All posts by Procurious HQ

Brexit Presents Export Opportunities for UK Business

Could an increase in export opportunities be a silver lining among the Brexit clouds for UK businesses?

Much of the reporting in the business world on the Brexit has focused on the potential negative impacts. However, there could be benefits for British businesses, including SMEs, in an increase in exports opportunities.

The weakening of the pound is believed to be a contributing factor to this growth. This has made British products and services cheaper overseas. As a result it’s provided British manufacturing with an opportunity to compete in foreign markets.

UK “Needs to Improve” in Export Market

The Flash UK Purchase Managers Index (PMI) has revealed export business rose for the second straight month, and to the greatest extent in two years.

Additionally, a recent survey by the Federation of Small Businesses suggested that the number of small businesses exporting could double, due to the drop in sterling value. This could potentially help to cushion the economy from the uncertainty of leaving the EU.

However, it’s not all positive. Despite the potential boost for exports from the drop in the value of sterling, Britain is still significantly behind the government target of £1 trillion of exports by 2020.

The recently appointed Trade and Investment Minister, Lord Price CVO, stressed: “The UK punches well below its weight in the export market and badly needs to improve.”

Increasing Overseas Tenders

Procurious caught up with Stuart Brocklehurst, CEO of Applegate, to ask him what the key factors are in export decisions. Since the result of the EU referendum, Applegate PRO, has experienced a 20 percent increase in overseas tender requests.

Brocklehurst commented, “With concerns over domestic demand, exports offer a great diversification of revenue for UK businesses. The decline in sterling means our goods and services are around a tenth cheaper for overseas buyers. This presents a significant opportunity for UK businesses.”

It’s worth looking at the situation from 2 sides when it comes to procurement – UK and non-UK based. For non-UK based procurement, the UK has become a lower-cost manufacturing option. There is a significant opportunity to make savings, as the goods and services in the UK are now 10 per cent cheaper.

Inside the UK, however, it’s a different story for procurement. As the prices fall in the UK, many procurement organisations will be faced with a tricky decision. Should they re-shore their supply chain or not. For example, manufacturing businesses currently planning to make capital investment priced in US dollars have seen the real-cost price increase by 10 per cent.

There’s also a question of currency stability. The pound may drop further in the coming months, so what can procurement do? Brocklehurst stated, “Companies can either mitigate this risk by purchasing derivatives, or purchase locally in order to avoid the volatility altogether.”

SMEs Uncertain on Exports

One interesting point that Stuart Brocklehurst makes comes in contrast to the positive note sounded by the Federation of Small Businesses. Brocklehurst argues that, although there has been a strong increase in overseas orders and export opportunities, many SMEs still don’t want to get involved in exports.

“When it comes to SMEs and exports, nothing is guaranteed. Some SMEs don’t want to get involved in exports, particularly where there are concerns about red tape. They’re hesitant to proceed where there are administration overheads, as they’re worried about getting it wrong,” says Brocklehurst.

Brocklehurst also believes that if there is a UK slowdown, this will be a benefit for businesses exploring export opportunities. Nevertheless, it shouldn’t be taken as a certainty that exports will completely offset the effect of falling currencies on purchases, and a potential economic slowdown.

In 2008, at the height of the Global Financial Crisis, many believed that the export market would help the UK economy. However, due to recessions in many other countries, demand for UK exports actually weakened, and the recovery took longer than expected.

Realising the Opportunities

Whatever the UK economy looks like in the coming months, it’s clear that the Brexit isn’t all bad. It’s also undeniable that it has presented clear export opportunities for UK businesses.

However, many companies remain uninterested in exporting, even with the potential revenue and business growth opportunities. It’s down to business leaders to help drive this strategy through.

Equally, for procurement, it’s time to decide how sourcing will look in the coming months, and ultimately when the UK leaves the EU.

Applegate PRO is the UK’s foremost sourcing database, helping to link buyers and suppliers, and streamline the eProcurement process.

The platform is being utilised by a wide range of companies across the world, including Airbus, SpaceX, General Dynamics, NATO headquarters and The White House.

US Intelligence to Aid Supply Chains Against Cyber Attacks

A new US Intelligence campaign is set to help supply chains defend themselves against cyber attacks.

supimol kumying/Shutterstock.com

As businesses and supply chains grow increasingly more global, inevitably risk increases at the same rate. One of the most high profile risks for supply chains currently is are cyber attacks and hacking.

With each passing year, the cyber attacks get bigger. In June, the Democratic National Committee was breached by Russian hackers, and 20,000 e-mails, linked to Hillary Clinton’s Presidential campaign, were posted online.

In March, the Bangladesh Federal Reserve lost $100 million to hackers, with only $20 million recovered so far. Over 4,700 cyber attacks have been reported in the US alone since 2005, impacting hundreds of millions of people.

However, organisations with cross-border supply chains are about to get a helping hand in the fight against cyber attacks.

Cyber Attacks & Vulnerable Supply Chains

The National Counterintelligence and Security Centre will provide sensitive information, including classified threat reports, to companies about the risks of hacking in their supply chains.

The move is part of an effort to increase responsibility and education for organisations for supply chain security. It has previously been highlighted that there is a lack of understanding in US companies that having international suppliers makes supply chains vulnerable to cyber attacks.

“The supply chain threat is one that’s the least talked about but is the easiest to manipulate for all aspects of our daily lives,” said NCSC Director, William Evanina.

Domestic & Foreign Threats

The NCSC campaign will initially focus on supply chains linked to both China and Russia, the alleged sources of previous hacks. However, it will also be aimed at domestic hackers, criminal enterprises, and even disaffected former employees.

The campaign will prioritise telecommunications, energy and financial services corporations first. This is in part due to the nature of the business, but also their strategic importance to US national security.

And as well as cyber attacks, the NSCS will also be providing information and advice on so-called “hands on” crimes, such as stealing of classified information, or destruction of sensitive equipment.

Procurement Must “Play Full Part”

As part of the efforts to reduce cyber attacks, the key role of procurement has been highlighted. Evanina emphasised that procurement need to be fully integrated with other areas of the organisation to help mitigate risk.

He highlighted the role of ongoing due diligence to support initial investment in cyber security software and programmes. This would be carried out by procurement, but in partnership with the other areas of the business.

Evanina expands on the role of procurement in this video. He states that research into suppliers, and their own supply chains is critical in mitigating the risk.

Wider World

Although the work to be carried out as part of the campaign is primarily aimed at US companies, the applicability is there for all global supply chains.

Many US-based companies will purchase goods from overseas suppliers, and at the same time there will be companies purchasing from US suppliers. The inter-connected nature of the supply chain, as well as increased connectivity across technological platforms, increases the risk to organisations.

Carrying out due diligence on suppliers, knowing the full supply chain, and, perhaps most importantly, ensuring procurement plays a full part in organisational security, is a way to help mitigate this risk.

Will your organisation be taking advantage of the advice from the NCSC? Will you be impacted by any changes that take place? Let us know in the comments below.

Want to know what’s happening in the world of procurement and supply chain? Well, we’ve picked out the key headlines from the past week to keep you up to date…

Verisk Maplecroft Releases Modern Slavery Index
  • Global Risk Analysts, Verisk Maplecroft, have released their latest supply chain modern slavery index.
  • According to the Index, modern slavery constitutes a ‘high’ or ‘extreme risk’ in 115 countries worldwide.
  • Major exporters China and India fall again into the extreme risk category. The UK is one of only four countries seen as ‘low risk’
  • The report notes that most countries have some form of anti-slavery legislation or framework in place, but lack the resources to enforce these laws.

Read more at Forbes

African Countries Ban Secondhand Clothing Imports
  • A ban on imports of secondhand clothing is to be implemented by the Governments of the East African Community.
  • The group, including Kenya, Tanzania, and Uganda, proposed the ban in order to stimulate the apparel industry in their countries.
  • It is hoped that the measure will also create jobs and bolster the countries’ economies.
  • The rise of ‘fast fashion’ has led to a dramatic increase in the region’s secondhand clothing imports over the past decade.

Read more at Sustainable Brands

Scotland Launches Brexit Stimulus Fund
  • The Scottish Government has announced plans to create a stimulus fund following the UK’s decision to leave the EU.
  • The fund will add an additional £100 million to capital spending to support Scottish businesses.
  • Funds will be allocated to projects based on jobs creation and impact on the overall supply chain.
  • The Government also announced the creation of Business Information Service to support businesses affected by vote.

Read more at Supply Management

Shipping Industry Struggles Continue
  • As the results for the first half of 2016 are released, the struggles in the shipping industry look set to continue.
  • Hapag-Lloyd and Orient Overseas have both reported first half losses for 2016, with Maersk expected to do likewise this week.
  • Decreasing freight rates and over capacity have been blamed for the current plight in the industry.
  • Hapag-Lloyd plans on acquiring United Arab Shopping Co., a deal that could deliver $400 million in savings annually.

Read more at the Wall Street Journal

Procurement Turns to Supplier Relationships for Innovation

As procurement seeks to increased its involvement in innovation, it’s turning to its supplier relationships to drive change.

This article was written by Daniel Ball, Director at Wax Digital.

Wax Digital’s Procurement Innovation Pathway research is based on 100 interviews with the UK’s senior procurement professionals, to canvass their opinions of the key topics in the profession.

Previously, we highlighted that procurement wants to be more involved in innovation. However it is the risk averse nature of procurement that appears to be holding it back.

In this article, we assess the importance of good supplier relationships.

Mutually Beneficial Relationships

Achieving effective, mutually beneficial relationships with suppliers can be a great way for procurement to drive positive change. That’s just one reason, according to new research, why procurement professionals are prioritising suppliers in their quest to innovate.

In fact, Wax Digital’s research showed that procurement’s top two innovation areas relate to working with suppliers.

In first place, 57 per cent cited supplier relationship management as an area that can aid innovation. Sourcing suppliers for product innovation came in second, with 49 per cent. Reducing supply-chain risks also scored highly.

Turning to Supplier Relationships

Compared to lower scoring areas, like automating processes to save time/resource, and improving spend management by empowering people, the supplier is clearly where procurement is turning its attention to innovate.

New ways of engaging with suppliers, through self-service portals for instance, and ensuring supplier compliance through automated contract management, are key priorities.

But it’s equally about what suppliers can do for procurement. There’s a desire to find partners who can be a catalyst for innovation at the core of the organisation’s products and delivery.

Technological Investment

These priorities remain the focus into 2017 too. This means the future could see an even more supplier-focused innovation mind-set in the procurement function.

Adding weight to this, the two most commonly used procurement technologies are also heavily supplier-focused. 51 per cent of organisations favour supplier information management, while 49 er cent are looking to contract management systems.

And the most common technology investment planned for the coming 12 months is supplier relationship management (SRM) tools. Procurement is clearly doing more than talking the talk on supplier innovation.

Challenge of Involvement

The future looks promising in this regard but there are challenges ahead. Procurement sees the value of supplier focused innovation but it is not always in control of it.

84 per cent of respondents said they were currently involved in innovations around supply chain collaboration. However, less than half of these, 40 per cent, said that they were leading it. Although this figure rises to 50 per cent in the future, there’s still some way to go before procurement fully takes the reins of innovation.

Now that many procurement professionals have already achieved some of the more transactional and process based quick wins, it’s natural that we see more and more looking to strategic supplier management as the next frontier to conquer.

Building better relationships with the right suppliers, whether existing or new, is clearly uppermost in their thinking.

The Innovation 2016 research was conducted by Morar Consulting. The research involved 100 interviews to canvass the opinions of UK senior procurement professionals, working in small to large UK enterprises.

You can find out more about the research, and download the report, by visiting the Wax Digital website.

Big Ideas Summit 2016: Big Idea #9 – Help Inspire Millennials

Lucy Harding has called on procurement leaders to help inspire Millennials by inviting them to thought leadership events.

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

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

Help Inspire Millennials

Lucy Harding, Partner and Global Head of Practice, Procurement and Supply Chain at Odgers Berndtson, challenged CPOs to open up access to events, such as the Big Ideas Summit, to the Millennials in their organisations.

Lucy argues that such events can inspire Millennials. By accessing thought leadership and innovative events, it can encourage them to sell key message to their generation in their organisations.

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

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

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 16,000 like-minded procurement professionals from across the world.

7 Key Objectives for Procurement Success

Global procurement professionals are attempting to find new ways to create cost savings, as well as create value. Help is at hand with these 7 key objectives for success.

ProcureCon Europe is back for it’s 17th consecutive year, answering your challenges in procurement and the future direction of the industry.

As businesses emerge from the recent recession into a fragmented ecosystem, a normal approach to creating value through cost saving is no longer relevant.

Instead, businesses are tasking procurement to effect enterprise-wide change, including implementing process improvement, and operating beyond the contract with suppliers to co-create value, and exploring payment innovation.

ProcureCon Europe has put together seven key procurement objectives you can’t afford to ignore, in order to create an efficient, cost saving and interactive procurement department.

#7: Talent Development

Talent development obtained the least amount of votes in our survey. However, there are few procurement executives who would argue against the importance of having a plan in place to develop the procurement leaders of the future.

#6: Responsible Sourcing

How is this made, and where does it come from? These are important questions on the lips of both procurement professionals and the general public.

Although perhaps less in the spotlight than it was 18 months ago, especially in the public sector, responsible sourcing remains a central pillar for Indirect Procurement.

#5: Taking Advantage of Digitisation

Organisations are rapidly digitising across the board. Procurement is attempting to make the most of the operational advantages implicit in this change.

The move to digitise in many cases means completely overhauling established business processes. This presents a significant opportunity for improvement, and is an essential element of a successful future for Indirect Procurement.

#4: Innovation in Services

Procurement seeks to lead innovation in the way that an organisation uses services, from HR, to IT, Marketing and beyond.

This is an area in which Procurement has the potential to add real value. The fresh availability of external services can mean easy, and comparatively cheap, solutions with minimal risk, which is great for growing companies.

#3: Operational Efficiency

While driving down costs can be done by negotiating better deals, there is also some considerable importance placed on increasing operational efficiency. Doing so means making better use of available resources and ultimately saving money.

#2: Value Delivery

Just like beauty, value is often in the eye of the beholder. That being said, those with a progressive approach to indirect procurement increasingly look to consistently add tangible value to the categories in which they work, and actively measure themselves on their ability to do so.

#1: Cost Leadership

Perhaps unsurprisingly the number one area of importance for Indirect Procurement is in the area of cost leadership. A strong stance on cost leadership can help to drive significant improvement to the bottom line. This is key when Indirect Procurement is expected to demonstrate its ability to drive meaningful savings.

Agility and Technology

These 7 key procurement objectives provides companies with guidance, in order to have an effective procurement department.

However, procurement must stay agile. Factors such as innovation and digitisation are constantly changing. Procurement professionals, particularly those in growing companies, should be taking advantage of available technology to further their reach.

The ProcureCon event series brings together a unique blend of Procurement, Purchasing and Supply Chain experts from across all industries to share their experiences and knowledge with a team of people who truly embrace the strategically important field of Procurement.

Find out more about how ProcureCon Europe is helping procurement professionals to solve their main challenges at on the event website. You can also follow ProcureCon Europe on LinkedIn and Twitter.

Throwback Thursday – How to Avoid Procurement Corruption and Fraud: The Fraud Triangle

Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.” When preventing procurement fraud, the Fraud Triangle is an organisation’s key tool.

The Petrobras scandal in Brazil has shown the potential for corruption and fraud in procurement. In light of this, our Thursday throwback takes us back to Hillary Ohlmann‘s article on preventing procurement fraud and corruption using the Fraud Triangle.

Corruption & The Fraud Triangle

In light of the Petrobras corruption scandal in the headlines this week, our Thursday throwback this week

Donald Cressey is credited with creating the fraud triangle, which outlines the theory behind why people commit occupational fraud. Cressey identified the three legs of the fraud triangle as pressure, opportunity, and rationalisation.

The Fraud Triangle

Let’s take a look at steps your organisation can take in order to address these three areas and avoid procurement corruption and fraud.

Pressure

The pressure factor is essentially what motivates someone to commit fraud. Usually the motivation is financial in nature, and falls under one of two categories: personal or professional.

Personal pressure examples:
  • unpaid personal debts
  • desire for status symbols (money, house, car, etc.)
  • inability to pay bills
Professional pressure examples:
  • need to meet productivity targets
  • need to prove financial gains
  • feeling job is at risk

How to mitigate pressure:

1. Adequate compensation

While adequate compensation will depend on the organisation, country, and individual employee, procurement employees should not be at the bottom when it comes to compensation.

Procurement professionals, at all levels, require a specific skill set to effectively do their job, and their compensation should reflect the value they bring to the company.

2. Realistic performance KPIs

This requires good communication with all stakeholders. Set KPIs and then review them frequently to make sure your procurement goals are realistic.

3. Adequate procurement budget

One way to avoid procurement corruption and fraud is to make sure your procurement department has sufficient funds for staffing, tools, and training. Being forced to cut corners can quickly lead to unethical decision-making.

4. Company-wide no gift policy

Suppliers often give gifts to procurement as a way to build relationships and show goodwill. Yet, these gifts may make it hard for procurement officers to remain entirely neutral. If Procurement is not allowed to accept gifts, enact the same policy for all departments as a way to reinforce a company-wide ethics policy.

In some parts of the world, it may be difficult to go 100 per cent no gift. If you do decide to allow Procurement to accept certain gifts, such as lunch or small tokens under a specific dollar amount, make sure the policy is crystal clear and communicated to all employees.

5. Recognise employee value

Adequate compensation is one way to recognise employee value, but other signs of appreciation can also go a long way. If your company has a no gift policy, perhaps set aside a portion of the budget for a procurement dinner, or event to celebrate when certain objectives are met.

Opportunity

The opportunity to commit fraud has to meet two basic standards. The person must have the technical know-how to take advantage of the system, and the ability to keep it a secret. You can decrease the opportunities for fraud by:

1. Implementing a transparent procurement process
  • Adopt an e-procurement solution – E-procurement software is the best way to make sure your procurement data is transparent and easily accessible for audits. You can also assign permissions within the tool, making it easy to allow top management access to all processes, while also limiting who can add suppliers, change supplier contact information, make awards, etc.
  • Educating your employees about the process and how to identify red flags – While it may be a given buyers within the procurement department understand the sourcing and purchasing process, buyers on the outside may not have such a clear understanding. Anti-fraud measures require all hands on deck.
  • Monitor the data in the system – Implementing e-procurement software is just the first step to a transparent procurement process. You’ll need to continuously monitor the data in your chosen e-procurement solution and the ERP to look for any irregularities.
2. Segment purchasing responsibilities

Divide responsibilities to keep any one person from having too much power over purchasing decisions. You may also find it beneficial to rotate responsibilities on a regular basis, but when you do so, make sure to update any employee permissions in your e-procurement solution.

For example, some companies rotate procurement employees between categories to avoid any one person having too much close contact with suppliers.

3. Adopt a four-eyes rule for approvals

Schoolyard bullies use “four-eyes” as an insult, but when avoiding corruption and fraud, the four-eyes strategy is best practice. More eyes on decisions means it’s harder for would-be fraudsters to keep their crimes secret.

4. Perform regular and surprise internal and external audits for all purchases

Audits are not a sign of mistrust. Consider them more like a doctor’s check-up. You should hope that everything checks out, but if you note any irregularities, you can take action to straighten them out before significant damage is done.

5. Manage both suppliers and their subcontractors

Your supply chain doesn’t stop with your suppliers. It’s likely they’ve hired subcontractors. The business practices of these subcontractors will reflect on your business.

Unfortunately, many companies have learned this the hard way. Your company should have a Supplier Code of Conduct, and signing off on it should be mandatory for all suppliers and their subcontractors.

Rationalisation

Rationalisation is the process of excusing one’s acts, and finding ways to justify behaving in a way that you know to be unethical or criminal.

It can take a number of forms:

  • An exaggerated belief in one’s value (e.g. I’m entitled to this because I work hard.);
  • A belief in a greater good (e.g. I’m doing this for my family.);
  • Dissatisfaction with the company (The company is cheating others, so I can cheat the company.);
  • Or comparisons with others (Everyone else has nice things. Why can’t I?).
How to avoid the pitfalls of rationalisation
1. Hire ethical employees

This one looks like a no-brainer, but it’s easier said than done. However, if ethics are important to you (as they should be), they need to be discussed from the very first interview. Research your potential employees like you research potential suppliers. Step away if anything looks fishy.

2. Model ethical behaviour at the top and reinforce it through company-wide policy

It’s all about company culture. How can you expect employees low down on the ladder to behave ethically if the top management is constantly cutting corners and making ethically dubious decisions? Don’t fall into a “do as I say, not as I do” mindset. Give your employees a good model to follow.

3. Adopt a zero tolerance policy for fraud and corruption

There’s the carrot, and then there’s the stick. Just as you would outline expected behaviour, so, too, should you outline punishments for breaking the rules. Also, don’t make idle threats. If you have a zero tolerance policy, then it should be zero tolerance. If you’re not prepared to follow through, adjust your policy to reflect the true consequences for fraudulent actions.

Part of procurement corruption and fraud prevention should be based on the realisation that, yes, it can happen to your organisation. No company is immune.

However, those companies with the lowest cases of fraud and corruption have taken steps to prevent it before it happens. If you’re waiting for a big scandal to break before mitigating this risk, then you’re already too late.

Procurement Professionals Going Mobile with Procurious App

Procurement isn’t 9-5 any more. Stay connected with all the major issues on the go with the new Procurious App.

Procurious App

In today’s modern, and highly connected, world, big issues like Brexit and supply chain disasters don’t neatly end at 5pm with the working day.

Whether at their desks or on the road, procurement and supply chain professionals need to stay on top of the latest challenges and opportunities, and take action 24/7.

But, now these dedicated individuals can relax (at least a little!) thanks to the new Procurious app. With a few taps, Procurious members can easily gain insights from their colleagues, invite their peers to get involved, stay in touch with suppliers and customers, make decisions and add value to their organisations, at home or away.

A Mobile Profession

“Today’s procurement professionals are always on the hot seat, managing business-critical issues,” said Tania Seary, Founding Chairman of Procurious.

“At the same time, these professionals, and especially millennials, are increasingly mobile, preferring to network, work and engage from their phones. The new Procurious app responds to growing demand from our members to support them wherever they are. It helps to provide them with the insights and collective experience of a worldwide procurement community.”

From e-learning videos to discussion groups, the app is easy to navigate and puts all of Procurious’ resources for networking, skill development and career advancement in the palm of members’ hands.

Download – Get Involved

The Procurious app brings all the functionality and great content of the Procurious site to your finger

Download the mobile app to:

  • Network with 16,000 curious, ambitious procurement professionals from around the world.
  • Discuss everything from achieving social responsibility goals to choosing contract document assembly software through lively forums.
  • Read our Blog to access more than 800 insightful posts. From the latest market intelligence and opinions, to tips from some of the top influencers around the world, we have it all!
  • Learn a new skill! Find dozens of e-learning videos on crisis management, winning the war for talent, negotiating, and more.
  • Messaging—Connect privately to build relationships, arrange discussions or share information with your peers.
  • Join a Group, from the Institute for Supply Management® (ISM®) to IT Buyers & Category Managers.
  • Shape the future of procurement by sharing your ideas at digital events like the Big Ideas Summit. Or mark your calendar to participate in our upcoming Boot Camp, an exclusive podcast series with daily insights to help procurement professionals get in the best career shape of their life.

If you’re a curious, ambitious procurement professional, don’t let travel slow you down! Download the Procurious app through the Apple App Store. Stay involved and in touch no matter where in the world you are.

If you want to see more of the Procurious app, stay tuned next week…

Share the news on Twitter: Join the global #procurement movement to #mobile with @procurious_ http://apple.co/1TWiAGx

What Can Procurement Professionals Learn From Young Professionals?

Generational stereotypes are frequently unfair and unkind. From traditionalists to young professionals, there is much to learn from each other.

This article was written by Dee Clarke, Davidson Projects & Operations.

With people living and working longer, the days of two to three generations making up a workforce will soon be a thing of the past. For the first time, we will start seeing workplaces with around five generations working side-by-side.

Loosely, Forbes Magazine defines the five generations that will soon be working together as:

  • The Traditionalists (born prior to 1946);
  • Baby Boomers (1946-1964);
  • Gen X (1965-1980);
  • Gen Y (now referred to as Millennials); and
  • The iGeneration (born after 1997).
Generation Stereotypes

Interestingly, Millennials, Gen. Y, Digital Natives (whatever you want to call the generation born between 1980 and 2004), represent almost a third of the global population today. They will comprise 75 per cent of the global workforce by 2025.

There are plenty of stereotypes about each group. The Baby Boomers who scorn social media, the Gen. X who don’t like authority, the Millennials who are impatient about promotions and getting ahead, and the iGeneration who are attached to their smartphones.

While there are some consistency in these traits, Jeanne Meister, co-author of ‘The 2020 workplace’ says that it is important as managers to move beyond the stereotypes, and get to know each person as an individual.

Mindful of Millennials

This could not be truer than within the procurement sector. As someone who specialises in sourcing talent in this sector, I have lost count of how many conversations I have had of late with clients and candidates regarding the hot topic of age.

And millennials are the hot topic of the moment.

There seems to be a general consensus in the media and public that Millennials are lazy, entitled, self-absorbed and will unlikely stay in any job for long. Personally, I believe there are many great exceptions to this mass generalisation, and hiring managers within procurement need to be mindful of this.

I recently had the pleasure of meeting two young professionals who were exceptions to the rule. I met Sandra Silva at a CIPS networking event. As I’m sure you would know, these events are normally attended by procurement professionals, currently working in the industry, to network and discuss market challenges, and perhaps learn something from a key presenter.

A young Sandra was studying her Masters in Supply Chain Management at Queensland’s Griffith University. She had relocated here from Colombia after completing her engineering degree.

What caught my attention was how committed Sandra was to start her career in procurement, and most importantly how determined she was to take the reins when it came to her career planning and progression. She was leaving nothing to chance.

Sandra attends regular industry networking events. She had sought out an industry mentor and was applying for internships, while continuing her studies. A few months later when I met her, she showed her determination and dedication to her career when she told me she had taken on an internship and a part-time entry level procurement position.

Diversifying Talent

The next example was when a colleague asked me to meet with a young man, James Young, who was seeking career advice in my area.

James simply defied every stereotype millennials face. James came to meet me on his lunch break. He presented well and, although he had already secured a contract position with another firm, he was looking at his long term career and direction.

Before finishing high school, James had completed a couple of short internships. While attending university, he attended networking events and connected with people within many different industries to identify the right one for him. On completion of his degree he applied for graduate programs with the big four consultancies.

Through our meeting he listed his plans, and how he was going to diversify himself so he was a valuable asset to any future employers. Most of all he talked about what he planned to do to consistently upskill and further develop his knowledge.

Learning from Young Professionals

Both Sandra and James showed determination, drive and willingness to go above and beyond the normal approach to secure the right career for them.

I believe this determination will not just stop there but will lead their careers to the top, these were not the actions of ‘lazy’ millennials, but two future CEOs.

So what can we all learn from these two young professionals?

Generally speaking, in the past most people ‘fell’ into procurement, starting with backgrounds in engineering, law or accounting to name a few. They then somehow became involved in projects, or saw the opportunity to add value with cost savings in better buying strategies.

While the industry has become more professional, and there are now specific qualifications and university courses, many have just moved from one role to another, letting opportunities dictate their next career move.

Bringing New Ideas

Just like these two young Millennials, we need, as an industry, to take charge of our career, and continue to develop our skills. We need to expand our networks, and not be afraid to take on an ‘internship’ or mentor, to ensure we not only survive, but thrive the future world of work.

Furthermore, we have to stop letting age stereotypes dictate how we approach work, or manage the growing number of generations we will work with.

FCIPS accredited Alan Robertson, who has more than 20 years procurement experience across private and public sectors, said Millennials will bring new ideas to organisations. And we need to listen.

“Otherwise we won’t take advantage of their skills such as online networking/blogging and asking plenty of questions,” Mr Robertson said.

He also added that “a ‘general’ trait of Millennials is that they like to try new ways of working and improvements, so don’t leave them to get bored. Companies will lose them if they don’t let them be free to use their adventurous spirit.”

Dee Clarke has more than 10 years’ experience in recruitment across the Australian and Irish markets. During this time, Dee has forged a strong expertise in Procurement and Contracts and is an Affiliate Member of CIPSA.

Dee is a Senior Consultant within the Projects & Operations team, which delivers the right technical and project expertise for any stage of a project or asset’s life cycle.

Corruption & Slavery Threaten to Overshadow Olympics

As the 2016 Olympics kick off in Rio, ongoing corruption and slavery scandals threaten to overshadow the event.

Brazil Corruption Slavery

The 2016 Rio Olympics opened on Friday evening with a lavish opening ceremony, watched by a global audience of billions. Over the next two and a half weeks, 10,500 athletes from 207 countries will compete for medals in 28 sports.

However, the Olympics could be overshadowed by corruption and slavery scandals currently engulfing Brazil.

Corruption Scandal Widens

There has been widespread criticism of the money being spent to hold the Olympics in Rio. Much has focused on where money could have been spent to tackle poverty and social issues present in the city.

However, one scandal that has rolled on for over a year relates to massive corruption in the awarding of contracts. Petrobras, Brazil’s national oil company, and it’s ruling Workers’ Party (PT), are at the centre of allegations of one of the largest corporate frauds in history.

Petrobras was nationalised between 2002 and 2010, with the PT appointing its own candidates to high-level executive positions. These executives secretly diverted funds, valued at up to 3 per cent of all new oil contracts, to the PT and its coalition partners.

Senior Politicians Implicated

The corruption probe, nicknamed “Operation Carwash“, continues to widen. Plea deals have now implicated more than 480 politicians and executives.

It is alleged that these individuals received over $6 billion in bribes from a cartel of Brazil’s biggest builders. The money was traded in exchange for at least $50 billion in Petrobras contracts.

Suspended President Dilma Rousseff has been found guilty of budget fraud by a senate committee. Her predecessor, former President Lula da Silva, has been ordered to stand trial by a federal judge for money laundering and hiding assets.

Rousseff’s campaign strategist, Joao Santana, was also arrested for allegedly receiving $7.5 million in bribes from Petrobras. However, due to delays in Brazil’s legislature system, it could be a while before these cases are heard.

Slavery Rife in Brazilian Cities

Alongside the corruption and fraud in Brazil, new figures released this week suggests that slavery is still a major issue in the country.

The Walk Free Foundation has reported that there are an estimated 161,000 people working in slavery conditions in Brazil. This figure is up nearly 4 per cent from 2014.

Brazil has seen an influx of immigrants over the past decade from other Latin American, and African, countries. The issue is most prevalent in rural areas, but instances are occurring in major cities too. There have been more slavery cases reported in urban areas than countryside since 2014.

Official statistics show the mining sector accounts for 31 per cent of slavery cases discovered in Brazil, followed by construction (18 per cent) and agriculture (15 per cent).

“Blackballing” Companies

However, the Brazilian Government has earned some positive press in the way it is tackling slavery. They have created a “dirty list” of 300 companies who could lose access to public contracts as forced labour has been found in their supply chains.

The list was briefly suspended in March this year, although it was reinstated in May. The dirty list, and strategies that go along with it, have helped to free over 50,000 people from slavery conditions between 1996 and 2013.

At a time when the eyes of the world are on Brazil, and Rio, the ongoing work to free workers caught in forced labour conditions represents a glimmer of hope in an otherwise bleak political climate.

Are you in Rio for the Olympics? Or have you been involved in procurement or supply chain for the Games? We’d love to hear your experiences and showcase them on the Blog.

We’ve been collating all the major headlines from the past week to keep you up to date…

UK Interest Rate Cut Bad For Savers & Pensions

  • The Bank of England announced a decrease in UK interest rates to 0.25 per cent, the lowest rate ever.
  • It comes at a time of lower than expected growth in the UK economy.
  • The cut heaps further pressure on pension schemes already facing huge deficits from the shrinking economy.
  • It also means that a greater number of accounts, including business accounts, are expected to not see any form of interest on savings.

Read more on The BBC

Mercedes-Benz Vans to Open New South Carolina Plant

  • Construction on a new plant began last week in North Charleston, South Carolina, to produce Mercedes-Benz’s iconic Sprinter Vans locally.
  • The move will significantly cut lead-times for the German automotive giant. Previously US-based plants only assembled vehicles from ‘kits’ sent over from Germany.
  • Parts suppliers including the Auto Truck Group and the Knapheide Manufacturing Company, are expected to establish production sites in the region.
  • Mercedes-Benz reported delivery of approximately 28,600 vans to US customers last year.

Read more at Automotive Logistics

Brexit Leads UK Retailers to Source More Home-Grown Products

  • Fashion industry publication Just-Style reported that one-third of British retailers predict they will source more from domestic suppliers following the Brexit vote.
  • Research published by Barclays has found that 52 per cent of retailers also expect to increase supply chain activity in India.
  • 43 per cent of British retailers have indicated they anticipate a reduction in goods sourced from the EU.  
  • Despite the Brexit vote, European manufacturing actually improved over July. According to data firm IHS Markit’s Purchasing Managers Index, figures rose to 53.2 in July from 53.1 in June.

Read more at Just Style

Phone Battery Life Could Be Used to Track Users

  • The battery status API, introduced in August 2015, has been found to be capable of tracking individual users online.
  • API allows site owners to see the percentage of battery life left in a device, as well as the time it will take to discharge or recharge.
  • Although currently being used to enable low-power versions of websites, researchers have proved that it could be used to spy on users.
  • Privacy campaigners have argued that companies could use this data to also monetise battery levels, with users making different decisions when faced with a low battery.

Read more at The Guardian

Management of a Global Supply Chain in Emerging Markets

Managing a global supply chain is complex, and fraught with risk. So what tactics can you use to minimise this risk?

This article was written by Rob Barnes, Founder at PrimeRevenue.

In many ways, sourcing goods and services internationally is easier than ever, with the internet making it possible to research, source and communicate with global suppliers from the comfort of your desk.

But in reality it isn’t always that simple. Setting up and managing an global supply chain is a complex, and often risky, business. Without careful planning, local expertise and meticulous management, there’s a lot that can go wrong.

Not only are you dealing with numerous rules, regulations, taxes and constantly fluctuating currencies – all of which have the potential to significantly impact your bottom line. You also have cultural and language differences to contend with, which, in the world of business, can be daunting and confusing to say the least.

On the other hand, getting it right can give you a huge competitive advantage, with cost savings and higher quality or unusual products just a couple of the potential benefits.

So how can you make sure your global supply chain works effectively, while minimising the risks to your business? Here’s a few pointers:

Strategic Planning  

Planning and management of a global supply chain affects the whole organisation, not just certain departments. That means ownership must come from the top, and involve all areas of the business, from procurement and finance, operations and logistics, to sales and marketing.

Don’t allow teams and decisions to become siloed. Make sure there is transparency across the business. Otherwise you’ll be missing important pieces of the puzzle, and find that your supply chain isn’t delivering the value you need, either for the customer or the bottom line.

Local Expertise

Knowledge of the local market is crucial to ensure you understand what to look for in a supplier and how to handle local business practices, from taxes and duties, to employment law and health and safety regulations.

If you don’t have this local expertise internally, consider hiring somebody who does. Or look to bring on a consultant who can guide you through what, and who, you need to know.

Prioritise Relationships  

The foundation of a successful supply chain is building strong relationships with as many elements of the chain as possible. While the internet can help you at the research stage, it’s crucial to visit suppliers regularly, to make those personal connections, scope out their operations in person, and discuss ways of maximising efficiency and collaboration.

In many countries, personal relationships and networks are even more important than in the UK, so it’s in your interest to prioritise this valuable bonding time.

Sales Forecasting

Forecasting is crucial when sourcing products globally, to avoid ending up with too much or too little inventory to deliver on what you need.

This is partly due to timing – your goods are going to take longer to arrive from far flung locations – but there is also a cost element, with taxes and duties to pay every time you move your goods.

Accurate forecasting means that you’ll be transporting the right quantity to arrive at the right time, to deliver on projected demand. You’ll also avoid wasting money on warehouse space by over-ordering.

Technology

Technology is your friend when managing a global supply chain, helping you to streamline processes and minimise unnecessary administration.

Look for a supply chain management solution that works across the different markets you’re operating in, so you don’t need to work with numerous systems.

You can also streamline your invoicing and payment terms using a supply chain finance platform, avoiding the need to negotiate these on a case by case basis, and improving consistency and transparency across suppliers.

Performance Tracking

Just one disruptive link in the chain can impact your whole operations. Make sure you implement a system to measure the success and efficiency of each supplier regularly – delivery times or product quality for example.

By doing this, you can spot any warning signs early on and be ready to replace an underperforming supplier if necessary.

Have a Plan B

Even with top notch processes, you can never be sure what’s going to happen, so have back-up suppliers ready to go in case of any unexpected disasters. This will keep your supply chain running smoothly and avoid lots of unhappy customers.

Focus on Long-Term Sustainability

To minimise risk in the chain, look for ways that you can support your suppliers both financially and logistically. Make sure your lines of communication are always open, so any potential issues can be aired quickly and easily.

You can also help your partners manage their cash flow through supply chain finance, allowing them to choose to be paid more promptly if and when they need. This is particularly useful for suppliers in emerging markets.

This reduces the need for them to take out expensive bank funding or overdraft extensions, minimising costs and risk in the long-term.

Supply Chain Finance from PrimeRevenue and AIG caters to thousands of mid-market, non-investment grade companies, by providing financing, with the credit risk insured by AIG’s market-leading trade credit insurance. It enables suppliers to take early payment less a small discount, while enabling buyers to standardise and potentially lengthen their payment terms.