All posts by Procurious HQ

Your Supply Chain Career: Accelerated

What do supply chain leaders predict for the future of the profession and how do you ensure you’re prepared seize the opportunities and get the most out of your career?

What is the biggest mistake supply chain professionals make?

What are the five key skills you need to make it to the top?

How should supply chain leaders embark on a major transformation?

Will the profession evolve in the coming years in preparation for an AI-enabled world?

We’ll answer all of these questions and more when Career Boot Camp 2018 kicks off at the beginning of October.

This year’s series, Your Supply Chain Career: Accelerated, has been designed to help you sprint outside of your comfort zone and get into the best career shape of your life!

Featuring tips and tricks from some of the best in the business we’ll be discussing how to make it as a Head of Supply Chain, the true value of professional certifications, how to persevere in the face of adversity and what the future holds for the profession.

Sign up here ahead of our launch on October 1st.

FAQs

What is the Procurious Career Boot Camp ?

Procurious’ Career Boot Camp, sponsored by IBM, is a global professional development event for supply chain professionals. The series, features five, fifteen-minute podcasts that have been designed to help you get into the best career shape of your life.

How do I listen to the Career Boot Camp podcasts?

Simply sign up here and you’ll be re-directed to the Supply Chain Pros group where you can access all five podcasts. You will also join a mailing list, which will alert you each time a new podcast is released.

How will I know when each podcast is published?

The series will run for one week, starting on October 1st, with a daily podcast released on Procurious each day. We’ll drop you an email to let you know as each podcast becomes available.

Is the podcast series available to anyone?

Absolutely! Anyone & everyone can access the podcasts and it won’t cost you a penny to do so. Simply sign up here!

When does Career Boot Camp take place?

Starting on the 1st October, Career Boot Camp will run for five days. The podcasts will be accompanied by daily blogs from our Supply Chain Career Coaches plus group discussions and articles on Procurious. When the series is complete, all five podcasts will be available for registrants via the Procurious eLearning hub, FREE of charge.

Why should I do Career Boot Camp every day?

Dedicating 15 minutes a day to developing and progressing your supply chain career can make the difference between standing still, or sprinting quickly into more impactful roles. At Procurious, we firmly believe that daily procurement learning is essential for career advancement. And Career Boot Camp will help you get into the habit!

Speakers

Rick Blasgen, CEO & President – CSCMP

Rick D. Blasgen has been the president and chief executive officer of the Council of Supply Chain Management Professionals (CSCMP) in Lombard, Illinois, USA since 2005.

Rick Blasgen has responsibility for the overall business operations and strategic plan of the organisation. His efforts support CSCMP’s mission of leading the supply chain management profession through the development and dissemination of supply chain education and research

Ron Castro , Vice President – IBM Supply Chain

IBM Supply Chain Vice President leading a remarkable team through the digital and cognitive journey to an end to end AI-enabled supply chain. Driving adoption of cutting-edge technology and applications inside and outside of the manufacturing walls.

Chris Crozier, Chief Digital Officer – Orica

Chris Crozier is the Chief Digital Officer for Orica International, the world’s largest manufacturer and supplier of explosives for mining and civil construction. In this capacity, Chris’ digital teams supports the global footprint of the organisation across Business, Customer and Manufacturing systems, including governance of Orica’s digital ecosystems, architecture, data and cyber posture. Prior to this, he has held executive roles within Orica as Global Vice President Supply Chain, and BHP Billiton.

Tom Evans, UK Ultramarathon Runner

Tom Evans is a 26 year old professional Trail Runner and Red Bull athlete. In 2017 he discovered ultra running and finished 3rd in the famous Marathon des Sables, which was his first ultra marathon. Since then, he has become a full time athlete. He finished 3rd in the Trail running world championships while representing Team GB. He has recently won the CCC – one of the most prestigious 100km mountain races”

Samantha Gash, Australian Ultramarathon Runner

Samantha Gash, as a World Vision Ambassador, ran 3253 km in 76 days across India, raising over $150,000 to fund education programs. Her other achievements include a 1968km expedition run along South Africa’s Freedom Trail and four 250km desert ultramarathons as part of the Racing the Planet – Four Deserts Grand Slam.

Laura Faulkner, Director Supply Chain Management – Nationwide Building Society 

After graduating from Strathclyde University with a BSc in Technology & Business, Laura joined Polaroid as a Graduate Buyer. Laura then spent time with GSK and Ernst & Young before taking a role with RBS that led to her being appointed CPO in 2014.

Laura is now CPO and Director of Supply Chain Management (SCM) at Nationwide Building Society where she has brought together Procurement, Property Services, Third Party Risk, Vendor Management, Accounts Payable and Offshore Operations.

SCM’skey focus is to maximise the value of 3rd Party Relationships across the Society, leading the Supply Chain Strategy to drive efficient, resilient and innovative solutions for the benefit of all Nationwide Members.

Career Boot Camp, Your Supply Chain Career: Accelerated kicks off on October 1st 2018. Sign up here (it’s FREE!)

How to Keep the Supplier Love Alive

We take a look at some of the ways procurement professionals should manage, and negotiate with, their long-term suppliers when things get tricky…

Nobody said it was going to be easy. Building and, most importantly, maintaining good supplier relationships takes hard work, commitment and focus. And the longer they last, the more they require this careful nurturing to keep the love alive and the flame burning.

But what happens when one half of the partnership doesn’t hold up their end of the deal; taking advantage of a long-term contract or a presumed arrangement which has started to have a negative impact on your organisation?

What do you do when a change of circumstance means you want to re-negotiate your terms?

How do you get yourself out of an undesirable, self-destructive partnership when to change things up could be costly and difficult to implement?

We joined a recent Negotiation Roundtable organized by CABL (Conti Advanced Business Learning), a firm that specialises in Negotiation & Influencing, on the topic of long-term negotiations. We wanted to hear advice from a number of procurement and sales leaders on how to manage those long term supplier relationships.

Giuseppe Conti, the founder of CABL, introduced the subject by highlighting that in long-term relationships there is a risk that one of the two parties take advantage of the situation. He then led the group to discuss a number of different ways for procurement professionals to manage, and negotiate with, suppliers when things get tricky.

Look below the iceberg

 For procurement professionals, this is a tale as old as time – how do you manage a supplier who increases prices without warning, when you were under the impression that you had a long-term agreement. Do you cut and run?

“That depends entirely” argues Laurence Pérot, Global Supply Chain Procurement Head at Logitech, “on the nature and origin of your relationship with that supplier.

“You need to consider how you selected them in the first place. Was there a good cultural fit, what drew your organisation to them? Cost reduction is just the tip of the iceberg.”.

According to Xinjian Carlier Fu, Sourcing Leader at Honeywell, “If you can satisfy all the elements beneath the surface (i.e. risk reduction, security, protecting margins and personal requirements) you will have a much more effective negotiation.”

Believe that you have the power

 It’s easy to be intimidated by suppliers who seem to be calling all the shots in your relationship. Xinjian Carlier Fu believes it’s important to have confidence in your own procurement power. “Don’t be afraid of [your supplier] relationship. They might seem dominating and intimidating but I like to use the analogy of David and Goliath.

“Procurement professionals should think of themselves as David. Don’t underestimate your influence or give up hope for your organisation.  You do have negotiation power. Don’t give up hope.”

“Unfortunately not every supplier is willing to work with you in a partnership. Sometimes not all parties are considered equal,” explains Guillaume Leopold, Former CPO at Coty.

Look for a win-win

Ifti Ahmed, Managing Partner at Titanium Partners, described that tricky situation of inheriting an existing supplier when starting a new procurement job. “This particular supplier wasn’t my first choice but it became my job to manage the negotiations and the budget. I did look for alternatives, of which none were suitable and so I did feel like I was in a tough position from a negotiations perspective. ”

“But we prepared well for these negotiations, ensured we had a greater idea of what they valued; what was annoying for them and what they wanted from the partnership, so we were able to discuss points for improvement on both sides and the new contract ended up as a win-win”

Giuseppe Conti also highlighted the importance of using partnership tools to effectively manage the supplier. This includes a Service Level Agreement with KPIs for both parties, performance reviews, alignment of senior management teams, bonus system, audits, 360-degree feedback. 

Make your position clear

It’s very difficult to build trust in your supplier relationships when staff turnover is high. Indeed, as Alessandra Silvano, Global Category Director CAPEX & MRO at Carlsberg, pointed out “many suppliers try to take advantage of frequent rotations in the workforce. But they need to know that you are aligned. Pricing should be treated in the same standardised way, not matter who you are working with.”

Work at it like a marriage

Regina Roos, VP & Sales Segment Leader Mineral and Mining at Schneider Electric, recommends you approach your supplier relationships like a marriage. “It’s not a one off event. There are levels of commitment and you have to keep working at it. If you’re not prepared and you don’t know what you’re getting into with a supplier it’s your fault. You need to make a commitment, and stick to it.”

Paul André, Director Reduced Risk Commercial Supply at JTI, agrees, arguing that “you need to be very clear on what you’re entering into – and that you don’t have a different expectation of the relationship you are building.”

Get to the crux of the problem

What should procurement professionals do when faced with a seemingly irrational supplier who simply won’t re-negotiate terms or agreements? Xinjian Carlier Fu suggests that you “try to identify the motivations underlying these actions or attitudes. Think about the possible constraints they might be facing. Then test your theories by asking questions – ‘Are you facing pressure to cut costs?’” When you understand what’s driving the supplier’s behaviour, you’ll find it easier to come to an agreement.

Work with suppliers you like

The value of supplier likeability is not to be underestimated according to Francesco Lucchetta, Director EMEAI Supply at Pentair. “Taking company culture into account is so important when it comes to selecting suppliers, particularly if you’re forming a long-term agreement. People are very different and to work with people you like is a really good thing. When the culture is unfriendly it’s hard to build trust in the relationship.”

For more advice on managing your supplier negotiations, check out the first blog in this two-part series – 6 Ways To Prevent A Negotiation Blow Up.

Tuesdays With Tom: Trump, Trade and Turning Disruption into Opportunity

Institute for Supply Management CEO Tom Derry compares the Trump administration’s trade policies to “self-inflicted friendly fire” in the first of our 10-part Tuesdays with Tom podcast series.

“In military conflicts, one of the outcomes we most dread are instances of ‘friendly fire’, when you mistakenly fire on your own troops. I think the current [trade] policy is almost an instance of self-inflicted friendly fire, from an economic perspective. We might be helping domestic industries like steel and aluminum (although even that’s arguable), but we’re actually damaging the far bigger industries that are consumers of those products; who make household appliances, yellow goods for construction, or automobiles. All of our exports in those areas will suffer with this trade policy.”

In the first of our Tuesdays with Tom podcast series, ISM CEO Tom Derry talks with Procurious Founder Tania Seary about the current raft of trade wars and tariffs that have come about as a result of US policy shift.

Supply management professionals do NOT like trade wars

“ISM publishes economic reports every month for the manufacturing and services sector. Comments have been very consistent: we’re seeing suppliers trying to impose price increases on buyers as they’re buying metals (such as steel and aluminum)”, says Tom. “We’re seeing people anticipating the tariffs, looking to end sourcing from China and look for suppliers elsewhere, and we’re seeing people postpone investments.

“The two most important economic factors in deciding where to locate a manufacturing facility are local taxes and tariffs. If tariffs are uncertain, [companies are] going to postpone decisions about building that next facility, which is not good for the economy in the long run.”

NAFTA renegotiations having an impact

“What’s so interesting about these policy changes”, says Tom, “is that even mere discussion has a real economic impact and causes real dislocation of supply chains. Even before the steel tariffs were imposed, people reacted to the idea of tariffs, and that caused businesses to have to change their plans.”

Historically, NAFTA has resulted in incredibly tightly integrated supply chains in certain industries, particularly the automotive industry. “We do a lot of assembly of automotive in northern Mexico for final sales here in the United States or in Canada, but before you get to that final assembly in those plants, you’ve got components for parts that move across the Mexican/US border four or five times before we get to the final vehicle”, says Tom.

“Imagine what it would be like to impose tariffs in both directions four or five times, and the inspections that would have to go with it, and the country of origin verification that would have to be performed. If NAFTA [fails], it’ll be incredibly disruptive in terms of the auto industry here in North America.” 

Two tips for turning disruption into opportunity

  1. Have a Plan B: “Every good category manger has a Strategy A for expected economic conditions, and Strategy B if there’s an economic downturn or something happens in the commodity markets. You have to have those playbooks thought through and scripted … if you haven’t done that, get to work on that immediately.”
  2. Be prepared to react fast: “If you see a dramatic change, you need to be able to respond to it in the moment. The advantage goes to the company, the organisation, or the individual who can react fastest during times of great change. If you’re late in moving, any potential benefit to be realised will be captured by someone else. Make sure you’ve got that playbook well defined.”

“The advantage goes to the company, the organisation, or the individual who can react fastest during times of great change.”

Tom tells the story of a CPO working at LG Electronics during the 2008-9 recession, who was concerned about securing semiconductors. They were aware that a recession would lead to a drop in consumer demand for electronics and hence a demand for semiconductor chips, so he visited his suppliers in Asia, then managed to convince his executive committee to buy $9 billion worth of semiconductors because the price would never be as low again. LG subsequently posted record profits for 2009 due to that CPO’s business acumen, his understanding of the spot market for semiconductors, and doing his homework. This is how you respond to disruptive events.

“[Procurement needs to] see through the common perception, recognise market opportunities and the dislocation between price and demand, and seize opportunities to turn a perceived threat into a great opportunity for a huge bottom line impact.”


Tuesdays with Tom is a 10-part podcast series featuring exclusive insights from ISM CEO, Tom Derry. Register now to receive an alert whenever a new podcast is released.

Here’s What Procurement Will Look Like By 2030

92 per cent of respondents believe that by 2030, procurement will look very different to today’s profession. But what exactly will this evolution look like, and how do we get there? Download the Procurement 2030 Report!

Procurious and Michael Page UK recently surveyed 590 procurement and supply management professionals from around the globe to uncover the facts about the outlook for the profession, the threats and opportunities facing procurement, and perceptions of procurement. Here’s what we uncovered in our new report, now available for download.

Procurement is expected to evolve

All but 8 per cent of survey-takers roundly rejected the suggestion that procurement in 2030 would be similar to today. This stands to reason, given the transformation the profession has undergone in the past 10 to 15 years from back-office function to an influential and highly-visible part of the business that’s increasingly focused on driving innovation and generating value.

Here’s the result when we asked respondents what they expect procurement will resemble in 2030:

Just over half of our respondents believe procurement will evolve into “an agile group of strategic advisors”. But what does this actually mean? It could refer to Agile (with a capital A) work practices that are sweeping through many of the world’s top organisations, or perhaps it means that procurement will evolve into a high-value team of experts who will move around the business to give advice at the highest levels and solve specific challenges.

To use an analogy from the gaming world, this evolution is a bit like moving from a Space Invaders-style “mission-control” approach where you are dealing with a never-ending stream of issues from the bottom-up, to the approach taken in 21st-century games such as Fortnite or Call of Duty, where a highly cooperative group of professionals with different areas of expertise parachutes into a certain area to solve a problem before moving on to the next mission.

The word “strategic” is also key here. This report discovered that an incredible 49 per cent of procurement’s current workload is regarded as “tactical”. Filtering by role and seniority revealed that:

  • Survey-takers with “junior” roles identified 59 per cent of their workload as tactical in nature.
  • Analytics professionals have the most tactical tasks (57 per cent), followed by supply chain professionals (56 per cent).
  • The tactical workload of category managers sits at 46 per cent.
  • Concerningly, 57 respondents who identified as Chief Procurement Officers indicated that 40 per cent of their workload is tactical on average, despite having what is regarded as a highly strategic role.

It’s also worth noting that two persistent concerns about the future of procurement have also been dismissed by survey-takers. Only 3 per cent believe the profession will be completely outsourced, while 9 per cent believe procurement will be completely automated by 2030.

Positive forecast

Procurement professionals remain optimistic about the profession, despite the rapid development of ever-smarter AI and media coverage of white-collar job losses to automation. In fact, optimism about the future has climbed by four points since this question was first asked in 2017.

Similarly, job security is relatively high. Only 9 per cent of respondents report a lack of confidence that they’ll be able to keep their role of the next 24 months.

While the profession itself is confident about its future, the task at hand is to broadcast this positivity to the wider organisation, other functions, and to suppliers. Building upon the brand of procurement will enable us to:

  • change the face of the profession from the inside out
  • overcome outdated stereotypes, and
  • educate others on the full value-offering of the profession.

Threats and opportunities

When we asked survey-takers to nominate the greatest threats and opportunities for procurement and supply chain management, we were surprised to discover that the top two threats are also seen as the top two opportunities.

  • “Not keeping up with technological advances” is seen as the biggest threat, while technological advances are also seen as the number one opportunity.
  • Being unable to recruit and retain top talent is seen as the 2nd-biggest threat, while recruiting and retaining top talent is also seen as the 2nd-biggest source of competitive advantage.

Organisations must therefore retain their focus on investing in top talent, even while they are investing heavily in technology. It also follows that procurement functions with leading-edge technologies will be more attractive to top-tier candidates.

Prisoners of our own perceptions?

We know that the profession wants to evolve into an agile group of strategic advisors by 2030, but what’s holding us back? In one word: perception.

  • Less than a quarter of respondents say their organisations have a strong understanding of procurement’s value, while 21 per cent have “little understanding” of procurement’s value-offering.
  • Procurement’s own perception of its purpose needs to change if it is to expand its value offering and transform into strategic advisors and commercial leaders. At present, 38 per cent believe cost reduction is procurement’s main purpose, followed by risk management.
  • The good news is that by 2030, the main purpose is expected to shift to two high-value tasks: “driving supplier innovation (29 per cent), followed by “driving sustainability” (25 per cent). Both of these revised areas of focus will also support procurement’s core capability of cost reduction.

CLICK HERE TO DOWNLOAD THE REPORT.

But wait, there’s more:

This content-packed report also contains links to heaps of relevant thought-leadership from  Procurious and Michael Page UK,  including videos, blog articles, podcasts and webinars.

And don’t forget … parts 2 to 4 of the Procurement 2030 report will be released in the coming months!

  • Part 2: Preparing for Industry 4.0: September 2018
  • Part 3: Human vs AI Skill Sets: October 2018
  • Part 4: Procurement Makeover: November 2018

CLICK HERE TO DOWNLOAD THE REPORT.

Why Out Of Date Procurement Models Are Worse Than Useless

Manufacturing and procurement technology has moved so fast in recent years that it’s entirely possible the trusty maturity assessment you’ve always used is now hopelessly out of date.

Image by Stokkete /Shutterstock

The other day, someone showed me a quiz from a 1960s Cosmopolitan with a title along the lines of How Good a Housewife Are You? The subject-matter, of course, had not aged well. The reader had to answer questions about what they did when their husband comes home from work – do they put dinner on the table straight away, or fetch his pipe and slippers first? For the 21-century reader, every question in the quiz came across as outdated, and you’d never dream of using it for its intended purpose (unless it was for a laugh).

Things change – whether it’s women’s equality, social mores, or technology. The point of the story above is that the way we measure performance must keep pace.

In the procurement world, maturity models are one such tool that can become obsolete.

Conventional maturity models for direct materials sourcing usually evaluate procurement in terms of outdated capabilities and enabling systems. You know the ones – they focus on concepts such as “upstream versus downstream” and rely on traditional metrics like spend under management. What they don’t do, however, is address the tremendous advances in technology that have transformed the manufacturing world in the last ten years. Nor do they address impaired agility and opportunity risks hidden by siloed data, fragmented ERP systems, and different product management systems. 

A contemporary maturity assessment

Cognitive sourcing advisor, LevaData, were motivated to build a Cognitive Sourcing Maturity Assessment after their 2017 cognitive sourcing study revealed the following trends:

  • Only 13 percent of companies continuously engage their suppliers; the average organization engages with only 52 percent of their suppliers once a year.
  • Outmoded enterprise analytics and sourcing tools lead to reactive, inward-looking decisions, rather than proactive insights that identify market risks and opportunities before they become a problem.
  • Compared to an average organisation, the most advanced procurement teams use technology to speed up their prep and negotiation time by a factor of ten.
  • Only 5 percent of organizations utilize a purpose-built platform for direct materials sourcing operations.

Proof of LevaData’s Maturity Model’s currency is the fact that it takes into account so many of the aspects of Industry 4.0. Founder and CEO Rajesh Kalidindi said the Model is “unique because it captures the impact of contextual market intelligence on sourcing professionals’ decision-making and their ability to leverage open-source analytics, machine learning, and AI-enabled insights with cross-functional teams”.

The survey takes about 10 minutes to complete, and will provide you with a summary report with recommendations for near-term improvements. Kalidindi explains: “This maturity assessment enables companies to quickly and easily close the performance gap. It offers an objective, third-party perspective of an enterprise’s strategic readiness and visibility into actionable business intelligence. C-level executives and board members who may not be familiar with these issues gain a clear picture of resources and processes needed to improve outcomes in increasingly volatile global markets.”

Click here to take LevaData’s Cognitive Sourcing Maturity Assessment.

Don’t miss out on the 2018 Cognitive Sourcing Summit

LevaData will host the 2018 Cognitive Sourcing Summit in Santa Clara, CA, on September 13, 2018.

The event is expected to attract 150 attendees, with speakers and panels exploring how to accelerate the journey towards cognitive sourcing, with a focus on the latest trends in digital transformation and the adoption of AI among procurement teams.

Attendees can expect to hear insights from executive leaders from the high tech, industrial equipment, medical device, telecommunications, and consumer products industries, along with industry analysts and thought leaders from IDC, Supply Chain Insights, Gartner, Chainlink Research, and Spend Matters. Presentations and workshops will include:

  • Cognitive Sourcing: Maturity Model, Innovation and Competitive Advantage
  • Digital Procurement: Building a Successful Roadmap
  • Driving the Transformation: Making the Case and Enabling Change

Participants will also hear from Fitbit’s Kevin Purser and others regarding their successful digital procurement journeys and recommended best practices.

Here’s the really exciting part – the closing keynote presentation will be delivered by Procurious’ very own founder Tania Seary, who will discuss:

  • How to formulate an action plan for when delegates return to the office.
  • The attributes needed to successfully orchestrate, collaborate and negotiate within a complex, technology-enabled global supply network.
  • The uniquely human skills we’ll need to untangle the gridlock of competing interest and find a resolution to the supply challenge in an AI-boosted environment.

Interested in learning more? Visit www.levadata.com.

Register now for the 2018 Cognitive Sourcing Summit.

Back To Blockchain Basics

Do I need to understand how Blockchain works? Where does bitcoin fit in? And how long until this tech hits the mainstream? Your questions: answered!

Kumpol Chuansakul/ Shutterstock

When it comes to Blockchain procurement pros don’t know what or who to believe, when to expect its takeover or how to prepare.

What’s the difference between bitcoin and blockchain, are they one and the same?

Do you need to understand the ins and outs of how the technology works?

Ahead of today’s Procurious webinar on Blockchain , Jack Shaw, Co-Founder and Executive Director of the American Blockchain Council, clears up some of the Blockchain basics!

Blockchain and bitcoin

“There is a widely held misunderstanding that blockchain and bitcoin are one and the same or inextricably connected with one another.

“In fact blockchain is an underlying enabling technology. Bitcoin and other digital crypto currencies are one of the first effective applications of that technology.”

“Think of it as being similar to the situation in 1990s with the emergence of the internet as an underlying enabling technology platform of which email was one of the first successful applications of internet technology and one of very many ways the internet is being used.”

Why you don’t need to understand Blockchain

“Blockchain is so highly technical that only people with advanced degrees in cyber science could possibly understand it.

“Often we get down into the weaves of the technical details of how blockchain works. I’ve found it helpful for procurement pros to understand what it is that blockchain does.

“You don’t need to be able to build an engine to know how to drive a car similarly you don’t need to understand every technical detail of how blockchain works in order to understand what it can do for you…”

What can Blockchain do for you?

“Blockchains do four things that we haven’t been able to do previously…

  1. Blockchains can create immutable signed and time stamped record of identity, ownership of assets, transactions or contractual commitments
  2. They allow that information to be shared among multiple entities; either people or businesses or other organisations, governmental agencies, across the internet without any of those entities having to depend on any one of the others to be the so called master record keeper. And without having to pay a third party intermediary for that service, which can take tremendous costs and delays out of inter-enterprise business processes
  3. They allow that information to be shared with complete transparency among all those authorised to see that information and the subset of those that are authorised to update it by adding new information
  4. [Blockchains are] virtually unhackable in terms of preventing those not authorised to update that information from doing so or even being able to see it”

The combination of those four capabilities means Blockchain provides a tool for the use and sharing of information across business and social ecosystems that goes far beyond the ability to exchange value via currencies. It, in fact, gives it the potential to impact every aspect of our personal and organisational lives.

When will blockchain hit the mainstream?

“I’ve been around emerging technologies for so long that I’ve finally come to recognise these things do not simply suddenly switch on full-blown and ready for everyone in the world to use at once. [adoption] increases over time.

“Blockchain is coming along much more quickly than the internet. Widespread adoption of Blockchain technology will be in place within the next two or three years. Most of the major IT solution providers are already actively in the process of delivering blockchain enabled capabilities.”

The purpose of the American Blockchain Council is to help senior level executives understand the strategic business implications of blockchain.   

Jack Shaw will be speaking on our latest webinar Blockchain: The Technology, the Myth, the… Legend? which goes live today at 11am EDT/ 4pm BST. Sign up here.   

Take the Nuclear Option at UPMG2018

Not many procurement conferences include a guided tour of a nuclear facility! Be sure to check out UPMG2018, the premier conference for utility purchasing managers.

Go nuclear

Remember the Fukushima Daiichi nuclear plant disaster in 2011? As part of the international review that took place after the event, the United States instituted the “SAFER” program. National SAFER Response Centres (NSRCs) house emergency backup equipment for all commercial nuclear plants in the U.S., ensuring the ability to move emergency equipment to affected nuclear plants within 24 hours by truck, plane and helicopter.

At ISM’s UPMG2018 conference (9th to 11th September, Scottsdale AZ), attendees will have the opportunity to tour a SAFER Response Centre under the guidance of the Southern Nuclear Operating Company.

Speaking of disasters, Michael Menges of Edison Electric Institute will be presenting a review of the mutual-assistance effort coordinated by electric trade associations, where multiple utilities aided in Puerto Rico’s restoration following Hurricane Maria. A panel of industry subject matter experts will discuss the supply chain impact around logistics of fleet mobilisation in Puerto Rico, the work management process necessary to coordinate the restoration effort, and material needs and challenges. 

Get to grip with a rapidly changing environment

Utilities Purchasing is a category that never stands still, as the landscape keeps shifting with breakthrough technologies and disruptive forces including climate change. UMPG2018’s agenda includes sessions to ensure attendees are kept up-to-date, such as:

  • Shifting Business Models in the Power Industry (featuring David Jacoby, BSI Energy Finance)
  • Innovation in the utility space
  • Supply chain disruptors
  • Actionable information to better understand economic conditions (insights from ISM’s Report on Business)
  • Blockchain application for utility industry.

Tap into the talent pipeline

This year, UPMG2018 has a strong focus on up-and-coming talent, with sessions including:

  • Attracting Millennials to Supply Chain (featuring a panel of young talent from Intel, Black Hills Corporation and Exelon)
  • How to Build a Successful Career in Supply Chain
  • University Student Presentations.

The Utility Purchasing Management Group (UPMG) exists to exchange information and provide a forum for divergent views, all directed toward increasing the knowledge of purchasing as it applies to and affects both utility purchasing management and their suppliers. Officers, managers, and employees of gas, electric, and telecommunications utilities – either investor-owned or government-owned, as well as consumer-owned, not-for-profit electric cooperatives, public power districts, and public utility districts – who are directly involved in purchasing or materials management make up the membership of the UPMG. Register for UPMG2018 now at http://upmg.org/.

 

In other news this week:

Reshoring in Reverse Again

A.T. Kearney’s most recent Reshoring Index has revealed that despite the Trump administration’s “Made in America” focus, imports from traditional offshoring countries are at a record high. Some compelling findings include:

  • The largest one-year increase in imports from Asia to the US, a staggering $55 billion dollars (up 8% from 2016), since the economic recovery in 2011.
  • The Reshoring Index has dropped 27 basis points since rising to a 5 year high in 2016.

Download the report: http://bit.ly/2ubCZ3a

Procurement Professionals: Get Your Blinkers Off!

Reluctant or unsure about driving greater diversity and inclusion in your procurement teams and the organisation at large? You need to take your blinkers off!

Simon Burt/ Shutterstock

When it comes to implementing diversity and inclusion initiatives in the workplace it can be difficult to know where to begin.

And perhaps you’re equally skeptical that your actions could even have a significant impact?

But when we were joined last month by Timo Worrall, Senior Category Manager, Facilities Management – Johnson & Johnson; Julie Gerdeman, General Manager, SAP Ariba and Darren Swift (Swifty), Inspirational Speaker, The Drive Project & Blesma Ambassador for our latest Procure-with-Purpose webinar all three speakers quickly put these doubts to rest…

The Facts

People with learning differences

“Just 6  per cent of young people with a learning difficulty are actually in employment which is a burden on society and for individual and their family,” explained Timo.

“These people are often willing but unable to work because we don’t give them the chance to get a foot in the door. They can’t find work because they can’t find work experience. We are often unwilling as big corporations to accept their differences. But they can do the work and they can also be very loyal. The barrier to entry isn’t them, it’s us.”

Veterans:

The Drive Project’s Veterans Work report found that three in ten businesses admit they have not even considered employing veterans. While the majority claim to be more open minded, 60 per cent of businesses rule out recruiting someone if they have no industry specific experience.

There are roughly 700,000 veterans currently in employment, over half find themselves in routine, low-skilled or low-paid jobs.

Neurodiversities 

“Individuals who are neurodiverse or on the autistic spectrum are underused source of talent with great skillsets that our leaders are seeking on their teams,” argues Julie. “There is a constant need for great talent and a unique point of view.”

Starting small is ok

“I have always been a huge advocate and proponent for diversity of thought,” explained Julie. “I’m one of nine children and so growing up I lived with lots of different opinions and personalities and thoughts and I saw the amazing environment that that created. And so I brought that with me to the workplace.

“I wanted to contribute to change. I volunteered to become the global exec sponsor for D and I at SAP Ariba. I started with a gender focus but it has evolved to become something much bigger and much broader.

“At SAP Ariba we think it’s ok to start small. It’s really ok. We started D and I [initiatives] with employees’ passions. [People who said] ‘this is what we’re passionate about.’ Welcoming and embracing personal passions into the professional workplace in a small way  blossomed into bigger, more formalised programs and from there we built a D and I framework to drive a more inclusive workplace”

As Timo explains, measuring success isn’t just about measuring numbers. “It’s easy to get bogged down in numbers and spend reports.” explained Timo. “[At Johnson & Johnson we are] trying to use story-telling and build business cases around the work we are doing. Talking about meaningful impact is a lot more powerful than just numbers.”

Take your blinkers off and crack on!

When it comes to getting started procurement teams simply need to “crack on and do it! I can promise you that you’ll find it hugely rewarding and enjoyable” asserted Timo. “I’m a firm advocate that [diversity and inclusion initiatives] change how procurement is viewed in the business and how we’re perceived.

“A social innovation agenda drives a completely different conversation with our business partners beyond that age-old savings conversation that we all get a bit bored of.

I really believe there is a massive untapped potential out there of many different groups that we don’t support as well as we should do. They can bring tremendous value and insights and different ways of doing things, often better than we can into our supply base. Get involved.”

Whilst serving in the Army in 1991, Swifty was seriously injured by a bomb. He lost both his legs, a number of his fingers and damaged his arms along with various other injuries.

Many years on and Swifty continues to live by this motto, championing individuality, pushing the boundaries of life as a double amputee and creating his own path.

“From my perspective I was lucky. I was surrounded by the right people. They were what I call “blinkers-off” people. They don’t wear blinkers. Or they’re prepared to take them off. They gave me the opp and had the right attitude to see some of the attrubutes that could be nurtured and untilised.

Broden your thinking. Take a punt on difference and diversity. Instead of always thinking you can’t ask why not, why wouldn’t we why shouldn’t, we let’s give it a go.

Unicorns are a mythical creature but they’re also a type of horse. Horses wear blinkers and they wear blinkers because it makes them go down a particular route, stops them from deviating stops them from thinking elsewhere and I quite like the idea of taking those off and having a wider vision.”

“What are the essential traits of future leader in procurement?” asked Julie.

“Is it this unicorn that ticks all the boxes. We intentionally seek a diversity of thought and a diversity of experience; different skill-sets. Because that drives innovation and that leads to great advancements.”

Procure with Purpose – Join the movement

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Enrol here to join the Procure with Purpose group and gain instant access to our exclusive online events, including the Don’t Go Chasing Unicorns webinar. 

The 4 Most Common Blockchain Criticisms – Busted

Blockchain technology is often criticised for its perceived limitations. But how much truth is there behind the accusations? 

We’re told that Blockchain is overhyped, it’s no big deal, it has some serious limitations and, whilst it might be a pretty cool piece of technology, it’s certainly not the procurement disruptor that it’s hailed to be…

But Jack Shaw, Co-Founder and Executive Director of the American Blockchain Council disagrees…

“Blockchain technology is currently criticised for several different limitations:

1. Security 

One of the questions I most commonly get is ‘If blockchain is un-hackable, how is it that there are all these stories of people having their bitcoin stolen?’

The reason for this is that bitcoin and many other digital currencies are typically still stored online and not on blockchain itself. In nine years  there has never been a successful hack of the oldest blockchain implementation, which is the bitcoin blockchain.

But people have lost money because they have stored there currencies on a more traditional centralised database.

2. Sustainability

A lot of criticism is aimed at the bitcoin blockchain and it’s important that people understand there are many different blockchains out there and there are many different ways of implementing these blockchains technically.

The Bitcoin blockchain is not only the oldest; it is the largest but also the slowest and the most unsustainable of the blockchains from an energy perspective. Figures indicate that supporting bitcoin blockchain requires approximately as much energy as the country of Peru. That is not something that is going to be scalable to many thousands of use cases across millions of organisations around the world.

It is becoming increasingly difficult for the bitcoin blockchain to keep up with the processing of transactions. Currently it processes 7 per second. by comparison visa processes something in excess of 50,000 per second. Clearly new approaches will be needed.

3. Transparency 

The same transparency that makes it easy to share information among authorised participants in the blockchain could, if not properly implemented, make it easy for those who are not authorised to view transactions to do so.

For example, if you’re participating in a supply chain ecosystem , the suppliers are not going to want their competitors to see the prices that they have quoted to you if they are offering you a significant discount.

How do you prevent that? By leveraging encryption technology and using blockchain to manage exchange of private keys to access that data.

4. Interoperability

How do we have multiple, different blockchains and how can those blockchains talk with each other? IBM have taken a strong leadership role in this area through their support of the open source hyper ledger platform for implementing blockchain. This is commonly used for permission blockchains, where only a limited and defined set of people and organisations can participate in the blockchain.

One of things that hyper ledger and a number of other blockchain inititiatves are actively working on is the issue of interoperability.

Procurement and Blockchain

This all seems very scary.  And there is a tendency for procurement pros to think ‘Oh my gosh. We still have to work out all kinds of technical problems surrounding blockchain, maybe we should put this on the back burner for a while’

But that would be a serious mistake.

I had a fellow come up me after a presentation I did about 20 years ago on the World Wide Web and e-commerce. He explained to me  ‘we don’t have the processing power, we don’t have the bandwidth and we certainly won’t ever have the security. This crazy notion you’re having of people being able to do electronic banking –  it will never happen it just can’t be done.’

At that particular point in time, he was right –  it couldn’t be done. But within 18 -24 months every major bank was rolling out online banking because the technical problems had been solved.

None of these problems are going to require us to violate the fundamental laws of physics in order to solve them.

They can all be solved as long as there is an economic incentive to do so.

A major IT services company identified that the three most common hurdles to blockchain adoption are

  • Understanding blockhain in use cases
  • Communicating blockchain to key decision makers
  • Evaluating cost benefits of use cases

None of these have to do with technical constraints. they are to do building awareness and understanding.

The purpose of the American Blockchain Council is to help senior level executives understand the strategic business implications of blockchain.   

Jack Shaw will be speaking on our latest webinar Blockchain: The Technology, the Myth, the… Legend? which goes live on 7th August at 11am EDT/ 4pm BST. Sign up here.   

Supply Chain Cyber Attacks On The Up

Software supply chain cyber attacks look set to be one of the biggest cyber threats facing organisations in the coming years. This week, the US intelligence community issued a new warning regarding future attacks…

Varlamova Lydmila / Shutterstock

The US intelligence community has issued a new warning on cyber attack risks.

The Foreign Economic Espionage Report, which was published by the US’s National Counterintelligence and Security Center (NCSC), warns that China, Russia and Iran are most likely to be behind future attacks.

“Software supply chain infiltration is one of the key threats that corporations need to pay attention to, particularly how software vulnerabilities are exploited,” William Evanina, the NCSC’s director and the US’s top counter-intelligence official, told the BBC.

“To get around increasingly hardened corporate perimeters, cyber-actors are targeting supply chains.

“The impacts to proprietary data, trade secrets, and national security are profound.”

The report details that despite the opportunities that technologies including AI and the IoT offer, they will also introduce vulnerabilities to U.S. networks – for which the cybersecurity community is not prepared.

The severe impact of cyber attacks was in evidence in June last year following the NotPetya attacks, ,  which cost nearly a billion dollars in collective damages. The White House called out Russia following these attacks issuing the following statement – “In June 2017, the Russian military launched the most destructive and costly cyberattack in history. This was also a reckless and indiscriminate cyberattack that will be met with international consequences.”

Experts believed that Russian hackers launched 2,000 “NotPetya” attacks in the early hours of June 27.  NotPetya was designed to masquerade as ransomware, but was soon revealed to be wiper malware with the purpose of destroying computer systems, erasing data and disrupting business operations.

Cyber attacks on the rise

One of the consequences and subsequent risks of living in a hyper-connected world is an increased vulnerability to indiscriminate cyberattacks.

According to Chain Store Age, “nearly 80 per cent of IT security professionals across the United States, Canada, UK, Mexico, Australia, Germany, Japan, and Singapore believe software supply chain attacks have the potential to become one of the biggest cyber threats over the next three years. Yet, few organisations are prepared to mitigate the risks.”

Whilst many organisations have response strategies in place to deal with cyber attacks, they are not necessarly holding external suppliers to the same security standards.

Tesla Asks Suppliers for Cash Back

  • Tesla sent a memo to some of its suppliers, asking to return cash to the automaker, The Wall Street Journal reported. Tesla did not respond to Supply Chain Dive’s request to confirm the memo
  • The automaker told the Journal it is looking for price reductions from some of its suppliers to improve competitive advantage.
  • Since the beginning of the year, “we’ve seen a huge run up” in the amount of money due to suppliers, Bill Danner, president of CreditRiskMonitor, a financial risk analysis and news service, told Supply Chain Dive. The figure, however, isn’t unexpected as Tesla ramps up production of the Model 3
  • At the end of the first quarter of 2018, Elon Musk assured Tesla shareholders he’s feeling “quite confident” the auto company will have positive cash flow in the third and fourth quarters of the year

Read more on Supply Chain Dive

‘Change public procurement rules in response to heatwaves’

  • In a report on heatwaves, the Environmental Audit Committee (EAC) said “extreme temperature events” in Europe were now 10 times more likely than in the early 2000s
  • “The government should make businesses aware of the developing threat of heatwaves and the economic consequences,” said the report
  • “Procurement rules should be updated so that schools and the NHS do not spend public money on infrastructure which is not resilient to heatwaves
  • “Research on the economic consequences of heatwaves concluded that there was a more significant cost to the economy than benefit,” said the report

Read more on Supply Management 

Record-breaking Prime Day’s aftermath

  • Now in its fourth year, Amazon Prime Day has grown into a major shopping event that not only drives online sales but creates ripple effects throughout the entire retail industry
  • But suppliers and retailers must prepare for a surge in consumers returning goods — or risk products turning in to “dead money”
  • Amazon recently announced it had sold more than 100 million products on Prime Day 2018, making it the biggest on record since it started the event in 2015
  • But now in the middle of its 30-day return period from Prime Day, Amazon and several retailers are likely fielding the return of hundreds of thousands or even millions of products

Read more on Supply Chain Dive