Beer, bacon supplies at risk as a national shortage of food-grade carbon dioxide (CO2) threatens a whole range of everyday consumables.
Why is there a CO2 shortage in the UK?
Food-grade CO2 in the UK is sourced from European ammonia plants, which usually close for maintenance in the summer months when demand for fertiliser is lower. This year, five producers in Europe and a number of bio-ethanol plants have shut down at the same time, leading to shortages not only in the UK, but across Europe. The situation is a result of a combination of planned shutdowns and unexpected equipment failure.
Who has been affected?
Brewers – C02 is needed in the bottling and kegging of beer. A Europe-wide beer shortage is particularly noticeable in the middle of a World Cup.
Soft drinks and carbonated water.
Packaged foods such as bagged lettuce and crumpets that use “modified atmosphere packaging” to extend product shelf-life.
According to Wired, there’s currently no alternative to CO2 that offers its range of benefits, such as its ability to prevent microbial growth and its inertness. It is also safe to transport and doesn’t affect the flavour of a food.
The good news? Two ammonia plants are expected to come back online this week, with supplies returning to normal within a fortnight.
Presumably the affected producers will be working with suppliers to ensure the same situation doesn’t occur in the summer of 2019.
Brexit is complicated and it’s very, very messy. And what happens during the next couple of years will be determined by a number of political factors…
At last month’s CPO roundtable Anand Menon, Director of the UK in a Changing Europe based at Kings College London, spoke to us about the long-term causes of Brexit and their future implications.
“Hand on heart I don’t know [what’s going to happen]” he said. “If I could answer that I’d be rich and famous!”
It’s the most uncertain moment in British politics since World War Two and what’s striking is that, two years on from the referendum, nothing has been decided.
A key reason for such uncertainty is the nature of the referendum itself. As Anand explained, the referendum packaged so many different options and outcomes into a binary choice: leave or remain. No one understood quite what they were signing up for and since the result, Brexit has largely been defined in terms of the different adjectives applied to it; black Brexit; white Brexit; hard Brexit; soft Brexit; white red and blue Brexit… the list goes on.
“Brexit was a vote against globalisation and it was a vote against the economic status quo. Subsequently, it’s interesting to see that the South of England has noticed the North and we’ve had a chance to address issues that never got air time under old centrist, liberal politics.
“More profoundly, the referendum and its outcome have taught us about us. In the same way that Trump has been a wakeup call for the U.S, the fallout from Brexit should be a wakeup call to our politicians to think about the real problems confronting the country. ”
And how to best to manage negotiations as we ready to leave the EU.
Does the UK want to establish a relationship with the EU similar to that of Norway’s or maybe more like a more distant partner?
Anand admitted that due to Brexit being such a complex and all-consuming process, there is no avoiding it being a messy one at that! What happens during the next couple of years will largely be determined by the following three political factors:
The UK Prime Minister relatively quickly defined what she meant by Brexit (leave customs market, end free movement etc) and her position has remained relatively unchanged since. Whilst she is unpopular with many in her party, it is unlikely her critics will choose to get rid of her yet. As long as she in place, she is a powerful force for stability.
The Conservative Government
There are a significant number of Tory MPs who want a much softer Brexit than the Prime Minister is proposing so it’s possible they will vote against May’s Brexit deal. However, if May loses this vote there is no question that she has to go; after all, her whole mission as Prime Minister is Brexit. If that happens, the Conservative Party will either elect a new leader or the UK will face a new general election. And the one thing no Tories want is another general election.
The Labour Government
In the last general election, Labour picked up votes from both remainers and leavers. As such, the party have been careful to keep their Brexit policies ambiguous. Whenever Corbyn speaks about Brexit, he speaks in ambiguities.
Does Anand believe there is any chance of a second referendum? “The beauty of Britain at the moment is that any outcome is possible – I can imagine us crashing out with no deal or a great deal but I can also imagine a scenario where the first referendum is overturned.”
“No one knows what would happen to public opinion at this point – we could vote Brexit again. Or, imagine second time around the UK votes to remain 52-48 per cent. We’ll find ourselves in a political groundhog day. There would need to be a huge swing in vote for it to carry much weight.”
Ultimately, Anand warns, the real danger for the UK’s economy is that the negotiations go pear shaped, the UK crashes out of the EU in March 2019 and they end up with no wiggle room to extend the UK’s transition period.
His advice to procurement organisations trying to prepare? Plan for a World Trade Organisation outcome from 2021 – “That, I think, is the most likely outcome.”
Learn how to persuade your colleagues and suppliers with 6 tips from 20th-century propaganda masters. Guest post from Invaluable.com.
Since their introduction in 1984, Dr. Robert Cialdini’s six principles of persuasion have become the framework for understanding the science of influence. Each principle is distinct and outlines different methods for effective persuasion.
Mastering the art of persuasion has become a major “soft skill” in the modern corporate world. The ability to influence others is key to developing strong relationships with suppliers, employees and end-users. Persuasion can help to convince others that we are credible, trustworthy leaders worth following and allows us to manipulate the psychological processes of others to our benefit to achieve better results.
In the procurement profession specifically, strong persuasion skills can help to convince your organisation to be more strategic in managing money and can also be a key factor in your fight to minimise maverick spend.
Learning from the propaganda masters
Before the rise of the social media influencer, advertising and propaganda posters were some of the most powerful persuasion tools available. Propaganda posters have been used for decades to inspire, educate, and galvanize the public. Whether you are selling a product, a war, or an idea, advertising can be a powerful tool to inform and persuade your audience. Propaganda posters from the 19th and 20th centuries addressed topics ranging from patriotism to healthcare to feminism.
This article, originally from Invaluable, takes Dr. Cialdini’s six principles of persuasion and applies them to famous propaganda posters used throughout history to wield influence and power over their audiences. With their striking imagery and bold messages, these posters are superb examples of each principle and perfectly illustrate the mechanics behind persuasion.
The first principle, reciprocity, is based on the idea that people often feel obliged to match or repay the behaviors and gifts they receive from others. When using the principle of reciprocity for persuasion, look for opportunities to be the first to give, and make your token unexpected and personal whenever possible. This tactic facilitates a relationship in which the recipient feels appreciative of your contributions and is likely to be more open to the message you share or the favor you ask for.
The propaganda poster “Remember Your First Thrill of American Liberty” is an example of reciprocity in action. This poster was created by the Food and Drug Administration in 1917 to encourage immigrants to the United States to invest in the war effort by purchasing Liberty Bonds, which were a crucial source of funding for the war effort.
By highlighting the benefits and opportunities that the United States had given to immigrants, the poster called upon its audience to invest in the country’s war effort in return. The poster also strategically included the Statue of Liberty as a metaphor for the opportunities available in the United States and to remind immigrants of the emotional experience of arriving in the U.S. for the first time. The artist’s powerful illustrations and the poster’s authoritative call-to-action prompted Americans to recall their debt to their country, which ultimately proved persuasive in raising money for the war effort. This poster remains a powerful example of the way reciprocity persuades us to act.
The second principle of persuasion, scarcity, refers to the idea that when people have less of something, they want it more. Scarcity speaks to our human nature to place greater value on things that are less readily available. To use this principle, incite people to act, agree, or buy your product by demonstrating how they can benefit from it, what’s unique about your offering, and what they could potentially lose out on.
In the poster “Doctors are Scarce, Learn First Aid and Home Nursing,” the artist used the scarcity principle to promote basic at-home care. By making it clear that good medical care would be hard to come by, the poster instilled fear and communicated the importance of individuals learning to manage their own minor health concerns. The poster was created to communicate people’s need to learn to handle their own injuries and illnesses since many doctors were oversees fighting in the war effort.
This poster is historically significant because it is one of the many examples of ways Americans on the home front were forced to ration supplies and services to aid in the wartime effort. Its message drove Americans to act and remains a powerful reminder of the scarcity principle and its ability to influence.
The third principle of persuasion is authority. This principle says audiences are much more likely to listen to messages from sources they respect or view as experts. Whether you are explaining your point of view or selling a product or service, showcasing your credentials will help your chances of success. No matter what your message is, it will be better received if it is packaged in a way that makes it seem authoritative.
When using authority, the source doesn’t always need to be yourself. When someone else points to your credentials the message can be just as powerful or even more effective. In the propaganda poster “Christ Guerilla,” Jesus was portrayed as a guerilla fighter. The poster was created by the Organisation of Solidarity with the People of Asia, Africa, and Latin America based on a quote from the Colombian priest Camilo Torres who said, “If Jesus were alive today, he would be a guerrillero.”
The poster called on the authority behind the Christian religion to convince audiences that being a guerilla fighter was a noble cause. This piece of propaganda was created in Cuba during the 1970s as part of a political movement to fight imperialism and defend human rights. Its message was clear: guerilla fighting was noble, necessary, and moral. Because the poster called upon the authority of Jesus to deliver its message, its theme was especially resonant for its audience.
The consistency principle refers to the idea that people like to remain resolute with the things they have said or done in the past. If someone already agrees with some of your message, or if you are able to get your audience to buy into your point of view in a small way, you’re much more likely to convince them to take further action.
The “We Can Do It!” poster used the consistency principle to encourage women who were already working in factories to work harder. While today this poster is considered one of the most iconic U.S. propaganda posters of all time, it was not widely circulated during World War II when it first appeared. The poster was made in 1943 by J. Howard Miller for Westinghouse Electric, and was part of a broader effort to encourage both male and female workers to work harder due to the high demand for manufacturing generated by the war effort.
The poster resonated with women in its original context in the 1940s and continues to serve as an icon of feminism today. When it was first created, the poster used the consistency principle to remind women of the importance of committing to their factory jobs while encouraging them to work harder and stay motivated. The likeness of Rosie the Riveter still resonates, and the poster has become a rallying cry for recognition of equality.
It’s commonly accepted that people are more likely to agree with the opinions of someone they like. The fifth principle of persuasion, liking, is based on this idea. This principle notes that people agree with those who are similar to them, those who pay them compliments, and those who cooperate with them. If you know your audience already likes you, you have a leg up for persuasion, but incorporating these three factors into your communication efforts can go a long way towards making your audience receptive to your message. Before making your case, consider spending a few moments with your audience to build rapport and likeability.
The poster “Women of Britain Say ‘Go’” incorporated the liking tactic to encourage the men of Britain to buy into the government’s request to join the war effort. During World War I, posters were one of the most important mediums for conveying a message. Women were used in these posters to spread ideas of morality, innocence, and justice in the face of danger.
While this poster was intended to remind the women of Britain to encourage their men to enlist, it also clearly communicated to British men that they’d be spurned by their loved ones if they refused the call to serve. Using the opinions of their families as advocates proved to be an effective persuasion tactic in getting men to enlist.
The sixth principle, consensus, is the idea that people are likely to agree with something if it is in line with what the broader group believes. To get others to believe in your message or your product, point to what those similar to your audience believe and do. When people are unsure of how to act, they look to the behaviors of others they identify with to determine their own beliefs. By highlighting what your audience’s larger social group thinks, you are more likely to get their buy-in.
The title of the poster roughly translates to “Let’s Fulfill the Plan of Great Works,” and shows clear parallels to the consensus principle. The tiny hands fill up a larger hand to communicate to the viewer that all of Russia is working together to reach a common goal. The poster was created in 1930 by Gustav Klutsis, a popular poster artist during this time period who was a popular designer for the Soviet government. This piece was created in the Constructivist style, which originated in Russia in 1919.
Klutsis was associated with the Communist party and created propaganda art for the organization, especially when the party was under the control of Stalin. The hand in this poster is Klutsis’ own hand, but it was used in the poster to represent the workers who were crucial to achieving the Communist party’s goals. The artist incorporated the faces of the workers directly into the poster’s design so they appeared not as individuals, but as a collective mass united around the same goal.
Both ISM and CIPS have released their annual salary surveys. Read on for a short summary of the similarities and differences in salaries across the Atlantic.
Salary surveys make for interesting reading. They reveal much about the perceived value of procurement and supply management, and provide a very helpful data set to have at your disposal the next time you ask for a raise.
If you haven’t seen them already, the two most comprehensive salary surveys for 2018 are available here:
Let’s look at 5 of the most interesting findings across the two surveys:
Average salaries for the profession
ISM has announced that the average overall compensation for participating supply management professionals was US$117,425, while CPOs earnt an average of US$263,578.
CIPS reported an average salary of £46,422 for procurement and supply professionals, with CPOs earning an average salary of £124,000.
Salary increase smashing the national average
In the U.S., ISM reported that supply management salaries rose an average of 4.1% over 2016 salaries, versus 3% for U.S. professionals generally.
CIPS found that 68% of procurement professionals received an average 5.1% increase in salary, versus a 2.2% increase for the UK national average.
Paul Lee, Director of ISM Research & Publications, offered the following explanation:
“In today’s global economy, excellence in supply management improves both top- and bottom-line performance, and advances companies’ leadership on the worldwide stage. Supply management professionals’ higher-than-average wage growth reflects the significant value they add every day”.
Certifications DO boost salaries:
ISM: Those with the ISM Certified Professional in Supply Management (CPSM) certification averaged 14.7% higher salaries than those without any certification.
CIPS: The data reveals that MCIPS and FCIPS professionals have increased earning power, with an average 12% salary disparity between MCIPS and non-MCIPS, and an average of 11% disparity between FCIPS and non-FCIPS across all job levels.
Most important factors when considering a new job
We’re a mercenary bunch. “Salary” has once again come out at the top of both ISM and CIPS’ research into what people consider when evaluating job opportunities. Beyond the money, however, are some other factors that employers should note:
Company commitment to training and development: 58%
Gender gap disappointment
ISM’s data reveals women are paid less than men across every level in U.S. supply management, with male CPOs earning 26% more than female counterparts, male VPs earning 52% more than women, and male Emerging Professionals earning 13% more than women.
CIPS reports that the most striking pay disparity exists at the Advanced Professional level, where men earned 33% more than women, a pay gap that has widened since the previous year’s (25%). Pay disparity at the Professional and Managerial levels is also considerable, at 14% and 11% respectively
What would you do after all of the low-hanging fruit in procurement has disappeared?
Here’s a quick quiz:
What would you do if you became the CPO of a procurement function that is a top-quartile performer and already highly mature?
Keep things as they are – if it ain’t broke, don’t fix it.
Make small, incremental improvements, being careful not to change anything significantly.
Roll your sleeves up and transform the function from top-quartile performer to a world-class organisation.
Bob Murphy was faced with this choice back in 2014 when he first took on the role of IBM CPO. In many ways, inheriting a highly-mature procurement function is more of a challenge than stepping into a low-maturity team. For Bob, the low-hanging fruit had all been picked: the team had already undergone a significant transformation, it was recognised internally and externally for its high level of excellence, cost savings were at record levels, and supplier relationships and sourcing strategies were delivering results. Client engagement and interlock with business unit stakeholders was also maturing, while procurement was viewed as a key function enabling business unit objectives.
So, what was there left to do? Bob’s challenge – as well as his opportunity – was to take a high-functioning team that was delivering best-in-class outcomes and make them evenbetter. He did this through unleashing his passion for the profession, leveraging 30+ years of procurement and supply chain experience to mobilise a global team of 3000 procurement professionals around a shared vision.
He developed a set of global, transformative initiatives and domain priorities that moved IBM from the front of the pack to a truly world-class outlier position. Today, IBM Procurement services have arrived at a status dreamt of by many CPOs – that of an essential trusted advisor to the business.
IBM’s secret recipe for success isn’t actually a secret – the roadmap established by Bob early in his tenure as CPO covers six key areas:
Investment in talent and skills development
Digital transformation through AI (Watson cognitive procurement), robotic process automation and Source-to-Pay transformation.
Unlocking big data to drive informed, outcome-based decision making for IBM and its clients.
Supercharged engagement through end-to-end ownership for deliverables and client-aligned squads, while satisfaction is captured using the Net Promoter Score.
Deployment of Agile principles and self-empowerment across the entire team.
Growth of supplier innovation as complex enterprise relationships mature.
It’s interesting to note that people and talent are at the very top of Bob’s list. To quote an article he wrote for Procurious, “I learned a long time ago that the key to success is having a great team. And there is a very human element to procurement. There will always be a need for people to handle the relationship management side of the function, with both suppliers and stakeholders and make the strategic decisions.”
Although he operates in a highly technical sphere, Bob stresses the importance of soft skills:
“When we think of the soft skills necessary for future success in the procurement industry, we focus on building closer stakeholder and supplier relationships. Broadening our communications skills, including active listening is a key enabler to both visibility to value proposition, but also in understanding our stakeholder requirements from their point of view. Another critical element is having better agility skills; think flexibility, adaptability and speed.”
Bob Murphy’s achievements in leadership were celebrated at the Procurement Leaders awards in May, where he picked up the prestigious 2018 Procurement Leader Award.
In a post-AI world, the cards are up in the air and everything is up for grabs. Can category management help the procurement profession to scrub-up and embrace these changes?
Our webinar, Clean Up Your Act! Category Management AI-Style is available on Procurious now. Listen here
How are large corporations managing and recruiting their workforce in the age of the gig economy?
Can cognitive tech help marketers connect the dots and better understand their customers?
Will we require architects in the future to design our buildings, or can we ask bots do that for us instead?
AI and cognitive technology will impact all corners of the business whether it’s construction, labour or marketing. For procurement’s category managers, technological advancement provides the chance to reinvigorate the profession and develop innovative ways of working.
But there is also a legitimate fear of the major disruption AI brings. Which services and industries will we lose entirely? How many roles will be made redundant?
The cards are up in the air and procurement prosperity is there for the taking. Can category managers help the profession to scrub up and seize this opportunity?
This month, we’ve enlisted the help of three category management experts to advise you on how to clean up your act and get the most out of AI!
With a focus on construction, labour and marketing, we discussed:
What common problems have category managers faced in old-world procurement, pre-AI?
How is AI impacting these categories; what sort of disruption can procurement professionals expect?
How can AI help procurement professionals in construction design, build and maintain their projects?
How can AI assist procurement professionals working in labour to attract, recruit and retain talent?
How can AI help procurement professionals working in marketing to strategise, create and manage optimal marketing campaigns?
Who is speaking on the webinar?
Tania Seary, Founder – Procurious
Luis Dario Gile, Global Category Leader (Design Construction and Real Estate) – IBM
Help! I can’t make it to the live-stream
No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!
Can I ask a question?
If you’d like to ask one of our speakers a question please submit it via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.
Our webinar, Clean Up Your Act! Category Management AI-Style is available on Procurious now. Listen here
A group of the USA’s most influential procurement leaders gathered at ISM2018 to discuss digital transformation, the evolution of the CPO role, procurement’s influence and the gig economy.
In a press-only event at ISM2018, ISM CEO Tom Derry brought together four CPOs from some of the world’s leading organisations to debate the biggest issues facing supply management today.
The consensus around digital transformation among this group is to take a step back and consider carefully before taking the plunge. DowDuPont Ag Division CPO and Chair of the ISM Board of Directors, Craig Reed, observed that there’s so much technology out there that everyone’s hyper-focused on it. He warns: “Some companies have a culture and a rhythm that doesn’t necessarily work at the same speed that the technology is growing. [You need to consider] how you get it, where do you use it, and what’s the benefit for the company.” Reed reports that in his organisation they’re starting to see a slight evolution where Service and Operations are looking at how digital technology can bring efficiency: “We won’t need as many people doing routine tasks”.
Reed also makes the point that first-movers are sometimes at a disadvantage. “It’s like being the first person on your block with a landline phone”, he said. “If suppliers have to standardise technology specifically for you, it’s going to be difficult [because] the cost of trying to deploy becomes prohibitive to the supplier.”
MGM Resorts International SVP and CPO Stacey Taylor drew a parallel between digital evolution and the industrial revolution, where a lot of people were doing unnecessarily manual work. “We need to be super-disruptive to the market … with a vision of where we see our teams from a talent perspective.”
Taylor notes that technology can drive process optimisation. “What can you fully optimise and automate [to function] without human intervention? The AI could do data, write the RFP, send out the RFP … right up to negotiating the contact. But at the end of the day, we’re not going to have a bot award a contract to a bot, and AI isn’t going to manage the supplier relationship.” For Taylor, human talent will also be needed to find creative, innovative ideas that shift the game.
Camille Batiste, VP Global Procurement at Archer-Daniels Midland, has seen how energised young people in her organisation are by technology opportunities. “If we bring an opportunity to automate and eliminate tactical work, they get excited about that. Then there are employees who don’t yet understand what that tech does – that’s where you get the fear. I feel we have leaders who just don’t understand the value of what this technology can bring and are very concerned about the risks. Our responsibility then is to make that clearer.” Batiste comments that we need to consider what concepts like the digital revolution, robotics and AI would mean to your average plant manager. “A lot of companies say they’re doing digital transformation, but … don’t really have an idea of what it is.”
Reed comments: “My fear is that all the great technology that’s coming out today [won’t survive] because we can’t communicate the opportunities to our organisations properly. I think the technology firms we’re dealing with [need to] help us better communicate that. How do you translate that cost reduction into operating margin and improvement?” Reed is looking at iterations of technology that can drive value for his organisation. “Look at Salesforce – it’s driving tremendous opportunity. That’s the [kind of] stuff we want to do in procurement, but it’s difficult to have that conversation and get the organisation to understand the value.”
The evolution of the CPO Role
LG Electronics VP Global Procurement Strategy, Chae-Ung Um, notes that every organisation has different levels of maturity. “We [currently] consider the CPO as the top, but whoever will become the Chief Value Officer will take the lead. I’ve been on a lot of transformation projects, and everything crosses procurement”.
Reed also talks about maturity. “How mature is your company in understanding the role of the procurement function? In some companies it can be seen as strictly commercial negotiations. In others, it’s broader – looking at things collectively to drive integrated value. But what you’re starting to see more of is that one function can’t do it by themselves – there’s a lot more collaboration.”
But who is best positioned to lead this transformation of the role? Reed says it needs to be someone business-focused, not procurement focused; someone who can look at the business strategy and demonstrate how your suppliers can provide solutions.
Tom Derry talks about meeting a professional at ISM2018 who, to him, epitomised the evolution of the CPO. “She was not only the CPO, but the CFO of IT and head of the business transformation office in her organisation. That’s the leading-edge conception of the CPO role.”
“From the time I joined procurement 17 years ago, one thing I’ve thought we’ve never done well is marketing ourselves”, said Batiste. “It’s so critical … [I’m considering] hiring a marketing person to drive the internal communication of our value to the organisation.” Batiste also reiterates that support from your organisation’s leadership team is paramount. “The CEO must be talking about what procurement is doing to drive the purpose of the company. Procurement needs to be vocal, not humble, and share … all the good things we’re doing.” She recommends partnering with a strong writer (such as someone from marketing). “It’s good for influence, and for attracting talent.”
Chae has a different approach to this challenge: “If I don’t have influence, I ask our customers – who have the leverage – to help us get there. We bring in a dealmaker.”
Batiste predicts that by 2023 she’ll be seeing a much smaller organisation, with transactional work completely embedded within the business. “What the name for this is, I don’t know. Right now it’s P2P solutions. What’s it going to be in 2020?”
How much will CPOs want to invest in talent in the future? Chae warns that any major transformation will require a lot of people, but two to three years later you won’t need all those professionals. “You need to balance optimising value for the company and minimising future headaches. Having the right people makes a difference.”
Taylor says that in regard to the gig economy, it really depends on your organisation. “There are areas of my business that I just can’t get to, so I’m augmenting it by getting in consultants. Do we train and scale up everyone, or get some blackbelts and move them around key areas as projects come up? Over time, through attrition, we’re scaling back and building powerful little teams.”
In the battle for capital, how does procurement ensure its cognitive projects come out on top?
At last month’s London CPO roundtable; Amit Sharma, Global Procurement Practice Leader for Cognitive Process Services (CPS) –IBM led our attendees in a discussion on how procurement leaders can ensure their cognitive projects come out on top.
There is so much potential in cognitive technology to transform the role of procurement. It will allow professionals to do dynamic forecasting, telling you when to raise acquisition and awards contracts to a particular supplier based on a triage.
“For procurement, maintaining our relevance to the organisation beyond cost savings is imperative” said Amit. “[Procurement pros] need to embed the latest in technology as best practise into the business as it will free up our time and help us to move from transactional to strategic management.”
“The logic is unquestionable. We know the sophistication of AI is going to come. It’s a question of when, not if.”
But when it comes to making the leap to cognitive, which can do a world of good for analytical and predictive analysis, organisations are still hesitant.
Procurement needs to make the business case for how cognitive can add long-term value and, as Amit reminded us, “If you’re not convinced, you can’t convince someone else”
Throughout our discussion, four key reasons for an organisation’s reluctance to embrace cognitive tech became apparent.
1. Remaining skepticism at the value of cognitive
As Amit explained, cognitive technology like Watson can help procurement professionals to analyse reams of data. It would, for example, allow users to plot the price at which they are being charged for something by suppliers and analyse how the index has moved in past [x] years. Five years ago this process would have been extremely time consuming but with the index data, the system can quickly tell you exactly where you’ve been overcharged.
So it all sounds great. But in reality, business leaders are often skeptical about the actual cost savings brought about by this kind of analysis.
Do you genuinely make better decisions in the long term by having so much data at your fingertips? Or can you have just as much success through effective negotiations with your suppliers?
Amit’s response to this “If you’re not doing spend compliance – you don’t know if you’re compliant. If you’re not analysing this data, you don’t know the potential cost savings.”
“I spoke to a CPO who thought their processes were good. [But it was discovered that] there was a 40 per cent unit price difference across the company in the same category, simply because the left hand doesn’t know what the right hand is doing!”
2. Spend within organisations is fragmented
One key problem for procurement, when it comes to implementing cognitive technology, is that the CPO doesn’t always have the authority to drive transformation. Perhaps they are reporting to a CFO who doesn’t see value in cognitive tech or the spend might simply be too fragmented across the business. When it depends on lots of other people, procurement are unable to drive change effectively.
As one of our roundtable attendees pointed out “there are organisations I know who can’t justify the need to implement Ariba to their CFO- let alone cognitive technology!”
3. Trouble looking at the bigger picture
Several of our roundtable attendees cited short-termism as a key reason for their organisation’s lack of cognitive adoption. “The mistake we make is that we look at opps in a tactical way and not at the bigger picture,” said one CPO.
“For example, we know that there will be headcount reduction in the coming years and we will benefit hugely from cognitive tech, but articulating that at a hollistic level to the CFO and explaining it as a 5-year journey is the challenge”
4. Confusion about AI
Remarkably, one of the biggest challenges remaining around the uptake of cognitive technology is a universal lack of understanding of what it actually is and the distinctions between different terms.
“You can start talking to a group about AI and within a few minutes people are talking about blockchain, as if the two are interchangeable,” said one of our attendees. “People need to have a clearer understanding of the buzzwords ; AI, blockchain cognitive etc.”
Of course, there are people who know a little and people who know a lot. And that’s a challenge in itself.
Read more here on the insightful discussions had at our London CPO roundtable.
The profession must evolve, but which way will it go? How can procurement give its value offering a makeover, and what are the indispensable human skills that will future-proof procurement careers … before it’s Game Over? Take the survey to help us find out!
What’s keeping procurement and supply management professionals awake at night as we hurtle towards the brave new world of Industry 4.0?
How is your procurement function preparing today for the digital revolution?
Which skills are most likely to be automated, and which skills are irreplaceable?
What does the future of procurement talent look like?
We’ve kept the survey to under 15 minutes – we know you’re busy!
Cool prize, right? But you’ve got to be in it to win it! The Procurement 2030: Makeover or Game Over survey is only open until Friday 22nd June. Participants will also receive a copy of the report summarising the findings of the survey.
It’s hard not to be horrified by some of the images emerging that demonstrate the impact of plastics on our oceans, our beaches and our wildlife. No one could forget, for example, Justin Hofman’s photograph of a seahorse clinging to a discarded cotton bud – a painfully stark image.
Last month National Geographic launched their new initiative, Planet or Plastic – the focus of their June publication and a multiyear effort to raise awareness about the global plastic waste crisis and encourage readers to take the pledge to help reduce single-use plastics.
“More than 5 trillion pieces of plastic are already floating in our oceans.”
National Geographic, Planet or Plastic
It can seem like a hopeless situation. But, as their campaign highlights, there is so much you can do both as an individual and as part of your organisation to impart real change.
And the situation is looking hopeful. Across the globe, the biggest corporations are waking up to the reality that big change has to happen with regard to their use of plastics. More and more of our restaurants, bars, theatres and cinemas are removing plastic straws from the offering and a number of big supermarkets have promised to make all plastic packaging reusable, recyclable or compostable by 2025.
Today, as we approach World Ocean’s Day on 8th June, we’ve highlighted a handful of corporations who are doing some inspiring work to tackle plastic pollution.
Their inspiring campaigns prove that solving the plastics problem is both a challenge and an opportunity for organisations to lead the way in finding innovative solutions.
1. Pret a Manger
Pret a Manger is consistently recognised for its efforts towards sustainable, socially conscious. The organisation is well known for offering all of its unsold produce to homeless people and recently introduced a 50p discount for customers bringing in there own reusable cups.
Schlee explains that Pret a Manger are striving to make it as easy as possible for customers to use fewer plastic bottles “All of our Veggie Pret and Manchester shops will now be encouraging customers to fill up their bottles for free using new filtered water stations. These shops will also start selling reusable plastic bottles alongside our regular water bottles, so the choice is clear.”
In February 2018 Pret a Manger announced they would be trialling a 10p cash back scheme for plastic bottles.
The company will add 10p to the cost of its plastic bottles which will be refunded to customers when they bring the bottle back. Any unclaimed deposits will be invested in their sustainability work.
Pret a Manger have also pledged to make all their plastic packaging use by 2025 100 per cent recyclable, reusable or compostable.
2. Whole Foods
Supermarket chain Whole Foods has been backing the no-plastics horse for some time.
In 2008 they made the switch from plastic to paper bags in all of their stores and they have consistently committed to reducing plastics by offering biodegradable alternatives for plates, cutlery and other food takeout items.
To date, over 1300 Haitians have collected and recycled 765, 280 plastic bottles.
“At Timberland, we’re constantly seeking innovative ways to create both social and environmental value, and are excited to continue making a difference in Haiti and in all the communities where we live, work and explore,” said Colleen Vien, sustainability director for Timberland. “Our collaboration with Thread has proven to be a meaningful way for us to grow our work in Haiti and generate social value for the people behind our products. We’ve embraced the opportunity to share their unique stories with our consumers, because this collection is about so much more than a boot. A Timberland X Thread boot represents real change – it helps create jobs, restore communities and build futures.”
Sky launched Sky Ocean Rescue in 2017 to shine a spotlight on the issues affecting ocean health, find innovative solutions to the problem of ocean plastics, and inspire people to make small everyday changes that collectively make a huge difference.
Partnering with WWF, Sky have committed £25 million to help find innovative solutions to reduce plastics and pledged to eliminate all single-use plastics from their operations, products and supply chain by 2020.
They’re also running a successful online campaign to encourage consumers to #PassonPlastic
In December 2017 Dell announced that it would be launching the world’s first commercial-scale, ocean-bound plastics supply chain, which takes ocean-bound plastics and repurposes it for their packaging.
“When Dell uses plastics from the beach, shorelines, waterways and coastal areas, we bring them back into the economy and stop them from breaking down and becoming part of a bigger problem.
It gives us an affordable resource, creates jobs for the recyclers, provides a template for others to follow and helps put a dent in the vast problem of plastics entering the ocean.”
In partnership with The Lonely Whale Foundation, Dell have helped convene Next Wave, an open-source initiative that brings leading technology and consumer-focused companies together to develop a commercial-scale ocean-bound plastics and nylon supply chain.
The group anticipates that they will divert more than 3 million pounds of plastic and nylon-based fishing gear from entering the ocean within 5 years – the equivalent of keeping 66 million water bottles from washing out to sea.
We’d love to know what your organisation is doing to reduce the use of plastics. Tell us in the comments below!
Procure with Purpose
Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.
Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.