Richard Allen receives The Faculty’s ‘CPO of the Year’ title.
Chief Procurement Officer (CPO) at Telstra, Richard Allen, was last night announced CPO of the Year by leading procurement consultancy The Faculty.
Awarded at the Asia-Pacific CPO Forum’s annual gala dinner held at the Eureka89, Melbourne, Mr Allen was chosen from a shortlist of top performing CPOs in the region.
Sponsored by WORKWEAR Group, part of Wesfarmers Industrial & Safety (WIS), the award highlights the importance of the CPO role in organisations by recognising CPOs who hold strong functional and technical expertise, realise commercial outcomes, demonstrate leadership influence and leverage the value of procurement across their businesses.
Responsible for all outsourcing decisions at Telstra, encompassing both local agencies and overseas partners with a procurement spend in excess of $12 billion, Mr Allen is credited with making a significant contribution to the telecommunications company’s customer-focused strategy over the past four years.
Richard was nominated by Robert Nason, Group Executive, Business Support and Improvement at Telstra, who said: “Richard has been instrumental in Telstra’s transformation over recent years, and his commercial leadership has helped Telstra strengthen its customer service offering,”
“He’s introduced innovative service evaluation, to measure and increase advocacy within Telstra’s suppliers, recognising that they are often our customers, too,”
“Richard’s also led a widespread rationalisation of our supplier base, reducing it by 30 per cent, which benefits both our business and our customers.”
Another innovation introduced by Richard was his ‘reverse sourcing’ initiative where he achieved a 90 per cent change in payment terms from suppliers, which has unlocked a significant incremental cash benefit to the business.
Mr Allen’s ability to lead the procurement function through an extensive domestic change program and make a significant contribution to Telstra’s transformation is what captured the judging panel’s attention.
Judging Panel Chair it is Dr Karen Morely said: “The change Mr Allen has made at Telstra is a perfect example of how procurement can support a company’s value proposition whilst also keeping a close eye on costs.”
“Richard’s ability to broaden the role of procurement across the business and reap such strong rewards is the result of his functional excellence, leadership, commercial capabilities and personal drive.”
The Faculty’s Founding Chairman Tania Seary said: “Making a tremendous impact on one of Australia’s largest corporations and driving real change across the business is far from simple – yet Richard has shown that his technical skills and leadership combined are a perfect formulae for success.
“The Faculty congratulates Richard and the procurement team at Telstra for all their achievements over the past four years, and hope that others in the industry learn from their excellent results.”
Established in 2012, the CPO awards program, a flagship initiative of The Faculty, was created to recognise and celebrate the achievements of procurement professionals across Asia Pacific.
WORKWEAR Group General Manager, Chris Jones, said that while procurement is one of the fastest growing professions in Australia, awards like CPO of the Year recognise the crucial impact procurement can have on business outcomes.
“The CPO role is not just about sourcing and purchasing, but includes building or protecting brand reputation, mitigating risks and help companies deliver on their value promise.”
For more information on the Faculty’s CPO of the Year Award, please visit here.
Katie Gallagher, managing director at the North’s leading independent digital trade association comments on the result of the UK General Election and how it is going to effect the digital sector in the North.
“The coalition certainly brought in some good initiatives for tech and digital businesses, most of which until recently were focused on London. However this changed dramatically in the run-up to the election where there was borderline hysteria from all political parties about tech and the North.
“I hope that the Tories will continue to invest in the North and understand just how vital our technology sector is to job growth and the wider economy. It’ll be interesting to see how the Tech North initiative pans out, considering it was a Lib Dem initiative all along.
“While the last Government did introduce computer science into the curriculum, they also introduced several controversial reforms which were actually at odds with the desire to create work ready students with vocational, hands on experience.
“David Cameron has said his party will create more apprenticeships, and whilst we admire this ambition, digital technology apprenticeships have not been as successful as hoped, particularly in the SME community. The infrastructure still isn’t right to get enough quality talent from schools into digital apprenticeships, so I hope the new Government will look to change this. We really need to get digital education right this time and tackle this skills gap once and for all.
“I’d also like to see additional investment in promising start-ups. While we did see the introduction of some helpful finance products under the coalition, there’s still number of decent tech businesses that are struggling to access the finance they need to grow. Cameron has been known to champion UK start-ups, so I hope this remains a priority.
“It was a challenge for us to make sure industry voices were heard in the right places with the last Government. I hope that the new Government listens this time and realises its approach to digital, skills and economic growth needs to be joined up, and the best way of doing that is from a business-led, bottom up approach.”
A report released by the Corporate Executive Board in May of this year has highlighted the key reasons procurement professionals leave their roles.
Despite a number of great success stories depicting the fantastic opportunities the function presents and positioning a career in procurement as a ‘job for life’, the study revealed that procurement professionals are among the most likely employees to want to leave their jobs. Only 29 per cent of the CEB survey respondents suggested they had a high intent to stay on in their current roles.
The following chart provides some insight as to the reasons that procurement professionals want to leave their roles.
Increased compensation, benefits and workplace flexibility are motivations to leave that are likely shared regardless of industry, so it is difficult to address these in a procurement specific context. However, CEB has outlined some strategies that procurement managers can follow in order to keep their staff.
“Procurement managers should take time to explain to their employees how and why they are valuable to the company and the function, and seek to show employees how they can fulfil their personal career goals by staying at the company”
CEB also outlined the following characteristics of procurement employees:
Procurement staff are more likely to switch jobs for more senior positions than their counterparts in other parts of the business
The prospect of working with more talented colleagues is a motivator for procurement professionals. This again feeds into the ongoing importance of the need for procurement teams to attract top talent.
Procurement staff are more satisfied with the strategic nature of the work they are doing than staff from other functions. The report showed that procurement employees are less likely to want to change jobs for more engaging day-to-day work than their counterparts from other parts of the business.
A little insight into the Big work that went into Procurious’ inaugural Big Ideas Summit, as told by the people that made it happen.
Gathering 40 of the world’s most influential thought-leaders for a one-day event in London was a potential logistical nightmare in the making…
Luckily Team Procurious had an ace up its sleeve in the form of its European General Manager – Lisa Malone, who skilfully guided the entire operation to its successful conclusion . Planning began back in the latter half of 2014, speakers were booked, agendas set, media packs distributed, interviews arranged, film crew booked, dietary requirements received and reservations at venues made. Yep, Big Ideas Summit 2015 was spread across not just one, but two venues.
Spend Matters’ Jason Busch joked: “I’m not sure if anyone else who knows the history of the Soho neighborhood also observed the irony of a “procurement” event there – especially one hosted by “Procurious” – but I at least got a chuckle out of it.
“Venues aside – and the Soho Hotel has a truly great small conference facility.” Suffice to say that the irony was not lost on us…!
Fun fact: Big Ideas Summit was originally known as 20:20 – with the idea being 20 speakers in a room with 20 influencers.
Product Manager Jack Slade built a bespoke landing page for the event. The Big Ideas Summit website carried essential information about the day, including featured speakers, topics to be covered, latest news and details for getting involved. A timer counted down the hours to the big day, ensuring that the whole team were kept on their toes…
As the big day rolled around Lisa would do a faultless job of ensuring speakers kept to time and everything flowed smoothly. In- fact we think the word ‘effortless’ was mooted…
On the day itself Procurious founder Tania Seary said: “Through the ideas that have been generated today, we’ve hopefully inspired a new generation of business intrapreneurs to get their creative juices flowing, to start collaborating through networks like Procurious and then start implementing those ideas to achieve change within their organisations and the entire profession.”
Fun fact: Even before Big Ideas Summit began we’d published 30+ stories on the topics and people who were set to appear
Euan Granger, Relationship Manager – Procurious, offered: “For me, Big Ideas represented a great opportunity to make people aware of procurement and Procurious, as well as getting them talking about the future of the profession. It was great to be able to see both sides of the conversation – the first part in the room in London where the room was alive with ideas and discussions, but also to watch what was happening on social media and know there was a huge number of people watching, following and taking part in the discussions around the world. To see the numbers of people following Procurious across the various social media platforms was something special.
I just hope they got as much out of the day as I did!”
Procurious contributor Jordan Early said: “Big Ideas was a blast. It was busy but that’s exactly what I expected when I stepped off the plane at Heathrow after an overnight (and day) flight from Sydney.
The lineup of speakers didn’t disappoint. It’s great to see some procurement conferences are finally moving away from the traditional sale pitch from service provider and CPO patting themselves on the back style of speeches towards discussions that hold real relevance for procurement professionals.
“I spent most of my day scribbling notes in the hall and turning them around into blogs that can now be read on the Procurious platform. I learnt a lot and met some great people and ultimately, isn’t that what events are about?“
Big Ideas certainly caused a buzz across social, just as Euan had alluded to. On Twitter #BigIdeas2015 was mentioned 759 times in 24 hours (reaching a potential audience of 1m+), we saw a colossal 2700+ new likes on Facebook, and our 5000+ strong community made Procurious the go-to place for daring discussions.
As the curtain went down, the action moved across town for a chance for guests to let their hair down.
Those not able to make the day were able to enjoy bowling, drinks and food at The Ham Yard Hotel.
It also provided us with an opportunity to get face-time with some of our biggest supporters and valued community members.
The Faculty’s Max Goonan treated us to some of his highlights from his trip across the pond:
Chris Sawchuk being described as a ‘Dapper Road Warrior’ despite arriving that morning from Chicago.
Max Goonan surviving similar jetlag on any even longer flight from Australia the night before.
Sigi complementing all on how good looking everyone was…
Paul Rakovich (I think it was him) aligning his mid-life crisis Porsche purchase – to the state of the procurement profession..
Rob Nott’s amazing bowling prowess – re-created from his teens…
And the genuine camaraderie amongst participants – all with a desire to be part of a momentum shift in thinking!
In the days since we’ve been hard at work getting all of the videos (keynotes, panels and Big Ideas) onto Procurious for you all to view and share among your peers. The latest uploads can be found on our Learning page.
The Procurious team now have just enough time to recharge their batteries before Big Ideas Summit 2016 kicks off! Keep your diary free next May, and keep your eyes locked to Procurious for further announcements…
The day itself may now be over, but your Big Ideas are still being amplified online. As a Procurious member you can access exclusive video content online – just join the Big Ideas Summit Group page to view.
Got a Big Idea of your own? We want to hear it (provided it’s less that 60 seconds)! Find out more here.
Delivery to your door? That’s all a bit old-fashioned for Amazon it seems, as their plans for delivering customer orders using drones takes shape.
The common thought was that Amazon had intended to use their drones to deliver packages straight to the customer’s door, but details of a patent lodged in the USA has opened up a whole new range of possibilities.
From warehouse to hand
The patent, lodged in September 2014 and recently accepted, allowing details to be published, proposes to deliver packages straight to the customer, tracking their location using data from their smartphones.
The delivery option falls under the previously announced ‘Prime Air’, something that Amazon has been developing for a while now. However, it goes much further than most people expected. Using the Amazon app, the customer would select the ‘Bring it to me’ option, and then wait for their package to arrive from the closest dispatch location.
The patent also reveals plans for the drones to be able to communicate with each other, exchanging information on the weather and traffic conditions in the area. The drones will be designed in a variety of shapes and sizes in order to manage packages of different weights and shapes.
And if you’re worried about the drones crash-landing in your cappuccino while waiting outside your favourite café for that must-read book, fear not. The drones will be outfitted flight sensors, radar, sonar, cameras and infrared sensors to ensure safe landing zones are found and to constantly monitor the drone’s path to ensure it avoided collisions with human or animals.
However, the patent’s acceptance does not mean that US authorities will approve the plans. For a while now, Amazon has been trying to convince the Federal Aviation Authority (FAA) to approve widespread use of drones, as well as allowing them to do further testing and development in the field.
Drones are currently limited to a height of 122m (400ft) and must stay in the pilot’s line of sight. Such have been Amazon’s issues with FAA regulations, that it has conducted much of its testing in Canada. The FAA has also been blamed for the US losing out in drone development, most notably to the UK, where a research centre is being built.
It’s not only the FAA that Amazon needs to convince either. A British Airline Pilots Association survey highlighted that just over half of adults think that drones pilots should have formal training, and that prison sentences should be imposed for endangering aircraft.
While Amazon’s patent raises a number of questions about safety and privacy, it’s clearly a major development opportunity for the supply chain and logistics industries. Direct deliveries to an exact location could prove to be a considerable time and money saver, particularly for people in remote locations.
We’d be interested to hear your thoughts on this development. Is it going a step too far? Do you really want to have drones delivering packages to people wherever they are? Is the convenience worth the potential disruption?
Technological advancements were a hot topic at the Big Ideas Summit, powered by Procurious, a couple of weeks ago. From driverless trucks on mine sites, to technological disruptors in the supply chain, we’ve heard some great ideas. But we want to hear your Big Ideas too – find out how to share them here.
To access all the great content and discussions from the event, join Procurious for free today and join the Big Ideas Summit Group.
Meanwhile, here are some of the big headlines making the news in the procurement and supply chain space this week.
Apple wants to be entirely carbon neutral… one day
Apple wants to create enough renewable energy to power its entire global business, including its supply chain. Chief executive Tim Cook claimed it would take Apple “years” to realise the goal but said it had to happen.
“Apple’s goal is to achieve a net-zero impact on the world’s supply of sustainable virgin fibre and power all its operations worldwide on 100 percent renewable energy,” it said in a statement.
The firm already generates enough renewable energy to power 87 percent of energy use in its stores, offices and data centres, but that figure doesn’t include the supply chain. Apple said its supply chain uses 60 times as much power as its own operations.
Wal-Mart builds Supply Chain to meet e-commerce demands
Wal-Mart Stores Inc. is one of a growing number of big-box retailers building out their supply chains with distribution centers designed to meet the demands of online shopping. The company expects to open four such giant facilities this quarter, as it aims to triple online sales by 2018, to $35 billion from $12 billion last year.
Building fulfillment centers designed to cater to e-commerce, which demands the ability to handle a large number of small orders, can help retailers conduct more profitable online sales, said Brian Kilcourse, managing partner at RSR Research LLC, a retail technology consulting firm.
Each of Wal-Mart’s new facilities will be more than 1 million square feet and hold at least 500,000 items—much larger than its traditional distribution centers for stores, which hold 30,000 to 50,000 items. Wal-Mart opened an e-commerce center in Texas last year, and like that one, the new buildings will use both human labor and automation, such as computer-controlled chutes, to move items.
The goal of Wal-Mart’s new centers is to provide a single place stocked with a wide variety of products to get shipments collected and sent faster, a Wal-Mart spokesman said. Ultimately, analytics behind the shopping software will determine, on the fly, the most efficient way to fulfill the order, the spokesman said.
Vehicle manufacturer Jaguar Land Rover has recognised its top ten direct suppliers at its inaugural Supplier Excellence Awards.
Companies from Corby to Cairo were presented with trophies by actress Joanna Lumley, at a ceremony held in the West Midlands, close to the heart of the company’s UK operations.
Ian Harnett, Jaguar Land Rover Director of Human Resources and Purchasing, said the awards had been instigated to recognise the role supply chain firms played in helping the company achieve its goals.
A total of 10 trophies were presented for performance in 2014: two gold, four silver and four bronze. The awards went to individual plants or facilities, rewarding on-time delivery, continuous quality, accreditation to international and Jaguar Land Rover standards and flexibility to meet the company’s developing needs.
New partnership to transform healthcare procurement in Asia-Pacific
UK and Australia-based company Healthcare Procurement Partners (HPP) has expanded its Asia-Pacific operations with a contract to deliver cost-savings and process improvements for the largest corporate healthcare provider in Asia-Pacific, Fullerton Healthcare Group.
Following an initial program of reducing non-payroll spend for Fullerton Healthcare’s Australian subsidiaries, Brisbane-based HPP will now pursue similar procurement projects in Singapore and Indonesia.
While the terms of the Project Fusion contract between HPP and Fullerton Healthcare Group remain commercial-in-confidence, HPP’s local on-site presence in these key Fullerton Healthcare markets is expected to deliver significant repeatable annual savings by mid-2015.
HPP’s Managing Director, Daniel Williams said: “This promotes the transparent exchange of knowledge about how and where to unlock savings and improve cost-efficiencies, locally and more widely,”
A “teardown” of the product by IHS Technology found the components cost $83.70, compared with the retail price of $349, giving it the lowest hardware costs relative to consumer price of any Apple phone researched by IHS.
IHS said estimated component cost to retail price ratios for other Apple products it had reviewed ranged from 29 per cent to 38 per cent.
The company said its analysis included manufacturing costs of $2.50 but did not include costs such as logistics, capital expenses, research and development, software and licensing.
Kevin Keller, senior principal analyst for materials and cost benchmarking services at IHS, said: “It’s fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost.
James Ferguson founder of Supplibase.com thinks the future lies in Social Supplier Management (or SSM for acronym fans).
James imagines a place where we all manage our supplier relationships through reviews, references and recommendations.
London-based professionals may also like to know that James hosts a monthly procurement meetup (don’t worry it’s not in a boardroom, but a local pub…) – you can RSVP and join James at the London Buyers Club here.
Want to add your voice to the conversation? We want you to share your point of view and ideas with the community by creating a video no more than 60 seconds long. What’s your Big Idea?
One of the most incendiary sessions at the Big Ideas Summit saw us gazing into our crystal ball with a view to identifying procurement’s blind spots.
“There are known knowns… There are known unknowns. But there are also unknown unknowns.” – Donald Rumsfeld.
This brilliant distillation of what was quite the complex matter can also be attributed to the disruptors likely to affect both business and procurement. We’re already well versed on innovations like 3D printing and social media, as well as water scarcity and climate change – but what of the blind spots, the things that no one is talking about yet?
What are the issues that have the potential to really shake things up? We turned to the Procurious community for answers and this is what you had to say…
Payments and costs seem to be a hot topic… Chris Smith starts things off by asking: “What about transaction costs for undertaking the procurement, for the user, the buyer and the bidders (winners and losers)? Mike Dunlop agrees, and takes the discussion further: How to best calculate the cost of transactions, the benefit of SRM as a tangible return of investment, the risk / cost of compliance of Procurement Payment cards vs loading a new supplier for low value spends?”
This prompts a reply from Cornelius du Preez who comments: “Measuring and procurement, what a headache. I’m currently doing my dissertation in the area of procurement. Al the reading of past research and case studies are really interesting, but the question that keeps coming up is the ‘How to measure….’ One of the questions I ‘m trying to get to the bottom is, ‘How to calculate procurement’s contribution on the bottom line?’ As there are many variable factors that needs to be considered, further upstream as well.”
We encourage lively discussion on Procurious, and this is exactly what we get here! Mike comes back: “My view is that anyone can negotiate. It is inherent in the human DNA and we all do it every day of our lives without realising it. But not everyone is able to – clearly articulate a specification and ensure all tender responses are like for like, create a valued weighted score card for value comparison, understand the cost of resource through the entire end to end process, look at where to reduce waste and enable people to great more value, contract management and risk mitigation (plus many more excellent tasks).
Mike argues: “In essence Procurement should be able to easily display their value to the company or there is an argument that they shouldn’t be there. With this you can calculate the value benefit from savings, reduced waste and reporting on missed savings. This will then give you a bottom line impact of X that you can compare against the Overhead cost of the department. This would then give you a Return on Investment of the procurement department. You now have your tangible rationale as to the contribution on bottom live vs the cost of return.”
Returning our focus to procurement blindspots, Simona Pop says “it’s prompt payments and how they could really improve supply chain health and our economy as a whole!”
Samantha Coombs believes more focus needs to be put on checks, saying: “I believe the best driver of prevention is proper checks. Ensuring there are policies in place to tackle a variety of the points you mentioned. By carrying out proper supplier due diligence then protects the company’s reputation, the people and importantly the shareholders who invest based on the appropriate management of risk.”
To round this particular topic off, Mark Johnson wanted to highlight Rogue Spending Activities, having seen this over and over in many different industries.