All posts by Procurious HQ

The Procurement Love Triangle

Love the idea of software solving all your procurement problems? You’d better make sure it’s working in harmony with your people and your processes. 

Paul Blake,  Senior Manager, Technology Product Marketing at GEP Worldwide is a keynote speaker at Big Ideas Summit 2017.  He’ll be talking about digital procurement transformation and why it’s so important for procurement to  adopt  digital-first models. We chatted to Paul ahead of the event to get his take on procurement’s current position.

Describe a perfect client for GEP?

The perfect GEP client is a large company with a lot of complexity in its spend but with a desire to do things better and drive more value into the business.

Do you think cognitive tech signals the end for the procurement profession in the near future?

I don’t.  Procurement has always been driven through human innovation and creativity, but that has often been constrained by the necessities of labour intensive transactional processing and data analysis.  Emerging technologies have the capacity to free the procurement profession from the bounds of document processing to focus more on driving new sources of value.

You’ve been at GEP for five years. What’s changed for the procurement function in this time?

Three major things:

  1. The cloud has come of age for procurement.  The industry can now conduct its entire operations completely independent of any infrastructure considerations.

2.  The unification of procurement and order processing.  Procurement’s remit used to end at the contract, with value realisation outside of their purview.  A single overview of “source-to-pay” gives a much greater ROI

3. The trend toward global harmonization of the supply chain is under threat.  That means increased risk, volatility and uncertainty.  Today, procurement teams need greater reserves of agility and responsiveness to remain successful.

What should we expect from the most successful procurement leaders of the future?

A recognition that procurement has a much broader, collaborative role to play across the entire business.  Reflecting changes in technology, the isolation of business functions into silos is retrograde thinking and a changing world will need a broad-minded approach to procurement operations

What 3 attributes make a great leader?

Education, education, education!

When is software not the answer?

When the question involves people and/or processes!  The three are so deeply interdependent that software itself is never the whole answer.

Join the conversation and register as a digital delegate for Big Ideas 2017

Cognitive Technology – One Giant Leap for Procurement?

Technology has helped to define the human race, from the invention of the car to the moon landings. Cognitive technology is one small step on the journey into the future.

Register as an online delegate for the London Big Ideas Summit 2017 here.

In 1961, US President John F. Kennedy said, “We chose to go to the moon.” People marvelled at the ambition of pushing the boundaries of human capabilities. After all, the technology to do this didn’t exist at the time.

Kennedy never lived to see his prediction come true, and watch as humans took that giant leap forward. Now, in the 21st Century, we come to the next advancement – cognitive technology.

It’s easy to compare the cognitive technology journey to the space programme and moon landing journeys of last century. For IBM, developing and deploying Watson is like the moonshot in the 1960s where IBM technology helped NASA make the lunar landings possible..

Cognitive technology is merely in its infancy in terms of where it can go. This journey will mostly likely take 50 years or more to be fully realised. And at the moment, we’re just in Year 1.

Millennials Will Help Take This Step

Procurement is starting its own cognitive technology journey and Millennials have the chance to be there at the outset. They will see cognitive technology evolving and developing throughout their whole career.

But first they need to know how to get on board and enjoy the journey.

At the same time, procurement professionals, and the wider workforce, are wondering what cognitive technology means for them. What’s left for procurement when cognitive systems like IBM’s Watson is the smartest guy in the room?

Without adapting and preparing adequately, procurement could easily be marginalised. But if CPOs lead from the front, identify the activities that only procurement can do, then procurement’s road will be much less rocky.

Now is not the time to be overwhelmed by cognitive technology, but to be educated. And to do this, we need to understand the key skills procurement professionals need to focus on to start preparing for the cognitive technology revolution.

Barry Ward, Procurement Brand Manager, Global Business Services at IBM, talks about five key skills below.

1. Watson Awareness

First things first, procurement professionals need to be aware of cognitive technology, and Watson, and what it can do for them.

The reality is that technology can change a job in four ways – eliminate, automate, empower, create. Far from being fearful for their jobs, procurement needs to embrace the change, and use it to enable the profession.

Traditional procurement processes such as cost optimisation, spend management and contracts can be empowered by Watson. Things that used to take days will now be done in a matter of minutes.

Watson can enhance these processes by analysing vast quantities of data, helping to improve the decision-making process. Through this, financial benefits can also be realised in this outcome focused structure.

Ward advises that professionals start with the categories that they manage, and understand how AI can be introduced (IBM refer to AI as Augmented Intelligence, using technology to enhance human knowledge and capability). Then it’s a case of learning as you go, and sharing knowledge with others to work collaboratively and to fully exploit the capabilities that the technology can bring

2. Relationships 

Cognitive technology may make computers super-intelligent, but it doesn’t mean consciousness or awareness. There will always be a need for the human touch in management of stakeholders.

In fact, as technology helps free up time for procurement to focus on strategic tasks, building relationships will become more critical than ever. For example, good supplier relationships will help procurement be more agile, ensuring they stay ahead of stakeholder needs.

Data can only take procurement so far. The rest is down to procurement doing the relationship work we always have done. Only now we’ll have more time to do it, and more information to help enhance the relationship.

3. Negotiation

As with relationship management, traditional procurement skills such as negotiation will also still be key. Watson can give recommendations for how to proceed, but ultimately it can’t make decisions for you. And you’ll always have the ability to correct it too.

However, Watson can help with providing data to enhance the negotiation itself. The system can give details on the person you are negotiating with, and help cut down the preparation time.

For example, if you were negotiating with Barry Ward, and you had done so in the past, Watson would be able to tell you what these previous experiences were like. Like what Barry does in certain circumstances, for example.

There’s less dancing around, you can get straight to the point, all of which saves you time. Plus, you’ll probably get a better deal out of it too!

4. Understand your organisation’s cognitive technology journey 

Find out what your CIO or CTO is doing, and what their plans are for the organisation in terms of cognitive technology. You can ask what the digital transformation will look like, and then think about how to prepare, or even influence, it.

Professionals can assess their own category, and establish what cognitive solutions are available in the market place. The key is learning how cognitive technology might specifically benefit your area.

For example, if you are travelling and your plans change, cognitive technology can assist. All you do is put the details into your phone, and the technology will assess the change, look at your airline and hotel preferences, and then present a plan, complete with cost, for your approval. All without lifting a finger. In truth, these systems are probably a couple of years away yet, but they will fundamentally change the way some categories are managed.

5.  Be Data Savvy

Finally, professionals need to be savvy in terms of knowing what cognitive technology can do for them in terms of data. As we have said, Watson is capable of handling structured and unstructured data, photos, contracts, documents, and even audio files.

The system can make sense of the data, and provide solutions based on combinations of data you’ve never even thought of. The quality of decision-making is improved, and previously unattainable insights are freely available.

We are only just discovering the possibilities that technological advances will bring but it is clear that digital transformation will open up huge opportunities for us all. This will be an exciting time to be in Procurement !

Barry will be  explaining the big ideas behind Watson and the opportunities that cognitive tech presents to procurement at  Big Ideas 2017. Register as a digital delegate.  

Stand By Your Women (…in Procurement)

You might not have to look far to find women who inspire, support and influence you throughout your procurement career.

Procurious recently launched Bravo, a new group seeking to address gender disparity in the workplace, and celebrate and empower women working within procurement.

As part of the Bravo campaign, Procurious will be interviewing a number of high profile procurement leaders and seeking their advice on how we can help other women to get ahead in their procurement careers.

Kelly Sissons is a category lead for connected home and accessories wearables consumer products.

In this interview Kelly discusses the issues that affect her as a woman in procurement, explains why procurement is the perfect career for her and lists a whole host of inspirational women!

What has been your most rewarding experience and greatest accomplishment to date?

I worked as the procurement category lead to support the launch of Telstra Smart Home, a new consumer technology offering that is revolutionising the homes of Australians. This was both a rewarding and great accomplishment. I was involved in developing the procurement strategy, conducting RFIs to source new suppliers, products and services and establishing contractual and commercial arrangements. It was really exciting to see the impact of my work when the category launched in market.

It’s also extremely rewarding to achieve  positive business outcomes when working through complex negotiations. This includes conducting dispute resolution activities to improve relationships amongst stakeholders

What issues currently affect you as a woman in procurement?

Procurement is doing well to address the barriers woman face in the workplace such as sexism and discrimination. In saying that, I believe that there needs to be further initiatives to increase the number of women in middle and senior management positions. Organisations and procurement must ensure that they adopt and embrace flexible working cultures to allow women with family and caring responsibilities to choose to remain at work.

Another issue I have noticed, which is a reflection of society as a whole, is that when working with stakeholders (men and women) from other departments or organisations there are still gender biases to overcome.

Who are the most influential women in your life?

Sheryl Sandberg is a great influential world leader who placed a focus on some important issues that women face in the workplace. Her book Lean In helped me to understand that self-doubt is a common fear women face and one that I need to contest. I’ve learnt to have confidence in my abilities and to put my hand up for opportunities.

Recently I worked with a great leader, Deanna Lomas, who challenged me to dream big and to consider opportunities beyond what I know. She taught me the importance of establishing a personal brand and taking charge of your career.

My mother inspires me to be strong and empathetic and my friends help me to be brave, to laugh and to stay focused.

Aside from these women, I regularly encounter incredible women that inspire me in many different ways.

Why is procurement the perfect career for you? 

Procurement is a profession that offers a lot of variety. I am continuously being challenged and always learning, which I love.

I have enjoyed countless opportunities including working with world leading organisations and with people at all levels across the business, gaining exposure to new technologies and working on a diverse range of projects.

Early in my career I have accountability, the ability to influence business decisions and am making recognisable impacts.

In procurement I am able to work on initiatives that address human rights issues that I am passionate about. This includes increasing the use of indigenous companies in corporate procurement and ensuring that corporations are only engaging with suppliers that follow ethical practices in their supply chains.

If you could offer your younger self two pieces of advice, what would they be? 

  • Surround yourself with the right people

Always surround yourself with people that enrich your life, inspire you to be a better person, challenge you, empower you to grow and who will help you find success. When considering whether or not to take a job, ensure that your manager and the team culture embody these characteristics. When a job no longer provides these things, consider moving onto something new. Seek out mentors and a support network of people that want to unlock your potential and to help you find your success. Once you find these people ensure that you put in the effort to sustain relationships.

  • Seek out challenging opportunities wherever possible and don’t be afraid of failing

Never let yourself become too comfortable and always seek opportunities to challenge yourself. Stepping outside of you comfort zone means you’re entering a new learning opportunity and will experience growth. Don’t say no to opportunities or hold back because you’re scared to fail. Accept that failure is a part of life. If you plan and put in your best effort regardless of the outcome you will feel better for trying.

At Procurious, we want to make it easier for women to get into, stay in, and thrive in the procurement profession. This is why we are launching Bravo – a Procurious Group celebrating and promoting women in Procurement. Join the conversation here.

Procurement Leaders: Don’t Be A Creativity Killer

Everyone is born with a lot of creative potential. So what’s been holding us back all this time from releasing our inner creative genius?

Register as an online delegate for the London Big Ideas Summit 2017 here.

Last week, we introduced James Bannerman as one of our Big Ideas speakers.  A creative change agent and author of Non-Fiction best-seller Genius: Deceptively Simple Ways to Become Instantly Smarter, James  firmly believes that everyone has the capacity to be creative and innovative.

To start unlocking creative genius within our procurement teams it’s important to first understand the reasons that creativity is often so lacking. What happens between childhood and adulthood that means the average person is so deterred from expressing their creative genius in the workplace? James has a good idea about what’s holding us all back and it often comes down to three things…

Labels

It’s all too easy to get categorized by managers, colleagues and even our own self-doubt. Perhaps someone has identified you as having a particular type of creative talent but written you off in other aspects. Maybe you’ve been discounted as a creative genius altogether! Everyone has different strengths, weaknesses and areas to which they are more suited but in pigeon holing people, we are also limiting them. James believes that by labeling ourselves we are stifling our imaginations and he points out that often the best ideas come when we least expect them and from the people we least expect them from!

Organisational Structures

We’ve all had that one boss who greets every new idea with a perplexed look, a raised eyebrow or complete disinterest. Sometimes, it’s the age-old story of senior management wanting to keep things simple, avoid too much risk and a reluctance to alter the status quo.

Even within organisations who are sincere about wanting to innovate, it’s easy to discourage employees without even realising it, leaving a team of budding intrapreneurs fearful of getting it wrong or what their colleagues might say and too embarrassed to express their best and wackiest ideas. Organisations must create an environment of psychological safety that allows employees to feel comfortable to be creative even in the highly regulated environment of a workplace.

Time

Bannerman is keen to affirm that miraculous and fully-formed ideas won’t simply land at your feet. Instead, he recommends a technique called deliberate creativity:

“ If people had all the time in the world they could patiently wait for genius ideas to fall from the sky. In the real world of business, however, most people are time-poor and don’t have that luxury. That is why Edward de Bono – the author of Lateral Thinking – championed ‘deliberate creativity’.

De Bono showed us how we can use provocative mindtools to jolt the patterns of the mind, as and when required. Look at the highly-innovative organisation Pixar, for example, who appear to make great use of the Oppositions tool. If the rules of superheroes are that they have to be ‘young, fit and athletic’, for example, what do they do? They create ‘The Incredibles’.

Or if the rules are that ‘children are afraid of monsters’, what do they do ? They create ‘Monsters Inc’ where it is the monsters who are afraid of the children. Or if the last thing a chef wants in their kitchen is a rat, what do they do ? They make the rat the chef and create ‘Ratatouille’.

So if you’re looking for innovative solutions for your Procurement team or your organisational Supply Chain Management, ask yourself what might happen if you creatively questioned the habitual ‘rules’ ? The rules of cereal, for example, used to be that they were always eaten in a bowl with milk and a spoon. Questioning these rules, however, helped to inspire the invention of the ‘cereal bar’. Similarly, as Kelley of IDEO points out, for years high-jumpers used to jump forwards, but then – at the 1968 Mexico Olympics – Fosbury wondered what might happen if he deliberately jolted this pattern and jumped backwards, and now the ‘Fosbury Flop’ has become adopted around the globe.”

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Should Procurement Pros Be Concerned About Global Trade?

Renowned economist and Big Ideas Speaker Dr Linda Yueh explains why CPOs needn’t panic about the President Trump administration but there are causes of concern. 

Register as an online delegate for the London Big Ideas Summit 2017 here.

Donald Trump made good on a campaign promise on the first day of his presidency by signing an executive order indicating the United States won’t ratify the Trans-Pacific Partnership (TPP) trade deal.

Though expected, the move caused a media storm and a flurry of responses from politicians and businesses all around the globe. But what does this mean for supply managers?

Many CPOs are understandably nervous about the Trump administration’s policies with regards to global trade. The resurgence of protectionism in the U.S., coupled with the continuing fallout and trade effects of Brexit, has left many procurement professionals wondering which region of the world they should plan to source from in the future.

The TPP was a massive free-trade agreement advocated by the Obama administration, aimed at deepening economic ties between the U.S. and 11 other Pacific Rim nations, cutting taxes, and fostering trade to boost economic growth in the process. Trump argued on the campaign trail that the agreement would be harmful to the U.S. manufacturing sector. As he signed the withdrawal order, he called it “a great thing for the American worker”.

Economist, broadcaster, author and Big Ideas Summit guest speaker Dr. Linda Yueh’s message to CPOs is one of caution but it’s not time to panic.

Don’t panic

According to Linda, there are three reasons not to panic about what Trump’s protectionist tendencies will mean for procurement, trade, and global supply chains.

  • We need to keep in mind that trade takes place under WTO rules. China is the U.S.’s biggest trading partner, despite no free trade agreement being in place. Of course, if Trump were to pull out of the WTO, then that would be a game changer. But, globalisation, especially e-commerce and the Internet linking markets and people, will mean that trade is likely to continue across borders as it’s hard to see a significant roll-back Costs of trade, of course, are another issue to be focused on.
  • Luckily, the Trump administration hasn’t honed in on e-commerce, which is good news for procurement and supply chains. Currently, one in ten transactions are already undertaken via e-commerce, and this figure will continue to grow.
  • Trump may have moved quickly to sign the TPP withdrawal order on his first day in office, but that wasn’t a formal agreement. Extricating the United States from NAFTA for instance will require renegotiation time and then a period of notice before that free trade agreement would end. Even then, most trade agreements include implementation periods, so a “cliff edge” is unlikely which gives businesses time to plan. Therefore, there’s no need to panic or overhaul your supply chain immediately. But, of course, forward planning and following economic policies would be wise. Also, take Brexit as an example – if Britain succeeds in triggering Article 50 in March 2017, then the UK is scheduled to leave the EU by the end of March 2019 – almost three full years after the people’s vote. And even there, the Prime Minister has indicated that there may be an implementation period to allow more time for businesses to adjust to leaving the Single Market.

Things to watch

So, Linda warns that supply managers should keep an eye on certain factors as global trade adjusts to these seismic political shifts.

1) U.S. border taxes – recently, Trump threatened BMW with a 35 per cent border tax on foreign-built cars imported to the U.S. market. This isn’t an isolated incident and American companies are under even more pressure to produce in the U.S.. Congress is also considering a similar tax, so that is worth bearing in mind as that would have the force of legislation.

2) U.K. Tariffs – one of the consequences of a “hard” Brexit where the UK leaves the EU without any preferential trade deal, which would include no agreement on the Single Market, Customs Union, is the re-emergence of customs for EU trade. Right now, significant customs procedures only apply to non-EU shipments. But, with around half of UK exports going to the EU, taking leave of Britain’s membership in the EU with no deal would means the end of free movement of goods. More customs declarations and duties would raise costs, slow down supply chains and certainly add time at border checks. A potential ‘hard border’ would be a particular issue for Ireland.

3) Resourcing Brexit – the UK Government also needs to think about the resourcing challenges involved in ramping up staff as well as IT systems to cope with the doubling of customs checks on the UK border.

4) NAFTA – As mentioned earlier, Trump has also flagged that the North American Free Trade Agreement (between Canada, Mexico and the U.S.) is up for renegotiation. If you’re a U.S. company, you need to start making plans now about how these changes will affect you. The same applies to any other of America’s free trade deals with 20 countries that Trump would have the authority to re-examine.

What about China?

Globalisation has helped China become a manufacturing powerhouse, but with numerous closed markets.

However, there are very good reasons to continue to do business with China. Wages may be rising but that helps businesses to think about China as a market as well as one production locale in a supply chain. Plus, with growing protectionism in America, China’s President has signalled that China may take more of a lead in globalisation. There’s a lot to watch for.

In short, Linda’s advice to CPOs around the world is keep calm, but keep an eye on the details as the globalisation landscape is shifting significantly. Global trade won’t end tomorrow but it will likely look rather different in the coming years.

Join the conversation and register as a digital delegate for Big Ideas 2017 in London.

Resistance Is Futile, Disruption Is Coming!

Massive changes are coming to procurement pros, whether they like it or not! Is it high time we started embracing, instead of resisting, them?

Mark Stevenson is one man who understands the key trends heading our way. An expert on global trends and innovation, he will be setting the scene with our opening keynote at the Big Ideas Summit 2017 in London.  We caught up with Mark ahead of the event to get to know him a little better!

Tell us a bit about yourself?

I’m an entrepreneur, an author, an occasional comedy writer, a musician, and, as some people like to define me, a futurologist, but I’m not at all keen on that particular term.

What don’t you like about the term Futurologist?

I think it’s a fairly dodgy profession overall if I’m honest. There are no qualifications required and it’s often associated with prediction and, of course, you can’t really predict the future, you can only make it. Also people who identify themselves as future-experts are as apt to be shaped by the culture in which they are embedded or dogged by their own prejudices and wish-lists as the rest of us, and tend to predict accordingly. For instance many futurologists are overly tech focused. My work is more about the questions the future asks us about the interplay of technology, economics, society and politics. My job is to help people and organisations to ask the right questions about the future and then convince them to answer those questions in a way that makes the world more sustainable, humane, compassionate and just.

 What are the key challenges procurement and supply chains face in the next decade?

Supply chain issues are hugely important at the moment and supply chain professionals are having a lot of questions asked of them.

The first challenge to overcome is achieving greater supply chain transparency. Plenty of procurement professionals, particularly in larger organisations, have no clue where they are actually buying from. When the Rana Plaza building in Bangladesh collapsed in 2013 killing over 1,000 factory workers, many high-street brands were called out and, it materialised, ignorant of their involvement. Tragedies like this have forced high street companies to better audit their supply chains but there’s still a long way to go.

Secondly, organisations need to make their supply chains more sustainable by adopting science-based targets – addressing agricultural sustainability and reducing carbon emissions to give a couple of examples.

You’ve often advocated science-based targets in the past. Could you explain the concept in more detail? How could procurement apply these targets?

Science-based targets are a really simple idea and a very good way to think about sustainability. When it comes to dealing with environmental sustainability companies tend to say ‘this is what we can do, this is what we’re aiming for’ but, in reality, it doesn’t mean a whole lot when a multinational organisation vows to reduce its carbon emissions by 10% by the year 2034! That’s a recipe for planetary disaster.

Instead, organisations must figure out what they have to do based on scientific facts. The Science Based Targets campaign (a partnership between

Carbon Disclosuse Project, UN Global Compact, World Resources Institute and WWF) helps companies determine how much they must cut emissions to prevent the worst impacts of climate change. Coca- Cola, Walmart and HP signed up to this and if they can do it, anyone can.

And, by saving the world you’re also saving your business. Companies who take this stuff seriously will out-perform because they’ll become more efficient and they’ll attract the most forward-thinking, young talent who want to work for companies of which they are unashamed.

In your experience, how open are organisations to new technology trends?

Not very! Organisations tend to be comfortable operating as they always have done.

Upton Sinclair put it well: ‘It is difficult to get a man to understand something when his salary depends on his not understanding it.’ Take Blockchain, it could take away the untrustworthy parts of banking: bankers, who will naturally resist this particular technology!

Another example is driverless tech- it doesn’t take an expert to predict that the 3.5 million US truck drivers would be wary of such an advancement – and rightly so. So we have to find a transition plan for them – which culture resists. But it’s a business responsibility to prepare for the changes and approaching transitions, you have a duty of care to your employees and not being future-literate is a dereliction of that duty. Remember, Blockbuster, the DVD rental company went bust the same week that Netflix released House of Cards.

If you had one key message for our delegates at Big Ideas, what would it be?

Wherever you work and wherever you end up in the next 15-20 years, remember that it’s going to be a very turbulent time. Massive disruption lies ahead and the bad news is that our current institutions and businesses are unfit for purpose. Ask yourself: what’s my best effort for myself, my family and for society (and remember they’re all related). If you don’t, you can prepare to be very irrelevant and very unhappy!

Join the conversation and register as a digital delegate for Big Ideas 2017

Why Procurement Needs Clearer Insight into Industry 4.0

The impact of Industry 4.0 is already being felt. But procurement needs greater understanding in order to thrive in the digital era.

Download your copy of ‘Procurement 4.0 – The Digitalisation of Procurement’ on the Fraunhofer IML website.

In our previous article we introduced the concept of Procurement 4.0 – the profession as it might look in Industry 4.0. The key findings of BME’s study into the impact of digitalisation highlighted that procurement faces some major changes in the coming years.

And alongside those changes, there will be an array of challenges, and also benefits, to be faced. In this article, we’ll examine the significance of Industry 4.0 in procurement, but also why the profession needs to find consensus.

Industry 4.0 – Scope and Impact

The BME and IML study showed that many procurement leaders believe that Industry 4.0 has a very high influence on their organisation. Equally, they expect this influence to increase in the next few years.

There is consensus from survey participants that digitalisation will have a huge impact on the organisation as a whole. However, there is less agreement of its overall impact on the procurement profession itself. For many, continuing to look at procurement as a separate entity is impossible in the digital era.

But could this lack of consensus stem from a lack of a common definition of Industry 4.0? When we have discussed the fourth industrial revolution in the past, concepts such as ‘automation’, ‘robotics’, ‘digital’ and ‘technology’ have all been used.

However, similar terms have been used in the past to describe Industry 3.0. BME have concluded from this that the line between 3.0 and 4.0 is not clear, which may be causing confusion. There are two interesting quotes in the report worth considering to highlight the differences of opinion:

“Industry 4.0 is not a thing of the future – it already exists in the present day!”

“The next revolution, which will completely transform our cooperation on every single level.”

Neither one on its own appears to be unusual. However, when seen side-by-side, they serve to highlight two distinct groups. One which sees the changes already taking place; the other which sees them as a future occurrence.

How Organisations Have Prepared

Has your procurement organisation started its digital journey? How confident would you be at pinpointing the changes so far?

If these two, polar-opposite, opinions exist, in a small sample, it highlights a level of unpreparedness in the profession. In the study, only 5 per cent said that no digitalisation activities had taken place. But, interesting, a quarter of respondents claimed the first steps were now being taken.

However, without a pre-defined starting point, then some activities that are already in-progress may be overlooked. Some organisations may be making progress in Industry 4.0 without realising it, or considering it relevant.

Something as simple as an e-procurement system, or digital P2P process, might not be considered as an Industry 4.0 change. Particularly if this change happened a few years ago.

Prof. Dr Michael Henke, believes “Companies often attribute these developments to the third industrial revolution and do not realize that this was nevertheless an important step towards industry 4.0.”

Impacting Procurement Strategy

Currently, it is unlikely that you will find either Industry 4.0 or Procurement 4.0 contained in strategy documents. However, there is likely to be mention of digital transformation, digitalisation, and innovation.

Contained within these objectives will be more common procurement strategies for realising these objectives. Within the BME study, over half of organisations were accounting for digitalisation in procurement strategy.

However, only 20 per cent claimed to have fully explored the impact of Industry 4.0 on their organisations. In spite of this, nearly half of the organisations have a department dedicated to ‘Industry 4.0’. This is a central team, usually comprising of senior management level employees.

“The companies that have already included Industry 4.0 in their company strategy are often already more advanced in the implementation of Industry 4.0 as a company without a corresponding strategy ” Prof. Dr Henke continues.

Taking Procurement Forward

As with most activities, the incorporation into strategy is not sufficient for action. Digitalisation needs to have a specific roadmap, complete with action plans, timelines, and responsibilities.

As well as this, the activities need to be seen from an organisation-wide perspective. Consideration of this topic without full functional input will only hinder coordination.

The perception of these strategies is also key. Though many of the participants considered digitalisation to only be playing a supporting role in order to move procurement forward.

The Association Supply Chain Management, Procurement and Logistics (BME), founded in 1954, is the leading professional association for supply chain managers, buyers and logisticians in Germany and Central Europe.

Fraunhofer IML, founded in 1981, is a global expert on all fields of internal and external logistics. The Institute also currently heads up the largest logistics research centre in Europe.

To download your copy of the report, visit the Fraunhofer IML website.

The procurement function must adapt and evolve to accommodate technology changes and be ready to embrace what we’re calling Procurement 4.0. The question is: Are We There Yet? Join the conversation and register as a digital delegate for The Big Ideas 2017 in London. 

Work-life, work-death and the right to disconnect

It’s a tale of two cities when it comes to work-life balance. Tokyo continues to struggle with a dangerous culture of self-sacrifice through “overwork”, while in Paris, lawmakers have recently enshrined French workers’ “right to disconnect”.

It’s 10.00pm. The kids are asleep, you’ve tidied the kitchen and you’re considering whether to fire up Netflix or turn in for a relatively early night. Your phone gives a soft “ding” and you reach for it, wondering which of your colleagues is emailing you at this hour.

Put. The Phone. Down.

2017 may be the year that we see the turning point in the fight against the “always-on” work culture, which has rapidly eroded the border between work and private lives. Unpaid overtime has surged as businesses increasingly judge employees by their availability, while employees themselves fall into the trap of “just checking one more email” in the evenings. Hyper-connectivity has led to increased levels of stress, sleeplessness, relationship problems, and, in places where the culture has reached an extreme level – death.

Karoshi

Yes, death. If you’re concerned about where the always-on work culture might be heading, there’s no need to imagine a dystopian future where employees work until they drop dead from exhaustion. The situation already exists in Japan, where the notoriously gruelling work culture has given rise to a phenomenon called karoshi, or “work-death”. As much as 21% of the workforce puts in more than 49 hours a week, while compensation claims from families whose loved ones have literally worked themselves to death peaked at over 2300 cases last year.

You won’t find 12-hour work-days on any contract of employment or job description, yet the culture of unpaid overtime (or “service” overtime) is so firmly entrenched in Japan that it may as well be a part of scheduled working hours. Overtime is unforced, yet workers feel it’s compulsory due to managerial and peer pressure. The results are devastating, and it’s not just elderly members of the workforce who are dying. Alarmingly, employees in their 20s suffering from heart attacks, strokes, and suicide triggered by karoshi.

Overwork culture exists in every profession, from manual labour to office work. Joey Tocnang, a 27-year old trainee from the Philippines employed as a steel-cutter in a Japanese factory, was working between 78 and 122 hours of overtime a month before he died of heart failure at his firm’s dormitory in 2014. Matsuri Takahashi, a 24-year-old employee of the advertising giant Dentsu, was driven to commit suicide in 2015 due to stress brought on by long working hours. She regularly worked over 100 hours of overtime per month in the firm’s internet advertising division, and had even posted calls for help such as ‘I want to die” on social media.

According to a government whitepaper, 22.7% of Japanese companies polled between December 2015 and January 2016 said some of their employees logged more than 80 hours of overtime each month – the official threshold at which the prospect of death from work becomes serious. Karoshi has its roots in Japan’s massive rebuilding efforts after the devastation of WWII, and gained traction in the economic booms of the 1970s and 80s.

There is hope of change, though. Posters are going up on the walls of workplaces all over Japan as part of the government’s efforts to reign in the culture of self-sacrifice. A new generation of professionals called “Freeters” are breaking the cycle by demanding to be paid casual rates (by the hour only) rather than salaries. But the real solution may lie in France. 

The right to disconnect

From January this year, French companies with over 50 workers are required to guarantee the right of their employees to ignore their smartphones after hours. The laws were passed after increasing pressure from France’s trade unions compelled the Labour Ministry to defend the country’s highly protected workplace laws and 35-hour working week.

The law applies to the company, not the individual, which means that compulsive email-checkers can work all hours if they’d like to, but cannot be pressured by their organisations into doing so. Businesses now need to enter into negotiations with their employees to define their rights around switching off, and must publish a charter that explicitly sets out the demands on employees out-of-hours.

Some French companies, including French insurer Axa, have taken proactive measures to limit out-of-hours communication and reduce burnout among works, including cutting email messaging in the evening and weekends, and even destroying emails that are sent to employees while they are on holiday.

The comparison between Paris and Tokyo is not strictly equal, as you cannot fairly compare someone checking emails in their pyjamas with a steel-worker putting in dangerous amounts of overtime in a factory, but it is useful to highlight extreme examples, such as Japan, to help combat the creeping culture of unpaid overtime.

Smartphones are, of course, a double-edged sword in that they can potentially offer enormous work-life balance benefits. A working parent, for example, could leave the office two hours early to pick their kids up, making up the time later that evening. But flexibility arrangements usually still come within the paid work-day and do not pressure employees to “gift” unpaid overtime to their businesses.

What can I do?

  • Recognise that “just checking one more email” on your smartphone is working overtime.
  • Talk to your manager about the right to disconnect, and make sure you bring up any instances when you feel you’re being pressured to work unpaid overtime.
  • Speak up whenever you see “overwork culture” advocated in your workplace or on social media.

In other news this week in procurement:

Procter & Gamble calls for an improved media supply chain

  • P&G, a global advertiser with a marketing and advertising spend of $2.8 billion per annum, has called for a “transparent, clean and productive media supply chain” at a digital advertising leadership conference in Florida this weekend.
  • Chief Marketing Officer Marc Pritchard called media supply chains “murky at best, and fraudulent at worst”, advocating viewability standards including improved compliance and measurement.
  • Common frauds include “bot views”, where advertisers report millions of digital hits that are actually views by bots, rather than humans.

Read more on CNBC.

British Standards Institution releases Slavery Index

  • BSI has published its annual Human Trafficking and Supply Chain Slavery Index, revealing an increased risk of modern-day slavery entering European countries.
  • Russia, Slovakia, India and Pakistan are identified in the Index as “severe risk source countries” that may export modern-day slaves to the UK.
  • Italy is also identified as a high risk nation – partly due to the conflict in Syria, while Greece and Turkey are additionally categorised as high risk countries.

Read more on the BSI website.

Leading Procurement into the Future – Big Ideas Summit 2017

2017 is a pivotal year for the procurement profession. The Big Ideas Summit 2017 will help lay the ground work for the changes ahead.

We firmly believe that 2017 will be the year that everything changes for procurement. No longer a transactional function, procurement is driving value for organisations across the world. But the journey doesn’t stop there.

As the pace of change increase even further, procurement needs to adapt and evolve in order to maintain its position. Technology will play a major role in this evolution across the profession, and throughout the supply chain.

To help procurement find its feet in Industry 4.0, and to help lead it into the future, Procurious is once again gathering the brightest minds in the profession for the Big Ideas Summit 2017. This year, we’re doing a spot of globe trotting as we host events in Singapore, Sydney, Chicago and Dubai but we’re kicking things of in London!

Leading from the Front

If you’re new to Procurious, or missed our previous events, let us set the scene for you. The first event of 2017 will take place in London on Thursday the 23rd of February. The event will bring together 40-50 established thought leaders, senior decision makers and industry experts, to discuss procurement’s future.

This is a unique opportunity for delegates, and the wider community, to gain insight into the trends shaping our profession. Once again, we’ll be inviting the community to get involved as digital delegates, and to help drive the conversations online.

By getting current and future procurement leaders discussing key trends, risks and issues, it will help prepare us all for the journey ahead. These leaders will then have tangible outcomes they can take back to their organisations to drive innovation and change.

Among our key themes underpinning the entire event this year are:

  • Industry 4.0 and how it’s reshaping procurement
  • Rebuilding your workforce for  Workforce 4.0
  • Procurement in the digital age
  • Authentic Leadership – Inspiring Trust and Driving Change in Uncertain Times

Be Brave or Be Dead

Procurious has once again secured a fantastic list of keynote speakers and expert panellists. Kicking off Big Ideas 2017 will be respected futurist, entrepreneur, and author, Mark Stevenson.

Setting the scene and providing a context for the day ahead, Mark will draw on his own experience to discuss the key components procurement need to be aware of. These are: geo-politics; geo-economics; and geo-technology.

Stevenson will also outline the technology ‘waves’ coming in the next decade, and argue that companies that can take advantage of these waves will not only attract the best staff, they will seriously outperform all their rivals.

Why take part?

As savvy social networkers you’ll already be of the mind that social media can be used to create a global stir. We want to amplify these Big Ideas throughout the global procurement community, connect with one another, start meaningful conversations, and ultimately drive change.

All keynote sessions will be captured on film and offered exclusively to registered attendees. As a ‘digital delegate’ you’ll also be able to access a rich collection of supporting material including articles, interviews and video content following the event.

Register for the London Big Ideas Summit 2017 here. You can also get involved in real time via social media, on Twitter, LinkedIn or Facebook, using the hashtag #BigIdeas2017.

Be brave -Join the global movement today.

Big Ideas Summit 2016: Big Idea #33 – Sharing Knowledge Openly

Collaborative working and knowledge sharing benefits everyone in procurement. It’s time to learn from one another.

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.

Harnessing Knowledge Sharing

Nicola Robinson, Knowledge Manager at CIPS, says that procurement professionals have a huge knowledge collateral at their disposal. And she also believes that by sharing this knowledge openly, everyone can benefit.

CIPS have led the charge at bringing trusted sources of information to the procurement profession. Nicola believes that the profession can bring all their collective knowledge together, harness it, and all learn from one another.

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 19,500 like-minded procurement professionals from across the world.