All posts by Procurious HQ

How to Get the Most from Your Training Budget

During the financial crisis, many organisations slashed their training budget, classifying this business requirement as ‘discretionary spend’.

Rise in the Training Budget

The classification of training as ‘discretionary spend’ is certainly a topic for further investigation on another day. However, as companies began to re-emerge from the cost constraints that governed their businesses in the years following the financial crisis, we are, thankfully, seeing a marked increase in training budgets.

Forbes outlined that corporate training budgets in the US grew by 15 per cent in 2014, the steepest increase in the last seven years, to over $70 billion USD.

Many organisations have cited skills and competency gaps as the key inhibitors to corporate progress. The severe cuts to training budgets during the Global Financial Crisis recovery period have surely contributed to this problem.

Maximise Your Training Budget

However, as training budgets start to creep upwards once again, how can procurement teams ensure that they are getting most bang for their buck when it comes to corporate training?

1. Determine your budget

It’s important to start with some pragmatic goals around what your organisation is looking to get from it’s training program. Once you have done this, you can then set a budget that will allow you to achieve these goals. Setting a firm training budget and objectives also eliminates the possibility of scope slippage and increases in unplanned spend.

2. Determine where to focus

Successful training is targeted training. There is no point in delivering high-level category management training to a workforce that lacks a sound understanding of the basics. Training needs should be identified at a personal level and should make up part of a broader development and HR planning process. Once the focus areas have been determined the task of prioritising can begin.

3. Before going external, look internally

There is likely a wealth of knowledge that lies within your procurement team. Facilitating and promoting knowledge sharing sessions benefits your firm in two ways. Firstly, you save precious money for other training initiatives. Secondly, at the same time you give your team an opportunity to show their skills and expertise to their colleagues.

4. Understand the external offerings

This one seems simple, but you need to do your research. There are numerous procurement training providers out there. Some are good, others not so good. It’s important to understand what your goals are and search for the most effective and well-regarded providers to help you meet these needs.

5. Train one, teach many

This process involves sending one staff member to a training course and holding knowledge sharing or training session when they return. This way, the lessons learned by one staff member can be amplified to your entire team. It’s a lot more cost effective than sending everyone on the same course.

6. Consider the benefits of eLearning

If your training budget is tight, then you need to look for a way to maximise Return on Investment. There is a wealth of training available on online platforms such as Lynda.com and Procurious. Most of this training is free and comes from some of the top names in education. There is also a potential saving when it comes to time out of the office for employees, and on travel and expenses.

7. Measure what happened

Do you want your training budget to increase next year? The quickest way to make that happen is to prove the effectiveness of the training you undertook this year. Investing in people is the quickest route to success, but if you are unable to track and measure these improvements, promoting the benefits of training becomes a far harder task.

These are just some easy steps you can take to ensure that you are getting the most out of your budget, while still providing the required level of training for employees.

Many employees now cite development opportunities as a reason for looking for or starting a new job. It’s important that your organisation isn’t the one missing out, and by ensuring the availability of quality training, you can work to keep hold of your star players.

Test-Tube Meatballs – The Path to Sustainable Dining?

As we continue to waste obscene amounts of food and question the ethics of animal farming, some companies are taking steps to tackle the issue of sustainable dining head on.

Sustainable Dining - Meatball

This week, following an initial successful trial, Asda announced it will be selling its wonky vegetable boxes in hundreds of stores, while Memphis Meats revealed a “cultured meat” meatball at a San Francisco conference.

And, in an effort to bring the idea of sustainable dining to a global audience, The Rockefeller Foundation has launched a campaign called ‘Yieldwise’, which has endeavoured to halve the world’s food loss by 2030.

Asda’s Vegetable Boxes

In an attempt to cut waste in its supply chain, Asda are selling boxes of misshapen vegetables which would otherwise have been thrown away. The boxes contain a variety of veg including potatoes, parsnips, cucumbers, peppers and leeks and are sold at a cheaper price than their regular-shaped counterparts. Currently, 20 to 40 per cent of fruit and veg produced by UK farmers ends up wasted.

In addition to these boxes, Asda has “relaxed specifications” on regulations for carrots and sweet potatoes. This will result in a staggering extra 640 tonnes appearing on our shelves.

The UK alone wastes approximately 15 million tonnes of food each year. Despite households being responsible for around 50 per cent of this, supermarkets can still make a huge difference by stocking our shelves with more diverse produce, and thus aiding farmers too.

Asda’s move, campaigned for by chef Jamie Oliver, is certainly a promising start and with any luck will continue to be well received by customers. 550 stores will receive the vegetable boxes from March, as Oliver continues to try and make “ugly produce the norm.”

Are supermarkets doing enough to make their supply chains more sustainable? Definitely not. But it’s a move in the right direction which will hopefully inspire supermarkets worldwide.

At the end of the day, does the size and shape of your vegetables really matter?

Memphis Meats

Next on the sustainable dining menu is a new method for meat production unveiled in San Francisco last week. Memphis Meats have created a new kind of farming which produces meat without all the drawbacks such as environmental degradation. The company presented, cooked, and served the very first test-tube meatball, complete on a bed of pasta, a process you can watch here.

They claim the process is “healthier, safer, and more sustainable than conventional animal agriculture.” As well as omitting the need to farm livestock, which CEO Uma Valeti believes will be a practice made “unthinkable” by the new process, cultured meat such as this uses 90 per cent fewer CO2 emissions than traditional agricultural methods.

The meat will also be free of antibiotics and other contaminants often found in the meat we currently eat and will cost less energy to produce (23 calories needed per one calorie produced vs. 3 calories needed per one calorie produced).

It certainly seems like a no brainer, even if the idea of lab-grown meat is a little unnerving at first. Valeti believes they can have their products on supermarket shelves within the next five years, so it might not be long until you can try it for yourself!

The Yieldwise Campaign

The Yieldwise Campaign has been launched by the Rockefeller foundation to cut waste in supply chains. It has vowed to cut the world’s food loss by 50 per cent in the next fifteen years.

The initiative will start in Africa, where the loss of fruit and veg is most significant, and will help farmers gain access to the latest and best technologies, including better storage options, and drying to increase shelf life. Cutting post harvest lost by half will yield enough food to feed 1 billion people.

As well as educating suppliers, Yieldwise will also be working with, and challenging, global businesses to encourage them to address and account for the amount of waste within their supply chain. The global economy wastes $990 billion each year on food.

Hopefully this programme, and the work campaigners like Jamie Oliver are doing, can get more people on the sustainable dining bandwagon and help to significantly reduce this figure in the future

We’ve been searching the Internet high and low for the procurement and supply chain headlines. Here are some of the top ones…

UK Procurement Boycotts

  • The UK Government are banning public organisation and council boycotts of Israeli goods because the practice undermines “community cohesion” and Britain’s “international security”.
  • Councils across the UK have been putting pressure on suppliers to cease business with the country because of Israel’s occupation of the Palestinian West Bank and its embargo of Hamas-controlled Gaza.
  • All countries that have signed up to the World Trade Organisation Government Procurement Agreement are required to treat suppliers equally, which is why Matthew Hancock has described the boycotts as “divisive.”
  • Labour, however, has criticised the new anti-boycotts policy as an “attack on democracy”, while the Campaign Against the Arms Trade said it was an attack on “the rights of all local people and campaign groups across England”.

Read more at Local Gov and The Independent

Procurement to Help Fight Zika

  • The global Zika outbreak is now affecting more than 3m people in 33 countries.
  • The virus is linked to microcephaly, a birth defect where a baby’s head is smaller than normal, and, more recently, to the neurological disorder Guillain-Barré syndrome.
  • Governments and businesses are aiming to combat the spread of Zika by investing in nets, fumigators, insect repellents and genetically modified mosquitoes.
  • Procuring mosquito nets has been made easier thanks to a consortium including the Department for International Development (DFID) and the Global Fund to Fight Aids, TB and Malaria (GFATM), who simplified the tender process for mosquito nets, saving around £86.1 million.

Read more at Supply Management

Asda Joins European Marketing Distribution

  • Asda have been in the news again this week after joining the European Marketing Distribution.
  • They become the fifteenth member of the group of national food and non-food retailers in 14 countries across the continent.
  • EMD pools the collective buying power of 250 supermarket chains to improve their competitiveness.
  • According to EMD, Asda will be able to “increase its buying power, generating significant savings from its supply chain which it can reinvest in lowering prices, further increasing product quality”.

Read more at Supply Management

EMEA Region Cargo Theft at 5 Year High

  • The reporting of cargo theft and crimes in the EMEA region reached a five-year high last year, according to the Transported Asset Protection Association (TAPA)
  • 1,515 freight thefts were reported during 2015 to the Association, a 37.4 per cent increase on the figures for 2014
  • The TAPA report suggests that this reflects the growing awareness of cargo crime among law enforcement agencies in the EMEA region
  • TAPA EMEA chairman, Thorsten Neumann, said that this may still only represent a low percentage of the overall cargo crime, as many authorities still report this as commercial property or vehicle crime

Read more at Arabian Supply Chain

Procurious eLearning: Upskill – Any Time, Any Where

eLearning is always better when it’s accompanied by a cheeky glass of wine. We have the tips you need to fit personal development into your busy life.

eLearning with wine

We live in a highly connected world, on the go 24/7 – whether it is spending time at work, having fun with family and friends, getting fit and healthy, or trying to fit in some much needed relaxation time. So the chances are high that personal development and doing training courses outside of work time is close to the bottom of your priority list.

It’s hard to find time to fit in training, but if you’re committed and want to, you can get your procurement training in the comfort of your own home. There are a huge number of eLearning courses, training modules, videos and podcasts that can be found online.

These resources are often created by established universities (think MIT, Harvard and Yale) and other subject matter experts, so you know that the quality is going to be high. And what’s more, the majority of them are free.

Online at any Time

The transition of training courses and professional development from classroom to online has followed much the same path as the way many of us now shop for clothes.

Online clothes shopping was virtually unheard of before the launch of Net-a-Porter in the year 2000. Before then, both men and women were far more likely to buy clothes that they had physically held and tried on in store. Net-a-Porter is now the world’s largest online luxury retailer, valued at over $2.5 billion.

CEO Alison Loehnis, who took over from founder Natalie Massinet in 2015, has been quoted as saying that women tend to order the majority of their clothes during the “wine o’clock” period, that time of day they have a bit of downtime away from work and family.

And there’s no reason why eLearning can’t fill that time of day too. Plus, online learning is much cheaper, and a video on supply chain management is less likely to cause feelings of buyer’s remorse the following morning!

Pick Your Resource

Once you’ve decided what course you want to do, it’s just a matter of finding the online resource for you. If you’re thinking about upping your procurement and supply chain knowledge, where better to look than Procurious.

Procurious has over 80 eLearning resources, including eLearning modules, podcasts and thought leadership videos, all of which are completely free for members.

Want to learn about procurement from the very start? Try the ‘Introduction to Procurement’ series, created using The Faculty’s acclaimed ‘Pathways to Procurement’ program. Check out this sample video on Social Procurement:

Get all the thought leadership and ideas from Procurious’ Big Ideas Summit 2015, from the major risks to the profession, to the future of procurement networking.

Whatever you are looking for, there is something for you. Procurious’ bite-sized training modules have been designed to be short enough to allow you to complete them during your lunch break, while our other resources are the perfect length to enjoy with a glass of wine in the evening. You know, instead of internet shopping…

Higher Employment Costs Threaten UK Jobs Figures

Rising employment costs in the UK look set to temper the positive mood around the latest unemployment figures in the country.

Rising Employment Costs

The number of people out of work in the UK fell by 60,000 for the period of October to December 2015, maintaining the decade-low unemployment rate of 5.1 per cent. However, wage growth in the same period was only 2 per cent, lower than its peak during 2015.

Although more than 31.4 million people are in work in the UK, the highest figure since 1971, this has not translated into expected wage rises, despite unemployment figures being their lowest since before the global financial crisis.

Governor of the Bank of England, Mark Carney, has previously said that inflation rates are likely to remain low until global economic growth has picked up, and other price pressures, such as wage levels, are alleviated.

Global Story

A similar pattern in employment figures has also been reported around the world. In the US, unemployment figures decreased to 4.9 per cent, in spite of a sharp decline in the number of jobs being created during the period.

There was a similar story in the Eurozone, with unemployment levels dropping to their lowest level for four years. According to Eurostat, the unemployment rate across the 19 countries in the Eurozone decreased from 10.5 per cent to 10.4 per cent in November 2015.

“Bright Spot”

However, the picture is not entirely rosy on the jobs front. Experts in the UK warned that new government policies coming into force in 2016 could raise employment costs for businesses. This, in turn, could have a major impact on the number of jobs being created.

The Institute of Directors said that the UK’s strong record on employment remained a “bright spot” in an otherwise turbulent global economy. However, they also argued that schemes such as pension auto-enrolment could raise employment costs, ultimately pricing low-skilled workers out of the jobs market.

James Sproule, Chief Economist at the IoD, said: “With pension auto-enrolment kicking in for many small firms this year, at the same time as the apprenticeship levy – essentially a payroll tax – and the National Living Wage, the cost of employing people is shooting up.

“How businesses will respond to these policies remains open to debate, but cumulatively, they are set to cost firms billions and could lead to low-skilled workers being priced out of the job market. The government must be aware of this, and resist any further moves which make it even more expensive to create jobs.”

Stalling Momentum

The IoD’s warning about rising employment costs comes at a time when a number of organisations are already cutting jobs. Over the next few months, both the UK and Europe are set for tens of thousands of job losses across virtually every sector.

Some of the major firms include:

  • Canadian aerospace giant Bombardier is cutting 7,000 jobs globally over the next two years.
  • Virgin Media plans to cut 900 jobs from its UK workforce by 2017.
  • Asda is cutting 200 jobs at its head office in Leeds.
  • Lloyds Banking Group is cutting a net 1,585 jobs and closing 29 branches across Britain.
  • BP is laying off 7,000 more people.

With the global economy already experiencing a slowdown, there is a high chance that these job losses will not be the last. What remains to be seen is how the new UK policies will impact the employment figures one way or the other.

It’s Not About Procurement – It’s About Problem Solving

Sometimes a different approach to problem solving is required. This is what CityMart are doing with public procurement groups in cities around the world.

Problem Solving in Procurement

Last month, Procurious reported on a new public procurement initiative in Barcelona, and the organisation at the heart of it – CityMart. The company’s progress has been rapid and it is now setting its sights on its next major challenge.

CityMart’s modus operandi is to encourage cities and public servants to readdress the way they approach public procurement processes. At the root of their model is a commitment to involve the community in the civic decisions that impact the city.

CityMart’s founder and CEO, Sascha Haslemayer, stresses that for too long procurement has been telling its suppliers exactly what it wants, rather than taking a problem solving approach, and working collaboratively with suppliers and the broader community to come up with a response.

Stop Specifying

Haselmayer sums this up brilliantly with an anecdote about the different way two cities approached improving the mobility of their blind residents.

St. Paul in Minnesota spent $4.5 million on speaking traffic lights. Despite being designed and developed by public servants, the initiative was deemed by advocates for the blind as largely ineffective.

Stockholm spent approximately the same amount of money, but went to the market with the issue. This open approach (the city essentially said, “we have a problem around how blind people move across Stockholm”) led to the formation of a project team, which included people from both the blind and technology communities.

This group collectively defined the problem, something that St. Paul public servants elected to do themselves. They then got to work developing a solution that would solve the challenges of the city’s blind people. Stockholm ended up piloting a mobile navigation aid that allowed the city’s blind residents far greater independence in their daily lives.

CityMart Take on the Big Apple

CityMart has a solid track record of crowdsourcing truly innovative solutions to civic problems. You can read more about them on the company’s website.

Success in it’s hometown, Barcelona, as well as in large cities overseas like London and Moscow, has brought CityMart’s innovative problem solving approach into the spotlight. The firm now aims to take on the biggest challenge of all – opening an office in New York City.

CityMart is working with New York mayor, Bill de Blasio, and his Chief Technology Officer, Minerva Tantoco, as they review the city’s procurement processes. A recent initiative to improve Internet connectivity in the city, including turning payphones into Wi-Fi hotspots, proved hugely successful.

The project garnered 69 responses from 52 sources in six different countries, many of whom were much smaller than the suppliers that city hall would have traditionally dealt with.

Jeff Merritt, Director of Innovation at the Mayor’s Office of Technology and Innovation, said that he hoped engaging with CityMart would help the city find solutions or providers it would have otherwise not known about.

“When [people] look at a procurement, they think that the actual RFP is sort of the beginning of the process — and in some ways, by that point in time, a lot of the work has already happened. So the early stage is really working with agencies to identify the tough problems, the problems where they don’t know the solution that’s out there,” he said.

“Our goal isn’t to turn every single procurement into a call for innovation. Rather, it is to identify the areas that we think perhaps a traditional RFP might not be the best way to go, and work in partnership with agencies to really flesh out those problems.”

Merritt concluded, “When we put out a solicitation, our partners in the private, non-profit, and academic sectors can really understand what is the issue that government is trying to solve, and what are their ideas and proposals for addressing it.”

We’ll leave you with a quote from Haselmayer. “It’s not about procurement, it’s about problem solving”. Perhaps there’s something we could all take from that.

Maverick Purchasing & KPIs – Your Big Discussions

There’s nothing like a good procurement discussion to get the blood flowing! Themes getting our community this month included Maverick Purchasing and KPIs.

Maverick Purchasing

On our agenda this time, we’re looking at the best ways of dealing with maverick purchasing, and what matters more to procurement’s stakeholders, speed of delivery vs. other product factors. And to top it off, no procurement discussion round-up would be complete without a look at that classic – KPIs.

What do you think is the best way to eradicate “maverick purchasing”?

Maverick purchasing is a topic that gets a lot of column inches, but that organisations have had difficulty stamping out completely. Maverick purchasing can be defined as “when an employee purchases goods, parts or materials for a project, going outside of the accepted buying channels of their organisation”.

The most popular answers focused on the two key issues that underline the ‘why’ of maverick purchasing – procurement’s relationship with the business, and the systems in place for purchasing and contract management.

Building relationships with business stakeholders, and knowing their requirements at the outset, could help to minimise maverick purchasing. As well as this, being able to show the value that procurement can bring to the table, and ensuring an understanding of procurement’s role, were also seen as critical.

It’s also important to remember the technological and systems argument. Within procurement, the likely cause of maverick spend was seen to be difficult to use systems. By making systems user-friendly, and putting the required approvals in place, it can help to minimise out of process practices.

It comes down to handling both people and technology, and not, as one answer said, using a taser. Although, for those of us who have seen this while working in procurement, a taser might actually seem to be the right option…!

To what extent would you agree with the following statement: the shorter the average time to procure, the happier the stakeholders?

Most procurement professionals will heard the question, “when will it arrive?” at some point. The focus in this question was whether or not speed was the most important factor for business stakeholders.

The general consensus from the community was that the shorter the time taken to supply against a requirement, the happier the stakeholder was going to be. However, it was also voiced that procurement needed to be involved much earlier in the process than it normally is, in order to supply goods and service in good time.

The idea that procurement needed to be involved with, or understand, the planning cycles was another piece of the puzzle that is often missing. Having all contracts in a single repository, and being involved in specification discussions before parts were agreed, were two of the solutions put forward to allow procurement to do this.

However, the traditional idea that procurement can only offer two of speed, cost and quality in most situations. The lack of leverage in sourcing activities means that one will be compromised, but stakeholders will still be expecting all three.

Being able to do all three is where procurement can weave “magic”, or otherwise, the function needs to get better at saying no and pushing back.

Procurement KPIs – What do you think are 3 key metrics (KPI’s) to evaluate procurement function?; KPIs other than cost saving?

Key Performance Indicators (KPIs) or metrics for individuals and procurement departments are high on the agenda at this time of year. Ensuring that your team is measured, both internally and externally, against the right metrics is key to both good data and success.

When asked about the 3 key metrics to evaluate the procurement function, the community’s answers didn’t spring many surprises. However, in nearly a third of the answers, savings generated were rated as one of the top KPIs. Although other answers highlighted value as a metric, it appeared fewer times than total spend managed, and shows that even now, procurement is still widely viewed as a savings generating function.

It also shows that, despite the profession looking to move towards value generation metrics, many procurement teams are still measured on this.

Other key KPIs highlighted were:

  • Percentage of on time delivery
  • Total Spend
  • Customer satisfaction
  • Stock Turnover
  • Quality
  • Supplier Consolidation
  • Supply Chain Security & Risk
  • Customer of Choice
  • Procurement Engagement
  • Sustainability
  • Ethics

On the other side of the debate was the question of KPIs other than cost savings, particularly in relation to Capital Investments for Projects. Suggested approaches involved the use of a Balanced Scorecard, including cost, quality, delivery, inventory and sustainability amongst others, and with a focus on reduction of Total Cost of Ownership.

What was seen as important in the answers was communication with internal stakeholders to understand their needs, and let them understand what procurement can offer. Within the Capital Projects environment, the feeling was that this was more about generating value for internal stakeholders, rather than focusing solely on cost.

Do you agree with the answers? If you want to add anything, join in the Discussions on Procurious, where you can find a variety of other questions, or start your own.

Understanding the Alternatives to Temporary Labour

The hiring and management of temporary labour can be an expensive business. However, there are alternative ways to bolster your workforce, explains Jon Milton, Business Development Director at Comensura.

Temporary Labour

Temporary labour comes in many forms, sometimes to cover permanent workers absent from work, or to fulfil short-term demand. In each case, the hiring manager’s default position will be to hire this resource from an agency. However, just because the need is temporary and use of an agency has always been a sensible approach in the past, doesn’t mean that it’s the way it always needs to be done.

In certain situations there can be more cost effective and flexible alternatives to temporary labour, to supplement the use of agency workers. Here we highlight various options for consideration.

Reassigning a permanent worker

There may be one or more existing permanent employees who can be reassigned, seconded or trained to provide short-term cover. If it’s an important role, some businesses have permanent workers trained to step up when the need arises and their role is then back-filled with a temporary worker.

Your business may also have a number of employees currently facing redeployment or redundancy that may be also seeking new opportunities. Alternatively, the demand from across your business may be stable and large enough to justify and sustain an increase in the number of permanent workers.

Fixed term contracts

The demand for temporary workers may be stable and consistent for a set period of time in the year. In this scenario, recruiting employees to the business on fixed-term contracts may be a viable alternative to temporary labour.

Direct workers

Your organisation may be able to create a database of people who are ready-to-work on a temporary basis when called upon. This approach can be referred to as the ‘staff bank’, ‘internal resourcing pool’ or ‘benched resource.’ It typically uses an internal agency approach and contracts workers to temporary or flexible roles.

This can work well in areas of your business where your need for temporary labour is low but with spikes in demand throughout the year. From a worker perspective it can be a beneficial way to retain the skills and experience of older, possibly retired workers, who want to continue working on a temporary, part-time or flexible basis.

Limited Company Contractors

Another alternative is to contract with workers who set themselves up as a limited company. This works best for highly skilled or project-led assignments where a defined scope of needs can be set and the worker measured and paid against milestones and deliverables, rather than salaried costs. It is important to note that in some sectors, such as IT, the best qualified and skilled workers may only work on a limited company basis.

Welfare to work

Your business may be able to work with Jobcentre Plus and welfare-to-work agencies to offer employment opportunities to long-term unemployed people. These agencies focus on getting candidates job-ready, typically by assessing the specific skills you require and then providing potential candidates with the relevant training and support. This approach can be a useful way to fill entry-level positions.

Apprenticeships

If your business has an apprenticeship programme you may be able to assign the apprentice to a relevant task.

Use of agencies remains a sure fire way of meeting significant temporary staffing demand but it doesn’t have to be your only strategy. These alternative approaches can help remove or reduce demand for pure temporary labour too. The key is to plan for your workforce requirements with an open-mind and evaluate the merits of how and when you use the non-permanent workforce.

How Do You Survive a Zombie Apocalypse? Ask Amazon

Amazon has been keeping us on our toes throughout the last fortnight. There have been rumours about their intention to open hundreds of bookstores, not to mention the white bald eagles that are being trained to keep control of the company’s drone deliveries.

Amazon in the News

However, I’m not sure any of us could have predicted that the next Amazon news story to hit headlines would entail self-preservation in the event of a zombie apocalypse.

The retail giant also plans to build a global shipping business to rival those of UPS and Fedex.

Amazon Terms of Service

Amazon made an intriguing alteration to its terms of service this week following the release of its new Lumberyard Materials development tools.

Lumberyard is a game engine and development environment designed for professional developers. It supports the development of high-quality, cross-platform games, which can be run on Amazon’s AWS servers.

Clause 57.10 of the organisation’s Terms of Service, which refers to Lumberyard, states that the Materials tools should not be used with systems such as nuclear facilities, manned spacecraft, or military use in connection with live combat.

Fortunately, there is one, potentially useful, exception. The clause states that “this restriction will not apply in the event of the occurrence of a widespread viral infection, transmitted via bites or contact with bodily fluids, that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue, and is likely to result in the fall of organised civilisation.”

So, if you think that you can utilise a game engine to your advantage in the event of a zombie apocalypse, you’re in luck. But, as The Guardian rightly points out, we’ve learnt from Shaun of the Dead that a cricket bat to the head works best of all.

Global Shipping Business

Bloomberg News revealed this week that Amazon plans to expand its ‘Fulfilment By Amazon’ service to directly rival FedEx and UPS, a claim that the company has repeatedly denied in the past.

The service, which could potentially launch a global shipping and logistics operation later this year has been named “Dragon Boat”.

Bloomberg claims that there are documents detailing Dragon Boat as a “revolutionary system that will automate the entire international supply chain, and eliminate much of the legacy waste associated with document handling and freight booking.”

‘Fulfilment By Amazon’ currently oversees storage, packing and shipping for third-party merchants on the site. Dragon Boat, however will enable these sellers to use Amazon to deliver products from warehouse to customer.

There are also plans to remove further intermediaries from the shipping process, theoretically simplifying things and further reducing prices in Amazon’s supply chain.

This move will put Amazon in the position to rival Chinese e-commerce powerhouse Alibaba, as well as Fedex and UPS.

Colin Sebastian from Baird Capital commented, “Amazon may be the only company with the fulfilment/distribution sophistication and scale to compete effectively with incumbent service providers [UPS, FedEx].” His thoughts reinforce what most of us already believe, if anyone can do it, Amazon can.

We’ve been keeping up to date with the other top procurement news stories from the past week. Check out what’s been going on.

Deloitte Global CPO Survey 2016

  • Almost two-thirds of CPOs do not believe their teams have the skills and capabilities to deliver their procurement strategy according to Deloitte’s 2016 CPO survey.
  • The survey profiles the views of senior procurement leaders from around the world on key issues facing the procurement function.
  • The survey, involving 324 responses from 33 countries, also found 45 per cent of CPOs reported a rise in procurement related risk, such as volatility in emerging markets and geopolitical uncertainty affecting supply chains.
  • CPOs are primarily focusing on consolidating spend, increasing supplier collaboration and restructuring existing supplier relationships to deliver value over the coming year, the survey found.

Read more at Supply Management and check out the full CPO Survey 2016 here

Lord Carter Review Promotes Procurement Transformation

  • A report on Productivity in the NHS, published by the UK Department of Health, has highlighted the need for procurement transformation across NHS Trusts.
  • Lord Carter, the report’s author, that although some trusts are doing well, others “still don’t know what they buy, how much they buy and what they pay for goods and services”.
  • The report recommends the implementation of a new Purchasing Price Index (PPI) for all NHS Trusts in England from April 2016
  • It also recommends that Trusts collaborate more to “aggregate sourcing work and reduce variety”

Read more at Future Purchasing

Pentagon Reduces Aviation Procurement Budget

  • The Pentagon has reduced aviation procurement by 7.2 per cent to $45.3 billion in its fiscal year 2017 budget submission.
  • This lower funding level buys eight fewer fixed-wing aircraft, and 35 fewer rotorcraft for the US Army and Navy.
  • The budget has been designed to offset perceived threats by Russia, China, Iran, North Korea and global terrorist organisations that are running amok in Iraq, Syria and now Libya.
  • Deputy Secretary of Defence, Robert Work, says in crafting the budget, the Pentagon focused on shape, not size, and modernisation versus readiness for today’s conflicts.

Read more at Flight Global

The ICC Academy Announces Speakers

  • The International Chamber of Commerce (ICC) Academy has announced its keynote speaker lineup for the 4th annual Supply Chain Finance Summit in Singapore on 9-10 March.
  • The Summit will gather over 50 speakers and 150 participants from across Asia, and will focus on topics such as supply chain financing in Asia, and the global growth of supply chain finance.
  • This year’s speaker lineup features leading players and industry experts from some of the largest organisations in the region, including ANZ and Standard Chartered Bank.
  • The ICC have said that the speakers have been selected to reflect “the progress of the industry, and provide unique insights into the trends, opportunities, and challenges affecting supply chain finance”.

Read more at ICC

Make 2016 Your Year for Personal Development

Are you someone who always needs to be learning something new? Or do you need to find the right personal development topic before your motivation kicks in?

Personal-Development

Whichever group you fall into, you should always be on the look out for new opportunities for personal development. Whether it’s a course on bike maintenance, learning how to do that bit of DIY that’s been sitting since last Christmas or expanding your knowledge in your professional field.

The good news is that Procurious has the answer for you (well for expanding your professional knowledge at least…), with over 80 free eLearning modules on a variety of topics in the procurement and supply chain space.

Getting Started

And where better to start than at the beginning? If you are just starting out in procurement, or are one of the many procurement and supply chain students at universities around the world, Procurious’ ‘Introduction to Procurement’ series is the one for you.

The series starts with “What is Procurement?“, running through the important foundations of procurement knowledge in stakeholder management, negotiation, specifications and much more.

And if you think you know it all already, why not take the chance to refresh your skills? Or, as many Procurious members have done in the past, share it with suppliers or stakeholders to clue them in about the function’s role.

Or, even better, share it with friends and family who, even after hundreds of explanations, still aren’t sure what it is you do for a living!

Whatever you choose to do, make sure you are looking for opportunities for personal development and learning.

Stay tuned in the coming weeks as we highlight more of our great learning content!

Like this? Join Procurious for FREE and meet like-minded procurement professionals from across the world.

3 Key Steps to Effectively Improve Manufacturing Operations

As the name suggests, reducing manufacturing complexity is no simple task. Success in this area requires careful planning, analysis and implementation.

Manufacturing Operations

Simplifying manufacturing operations should always be done in a way that doesn’t adversely impact product performance or customer preferences. Top performing organisations typically take the following three key steps to identify opportunities to reduce complexity:

  1. Analyse drivers of complexity and key market trends

Higher customer expectations for customisation and service have increased manufacturing complexity. These expectations demand greater flexibility in operations, but can also improve overall revenue opportunities.

However, increasing complexity has also been highlighted as the cause of  significant cost increases. These cost increases can be attributed to lower performance levels, or increased inventories of materials or finished goods.

In order to reduce complexity, it is important for organisations to understand the key market trends that are driving demand. Once trends are understood, they can then be analysed in order to develop new manufacturing strategies.

  1. Examine best practices of top performing organisations

Understanding what top performing organisations are doing is a key way to establish industry best practice. However, best practice should typically act as a guideline rather than a hard rule. Any strategy for complexity reduction should be tailored to fit an individual organisation. What works for one organisation may not necessarily work for another.

It is often difficult to replicate the best practices of top performing organisations, as best practice will be linked to a number of factors. However, by using this as a guideline, organisations will be able to identify where changes can be made.

Data on best practice is not always readily available. You can use the Hackett Group’s repository of key best practices is a good place to start gathering data. This will ultimately allow you to carry out your analysis and plan new strategies.

  1. Benchmarking against Key Performance Indicators

Many potential metrics and KPIs are available to measure the performance of an organisation’s manufacturing complexity. Using these KPIs will allow organisations to benchmark themselves against industry leaders.

Of all the available metrics, there are several that The Hackett Group recommends using to indicate the overall effectiveness of complexity reduction initiatives:

  1. Production Rate as a percentage of Maximum Capacity
  2. Total Inventory Turns (Raw, Work in Process (WIP), Finished Goods)
  3. Finished-Product First-pass Quality Yield
  4. Scrap and rework costs as a percentage of sales (see below)

Manufacturing Complexity Reduction_Slide 6

As with all metrics, it’s important to be measuring the right things. The SMART (Specific, Measurable, Achievable, Relevant, Timely) rule will also help you ensure that good data is output from them. You should be looking to limit the number of KPIs to around 6 or 7.

The Hackett Group’s Perspective

Reducing manufacturing complexity is a crucial element of a successful supply chain. Through reducing complexity, organisations will typically see a number of improvements. These include:

  • Reduced overall product cost
  • Stock Keeping Unit rationalisation
  • Improved product performance
  • Reduced product development cycle
  • More motivated and specialised workforce
  • Increased manufacturing flexibility
  • Better product planning and scheduling
  • Improved supplier relationships and performance

Reducing manufacturing complexity is a crucial performance indicator in itself for the supply chain. By driving changes across operations, organisations will start to see improvements in their supply chains, and will move towards being a top performing organisation.

If you want to learn more about trends, best practices and metrics you can use in manufacturing complexity reduction, download the Hackett Group Supply Chain Insight Report here.

Marcos Cominasa is a Director in The Hackett Group’s Strategy and Business Transformation Practice. He has over 18 years of management consulting experience, and specialises in improving supply chain operations for Fortune 500 companies.