thoughts on future packaging trends with Procurious. 

DHL packaging innovations

Taking place at Birmingham’s NEC on 25-26 February 2015, Packaging Innovations 2015 will bring together the very best in the packaging and print industry from right across the globe.

Now in its tenth year, the expo will be home to  over 350 exhibitors specialising in all aspects of packaging from materials and design, to machinery, new technologies and equipment.

Here’s what Paul had to say:

 What innovations are enabling new capabilities for packaging?

From the use of new substrates to digital technology, a number of innovations are enabling new capabilities for packaging. Edible and dissolvable packaging are becoming more prominent as companies focus on their environmental agendas, whilst QR codes have created packaging capable of communicating with the consumer in a more interactive way.

It’s important that packaging solutions should fit the product and company values. Creating edible cups, for example, will emphasise a brand’s environmental credentials and reduce waste, whilst packaging that incorporates a digital element can engage consumers with the wider brand on multiple platforms.

What are the key packaging trends of 2015?

A study commissioned by Tetra Pack found that 89 per cent of consumers prefer to buy products in recyclable packages. This is therefore a key trend for 2015. As consumers are increasingly aware of environmental concerns, they wish to make efforts to cut down on their personal environmental impact.

Digital print is another trend to watch. Currently, labelling has been the area most impacted by digital print, however as the quality of products has significantly improved we expect to see more packaging created in this way over the year.

Is sustainable packaging high on the agenda for many customers? 

Sustainable packaging has a number of benefits for customers. It allows customers to demonstrate their environmental credentials and improve brand perception as well as reducing unnecessary, non-recyclable wastage.

Computer manufacturer Dell, have been using bamboo to ship 70 per cent of their laptops and packaging multiple products in the same box where appropriate. This strategy aims to save Dell US$18 million between 2008 and 2018 as well as generating substantial environmental benefit.

Are there any new ways in which packaging waste is being reduced in the manufacturing process?

Minimising the packaging size for any given product reduces packaging waste during the manufacturing process. Recently, Chainalytics, a supply chain consultation and analytics organisation, reduced the size of packaging for a prepared food product by one eighth of an inch and in doing so eliminated 146 tonnes of paper and cardboard annually.

Creating custom sized boxes for less-than-full-case orders is another way in which packaging waste can be reduced with smaller boxes able to compactly hold products, thus eliminating excess wastage.

Which new technologies are increasing packaging efficiency?

Technology, such as ‘on-demand’ packaging equipment, creates custom sized packaging and significantly improves packaging efficiency.

Office giant Staples has been using this cutting edge technology to create 6,000 to 8,000 custom sized boxes each day so that 30 per cent of the orders the company ships are now custom sized. As well as enhancing the consumer’s experience of the package, this has enabled Staples to accommodate more orders in each delivery, transporting products with increased efficiency.

What mistakes are companies [still] making when it comes to choosing their packaging strategy?

Companies are much more aware of the importance of packaging however some mistakes are nonetheless made. For example, online retailers often do not consider the impact of the packaging they choose for specific products. This can lead to potentially harmful situations for the consumer, for example, liquids packaged in basic cardboard boxes, highlighting the need for effective, product specific packaging.

Many companies still need to be aware of what packaging strategy is most advantageous to their business. Whilst sustainable packaging is of importance to many consumers, re-usable packaging may instead reduce waste further and reap financial better benefits.

Generation ‘Why’? Debunking the Millennial Myth

Professional Services firm, PwC estimates that by 2016 almost 80 per cent of its workforce will be Millennials. In light of this frankly staggering statistic we would like to dispel some of the myths that surround the ’next generation’ of procurement professionals.

The rise of the Millennial workforce

Who are the Millennials?

A Millennial is the term attributed to someone born between the early 1980s and early 2000s. You might also know them as ‘Generation Y’.

The stereotype

In recent years Millennials have garnered much criticism from their baby-boomer counterparts. The New York Post even went so far as to label them ‘the worst generation’ ever.

If you believed everything you read in the mainstream media, you’d see Millennials as a generation of entitled, delusional, lazy workers with a penchant for replacing traditional social interactions with a series of web enabled applications.

However, these presumptions that a Millennial workforce is one that is constantly looking for a new job, requires extended holiday leave, possesses an inflated sense of ability and prioritises work-life balance over remuneration, are neither fair nor accurate.

The reality

A recent study by SAP (a German software producer) has gone some way to dispelling the myths attached Millennials, claiming that the ‘next generation’ of worker shares more with the rest of the workforce than many of us first thought.

The study points out that Millennials are in fact no more likely to prioritise workplace ethics, work-life balance or salary expectations in a different way to any other generation.

The report provides the following stats to support these claims:

  • Competitive pay is the biggest motivator for job satisfaction for both Millennials (68 per cent) and non-Millennials (64 per cent).
  • The second biggest motivator for job satisfaction for both groups was a merit based reward system and bonus structure. (55 per cent Millennials, 56 per cent non-Millennials).
  • Despite what stereotypes suggest, fewer Millennials (29 per cent) reported that achieving work/life balance would contribute towards professional satisfaction than did non-Millennials (31 per cent).
  • Similarly, more non-Millennials believe that ‘finding personal meaning in work’ is important (17 per cent) than did Millennials (14 per cent)
  • A meagre one-fifth of each group suggested that making a positive difference in world impacted their job satisfaction.
  • In other stereotype-breaking findings, more non-Millennials (23 per cent) are considering leaving their job in the next six months than are their Millennial counterparts (21 per cent).

Whether our preconceptions were correct or incorrect, the Millennials have arrived. They are the largest generation ever and they possess the greatest collective largest purchasing power in history. What they believe, how they work and the way in which they interact will matter.

Disclaimer – This article was written, edited and posted by a Millennial.

Straw houses: no need to fear the Big Bad Wolf

We’re all familiar with the tale of the three little pigs and how the Big Bad Wolf blew down the first little pig’s house, a questionable dwelling built entirely from straw.

First straw house goes on sale in UK

Apart from having us wonder how it stood up in the first place without a frame, we all grew up knowing that a house made of straw was a bad idea.

However, an engineering research project in the UK is showing that maybe the little pig was ahead of his time in construction innovation. This week, the first straw houses offered on the open market in the UK are up for sale.

So huff and puff as much as you like, but you’re going to have to try harder than that to blow these houses down!

Building with bales

The research project was the brainchild of the University of Bath and Modcell, a specialist architectural firm. The hope is that the research, and the subsequent sale of the houses in Bath, will lead to the wider use of straw bales in construction.

The benefits of using straw are worth noting. Straw bale houses are more environmentally friendly to build and maintain than traditional brick houses and with proper care, the house will last for up to 100 years.

As straw is a natural material, the requirement for the production of raw materials will be reduced. This will in turn lead to a lower carbon footprint for the supply chain as the processes for manufacturing cement and firing bricks, both of which require high energy usage and generate substantial waste, will not be required.

Straw can be sourced relatively easily. Each year, UK agriculture produces an estimated four million tonnes of straw, of which only a small proportion is used, with the remainder just being burned. A new house would require seven tonnes of straw to build, meaning that there would be a potential to build half a million new homes from the straw produced each year.

Not only are the building method and supply chain more environmentally friendly, but also the houses themselves have significantly lower running costs and environmental impact. The bales provide highly efficient insulation and retain heat more effectively than their brick counterparts. The expectation is that the houses in Bath will have energy bills that are up to 90% lower than similar houses in the area.

Innovative construction

In recent years, the construction industry has made significant strides to reduce the environmental impact of and waste in its supply chain. Innovations have included:

  • The ‘house in a box’
  • The use of recycled materials in concrete – leads to reductions in fossil fuel and greenhouse gas production, rain acidification potential and waste
  • Bio-based composite building materials
  • Roof tiles that remove nitrogen oxide from the atmosphere

It’s hoped that these innovations, plus the potential for a wider market for straw houses, could lead to a much more sustainable supply chain and industry as a whole.

For more on the straw houses go to http://www.modcell.com/.

Read on for more of the biggest stories commanding headlines right now:

New guidance aims to keep products of pirate fishing out of UK supply chain

  • Illegal “pirate” fishing damages the environment and human rights, and leads to economic losses of as much as $23.5bn (£15.3 bn) a year, according to fresh guidance which aims to help British businesses keep illegal fish products out of the supply chain and stamp the practice out.
  • A briefing published by retailers, conservation and human rights groups sets out in full how retailers and suppliers should act to end the long-term threat to the oceans, while building up legal and sustainable fisheries.
  • The briefing by the British Retail Consortium, Environmental Justice Foundation and WWF UK is to inform UK industry, retailers and brands of the risks associated with illegal, unreported and unregulated or pirate fishing. It offers advice on risk-assessment and mitigation, and encourages action to prevent illegal fishery products entering UK supply chains. As much as 26 million tonnes of illegal fish products is involved annually.

Read more on The Guardian

Fresh row for Tesco as supermarket giant demands suppliers cut prices as food commodity values fall

  • Tesco risks a fresh dispute with suppliers after it demanded they cut their prices or risk being dropped from supermarket shelves.
  • The grocer has written to suppliers asking them to reflect recent falls in the cost of commodities such as wheat and sugar. In some cases, those who do not decrease their prices have been told they risk being ditched by the supermarket in favour of cheaper rivals.
  • The revelation comes only days after the grocery giant faced a fresh investigation into claims that it bullied firms that it buys goods from. A probe by the supermarkets watchdog the Grocery Code Adjudicator has begun over allegations it charged huge sums to place suppliers’ wares on prominent shelves, even if they were not on promotion.

Read more at This Is Money

How Will Global Supply Chains will be Impacted by Obama’s Budget?

  • In his 2016 budget plan, to be unveiled today, President Obama will propose that U.S. companies’ overseas profits be taxed to fund a major boost in infrastructure spending. These tax proposals could change the way the Tax Efficient Supply Chain (TESC) operates.
  • When highly profitable companies pay little in the way of taxes, negative press coverage can ensue.  But CEOs are asked by financial analysts about their corporate wide effective tax rate (ETR) all the time. This can be a no win situation for a CEO. A company with a high effective tax rate is at a significant disadvantage to industry competitors with low tax rates, particularly in the company’s ability to grow the business. And ultimately a CEO’s tenure is often most strongly impacted by the financial community’s view of his company’s performance.  Not surprisingly, many large companies have restructured to lower their tax burden; it is not unusual for these companies to lower their ETR by about five percent.
  • While supply chain cost savings fall to the pretax bottom line and improve a company’s Net Income position, corporate tax restructuring increases deferred revenues.  Some large corporations are sitting on tens of billions in deferred earnings that can’t be used for stock owner dividends, without being taxed at US rates, but can be used to fund growth and thus future earnings, in a variety of ways.

Visit Logistics Viewpoints to read more

Distribution demands drive investment in logistics properties

  • Ecommerce is fuelling a boom in logistics property investment in Europe, as retailers try to keep pace with changing consumer demands.

  • Investors pumped €19.8bn into properties such as warehousing and distribution hubs in 2014, a seven-year high and a 34 per cent jump year on year as companies scramble to adapt to evolving supply chains and developers position themselves to profit from the thriving sector.

  • The UK led the way, with investment in the sector jumping 65 per cent to €7.9bn, according to Property Data. But investment accelerated on the continent too, as European eretailers expanded and cross-border ecommerce took off.

  • “You’re doing the stuff inside the distribution centres that you used to do inside the shop . . . Companies are having to reorganise their distribution logistics,” said Alan Braithwaite, chairman of LCP Consulting.

Read more at the FT.com

The businessfriend platform offers new way for supply chain execs to do business

  • In a world full of technology, it can become a hectic existence trying to wade through the myriad of business apps as part of your day-to-day working life. But there is a new platform on the horizon which could solve this issue for supply chain executives.
  • Businessfriend is the one-stop communications channel that helps you stay connected with the people and professionals that matter the most to you. Whether that be warehouse operatives, production line managers or managing directors. Consolidating the noise with one effective business communications platform, businessfriend launched on 6 January during the three day CES event in Las Vegas, and it promises to redefine how business is done in the supply chain sector.
  • Glen White, Founder and CEO of businessfriend, said: “On any given day, the typical young professional can have as many as five platforms open to get them through their day. “We offer one complete forum that enables constant connectivity for optimal business communications. One mobile app, one desktop, any device – no more juggling apps.”

Read more at Digital Supply Chain

McDonald’s and the Challenges of a Modern Supply Chain

  • Recently, McDonald’s, the world’s iconic largest food service provider, has been (forgive the cliché) through the grinder. Poor performance has led to the departure of its CEO and plenty of critical attention in the business pages. Part of this story relates to the provenance, or origins, of its products: Chains that provide more upmarket “fast casual” dining such as Panera, Chipotle, and Shake Shack have brands that speak of freshness, health, and trustworthy sourcing.
  • In 2010, I wrote an HBR article predicting increased interest in supply-chain transparency: firms needed to develop strategies for knowing and explaining where stuff comes from. Since then the idea of product provenance has steadily crept up the corporate agenda and is now a compulsory issue for boards and governments. In the UK, for example, legislation is in progress that would build on the California Supply Chain Transparency Act, potentially applying to wider range of firms. Across Europe, the 2013 horsemeat scandal generated widespread panic about contaminated meat. In a wide range of industries — electronics, software, toys, aerospace — provenance is increasingly a critical concern.
  • McDonald’s woes offers three lessons for others about supply-chain transparency. Visit Harvard Business Publishing to read them.

How to reap the benefits of the conference circuit

How to get the most out of conferences

At Procurious, we’re obviously big advocates for online social networking, we’ve outlined the career and personal benefits of partaking herehere and here.

However, we want to use this blog post to remind you all of the importance of incorporating traditional face-to-face events and conferences into your networking program.

Should you need any convincing, we’ve listed some of the benefits you’ll reap from attending conferences and events below.

You’ll get a sense that you are not alone in the world

Lets face it, procurement can be isolating at times. Have you ever sat at your desk and questioned your approach to a certain problem? It could be negotiating new terms with a supplier or trying to get a bigger slice of your CPO’s time. Well chances are in hundreds of offices across the world, other procurement professionals are pondering exactly the same problems. Conferences are an opportunity for you to meet these people, share your challenges and potentially come up with some solutions.

You’ll learn about the full breadth of your industry

At a good conference, everyone is present: be it tech providers, consulting groups, journalists or fellow procurement professionals. It’s incredible to see the diversity of companies and potential careers that are supported by the procurement function.

You’ll be exposed to new technologies

Conferences are a place where technology providers and consulting groups come to pitch their wares. While sales calls from these organisations may be disruptive and tedious while you’re at your desk, at conferences you have the opportunity to sit back and evaluate these solutions on their merit. Not sure about the new supplier relationship management tool you heard about before lunch? Why not find someone from a company that has already implemented the solution and get the inside word?

You’ll get an opportunity to take stock

Taking time away from the office to step back from the day-to-day and engage with other professionals on a strategic level can help to refocus your efforts when you’re back at the desk. Conferences not only provide a new perspective on old problems, they also serve as a great opportunity to reinvigorate your efforts.

It’s an opportunity to position yourself as an expert

Whether it’s a formal presenting role or simply speaking-up during a roundtable discussion, conferences provide a pedestal for you to display your knowledge and expertise. Events are a fantastic opportunity to grow your profile within the function.

You’ll experience a diverse range of opinions

While you may not agree with everyone’s point of view (how boring would the world be if you did?), the opinions of others will challenge your own personal beliefs and may encourage you to tackle issues from another angle. Unless you’re certain there is no way you could possibly improve as a procurement professional, it is definitely worth listening to what others have to say. As Einstein said, “insanity is doing the same thing over and over again and expecting different results.”

You’ll have fun

One Republic will play at Microsoft Convergence this year (maybe that’s not everyone’s idea of fun), Boris Becker presented the trophies at last year’s Procurement Leaders Awards and Bill Clinton is popping up more frequently on the corporate speaking tour. So, despite what many say, conferences can be a great opportunity to have fun! Great food, open bars, hotel rooms and exciting cities – what else do you need?

You can turn it into a vacation

The procurement conference schedule is packed with events lined up all over the world. Savvy conference organisers have figured out that you are more likely to attend events towards the end of the week and have adjusted their timetables accordingly. What this means is that conferences have become a great excuse for you (and your loved ones) to take an extended city break. Further your career and win some brownie points with your spouse in the same week? No brainer!

Remember, at these events engagement is key. Don’t be shy, get out and talk to people, tell them your problems, listen to theirs, talk about the presentations, interact, learn and enjoy. The more conferences you attend, the easier the networking becomes – you’ll feel more comfortable catching up with the colleagues you’ve met at previous events and the benefits of these catch-ups will magnify.

Here’s the problem: convincing you on the value of conferences is the easy part, but ultimately it’s not you we need to convince is it? Your boss holds the budget and has the final say as to whether or not you attend conferences.

Keep an eye on Procurious because next week, we’ll give you a guide on ‘how to ask you boss to pay for your next conference’.

How to navigate the tricky path to procurement accreditation

Procurement accreditation and qualifications

At Procurious, we are all about changing the face of procurement and encouraging and engaging with the next generation of procurement professionals.

Discussion wraps allow us to consolidate the knowledge of the whole community and keep the conversation going on the key issues and themes.

Achieving and Leveraging Professional Accreditation

People are constantly looking to develop personally and professionally. A number of questions have been asked about accreditation – routes for achievement, how it can be leveraged, is it worth it and how to get into it.

There are a few routes for accreditation open to procurement professionals, with the most common being CIPS through study and exams, an MSc through an accredited university or distance learning.

While there was no consensus on the best route to take, there was a consensus that having these qualifications and being a member of CIPS was necessary for procurement professionals and often used as a requirement for recruitment.

Things to consider when selecting a route were:

  • Practical application
  • Acceptability in your organisation
  • Balance of theory vs. practice
  • What your long-term career goals are
  • What you as an individual want to do

One of the agreed themes was that many organisations would sponsor studying through the CIPS route, as they push for their departments to be adequately qualified.

Having achieved MCIPS, or other accreditation, the question was could you leverage it in salary or promotion negotiations.

The consensus from the community was that these qualifications added value to your personal offering, but that having them would not normally lead directly to an increased salary in isolation.

It was important to demonstrate improvements, highlight practical applications and present a track record of accomplishments to managers in order to properly leverage qualifications.

For more on routes to MCIPS, go to the CIPS website: http://www.cips.org/en-GB/membership/What-is-MCIPS/Routes-to-Membership/

For distance learning opportunities, check out the recommendation from the community of Canban: www.canban.org

What is a Purchasing Managers Index? PMI explained

You may have heard of the Purchasing Managers Index (PMI) in the media recently and questioned what it was. The index was used on Monday to show a slowing in China’s manufacturing sector and again on Wednesday when discussing the strength of the Canadian economy.

What is the Purchasing Managers Index

Here is a brief run down on exactly what the PMI is:

PMI is essentially a means for economists to understand economic activity in a particular area based on the outputs of its procurement departments.

The index is generated monthly by surveying purchasing managers activity across five key indicators. These being: new orders, inventory levels, production levels, supplier deliveries and employment environment.

Once the results have been collated, a PMI score is produced. A PMI of above 50 represents an expansion in economic activity over the previous month. Anything below 50 represents a contraction.

The PMI indicator is used extensively by economists because it is thought to be one of the most accurate leading (or predictive indicators) for the future health of the economy.