All posts by Procurious HQ

Procurement Translation? Now You’re Speaking My Language

Sometimes in procurement it feels like you’re speaking a different language to the rest of the business. 

speaking my language

Procurious is at ProcureCon Europe this week. Stay up to date with what’s happening on Procurious, and by following us on Twitter.

If we’re perfectly honest, procurement wasn’t the first thing on everyone’s minds this morning. With both media and social media, dominated by US Election coverage, you might have been forgiven for not having your eye on the procurement ball.

However, if you didn’t, then you were likely to miss some great nuggets of procurement knowledge on Day 2 of ProcureCon Europe.

Do You Speak the Language of the Business?

A prevailing theme at the conference has been communication and collaboration between procurement and the rest of the business.

Kristian Saksida’s gave a Finance to Procurement perspective yesterday in his keynote. Today gave us the Engineering to Procurement perspective from Gordon Tytler, Director of Purchasing at Rolls-Royce.

It’s worth noting that none of these speakers have used this as a criticism of procurement. In Tytler’s case, his Engineering and Supply Chain background gave him a broader perspective both inside and outside the profession.

According to Tytler, Procurement as a role and a function is appreciated but, crucially, not fully understood by the rest of the business. If procurement is too insular, then it can’t be sure it’s delivering what the business actually wants.

However, by communicating well (and speaking the right language), procurement can be sure it’s meeting the strategic needs of internal and external stakeholders.

Fly the Plane While Fixing It

Collaboration was also picked out as a vital part of procurement transformation and procurement excellence.

Thibault Eissautier, CPO at pladis (a newly formed organisation in the FMCG industry), was discussing the factors procurement must consider when choosing its operating model. He highlighted collaboration between functions as the only way to definitely deliver significant value.

Procurement needed to speak the language of the business to make sure that senior managers were on board. From Decentralised, to Centralised, to Centre-led, there was no way that procurement could operate in isolation.

The current POM is often defined by the maturity of the organisation. However, many organisations will be changing their POM, while still trying to deliver for the business. Eissautier likened to “flying the plane while fixing it” – not really an image you want with a flight back to the UK later on!

The Future of Air Travel?

The flight metaphor leads nicely into an afternoon session on the construction of a new airport in the Netherlands. Not your common fare for procurement, but there were some amazing insights into the potential future of low-cost air travel.

The Royal Schiphol Group has been charged with the project to build Lelystad Airport by 2018. Two of the team, Budi Darmadi and Peter Mustert, showcased the very different approach the Group is taking to the project’s procurement strategy.

Competition in the sector is fierce, and Lelystad Airport is aiming for the low-cost market, so needs to price accordingly. Given a $58 million maximum budget to work with, Mustert said that they knew a best-value approach would be needed.

For this, they needed to work with experts, but first they needed to identify them using a 4 step model:

1. Approach the Experts

Using a functional, rather than technical specification, and a maximum budget for a ‘good’ solution.

2. Assessment

Experts are asked to supply a 6 page only bid. This is to focus on proven performance and results.

3. Clarification

Following selection, the two parties discussed unclear items, risks, etc. to form a contract.

4. Execution

Let the supplier do their job, procurement is not to interfere. A weekly risk report helps to ensure that there are no blockers for the supplier in completing the project.

And that was it! There was no question of SRM, or partnerships, or even the endless meetings usually associated with contracts. The process aimed to have all parties working together in an open, functional way.

Whether this proves to be successful, we’ll have to wait until April 2018. But if it is, Lelystad Airport will showcase the future of the form of travel. Fully automated, simple, but highly innovative designs, all aimed at providing customers what they need, and want, from low-cost travel, and nothing more.

And who knows, maybe if this is a success, then best-value, non-interference contracts will become the norm. A great vision of the future (so long as you don’t manage contracts…!).

Why Some Supplier Relationships Are More Equal Than Others

All suppliers are equal, it’s just that some supplier relationships are more equal than others. It’s just one of the challenges facing procurement.

some supplier relationships more equal

Procurement in the public sector can provide its own set of unique challenges. Learning from the experts is one of the best ways that professionals can aim to overcome them.

Marea Getsios is the Coordinator of Procurement at Kogarah City Council in New South Wales, Australia. Marea has worked with both Local and State Government departments in Australia over the past 20 years.

This has given her an in-depth understanding of the procurement process from a strategic leadership perspective, as well as what it takes to drive procurement success.

Ahead of her appearance at the 3rd annual GovProcure 2016 conference, Marea highlighted some of the key challenges she faces in her current role, and the ways she has overcome them. She also shared some tips on the practical side of procurement, including best practice in supplier relationships and risk management.

What qualities and capabilities have you built that supported you in achieving better procurement outcomes?

I’ve used my sales and marketing background to communicate, and engage, with stakeholders more effectively, in order to achieve better procurement outcomes. It’s been important to educate stakeholders on the differences between a procurement and a purchasing role.

By communicating the procurement cycle, and discussing the importance of good procurement practice, it’s been much easier to achieve better governance and practice amongst my colleagues.

The other area I focus on is the importance of planning your procurement program. It is important at the beginning of every project to sit down with key stakeholders and work out the key objectives and risks of the project.

It sounds like you are really harnessing your strengths and experience to minimise setbacks at your organisation!

What would you say the biggest challenges you and your organisation are facing in procurement at the moment? Do you feel that these challenges translate to local government at large and why?

At the moment the most challenging aspect of my role is amalgamating two very different frameworks into one. You have to methodically go through each process and work out which method is going to work best for the new entity going forward.

It’s a good opportunity to look at what has worked in the past for both organisations and decide what will be the most effective in the new framework going forward. Many Councils are presently going through this process, and its not any easy one.

In addition to trying to amalgamate the differing key procedures and policies, the most challenging factor is the culture, and trying to break down the silo mentalities of individuals who are adverse to change.

Interesting you mention the change adverse cultures that exist in business. We know that procurement operations within local government can have far-reaching, visible impacts on the community.

Can you tell us a bit more about the key procurement trends that might impact procurement and supplier relationships at the local level? How you can make the most of these challenges and opportunities?

Obviously we are embracing cloud-based networks to streamline ordering processes. We also have lots of new technological platforms that can automate certain procurement functions, including spend analysis, contract management, and saving trackers.

I don’t believe local government has embraced enough of these opportunities, but they are beginning to play in this space. There is opportunity now to start implementing some of these platforms and managing the workflow more effectively.

The other area I believe could also be embraced better is social media, especially where the engagement of both the community and suppliers is involved.

Procurement technology with built-in social collaboration tools can encourage innovation through improved collaboration with suppliers and other stakeholders. At the same time it can minimise risk, and enable effective decision making.

Moving outside your business to your external suppliers. Do you have any advice or key lessons learned from your supplier relationships and risk management strategies?

I believe if you are fair and transparent, and allow all suppliers and contractors the same opportunities, you will be successful in developing good supplier relationships and managing any potential risk to your organisation.

I try where possible to give suppliers the best insight to the business and our requirements in order to allow them to work out if the organisations requirements are a good fit for their business. This way they don’t waste their time or our time.

It’s important to be clear at the beginning of any relationship, and to set expectations at a realistic and achievable level. I have found that problems arise if suppliers feel they have entitlements, or are basing their livelihood on anticipated revenues.

As long as the communication is clear, it enables the supplier to work out whether they are able to service or supply your organisation accordingly. If they feel they are building their business fairly, then they will do whatever they can to grow their business and in turn provide a good service to your organisation.

It’s important not to treat suppliers and contractors with contempt, or as if they owe you. This can create issues and open up the organisation to unnecessary risk.

It’s been wonderful hearing from you, your insights are extremely useful and there are many thought starters here!

How can attendees benefit from your panel participation at the GovProcure 2016 conference?

The GovProcure conference is a good opportunity for procurement professionals to get access and exposure to a variety of principals and processes that operate across the three levels of government.

It’s interesting to see where there are alliances in the various government sectors and it’s a good opportunity to share ideas and network with other likeminded procurement professionals.

My contribution will have a strong Local government focus, but I also try and talk about how my sales and marketing background has helped me promote procurement in my sector. Much of my procurement practice focuses on the engagement of stakeholders, which I believe is the foundation for success in the procurement sector, and all other sectors for that matter!

Too find out more or to download a brochure, visit the event website.

Will Procurement Have a Fight to Stay Relevant in the Future?

Is procurement facing an uphill struggle to stay relevant? Could strategy and technology hold the key to both destruction and survival?

fight for relevant

Procurious is at ProcureCon Europe this week. Stay up to date with what’s happening on Procurious, and by following us on Twitter.

It’s the end of Day 1 at ProcureCon Europe, and the Procurious team are looking forward to winding down with the best Berlin has to offer. First, though, we’re reflecting on what we heard from the speakers and delegates at the conference.

Procurement’s Burning Platforms

After fortifying ourselves with the great coffee on offer, Procurious stepped into the conference hall to listen to David Noble’s ‘State of the Profession‘ address. The CIPS CEO was positive about the situation procurement currently finds itself in, but had words of warning for the future.

One particular quote stuck in our minds as we considered the question of how procurement could remain relevant:

“If we don’t show our true value, our profession will cease to exist in its current form.”

Noble outlined what he termed as procurement’s “Burning Platforms” – those factors the global profession needs to be aware of now, and in the next few years.

First, the spectre of supply chain risk. Global risk is at its highest level (a peak of 80.8 in CIPS’ Risk Index in Q2 this year) since 2013.

Second was ethical supply. Linked heavily to supply chain risk, it appears that procurement is still struggling with transparency and ethics. Only 57 per cent of buyers have visibility of their Tier 1 and Tier 2 suppliers, and the percentage drops to single figures when it gets to Tier 3 and beyond.

The final burning platform was professional relevance, and how procurement could embed strategies to remain relevant. Noble touched on the ‘gig economy‘. This area is a double-edged sword, giving procurement the opportunity to train those not in the profession, but also challenges in maintaining the profession’s reputation.

Innovation & Frank Assessments

Automation and technology was a topic covered by a number of keynotes (more on that in the near future). However, it’s worth touching on a couple of areas of innovation, particularly in the area of stakeholder engagement.

JJ van der Meer, Partner at PA Consulting, outlined some of the activities that procurement can do to bring stakeholders on board. He and his team have coined a new word, “entreprocurement”, as a way of describing this innovation. While a bit unusual, it’s a term that’s likely to stick in the procurement world, we’re sure!

Innovation, and the drive to do better and better, was also the focus of Kristian Saksida’s keynote. Saksida, CPO at Solvay, offered a refreshingly honest assessment of his team’s transformation journey.

He was open to admitting the mistakes they had made while striving for more, but it was clear he wanted the room to have the benefit of this knowledge to avoid the same pitfalls.

Saksida’s background in Finance helped put an interesting spin on his material. However, he made some key points about the need for procurement to be speaking the same language as the business.

For two functions which have often had a troubled relationship, Saksida’s keynote gave a sense of positivity for the future at Solvay.

Sport and Procurement – A Creative Mix

Lastly we stopped in on Celia Sanchez San Juan’s interactive case study on optimising business partnering. Having seen Sanchez San Juan in a panel earlier, it offered a chance to dig deeper into Adidas’ fledgeling procurement team.

You may not see how sport is relevant to business partnering, but the link was far from tenuous. Adidas look at sport as having the power to change lives, and approach their procurement in the same way.

Sanchez San Juan offered Adidas’ maxim, “The Guiding Principle is Helping to Make a Difference, in the Game and in the World”, by way of explaining how the company puts its people at the heart of its change in procurement.

The journey to becoming a strategic business partner drew on the ideas of insights, impact, and innovation. Moving procurement from ‘Support’ to ‘Creator’ drives greater collaboration, and ultimately delivers greater value for the customer. In the world of sport and procurement, it was all about playing on the same team.

Isn’t that a good thought to finish the day with!

Business Backwards – Putting the Customer at the Heart of Procurement

Everyone knows that the customer is always right. And it’s time for procurement to put them at the heart of their work.

customer at the heart

Procurious is at ProcureCon Europe this week. Stay up to date with what’s happening on Procurious.

They say every day is a school day. And today is no different for the 250 procurement and supply chain professionals in the room.

Far from focusing on the supplier relationships (though there is plenty of that too), one panel discussion got the assembled masses considering a relationship that doesn’t always get the focus in procurement.

The internal customer interactions have not traditionally treated procurement well. Blamed for late deliveries, for complicating processes, and for being a “roadblock”, the profession takes its fair share of flak.

However, a change of thinking, to put the customer at the heart of the relationship, could change all this.

Don’t Stray too Far from the Customer

Titled ‘5 Changes to Make to Your Procurement Teams to Transform to a Higher-Performing Organisation’, the discussion showcased some great ideas about how procurement could change its focus.

The panel, chaired by Richard Beaumont, former CPO at Prudential Digital Services, consisted of:

  • Antonia Wanner – Director Global Commodities Procurement at Nestlé
  • Axel Horst – Operational & Commercial Excellence Manager at Shell Global Solutions
  • Celia Sanchez San Juan – Director Group Procurement at Adidas

The overwhelming message from all three procurement leaders was that there needed to be a greater focus on the customer. According to Sanchez San Juan, the right business plan should put customers at the centre. If procurement is too far from its customers, then it’s too far from the core of the business.

Antonia Wanner gave an example of the focus that Nestlé gives to its customers in procurement. In the past, the organisation had used 10 types of topping for its chocolate ice cream (competitors used 2).

However, procurement established that its customers were more interested in having natural vanilla in the ice cream, than the chocolate toppings. By reducing the number of chocolate toppings, it allowed Nestlé to procure the natural vanilla, ultimately meeting an important customer requirement.

Business Backwards

Axel Horst then shared the strategy that Shell are using the help drive a customer focus – “Business Backwards”. The strategy takes the traditional top-down process model, and turns it on its head, starting with the customer requirements.

Once these are known, strategies can be defined as to how to deliver this, and then finally, leaders know what they need to do to make the strategy a reality. And it’s not just in process that Shell are demonstrating the drive for serving the customer.

Each Shell employee, including the procurement function, is required to work one full day each quarter on the retail site. According to Horst, this helps each employee understand the customer more, and, for procurement, what they need to consider when buying for the retail side of the business.

Advice from the Future

Beaumont finished the panel by asking the three leaders what advice they would give to their past selves. Though they focused on the key to current success, all three showed that customers were still at the forefront of their thinking.

Wanner highlighted the constant innovation required to stay ahead of the game, with the key being to “try, fail, and learn fast”. Horst built on this by saying that if you were going to fail, fail fast, so that innovation wouldn’t be held up.

Finally Sanchez San Juan said that she would tell herself to push harder for what she really believed in, which was key to driving great innovation across the business.

Will customer-centric procurement really take hold? Or will we be looking back in three years at an opportunity lost? Sadly, without a crystal ball, only time will tell.

ProcureCon Europe, now in its 17th year, is Europe’s most strategic procurement conference for CPOs and senior procurement executives. See the full range of topic and speakers at the event here.

Raising the Curtain on the Future of IT Procurement

Few categories receive the same attention as IT procurement. So how can professionals demonstrate the value they deliver to organisations?

raising curtain it procurement

IT procurement is the most important spend category for most large businesses today. As a result, the category is under pressure to demonstrate its ability deliver cost savings against a backdrop of financial pressure and restricted budgets.

In just a few weeks, Procurement pros from all over Europe will gather in Amsterdam to discuss the future of their industry at ProcureCon IT Europe.

Progressive procurement leaders know that it’s not just about saving on the bottom line, it’s about adding value to the business too. It’s a subject which is bound to be top of the list of priorities in Amsterdam.

We asked 100 IT Procurement executives from some of the world’s largest organisations what they are doing to innovate, inspire and add value as part of our research for ProcureCon IT.

Creating a Best-in-Class IT Procurement Function

Procurement is becoming a more integrated part of many organisations, and IT Procurement increasingly has the skills required to deliver value to its stakeholders and make a significant impact on this important category of spend.

But what are the best-in-class procurement pros focussing on now to improve their effectiveness?

procurecon-it-blog

Our research highlights a focus on tightening up the relationship with suppliers. Nearly 60 per cent of our research participants named contract management as their number one focus. Procurement teams seek to optimise all contract-related costs, and provide both clarity and transparency for both parties.

Other priorities speak directly to the supplier relationship. More than half of respondents named vendor innovation as a key area of focus, and a similar amount highlighted supplier rationalisation.

Clearly, IT Procurement is on the hunt for the innovative solutions which will create a competitive advantage for their business. It’s not all about quantity though. It’s about slimming your roster down and making sure that every supplier is pulling its weight.

Thriving in the Future IT Procurement Landscape

What does some of this innovation look like? There is no doubt that the digital innovation which has turned the world upside down in the last ten years is also changing procurement too.

Cloud technology is an important area of growth for our respondents – more than half of our respondents are already heavily invested in these solutions. Some of the latest innovations in this area use app-based user interfaces and cloud-based analytical platforms to provide real-time access to information about who is spending what and when (and that’s just the beginning).

Even better, these systems generate an incredible amount of data with which to hone your operations further.

Data on this scale has the power to enhance planning, delivery and reporting on opportunities for cost savings, value creation, and a host of other things. Trend analysis can uncover patterns which will predict both future opportunities and future threats.

As a result, learning how to harness the information you already have inside your business is now of critical importance for those seeking to thrive in this new economic reality.

The Solutions Zone

ProcureCon IT is all about finding practical solutions to the challenges which IT procurement pros face on a daily basis. It’s the only truly peer-led conference of its kind in Europe!

Not only will you meet hundreds of people who are successfully taking their IT procurement operations successfully to the next level, but it’s also a superb opportunity to meet with some of the most innovative solution providers in the market place today.

To get industry-leading insight on the issues mentioned here, as well as lots more, join us on the 5th and 6th of December at the Mövenpick Hotel Amsterdam for ProcureCon IT.

Take a look at the full event agenda here.

Why The Future of Logistics is Dynamic – And Huge!

The market value of the logistics industry is on the rise. But in order to maximise this value, organisations need more dynamic strategies.

dynamic warehousing

Logistics has not been immune to the global changes and shake-ups during 2016. However, in spite of this volatility, the importance, and size, of the Logistics industry has continued to grow. In the era of on-demand everything, organisations need to ensure logistics strategies are able to keep up with customer requirements.

As with any other market or industry, the changes being seen bring risk and reward in equal measure. New technology, new entrants into the market, and demand can boost the agile, and bring down the inflexible. As we have seen in the shipping industry, there’s no guarantees to be had from size and longevity if you can’t meet demand.

And with the global Logistics and Transportation Industry expected to reach a market value of $15.5 trillion in the next decade, the rewards for staying on track are obvious.

Growing Global Value

The estimated increasing value was highlighted in a new study from Transparency Market Research, released last week. The current market value of the industry is estimated at $8.1 trillion, with an estimated 54.6 billion tonnes of goods handled in 2015.

From their research TMR expect this value to nearly double in the next 8 years, to $15.5 trillion, with global logistics companies handling over 90 billion tonnes of goods.

What is key to note is that the industry is not dominated by one or more major player. This makes for an attractive proposition for new players to get a slice of the pie. Currently, the big four companies – Deutsche Post DHL, Ceva Logistics, UPS, and FedEx – control less than 15 per cent of the market.

New entrants tend to enter the market with newer technologies, use of data analytics, or, for companies like Deliveroo, solve the problem of, and meet customer demand for, the so-called “last mile” logistics.

Some retailers are even choosing to move their logistics back in house thanks to new strategies available to them (more on that shortly!). There is also increasing collaboration, with larger organisations working more closely with smaller, newer companies, whose service complements their own.

Apart from being a great way of sharing best practice, it also serves as a lesson to other industries, procurement included.

Disruption on the Way

One thought that seems to be pertinent for the logistics industry is, “If you’re not disrupting, then you are being disrupted”. Companies need to be adapting to changing markets, or they face obsolescence.

PwC recently published “Shifting Patterns: The Future of the Logistics Industry“, outlining just this issue. They see four main areas for disruption in logistics: customer expectations; technology; new entrants; redefining collaboration.

The whitepaper covers what a possible future in the Logistics industry will look like. They share interesting trends across each possible future. However, one key takeaway is the Logistics could be in line for an Uber-type disruption in the near future.

Could Dynamic Strategies Be the Key?

It’s getting to that time of year again. In a little over 3 weeks it’s Thanksgiving, with Black Friday and Cyber Monday following hot on its heels. And although you might not want to think about it, Christmas is peeping over the horizon.

All of this isn’t news for the supply chain and logistics organisations (or at least, we would hope not). However, with increasing, yet still uncertain, demand at this time of year, many are looking to different strategies for their warehousing.

Dynamic, on-demand warehousing is proving to be a viable alternative for many organisations, particularly those retailers looking to change their logistics strategies.

Dynamic solutions can be particularly helping for e-commerce, as it allows companies to quickly adapt to changing demand and costs. With the growth of e-commerce, consumer wants are changing. At the top of that list is fast delivery, something that traditional warehousing solutions can hinder.

At times of peak demand, like the holiday season, organisations can increase their capacity and their coverage across a region, without a major capital outlay.

The dynamic warehousing strategy also pays dividends for warehouse owners. They can offer capacity to a number of companies at once, and are less likely to end up with spare, or unused space, which costs them money.

2016 hasn’t been the best year for Logistics and Supply Chain, but with more flexible and dynamic strategies in place, the coming 12 months, and beyond, could see a significantly more rosy picture.

Have you used dynamic warehousing for your business? How does it work from a procurement point of view? Share your story below.

e-Commerce has reminded us about our Christmas shopping. While we do that, you can look at the latest headlines in the procurement world…

Impact of Hanjin Bankruptcy Not as Severe as Feared

  • ISM has released a ‘Report on Business Special Question’, asking its panel of U.S. supply management professionals if they have been impacted by the Hanjin bankruptcy.
  • Results reveal that while Hanjin’s situation has caused some impact in the U.S., disruption was not as wide-spread as expected.
  • 51.9 per cent reported “no impacts”, 29.7 per cent reported “small, but not material” impacts.
  • 13.4 per cent have said they have experienced a “material, but management impact”, while only 0.8 per cent reported a “large material impact”. 4.2 per cent said they were unsure if they have been impacted or not.

Read more at ISM

Paris Climate Agreement Comes into Force

  • The Paris Agreement came into force on Friday 4th November, formally replacing the Kyoto Protocol.
  • The agreement aims to hold the global average temperature increase to “well below” 2 degrees Celsius above pre-industrial levels.
  • According to Sydney barrister Noel Hutley it is “conceivable that directors who fail to consider climate change risks now could be found liable for breaching their duty of care and diligence in the future.”
  • As of the 3rd of November 2016, 97 of the 193 parties who signed in Paris have ratified the agreement.

Read more at the Australian Financial Review

Philippines Government Looking for Alternative Firearms Supplier

  • The Philippines Government is looking for alternative suppliers of firearms after the U.S. blocked the sale of 26,000 weapons.
  • The U.S. State Department halted the sale due to concerns about human rights violations carried out as part of Duterte’s “war on drugs”, which has seen more than 2,300 people killed by police and vigilantes.
  • Ironically, Philippine Government procurement laws disqualify local gun makers from selling weapons at this scale domestically.
  • However, both Russia and China have offered to sell arms to the Philippines in the US’ stead.

Read more at ABC

IBM Trials Blockchain for Dispute Resolution

  • IBM has announced that it will be using blockchain technology to help resolve supply chain disputes.
  • A number of companies in finance are looking at permissioned ledgers connecting companies that know and (within limits) trust each other.
  • The blockchain could allow companies to transact, resolve disputes and settle more efficiently than current practices.
  • During IBM’s testing of the concept, it reduced resolution time, and markedly improved customer satisfaction.

Read more at Forbes

Procurement Innovation Personas Revealed: Which Are You?

Are you an ‘innovation visionary’? Or one of the other innovation ‘personas’ in procurement? Well now you can find out!

procurement innovation personas

By Daniel Ball, Director, Wax Digital.

Recent research Wax Digital has conducted has revealed that 80 per cent of procurement professionals are seeking to challenge the status quo.

However, for many their use of innovation is evolving. Fewer than one in five are seen as ‘innovation visionaries’, and many others are taking different paths.

The research shows that procurement professionals value innovation, with most working towards becoming more innovative in their role in a bid to drive the business.

Procurement Innovation Personas

However, what it also shows is that there are four distinct ‘personas’ that define how procurement professionals are driven by innovation and change.

The four different personas defining procurement innovation are:

  • High-level Visionaries

18 per cent are committed to the use of technology and using data insights to influence business innovation.

Very much about the bigger picture, they use their procurement expertise to influence top level innovation and growth, rather than being personally and practically hands on in driving that change.

  • Enlightened Activists

At 36 per cent, the most common of the ‘personas’ and the most likely to be directly driving innovation.

This group is successfully driving change and delivering business value through high technology adoption. They are focused on solving real business issues rather than departmental processes. They don’t stand still and are always on the lookout for what’s next.

  • Early Strategists

30 per cent are still sowing the early seeds of procurement innovation but realise that they have many opportunities ahead of them. Innovation is a priority, but they have some way to go before they fully embrace it.

  • Pragmatic Professionals

This final 20 per cent are less innovation focused, but still open to using it practically, to improve procurement processes. Their primary focus is on savings to the bottom line and following clear business mandates.

Seeking Value in Innovation

It’s really positive that these findings show almost all procurement professionals seeing value in innovation and involvement in it. Whether this is through changing the way they do things, or, as is increasingly the case, influencing how the business as a whole should adapt too.

While early innovators tend to be dealing with more fundamental changes, such as implementing technology for the first time, they have the biggest ambitions for innovation in the near future.

At the more experienced end of the spectrum we see a mix of procurement working hands on to drive business innovation, and senior procurement advisors consulting on the business big questions around future change.

What’s interesting is that these findings ring true with what we see working with procurement teams on a day-to-day basis. The function is shedding its stuffy and administrative reputation. It is investing in technology that integrates the whole sourcing and purchasing process, delivering valuable insight, and enabling them to be bolder in showing the business what it’s capable of.

Procurement’s path to innovation is not perfect however. There are tell-tale signs that its innovativeness could be hampered and restricted by its inherent aversion to risk.

To become real innovators, procurement professionals must foster the right business relationships, nurture the correct set of new skills and seek to break ground in their approach to technology.

If you’d like to find out which persona you are and how you can best apply innovation in your role we have created a simple quiz – What type of procurement innovator are you?

The personas are based on research conducted by MORAR Consulting with 100 senior UK procurement executives commissioned by Wax Digital.

Big Ideas Summit 2016: Big Idea #21 – Creating Global Practices

Social media has opened up a global audience to procurement. Now the profession needs to leverage this to expand its role further.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Global Presence, Global Strategy

Siddharth Sharma, Strategic Sourcing Manager (SCM) at KPMG, believes that social media has given procurement the power to share ideas, thoughts and best practice. However, he also believes that this needs to be taken to the next level, to create global leaders and strategy.

Siddharth talks about the role of Governance and technology in procurement, and how all three of these aspects can be leveraged together, in order to advance the profession on a global scale.

Catch up with all the delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

Want to find out more about Big Ideas 2016? And maybe what we have planned for 2017? You can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 17,500 like-minded procurement professionals from across the world.

Have Commodity Prices Finally Bottomed Out?

Rising commodity prices have the experts talking about a bull market. But what do buyers need to keep an eye on in the coming 12 months?

commodity prices

You can find and download the ‘MetalMiner’s Annual Metals Outlook Report – 2017‘ here.

MetalMiner has called it – commodity prices in the U.S. have finally bottomed after five years of a bear market. So far, we’re witnessing an uptrend, but the publication’s founder and executive editor Lisa Reisman says industrial metal buyers should continue to take a cautious approach.

“Although markets remain bullish,” she says, “rising interest rates would likely lift the U.S. dollar and depress commodity prices. In addition, Chinese demand remains tepid and a slow-down in China would also lead to lower commodity prices.”

Big 3 Commodity Price Influencers

MetalMiner’s Annual Metals Outlook Report is essential reading for metal buyers. The report speaks authoritatively about the state of the commodities market, the industrial metals market and key price drivers before diving into a detailed analysis of aluminium, copper, nickel, lead, zinc, tin, HRC, CRC HDG and plate price movements.

The big three price-influencing factors that commodity buyers must continue to keep an eye on are, as you would expect:

  1. Metals production;
  2. Demand from China; and
  3. The U.S. Dollar.

According to MetalMiner’s analysis, after commodity prices fell sharply in 2014 and 2015, producers responded by shutting down lines and curtailing capacity. These actions have helped markets maintain better supply/demand balance this year.

December 2015 saw China unleash a renewed government stimulus in the form of credit expansion and infrastructure building, which has – for now – improved demand, particularly for industrial metals.

Finally, a weakening U.S. dollar this year has had a bullish effect on commodities. Between them, these three factors have lifted metal prices across the board, with some rising more aggressively than others.

Trends in Metals

According to Reisman, the price movement in zinc and nickel took many analysts by surprise in 2016.

“We have often said that metals move in trends. In other words, if the entire industrial metal sector languished in bear mode, it might prove difficult for, say, one metal to make substantial price gains. In 2016, tin along with steel led the price rally back in March and April, respectively.

“And though we knew steel prices had support from the import blocks due to anti-dumping trade cases, we were surprised at how quickly some of the other base metals supported the bullish trend – particularly zinc, followed by nickel.”

Bull or Bear – Have a Plan

To cut to the heart of the matter, Procurious asked Reisman which metals she would recommend buying organisations keep a close watch on as we move into 2017.

“From a rising price perspective, the more bullish metals – tin, nickel, lead and zinc – deserve a close watch. In addition, many buying organisations purchase steel on longer-term forward buys.

“We would wait patiently before committing large volumes, to see when steel prices find a bottom (steel prices have been sliding since early August) and then make purchasing decisions once we see where prices will go.”

There are plenty other sage pieces of advice to be found in the report. One such nugget is that while forecasting the future of commodity prices is an impossible task for purchasing organisations, it’s not as important as knowing what to do when prices move.

Have a plan in place to hedge or buy forward in a bull market, while ensuring you stay as informed as possible.

MetalMiner is North America’s largest metals information site, providing global perspectives on the issues, trends and trade policies that impact organisations that source and trade metals. MetalMiner provides clients with custom advisory related to industrial metal prices, forecasts and benchmarks.

Download the ‘Annual Metals Outlook Report for 2017′ here.

Scan, Print, Wear – Does The Future of Fashion Lie in 3D?

3D Printing is disrupting yet another industry – fashion. But this time, the big companies are ahead of the game.

3d printing fashion industry

From parts for fighter jets, to prosthetic arms and legs, and concept cars, 3D Printing is being used to manufacture a huge variety of items. And with its use on the rise, it’s putting pressure on organisations to reassess their manufacturing and supply chains.

The latest industry to come into the sights of the 3D Printing revolution is one that might surprise you – fashion. It’s not strictly a new phenomenon (it’s been over a year since these items first appeared), but it’s worth noting for a couple of important reasons.

Firstly, unlike in other industries, the well-known clothing manufacturers are at the forefront of the efforts. Secondly, the consideration of what this might mean for the fashion industry in terms of manufacturing and intellectual property.

Introducing Liquid Factory

Last week, Reebok announced the introduction of ‘Liquid Factory‘, a brand new manufacturing process using the concept of 3D drawing. Using a liquid created especially for them, Reebok can literally draw a shoe, without the need to use a mould at any point.

Not only does this drastically reduce the speed of manufacture, but it also allows Reebok to innovate more freely in the design of their footwear. According to Bill McInnes, Head of Future at Reebok, it’s the first jump forward in footwear manufacturing in over 30 years.

“One of the most exciting things about Liquid Factory is the speed. We can create and customise the design of shoes in real time, because we’re not using moulds – we’re simply programming a machine,” said McInnis. “Liquid Factory is not just a new way of making things, it’s a new speed of making things.”

Innovation doesn’t come cheap, for the consumer at least. A pair of the new ‘Liquid Speed’ trainers will set you back $189.50, though McInnes points out they more advanced than other trainers.

Setting the Fashion Trends

Reebok aren’t alone in using new methods to creating footwear.

Adidas rewarded its sponsored athletes who won medals at Rio 2016 with a new 3D printed running shoe. Under Armour created a new trainer with a 3D printed sole, and sold out the entire line (at $300 a pair) after Michael Phelps wore them at the Olympics Opening Ceremony.

Under Armour have stated that the 3D printing process allows them to create a highly customised shoe based on individuals’ vital statistics. And printing, rather than moulding, allows for “mass customisation” without huge increases in price.

And it’s not just trainers that are going through the 3D printer. Bikinis, dresses, and even the costumes for HBO’s latest masterpiece, Westworld, have been 3D printed. 3D printing is also being used to manufacture so-called “smart fabrics“, essentially wearable technology in clothing.

IP, Counterfeits & Consumers

However, while 3D printing holds many positives for the fashion industry, there are concerns too. Consumers are unlikely to see changes to their shopping habits in the very near future. But it’s how shopping will evolve that plays a major role in the fashion industry’s evolution.

Consumers may in the future be able to pay to download files of clothes to print themselves at home. 3D body scans could make tailored clothing much cheaper and more accessible.

But the over-riding concern for designers and retailers is what would happen to the IP. And how could they cope with the likely influx of counterfeit goods. The industry already deals with countless fakes, but access to CAD files and cheaper 3D printers could see the issue increase exponentially.

Fortunately, the fashion industry has time on its side in this respect. Affordable 3D printers capable of this are still very rare. And if organisations choose to invest time and resources into protecting their IP now, it could save them considerable trouble in the future.

Will 3D Printing change the way we buy clothes? Could it also see an end to sweatshop labour in fast fashion? Share your views below.

While we’ve been searching for a cheap 3D printer, we’ve also been on the look-out for the top headlines this week.

Uber Drivers in Landmark Case Win

  • Uber drivers in the UK have won an employment tribunal case, which ruled they were workers, rather than self-employed.
  • The decision means that drivers will be entitled to holiday pay, rest breaks and the national minimum wage.
  • Uber, who argued that its drivers were self-employed contractors, has already said it will appeal.
  • Should the verdict stand, it could impact tens of thousands of workers in a similar situation.

Read more on The BBC

Tesla Posts First Profit in Three Years

  • Electric car maker Tesla has posted a surprise profit this quarter after selling more vehicles than expected.
  • The company’s revenue rose 145 per cent to $2.3 billion in the quarter, while vehicle sales doubled to 24,821.
  • Tesla’s stock rose 5 per cent in response to the news.
  • The news may mean Tesla is able to meet its bold target of selling between 80,000 and 90,000 electric vehicles this year.

Read more at The Wall Street Journal

Currency Related Price Increases Continue

  • Microsoft has become the latest company to increase its prices as it adjusted its charges to account for currency fluctuations.
  • The rise comes less than two weeks after Unilever’s public spat with Tesco over requested price increases.
  • Microsoft stated that the increases were as a result of assessing their product prices, and creating alignment across the European region.
  • Apple have also announced price rises on their hardware in the UK, some by more than £500.

Read more at Supply Management

Modern Slavery Allegations in Fashion Supply Chains

  • A BBC investigation has revealed modern slavery and child labour in the supply chains of major global companies.
  • The supply chains of Marks & Spencer and ASOS were found to have poor working conditions in Turkish factories.
  • War of Want also alleged similar findings in the supply chain of Japanese retailer, Uniqlo.
  • The company’s Chinese suppliers have been found to enforce excessive overtime, and dangerous conditions, on their workers.

Read more on Supply Chain Dive