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Rio Olympics Focus on Global Supply Chain Sustainability

A focus on supply chain sustainability gives the Rio Olympics the opportunity to revolutionise global sustainability, and create a lasting legacy in Brazil.

Rio Olympics Supply Chain Sustainability

The Rio Olympics’ commitment to supply chain sustainability (with 100 per cent recovery, disposal and use of goods and waste) has the capacity to revolutionise supply chain sustainability worldwide as well as creating a legacy for positive change in the region, says supply chain consultancy Crimson & Co.

Despite a backdrop of political and economical uncertainty, Brazil has promised that the first South American-hosted Olympic and Paralympic Games, taking place in less than 100 days, will bring permanent changes to the city of Rio de Janeiro, with benefits spread throughout the country. Central to this has been the drive to ensure all suppliers are adopting sustainability practices.

“Most Sustainable” Olympics Ever

The London 2012 Olympics was billed as ‘the most sustainable ever’ but associations with key sponsors including BP, Rio Tinto, Dow Chemical and McDonalds, provoked a backlash from a coalition of campaign groups, keen to highlight the negative social or environmental impact of these firms.

In the run up to the Games in Rio, event organisers have been keen to ensure that all suppliers adopt sustainable practices, including managing waste, minimising the use of harmful substances, making conscious use of energy and water and maintaining ethical labour practices. Additionally, businesses are invited to participate in training sessions on sustainability as part of the bidding process.

For Richard Gurney, General Manager of Latin America for Crimson & Co, this commitment to sustainability represents the positive impact the Games can have on Rio and further afield:

“Sustainability throughout the Games’ management cycle – from initial planning to after the event – has been in the DNA of the Rio proposal since it first announced its interest in hosting the greatest sporting event on the planet.

Learning from Past Mistakes

“Brazil’s hosting of the FIFA World Cup in 2014 was not without controversy. More than $3 billion was spent on building five new stadiums and renovating seven existing ones, but many of these so-called white elephants are as likely now to collect dust as they are to generate ticket receipts. Brazil does not want to see a repeat of this and that is why there is such a huge emphasis on sustainability.

“When the Games finish, and until 2017, the Olympic Operations Committee will manage the dissolution process. This includes closing contracts, selling property assets and managing donations and returns. This planning, i.e. what will be done with each item after the Games, was part of the purchasing process and is considered part of the total cost of acquisition in purchasing decisions. The goal is 100 per cent recovery, disposal and use of goods and waste.”

Gurney continued: “In addition to reducing the environmental impact and the volume of waste after the Games, the initiative informed producers about how to get more sustainable alternatives to their products.

“Companies were invited to participate in training sessions as part of the bidding process to win contracts. Many companies still have the perception that sustainable products are more expensive. In fact, more often than not, the price of a product or service can be greater, but the cost reductions and elimination of waste in the value chain through sustainable practices lead to a lower total purchase cost.

“Time will tell on the impact of these decisions for Rio but, if carried out effectively, it has the capacity to revolutionise supply chain sustainability as well as creating a legacy for positive change. If that is the case, it will certainly have cause to rival London 2012 for the most sustainable Olympics ever.”

Australian Shines Spotlight on Unethical Supply Chains

Australian fashion brands are bearing the brunt of increasing unwanted attention for unethical supply chains.

Fashion Unethical Supply Chains

No-one wants to talk about it. But if you’re working in procurement for the fashion industry, you’re in the hot seat.

Fuelled by consumers’ love affair for fast fashion, the fashion industry is finding ways to produce faster and cheaper apparel than ever before. The latest example of this is Kmart and Target producing school uniforms for $2 an item, in a marketing campaign that made recent headlines for all the wrong reasons, given that factory workers are paid below levels that can cover basic living expenses.

The broader industry is digging its own grave, and, in years to come, the fast fashion industry will cease to exist, warns an Australian fashion industry authority who has worked on both sides of the fence.

A Different Way to Do Fashion

Catherine van der Meulen (formally Taouk) worked her way up in her father’s teen, fast fashion brand SUPRÉ for 15 years, which specialises in mass-produced, cheap fashion. During those years, the potential issues of unethical supply chains never crossed her mind.

She’s since realised the error of her ways, designing the Raw to Store movement to educate businesses about the spectrum of impacts generated by the fashion industry globally.

“Since leaving SUPRÉ, I’ve realised that there’s another way to do business, and it’s not this ruthless, cut everyone down to make money style of business that’s operating in the fashion world today,” van der Meulen says.

“I wish I’d have known back then what I know now about ethical fashion and conscious capitalism in my days at SUPRÉ. I wish I knew that the impact of our decisions can have a negative impact on others without me even knowing it.”

Raising Awareness

But she’s making up for lost time. Late last year, van den Meulen landed the role as head of corporate sustainability at Clean Cut Fashion – Australia’s industry body for ethical and sustainable practice. The organisation connects Australia to the global sustainable fashion movement and encourages national retailers to be more mindful of their supply chain.

She has only been in the role a few months, and is starting by raising awareness and contacting the industry’s worst offenders in search of a commitment.

“I’m starting with exemplifying the ones that are doing well in creating positive impact in the industry. We want to empower the great work of the brands that are committed to change and use that to teach other brands,” she says.

Issues associated with unethical supply chains include building an entire brand on an unsustainable business model, bad publicity, consumers turning to social media to vent about brands doing the wrong thing and, of course, knowing that you’re paying workers less than they need to live on in their own countries.

Collective Responsibility

Cath-van-den-Meulen - Unethical supply chains

Cath van den Meulen

“It’s my job to look at the supply chain of these fashion brands here in Australia and open up discussions around what’s being done to improve the processes. There’s plenty of room for improvement out there. But there’s generational corporate resistance to work through,” says van den Meulen.

She hopes to bring about change among Australian fashion brands that rely on mass sales by producing ‘loss leaders’ (extremely cheap items that are highly publicised), which are commonly mass-produced in unethical supply chains and manufacturing establishments in third world countries, she says.

To highlight the sheer size of the issue of unethical supply chains in Australia, she points to the Australian Fashion Report prepared by Baptist World Aid Australia, which last year named and shamed Australian fashion brands that haven’t cleaned up their supply chain or protected workers overseas.

The report was released two years after the fatal Rana Plaza factory collapse in Bangladesh, which saw the lives of 1,129 factory workers die. This event has put a black mark against the collective fashion industry, and van der Meulen says everyone needs to take responsibility.

Australian Offenders

The Baptist report named iconic Australian fashion brands as worst performers, such as the Just Group (owner of Just Jeans, Jay Jays, Dotti, Peter Alexander and Portmans), fast retail brands like Ally, Valley Girl, Temt and Industrie, and low cost suppliers like Lowes and Best & Less.

These companies each received D or F grades because there was little evidence they were doing much, if anything, to protect workers overseas. Many had little or no publicly available information and/or didn’t respond to requests to engage with the research process.

Oxfam Australia also released a report late last year naming the Australian brands dodging workers’ rights. The report named Best & Less as making the least progress of all the companies Oxfam has been engaging and assessing. The Just Group was also named in the report as another company sourcing from Bangladesh, which has so far refused to sign the Fire and Safety Accord.

“The truth is that you can create a profitable and sustainable business model while also doing the right thing as a corporate citizen. And yet there’s so much toxic fashion out there that consumers can purchase clothing for the price of a coffee is utterly obscene. Everyone needs to take responsibility for there to be change.”

Procurement – Authentic and Transparent

And while almost impossible to put a figure on the cost of cleaning up unethical supply chains, she recommends that procurement professionals approach this mammoth task in an authentic and transparent way.

Procurement professionals need to take responsibility for what’s happening further down the supply chain, starting with an independent audit to uncover and document the issues, she says.

“Where the cotton is from that you’re using, for example, can have one of the biggest impacts on the cotton industry globally. These are questions procurement people should be asking that demand answers.”

“I recommend that fashion brands start out by doing the B Corp assessment, which take just 90 minutes and gives you a rating out of 200 to see where you stand today,” she says.

Next, work out where you can make the most impact within your supply chain, and commit to starting an improvement program.

“Just focus on one thing that will improve your supply chain by 1 per cent this year. This could include improving energy consumption or waste water, changing suppliers, or sourcing more ethically produced products,” van der Meulen says.

Good News-Bad News Week for Global Tech Giants

The good news is that one of your favourite social networks is booming, the bad news is that one of your favourite tech companies is not.

Good News Bad News

It’s been something of a good news, bad news kind of week for a number of major global organisations this week. On one hand, alongside the success of the Big Ideas Summit 2016 (we couldn’t resist one last mention…), Facebook is bucking the trend for growth in 2016.

On the other hand, continuing (and very public) supply chain issues, as well as declining sales, put Apple firmly in the bad news column. And outside of the tech industry there was bad news in global manufacturing, as it became clear that lessons don’t appear to have been learned in Toyota’s supply chain following recent earthquakes in Japan.

Golden Quarter

At a time when other technology companies are beginning to feel the pinch, and slow growth is causing some real concerns, Facebook appears to be bucking the trend with its good news announcement on its first quarter growth.

Q1 of 2016 was the company’s strongest single quarter growth since 2014, with an overall revenue increase of 51.9 per cent. Combined with an increase in user activity (it’s estimated that two-thirds of Facebook users are on the site or app every day), it served to place Facebook far out in front of its competitors in both the social media, and tech, fields.

The revenue growth has been put down to a marked increase in the sales of mobile advertising on both its original platform, and on Instagram, which it purchased for over $1 billion in 2012.

What’s more, there is plenty potential for more good news, as Facebook is yet to release advertising for it’s other 2 major platforms – its Messenger service, and Whatsapp. There is also the release of Oculus Rift, the company’s virtual reality headset, to be taken into account, although this is unlikely to happen until next year.

‘The Fruit’ in Decline?

Facebook’s good news came as welcome relief for investors and markets, particularly in light of other first quarter announcements from the large technology companies came in under expectations.

Twitter’s earnings fell short of Wall Street predictions, with $595 million, compared to an expectation of over $607 million. Bigger problems for Twitter were a less than expected growth in user numbers, hindering the platform’s ability to drive advertising revenues.

However, the biggest news (though some might say not as surprising) came with the quarterly announcements from Apple. For the first time in 13 years, Apple reported a fall in quarterly sales, at nearly 13 per cent, to $50.6 billion. The tech giant expects this trend to continue in Q2, with estimated sales falling to around $41 billion.

Apple were not alone in feeling the effects of the slowing Chinese economy, where its sales dropped by more than a quarter. However, there was some good news for Apple fans. CEO Tim Cook told analysts that, “The future of Apple is very bright”, with a 20 per cent growth in revenue from Apple Music and App Store areas of the business.

However, many analysts are concerned that, in a market saturated with smartphones, unless the iPhone 7 is a game changer, then this decline could continue. With an announcement, and launch, expected later this year, it seems we will just have to wait and see.

Vulnerable Supply Chains

Technology wasn’t the only bad news area this week either. Toyota have come under fire for not learning the lessons of Japanese earthquakes in 2011, with their supply chain again showing severe vulnerability following earthquakes in the country in recent weeks.

Following the events of 2011, Toyota set out to create an “earthquake-proof” supply chain, working with suppliers to create the RESCUE (REinforce Supply Chain Under Emergency) system, aimed at spreading the risk in the event of future natural disasters.

The new supply chain was put to the test in April, and despite early promise, it seems that the same vulnerabilities in the supply chain still exist. The manufacturer shut 26 of its 30 Japanese production facilities in the middle of April, only reopening 5 at the tail end of the month.

With both Honda and Nissan now operating at full capacity, with minimal shutdowns, it seems that Toyota has yet to learn its lesson.

Do you work in the technology industry? What do you make of the latest announcements from Facebook and Apple? We’d love to hear from you – you can get started in the comments section below.

As ever, we’ve been keeping an eye on all the major headlines just for you…

Congress Votes Yes on Russian Rocket Purchase

  • US Congress have voted to purchase $540 million worth of Russian rocket engines, despite a ban on trading
  • The intention of the 2014 procurement ban was to end US reliance on Russian-made RD-180 rocket engines
  • The US relies on these engines to launch national security satellites into orbit, as the US-built engines are still under development
  • Critics say the $540 million will be spent by Russian on modernising its military

Read more at Space Daily

Japan Fury at Australia-France Deal

  • Australia has awarded France the submarine ‘deal of the century’
  • The $AUS50bn submarine contract is the largest defence deal in Australian history, but the move has infuriated Japan.
  • Japan’s Mitsubishi Heavy Industries and Kawasaki Heavy Industries submarine had been seen as early favourites for the contract.
  • In an unusually blunt criticism, Japan’s defence minister Gen Nakatani described Australia’s decision as “deeply regrettable”.

Read more at The Telegraph

Slow Progress on US-EU TTIP

  • Progress is slow on negotiations for a comprehensive Trans-Atlantic Trade and Investment Partnership, or TTIP, between the EU and the USA
  • Negotiators said they would push for a comprehensive TTIP before US President Barack Obama leaves office in January.
  • Among the deepest divides concern Europe’s food safety rules that exclude American beef raised with hormones, genetically modified foods and Europe’s many local food naming rules.
  • The deal exclude European demands for greater access to US federal, state and local government procurement, which often carries “buy American” or local content standards.

Read more at Euractive

Gorman Failing Overseas Workers

  • Australian fashion brand Gorman has come under fire for not doing enough to protect overseas workers in its supply chain
  • The 2016 fashion report by Baptist World Aid Australia graded Gorman as an ‘F’ for policies on preventing exploitation of workers in overseas factories
  • Although the organisation has an ethical compliance statement on its website, fans and wearers of the brand have reacted angrily to the company’s alleged lack of action
  • The company’s founder, Lisa Gorman, has now stated that they will be publishing supply chain audit reports on its website in the coming months to help prove transparency

Read more at The Guardian

Innovating the Last Mile of the Supply Chain

From Amazon delivering your groceries, to a host of companies delivering your dinner, the competition for the last mile of the supply chain is heating up.

Last Mile Supply Chain

At the Big Ideas Summit 2016 last week, there were a whole host of discussions around the future of the supply chain. Paul Markillie discussed the future trends in manufacturing (and you can watch Paul’s Big Idea video too), while Lucy Siegle discussed the increasing need for transparency and ethics in the supply chain.

Ahead of the Summit, we also asked the Procurious community about their Big Ideas for the future of the supply chain, and logistics, industries.

David Weaver, Online Marketing Manager, INFORM GmbH

Big Ideas Supply Chain - David WeaverIt truly is an exciting time to be involved in the supply chain industry. Over the course of 2016, technological advancements in the field of robotics will continue to reshape manufacturing and warehouse facilities.

Based on what I saw at some of the events I attended in 2015, I believe picking bots in large warehouses will become a reality, sooner rather than later. Additionally, the migration of supply chain planning into the Cloud will continue to expand and the implementation of advanced analytics to successfully plan across all supply chain functions will experience an upward trend.

Furthermore, companies will have to get creative with their methods for increasing transparency across their value network. However, in order for companies to be successful, the 4 important T’s of transparency must be fulfilled:

  • The topic must have traction within the organisation,
  • Internal and external trust must be established,
  • Appropriate supplier training programs should be in place, and
  • Today’s available technology needs to be implemented.

Next to all of these leading topics, I expect some of the biggest ideas to be aimed at solving the “last mile” logistics problem. Over the last few years we have seen several last mile logistics providers introduce their innovative approaches to solving the problem (Doorman, Roadie, Deliveroo, etc.).

I expect the fight for control of this market to continue, and as a result of the high level of competition, we will continue to see new, innovative problem-solving methods. 

Even although the event itself is over, there’s still time for you to get involved with the Big Ideas Summit 2016. Visit theBig Ideas Summit website, join our Procurious Group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

In the coming weeks, we’ll be sharing exclusive and unique thought leadership, Big Ideas, and discussion that will shape the future of procurement. Don’t miss out – get involved, register today.

Procurement Recruitment – Find the Needle in the Haystack

According to the experts, procurement recruitment can sometimes be like finding a needle in a haystack. But what are the trends in this area in the coming years?

Procurement Recruitment

One of the key topics at the Big Ideas Summit 2016 was people, and more specifically, how to attract and retain the best talent in procurement. Our experts and influencers discussed a number of ideas and concepts procurement could consider. You can read all about them here.

However, we also wanted to hear what the Procurious community thought were the Big Ideas in procurement recruitment, now and in the coming years. Here is what they had to say.

Tony Megally, General Manager, The Source Recruitment

Big Ideas - Tony MegallySpecialist roles – Procurement needs to consider promoting the profession as an exciting career path to non-procurement professionals already in relevant commercially focussed roles. For example, finance and legal (great for contract management), and possibly agency recruiters specialising in procurement.  

Commercially focussed accountants are highly numerate, analytical and offer great business partnering skills, and, in some cases, they are supporting sales teams with commercial analysis of bids and tenders. In house legal advisors are often partnering with Procurement overseeing contract terms, and could transition well to contract management roles.

Procurement recruitment consultants are generally great at negotiating, building relationships, are equipped with sound knowledge of the profession, and maintain strong soft skills all round. (I’ve know of a couple of recruiters who have made a career change to Procurement!).

The challenge will be getting CPOs and Procurement Heads to think outside the norm of recruiting just from our profession. Non-procurement pros are not typically thinking about procurement as a career change. But if we promote it on both sides this could change!

Senior and Exec Leadership Roles – Procurement should be recruiting for senior and executive leadership capability, rather than technical expertise. We have a great recent example in Australia, where Qantas has appointed a new CPO, Lisa Brock.

Lisa previously occupied executive roles with Jetstar as Chief Commercial Officer, and previously with Qantas in Strategy and Corporate Development, and she has a background in Corporate Finance at Ernst and Young.

She knows the business, is highly people focussed, is a great change agent, is financially literate and has built strong relationships across the organisation at a senior level. Perhaps this is easier to achieve with internal leaders with a proven track record of leading cross functional teams.  

Succession Planning – Succession planning is crucial for future leadership capability. There is a lot of material out there on this topic but it is relevant. The point to be made is around the changing demographics of the workforce, and the fact that Millennials now make up a significant number of the workforce. They generally want faster career progression  and development opportunities.

If we want to retain outstanding talent then it’s necessary for CPOs to actively identify a strong bench of potential leaders, and to actively provide opportunities that will enable a future leadership development path to those who are capable of attaining it.

Anna del Mar, Head of Learning & Development, Future Purchasing

Big Ideas - Anna del MarWith enormous pressure on businesses to streamline their operations and find ways of driving performance in increasingly competitive environments, the need to improve capability and maximise returns from L&D investment is critical.

A leading private equity firm confirmed to us that more than 75 per cent of value creation in their portfolio of companies comes from operational performance improvement.

Procurement has a large contribution to make to any performance improvement programme and increasing capability is often a critical step achieving this.

The procurement recruitment market remains increasingly challenging, and finding people with both the technical and change management skills to create performance improvement is often likened to ‘finding a needle in a haystack’. Future Purchasing is not a recruitment agency and as such we cannot comment on the state of the recruitment market. We can however, observe the methods our clients are deploying to get the best talent.

We have seen three interesting trends:

1. We are seeing some organisations recruit from other functions, and train individuals in Procurement approaches. The behavioural skills required to drive change and implement real category management are so important and less easy to learn than procurement process skills. Whilst that can work in some cases, in practice the value of real experience in commercial scenarios cannot be underestimated.

2. Finding people who will drive real change can be made much easier by using Network Analysis. This approach lets recruiters assess the level of connectivity and impact people have across the networks in which they work. Those people who are well networked, are often well suited to change management roles, as it is their natural tendency to drive change.

3. Thirdly we see procurement organisations recruiting excellent skills from other markets, in particular central Europe. One leading CPO who has outsourced transactional activities to Poland sees this location as a real talent pool for the rest of the global team.

Food for thought!

Tell us what you think about the future of procurement recruitment on Procurious. Even although the event itself is over, there’s still time for you to get involved with the Big Ideas Summit 2016. Visit theBig Ideas Summit website, join our Procurious Group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

In the coming weeks, we’ll be sharing exclusive and unique thought leadership, Big Ideas, and discussion that will shape the future of procurement. Don’t miss out – get involved, register today.

Procurement Gives a Tweet – #BigIdeas2016 on Twitter

Likes, retweets and the #BigIdeas2016 hashtag being spread far and wide – taking a look at how the Twitter-verse reacted to Big Ideas 2016.

Twitter on #BigIdeas2016

Whether you chose to follow the Big Ideas Summit 2016 on Procurious, or via one of our other social media channels, we hope you got just as much out of the day as we did in London.

The Big Ideas Summit was positioned as a digitally-led event, enabling us to include the global procurement and supply chain community in the day, even although we couldn’t have everyone in London (as much as we wish we could!).

Following the huge success of the event on Twitter last year, we were eager to find out just how far our conversations, learnings, interactions and Ideas reached. And we couldn’t have predicted just how widespread the Big Ideas conversation went.

Once again, we’ve been overwhelmed by the response from our followers. So, thank you, and here are some figures showing just how much you helped us spread the word:

Hashtag: Our #BigIdeas2016 hashtag was picked-up and mentioned 1,500 times throughout the day.

In total, tweets relating to the event were served to a potential combined audience of over 5 million people worldwide!

This map shows where the #BigIdeas2016 hashtag was being used worldwide:

This map shows the global activity on April 21 of #BigIdeas2016
This map shows the global activity on April 21 of #BigIdeas2016

If you’re not following us already, come and find us using @procurious_ and help to continue the conversation! We’ll be continuing to share your Big Ideas, and all the key thoughts and ideas from the Summit in the coming weeks.

We’ve also put together a sample of the tweets from April 21st which mentioned the Big Ideas Summit, and used the #BigIdeas2016 hashtag. See what influencers, thought-leaders, commentators, and fellow procurement professionals made of the day’s events.

Disruptors & Cul-de-Sacs: Recapping Big Ideas 2016

Did you fall asleep or oversleep? Get caught in a meeting? Or did you just forget it was on (we hope not!)? To help you catch up, we’re recapping Big Ideas 2016 – and what a day it was!

Many Meetings - Recapping Big Ideas 2016

The team at Procurious HQ would just like to say a quick thanks to everyone who took part in the Big Ideas Summit 2016, both in London, and around the world. We were blown away by the conversation, discussion and interaction last week’s Summit, and are looking forward to sharing even more with you in the coming weeks.

Where were you last Thursday? Did you join in with the discussions and conversation online? While we prepare all our influencers’ videos and content to share soon, we’ve pulled out some of the key moments and are recapping Big Ideas 2016 just for you.

We got started early, setting the scene and introducing our early arrivals to our digital delegates and social media audience.

To provide the context for all our conversations over the course of the day, Barry Ward, Senior Procurement Brand Manager at IBM, spoke about external change, market disruptions and the three key calls to action that CPOs must take notice of.

Barry W - BIS Keynote

Nik Gowing then scared the life out of us talking about the cataclysmic potential of Unthinkable Events.

Having talked about the findings of his excellent ‘Thinking the Unthinkable‘ study, our delegates were invited to think about their unthinkables, and share them with the rest of the room.

Nik G - BIS Keynote

As everyone settled back down again after our morning interlude, Paul Markillie opened our eyes to the potential of the disruptive mega-trends that will change the way supply chains are designed and operated.

Paul talked about new materials being used in the manufacturing process, how BMW are leading the way in this field with their manufacturing process for the i3 model, and how 3D Printing is finally coming of age.

The audience were then treated to an insight of a revolution currently taking social media by storm. Elizabeth Linder used her wealth of experience to build on the concept of the Conversational Century.

Needless to say, it got people thinking, and more than a couple of senior procurement leaders in the room considering how their teams could be leveraging social media more effectively.

Elizabeth L - BIS Keynote

Probably the keynote with the most profound human and empathetic impact of the day came from Lucy Siegle. Lucy pricked our social consciences while discussing the impact that supply chains, particularly those in the fashion industry, were having on a global population.

From consumer behaviour, to the forgotten people in supply chains, Lucy got us all considering what we individually and collectively could do to make a real difference in the world.

Sustainability Panel

Lucy was joined on stage by Peter Holbrook, CEO at Social Enterprise UK, and Timo Worrall, of J&J, to discuss social and sustainable procurement.

It was a fascinating discussion and generated some great takeaways for our procurement leaders. Take a look here at some of the topics our experts discussed.

Gabe P - BIS Keynote

Fancy yourself as a Chief Spend Officer? If Gabe Perez and Coupa have their way, then procurement’s remit could expand to include all organisational spend. Here are a few top insights from his session.

Online collaboration is something all the members of our next panel know about in great detail. Martin Chilcott, founder of 2degrees, Chris Hancock, founder of Source2Fund, and our very own Procurious GM, Lisa Malone, discussed the power of online collaboration in procurement.

Read our thoughts on it here.

Next up, procurement heavyweight and ISM CEO, Tom Derry. Tom talked about how ISM are helping procurement professionals equip themselves for the future by ensuring that they have the right skills. The ISM Mastery Model has already helped train over 60,000 procurement professionals, and it certainly felt like there were a few more converts in the audience!

Tom Derry - BIS Keynote

Tom was then joined by two heavy hitters in the UK CPO recruitment space in Lucy Harding and Lee Gudgeon to discuss what skills procurement leaders need to succeed in the future.

Lucy urged the delegates to help “challenge the notion that procurement is a career cul-de-sac“, and showcasing all the best aspects of working in procurement.

Big Data, predictive analytics and forecasting will enable procurement to be more agile in a volatile environment. This was the view of Chris Sawchuk, the Hackett Group, during the final keynote of the day.

Finally, we asked some senior procurement leaders to tell us what they thought procurement’s blind spots were, and how they should be dealing with them.

There were some great, tough questions from the audience, and from our social media audience, producing some great insights for our delegates to take away.

Continuing Online

The day itself may now be over, but the debate and discussions are still being amplified online. You can see all our content from the day on the Big Ideas Summit website, plus check out all the conversation from the day on Twitter too.

You can find all our Periscope recordings of the keynotes and panels in the Big Ideas 2016 Group, as well as accessing our Digital Goodie Bag, which all our sponsors have contributed to.

Plus we’ve just started to release our first few videos from the event, in which our thought leaders shared their own Big Ideas. You can find them in the Learning hub on Procurious.

And if that’s not enough reading material for you, here’s a handy list of related stories you might have missed on Big Ideas 2016:

Procurement Sets Courageous Agenda – Big Ideas Summit 2016

The Big Ideas Summit 2016 global brainstorm lit up social media, bringing together a global community to advance discussions on ‘uber-ization’, cognitive procurement and more, as well as setting a courageous agenda for the future.

Big Ideas 2016 - Courageous Agenda

Expected to handle cataclysmic events and act with extreme agility, today’s procurement executives must be brave and bold. Indeed, Being courageous is now the defining characteristic of successful procurement leaders, according to the influencers who spoke during Procurious’ second annual Big Ideas Summit on April 21, 2016.

The unprecedented digital think-tank event connected these presenters with Procurious’ 14,000+ members, crowdsourcing everyone’s big ideas for the future of the profession.

Sponsored by Coupa, The Hackett Group, IBM, and the Institute for Supply Management® (ISM®), the event sparked vigorous discussion on Procurious.com, the leading online community for procurement/supply management professionals.

Delegates watched live footage, and posted and tweeted under the #Bigideas2016 hashtag, reaching a potential audience of over one million individuals. Among the big ideas that influencers shared:

Preparing for “Black Swans”

In a year racked by political and economic volatility, Former BBC anchor Nik Gowing challenged delegates to prepare for the next “black swans” (unknown cataclysmic events) that threaten their supply chains.

Barry Ward, Senior Brand Manager, IBM, urged them to use Cognitive Procurement technologies to predict these crises, which could throw their market caps into a downward spiral.

Uber-ization Sparks Innovation

Gabe Perez, Vice President of Strategy and Development, Coupa Software, encouraged procurement leaders to drive more innovation and value by replacing RFP processes with an Uber-like open network model.

How else can procurement leaders accelerate innovation? Christopher Sawchuk, Principal and Global Advisory Practice Leader, The Hackett Group, laid out an agility model enabled by the right culture, talent and leadership, risk forecasting and planning, automation, outsourcing, and more.

Driving Social Outcomes

Procurement leaders’ opportunity to do social good was another hot topic. Journalist Lucy Siegle, co-founder of The Green Carpet Challenge, called attention to abuses in the fashion industry supply chain, and the iconic brands who are tackling it.

Peter Holbrook, CEO of Social Enterprise UK, discussed the transformational ‘Buy Social Corporate Challenge‘, through which ten major global organisations will spend £1 billion with social enterprises by 2020.

Open and Connected

With the pervasive use of the Internet and social media, especially among the Millennial generation, leaders such as Tom Derry, CEO of ISM®, advocated a more open communications approach. Walking the talk, his organisation recently made its comprehensive Mastery Model – a blueprint for lifetime success in supply management – freely accessible over the Internet.

“The procurement profession must share, share, and share online to build our collective muscle, amplify attention to our impact, and tackle our thorniest issues together,” said Tania Seary, founder of Procurious.

Everyone’s Turn

The global brainstorm continues on Procurious, where members can view more Big Ideas Videos and articles from the speakers, submit their own videos, tweet using #BigIdeas2016 @procurious_, ask follow-up questions on the Procurious Discussions Board, claim their Digital Goodie Bags, and invite friends to participate.

Be courageous and make your voice heard today by visiting the Big Ideas Summit website.

We’ve been keeping an eye on the top headlines in procurement and supply chain this week…

More supply chain leaders are making the move to CEO

  • Supply chain leaders who have stepped up to CEO include Tim Cook of Apple, Mary Barra of General Motors and Brian Krzanich of Intel.
  • Kevin O’Marah comments that supply chain leaders have CEO-level skills including balancing risk and opportunity, fighting the near-term battle with an eye on long term strategy, and focusing on profitable growth.
  • CPOs think like engineers, but also like salespeople. Like CEOs, they’re able to communicate and influence to get the job done.

Read more at Forbes

CIPS UK: Procurement salaries are on the rise

  • Demand for procurement professionals has risen over the past 12 months driving salaries up 5 per cent, compared to the UK national average rise of 2.9 per cent.
  • 68 per cent of those surveyed had received a pay increase in the past year, compared to 61 per cent in 2015,
  • This has driven the average salary for procurement professionals up from £41,661 last year, to £44,226 in the past 12 months.

Read more at CIPS

India: Punjabi procurement agencies in wheat corruption scandal

  • Punjab’s foodgrain procurement agency officials accused of siphoning off over Rs 12,000 crore and diverting procured wheat to the black market.
  • Officials accused of covering up theft by adding water to stored wheat to increase its weight.
  • Farmers caught in the cross-fire as banks freeze payments.
  • Over 500 mandis (procurement centres) to be monitored by committee.

Read more at Indian Express

US Defence: Proposal to cut war budget to fund procurement

  • Chairman of the House Armed Services Committee, Rep. Mac Thornberry, wants to allocate an additional $18 billion to buy newequipment and maintain aging gear and facilities.
  • The draft bill would preserve the overall budget top-line of $610 billion, but bulk up base budget spending to $574 billion.
  • $18 billion would be pulled from overseas contingency operations funds.
  • Thornberry said he believed “procurement was the real way out of the readiness pit”.

Read more at Military.com

How to Introduce a Sustainable Procurement Strategy

Although the theory is well regarded, the practical aspects of introducing a sustainable procurement strategy are often overlooked.

Sustainable Procurement Strategy

This article is by Gerard Chick, Chief Knowledge Officer, Optimum Procurement Group.

About 10 years ago the UK government started taking the pursuit of sustainable procurement seriously. They established a task force of industry experts to try to define ‘sustainable procurement’, and develop appropriate standards for general deployment.

The Government’s goal was position the UK at the forefront of sustainable procurement in Europe by 2009. Their framework and recommendations have been instrumental in guiding sustainable procurement strategy, theory and practice across the globe.

What is Sustainable Procurement?

So what is this thing we call sustainable procurement? Sir Neville Simms, chair of the UK Procurement Task Force, described it as the use of procurement “…to support wider social, economic and environmental objectives, in ways that offer real long-term benefits” to organisations and the communities in which they exist.

These long-term benefits include:

  • The achievement of significant savings by focusing on a “whole life costing” methodology for procurement.
  • The incorporation of the “three Rs” (Reduce, Reuse, Recycle), to cut waste and improve the efficiency of resources.
  • The enhancement of businesses public image, by demonstrating a sustainable approach to business, and championing related environmental and social benefits.
  • The development of new markets for innovative products and services through technological advancements.
  • The improvement of management information, a focus on business and supply chain risk, and better supplier relationships.
  • Competitive advantage as a consequence of the early adoption of practices, focusing on increasingly environmentally-focussed legislation.

Developing Sustainable Procurement Practice

The UK Task Force devised a National Action Plan to inform interested organisations to adopt a sustainable procurement strategy. In 2006, Procuring the Future was published to support public and sector organisations in taking their first steps in this burgeoning area of interest.

To help you, here are the central planks of the report established as recommendations for those who wanted to develop sound, achievable, sustainable procurement practice:

  • Be a beacon: Provide clear direction for both procurement and your supply base providing consistent leadership and policy-making on sustainable procurement issues.
  • Set the standard: Fully implement existing procurement policy and standards. and ensure these are extended across all procurement activity. This will improve performance and underline expectations, including the establishment of well understood minimum standards for your suppliers.
  • Prioritise: Rationalise existing procurement standards into a single integrated procurement framework, which covers both policy relevance and appropriateness.
  • Test: Filter and select new procurement policies to ensure they are enforceable, before considering implementation.
  • Develop capability: Ensure you and your team have the requisite professional skills to support the efficient deployment of sustainable procurement.
  • Tool up: Provide the appropriate tools, training and information resources to execute these standards.
  • Be ready: Ensure you already have the appropriate budgetary mechanisms in place, and that your spending and budgeting policies facilitate your sustainable procurement strategy.
  • Be proactive: Encourage openness to innovation and look proactively for opportunities to drive social benefits through your engagement with suppliers and the wider marketplace.

There is no doubt that the UK’s lead is now being adopted elsewhere, and that the global procurement community seeks to embrace a sustainable approach with an eye on good practice coupled with other significant business rewards.

Why Procurement Agility is Key to Avoiding Obsolescence

Organisations that don’t increase their procurement agility and harness the power of new technologies face obsolescence in the next few years.

Chris Sawchuk - Agility

Chris Sawchuk, fresh from Hackett’s own Best Practice Conference, took a look at what agility means, and why procurement needs to be more agile.

The Hackett Group believes agility is the defining trait of the procurement team of today and the future. More agile functions will be better positioned to respond to complex business problems, and adapt to the fast-changing business environment in which procurement exists.

As easy as it might be to talk about being more agile, putting it into practice requires leveraging of new tools and technologies, as well as ensuring that the procurement teams have the skills they require to carry out these strategies.

Growing Business Uncertainty

In 2016, companies are expecting to see business uncertainly and risk increase, along with greater struggles to grow revenue. So the pressure to reduce costs is increasing. At the same time, procurement leaders need to balance this with other, more strategic, priorities, like becoming a better strategic business partner.

Chris discussed how a confluence of high volatility, technology-led innovation, and hyper-competitive market conditions, has accelerated the rate of change in business to unprecedented levels. Agility is the key to success in this environment.

However, for many companies, agility just hasn’t been a priority in the past. Chris made the point that because agility isn’t an area that many CPOs focus on, procurement’s maturity in the area is only low to medium, leaving the procurement teams a step behind the rest of the organisation.

It’s not about a lack of understanding. Organisations are certainly talking about agility, but procurement either isn’t aligned with this strategy, or there’s a delay in alignment. People need to have the right mindset, and up until now, procurement hasn’t had this. And as we’ve said, a more uncertain environment means that procurement needs to be more agile. It’s time for procurement to catch up.

Role of Technology

Chris went on to talk about the concepts surrounding procurement agility. These functions have strategies in place to take advantage of technologies like the Cloud, and the Internet of Things, and are using other technology, like bots, to push their organisation on.

Procurement leaders are realising that higher-quality information can help them drive greater business value. Big data has been a game changer when it comes to customer analytics, offering an unprecedented ability to quickly model massive volumes of structured and unstructured data from multiple sources. But procurement’s lack of maturity in market intelligence is a significant obstacle that must be overcome.

Becoming information-driven should be a primary focus area for procurement. The function must develop the tools and skills that will allow staff to apply market data and intelligence to decisions on spending and sourcing strategies. Creating deep, consultative working relationships with business leaders, demands that procurement bring this valuable expertise to the table.

Chris ended by outlining a path for procurement leaders to take in order to understand their department’s level of agility, and how to increase this agility in the future:

  1. Apply the agility test to your own service delivery model – determine where the gaps are and how it needs to change to support procurement’s evolving role.
  2. Take an honest inventory of procurement’s identity and culture – Is it an optimiser or an innovator? Is it operating seamlessly across cultural and geographical boundaries? Refresh recruiting, hiring and training with the idea that chaos is the new normal.
  3. Even for non-regulated businesses, risk forecasting and planning is a hallmark of agility – Evaluate your current risk management program not only for depth but speed and agility. Benchmark cycle times to strike the right balance.
  4. Invest in predictive capabilities, pilot emerging technology – Work towards expanding single function supplier networks into interconnected business communities.
  5. Consider outsourcing providers to help manage tail spend – Model the ROI on efficiency gains and compliance versus savings.

The message was clear – it’s critical for procurement to become more agile to avoid potential obsolescence in organisations. As Chris concluded, it’s not the strongest that survive, it’s not the fittest, but the most agile and adaptable.