All posts by Procurious HQ

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

6 Ways To Prevent A Negotiation Blow Up

There’s no denying that negotiations can be tough. And the best thing you can do to lessen the tension and prevent a negotiation blow up is to be prepared…

Palms are sweaty, knees weak, arms are heavy…

No, it’s not the start of an Eminem song… (well, it is, but that’s not what we’re getting at!)

You’re preparing for a big negotiation with a group of key suppliers and you’re already anticipating a disastrous outcome.

Perhaps you already know the people you’re dealing with are difficult to work with, or you’ve heard about their reputation.

Or maybe you know your own negotiation skills leave a lot to be desired when it comes to crisis management.

Whatever the reason, there’s no denying that negotiations can be tough. And the best thing you can do to lessen the tension and prevent a negotiation blow up is to be prepared.

We joined a recent Negotiation Roundtable organized by CABL (Conti Advanced Business Learning), a firm that specialises in Negotiation & Influencing, on the topic of Emotions and Negotiation. We wanted to hear advice from a number of procurement and sales leaders on how to keep your negotiations sweet.

Giuseppe Conti, the founder of CABL, led the conversation by discussing how emotions can influence decision making during negotiations and the ways to increase effectiveness when this factor is taken into account.

  1. Practice mindfulness

If you enter into your negotiation like a coiled spring, chances are the spring won’t stay coiled for long. The calmer you are the calmer you’re likely to remain for the duration of the meeting.

Olga Guerous, VP Commercial – Mars,  recalled a confrontation she experienced early on in her career. A particularly difficult supplier, who’s emotions were “all over the place” became so angry that he was forced to “leave the room midway through a negotiation and remained in the corridor for fifteen minutes in order to calm down.

“He came back and apologised but the situation wasn’t redeemable and he didn’t get what he wanted. Losing his temper made him lose any power and control he had in the negotiation. Having full control of your emotions is a key benefit in negotiations.”

Paul André, Director Reduced Risk Commercial Supply – JTI agreed, recommending, low breathing and mindfulness to help create a barrier to your emotions.

  1. Practice what you’re going to say

If you’re nervous or apprehensive about an impending negotiation, there’s nothing wrong with rehearsing in advance, to ensure you come across as intended.

Regina Roos, VP &  Sales Segment Leader Mineral and Mining – Schneider Electric,  said: “In the morning in front of the mirror I smile and practice some conversations, particularly ones that help you respond to people that are angry.

“When you are talking you can’t see yourself.  When you look in the mirror you can practice your facial expressions so it is not ironic or sarcastic. I call it ‘the mascara moment’.”

Francesco Lucchetta, Director EMEAI Supply – Pentair, agreed asserting the ” importance of making people aware of emotions without showing them, making an effort to keep the exchange respectful and controlled”

  1. Be physically prepared

Regina Roos recalled working with a procurement leader who took a very unique approach to managing his negotiations. At the beginning of every meeting and regularly throughout he would direct participants to the bathrooms.

“The need to take a break, to go to the toilet can create problems and impact on emotions during a negotiation. It’s good to take a minute, recharge your batteries and re-enter the discussion with a fresh perspective.”

Olga Guerous agreed in the importance of taking regular breaks throughout the negotiation process, even if it’s simply a break in the current conversation.  “It’s a powerful technique, when emotions are running high, to completely deviate from that topic, particularly if you believe you are going to have minimal success. Switch to a less contentious discussion and return to the difficult point later, whether it’s in a few minutes or a few hours.”

  1. Prepare to be confident

Preparation before a negotiation is crucial to help regulate emotions because it gives you the confidence to calmly assert your position and communicate your key points.

Ifti Ahmed, Managing Partner – Titanium Partners, argued that the most important way to control emotions is through self-confidence. “Confidence comes from preparation. If you’re prepared – you’re confident. If you think you’re going to win – you’re confident. If you think you’re going to lose – that’s when the emotions come into it.

If it helps you, don’t be ashamed of preparing everything you have to say in writing and sticking to that script.

  1. Plan your stand-up routine

There’s nothing like a touch of light humour to diffuse an escalating argument. Alessandra Silvano, Global Category Director CAPEX & MRO – Carlsberg, explained that his favourite way to blow out tension during negotiations is to crack a joke.

“Of course it has to be tactful, considered and culturally appropriate but it can be a useful and powerful way to break the tension.  Be sure you are not offending anyone and perhaps keep it exclusively to jokes about yourself!”

  1. Pick your venue wisely

Location-choice can make or break the success of your negotiation. If you want to ensure all participants remain civil, calm and professional there’s nothing like a neutral or public space to guarantee best behaviour.

“I’m a very emotional person and I find it difficult to process,” said Alessandra. “The venue of the negotiation has a big impact for me. I try to pick a relaxing, informal setting, such as a dinner. In an office environment it’s easy to get angry. In a nice restaurant I’m more relaxed and it’s easier to joke around and control emotions.”

Blockchain: The Technology, the Myth, the… Legend?

We’re told Blockchain is a huge game changer, that it’s the biggest innovation since the internet. But we’re also told it’s overhyped, it’s no big deal and that it has some serious limitations. So…what’s the truth? “Depending on who you ask, blockchains are either the most important technological innovation since the internet or a solution looking for a problem.” These are the opening words to a recent Wired article, entitled: The Guide to Blockchain.

And they certainly resonate with procurement professionals across the globe.

We’re told Blockchain is a huge game changer, that it’s the biggest innovation since the internet; it’s unhackable, it’s pervasive, it’s unparalleled and ultimately…it’s coming to the mainstream imminently.

But on the other hand, 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…

It’s no surprise that when it comes to Blockchain procurement pros don’t know who to believe when to expect its takeover or how to prepare.

So we’ve enlisted the help of some blockchain experts to give you the truth, the whole truth and nothing but the truth.

On 7th August,  Procurious presents: Blockchain: The Technology, the Myth, the… Legend?

Blockchain: The Technology, the Myth, the… Legend?

We’ll be discussing: 

  • How will Blockchain impact procurement?
  • What are some of the most common misconceptions about Blockchain?
  • How is Blockchain commonly being used in businesses today?
  • How can blockchain help procurement pros to manage their organisation’s contingent labour force?
  • What are the flaws at the heart of blockchain? Is it over-hyped?

Webinar Speakers

Vishnu P Tadepalli, Global Program Manager – Procurement Blockchain Lead – IBM Procurement Services
Vishnu is a highly motivated design thinker and is a digital procurement / supply chain enthusiast. In his current role Vishnu Tadepalli is the Global Program Manager / Lead for procurement blockchain solutions at IBM Procurement Services (IPS) , program managing the blockchain procurement transformation for both IBM global procurement and its procurement services clients. In his earlier role at IBM , Vishnu product managed Procurement Cognitive solutions and earlier worked as a sourcing consultant for multiple Fortune 200 companies. In addition to IBM, Vishnu worked with Unilever , AGCO and Suzuki Motor corporation in supply chain transformation and category manager roles.  His experience spans end to end global supply chain, including both direct and indirect procurement.
Vishnu has an MBA in Strategy & Supply chain from Uni of Wisconsin, Madison and is currently pursuing second Master’s in  Artificial Intelligence. He is a member of Government Blockchain Association(GBA) and Council of Supply Chain Management Professionals (CSCMP).  An active Linkedlner, Vishnu likes to spend his free time social volunteering and mentoring.
Linkedln : linkedin.com/in/vishnutadepalli
Twitter Handle : @vishnu65886588 

Paul Sidhu, Blockchain Practice Lead – IBM

Paul is a senior leader with over 25 years experience delivering business transformation in large and complex business environments. A natural strategy and innovation practitioner, Paul works with business leaders to articulate the benefits of process optimisation, digital transformation and new operating models that impact upon their business and to present them with options and strategic recommendations in a way they both understand and feel passionately about.

Paul leads the IBM Global Business Services Blockchain Practice in Australia. His cross-industry background and working with clients in multi-discipline business functions enables a deep understanding for the needs of diverse stakeholders and the ability to solve business challenges by incorporating new solution offerings built with Blockchain.

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

Jack  is a leading expert on the strategic business implications of Blockchain technology who has spoken and consulted on Blockchain around the world.

He is a world renowned Keynote Speaker. He was recently voted one of the World’s Top 25 Professional Speakers by over 27,000 meetings planners, executives and conference attendees – the only Technology speaker to be accorded this recognition.

Jack has been a Technology Futurist for over 30 years – helping others to understand the impact of emerging technologies. In addition to Blockchain, he is widely recognised for his expertise in such breakthrough business technologies as:

  •   Artificial Intelligence,
  •   Internet of Things, and
  •   3D PrintingHe has advised such Fortune 500 Companies GE, Coca Cola, Johnson & Johnson, IBM, Oracle, and SAP as well as hundreds of small to mid-sized businesses.A charismatic speaker, he’s delivered more than 1000 keynote speeches and executive presentations in 23 countries and every U.S. state. Jack graduated from Yale with a degree in Business Administration and has an MBA from Kellogg in Finance and Marketing.

AmericanBlockchainCouncil.org 

How do I register for the webinar?

Registering for our webinar couldn’t be easier (and, of course, it’s FREE!)

Click here to enter your details and confirm your attendance. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

I’m already a member of Procurious, do I still need to register?

Yes! If you are already a member of Procurious you must still register to access the webinar via this platform. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

When is it taking place?

The webinar will take place at 9am EDT/ 2PM BST on 7th August 2018

Help! I can’t make it to the live-stream

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask a question?

If you’re listening live, our speakers would love to hear your questions and we’d love for you to pick their brains . Questions can be submitted throughout the live stream via the webinar platform.

If you think of a brilliant question after the event, feel free to submit your question via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Blockchain: The Technology, the Myth, the… Legend? goes live on 7th August at 9am EDT/ 2pm BST. Sign up here.  

Delivery Failure Notification: Your Spend Analysis Tools Could Not Deliver On Their Promise Of Good Data

When spend analysis solutions have failed to solve the problem they were designed to fix, they leave their users wanting more. But there are always ways to salvage your investment….

At a high level, companies utilising spend analysis solutions are leveraging spend data for the purpose of gaining visibility into cost reduction, performance improvement, supply risk, compliance, and other value generation opportunities. Simply put, spend analysis, and the resulting spend visibility, are considered “table stakes” for any procurement organisation. No procurement function can make a claim to world-class status or even average performance if it lacks this entry-level capability. It should be the first and last step of the strategic sourcing process that both identifies the opportunity and measures the organisation’s achievement thereof.

While these solutions have existed for decades, many companies that utilise them continue to suffer from poor procurement data, if not downright unusable data. They are undone by noncompliance, data entry errors, fragmentation of data across multiple systems and general poor data discipline.

Many of these solutions encompass complex organisational schemas such as UNSPSC, which was designed for other purposes and applies a categorisation structure that reflects the way supply markets are organised. Furthermore, general ledger (GL) codes are simply not a trustworthy substitute for a true procurement and sourcing taxonomy, and were designed for people who write the checks.

Certainly some companies must have great procurement data, because so much money has been spent on these systems specially intended to solve this challenge. But in cases where those technologies fail to deliver on the promise of good data, they are typically suffering from a host of data issues due to:

  1. Accounting-oriented data not aligned with procurement categorisation
  1. Maverick and unmanaged spend not captured in the solution
  1. Poor input discipline, or procurement-related data being entered by non-procurement resources

When these solutions have failed to solve the problem they were designed to fix, they leave their users wanting more. User adoption is low and many find that additional data manipulation is required, with many organisations dedicating internal resources to spend analytics, despite paying at third party to perform this for them. These tools are often clunky and difficult to use and fail to deliver the key insights procurement professionals need to drive value and impact the bottom line.

The market is calling for an end to this systemic problem impacting most procurement functions. After all, having access to quality data will always ensure procurement a seat at the table. Organisations should be able to rely on solution providers to provide them at a minimum with:

  • Highly accurate categorisation
  • Actionable, data-driven, procurement-focused insights
  • Fingertip access to ‘good” or even “great” data through a simple, easy to use interface

If you find you are not experiencing this with your solution provider, there are still ways to salvage your investment. Identify the desired changes and develop strategies with your vendor to overcome the visibility challenges. They should be ready and willing to restructure the underlying data/taxonomy to ensure you reap the benefits of the solution you implemented. Today, procurement professionals should be focusing on the strategic aspect of their roles and elevate beyond the frustrating and tactical world of data manipulation.

Continue reading Delivery Failure Notification: Your Spend Analysis Tools Could Not Deliver On Their Promise Of Good Data

Burberry Under Fire Following Reveal of Mass Product Burn

In the past five years luxury retail brand Burberry has burned more than £90m worth of stock. What’s the justification?

Sorbis / Shutterstock.com

British fashion giant Burberry hit the headlines this week as it was revealed, in its 2017/2018 annual report, that it has set fire to over £28 million worth of products.

According to the BBC, this takes the total value of goods Burberry has destroyed over the past five years to more than £90m.

Several commentators have explained this procedure as common practice in the fashion industry; used as a measure to protect  intellectual property and to prevent products being stolen, replicated and sold on for a fraction of the market price. Destroying stock also ensures it will not worn by what the brand believes to be the “wrong” sort of people.

Indeed, Burberry is far from being a singular culprit in the fashion industry when it comes to destroying excess stock. In 2017, The New York Times carried out an exposé on Nike, which revealed it was deliberately destroying stock by slashing large rips through its shoes.

According to the New Statesman, luxury brands are all at it – “the owners of Cartier and Montblanc destroyed more than £400m worth of watches in two years after buying back unwanted stock from jewellers.”

Burberry’s spokesperson said “Burberry has careful processes in place to minimise the amount of excess stock we produce.  On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste.

“This is a core part of our Responsibility strategy to 2022 and we have forged partnerships and committed support to innovative organizations to help reach this goal.

“One example is our partnership with the Ellen MacArthur Foundation’s Make Fashion Circular Initiative, where we join other leading organisations to work towards a circular fashion economy.”

What the critics say

The news has sparked a great deal of controversy in the media with critics describing the practice as elitist, wasteful and unethical.

Kirsten Brodde, who leads the Detox My Fashion campaign at Greenpeace, spoke to The Guardian arguing that Burberry  “shows no respect for its own products and the hard work and natural resources that are used to make them”.

“To learn that a major fashion house with power and authority is choosing to add even more retail waste to the billions of tonnes offloaded to landfills and oceans around the world every year is reckless and arrogant” said Niamh Odonoghue for Image.

“The stuff that Burberry is burning is not waste – it is surplus, which is a very different concept. It is perfectly useable stuff,” said Orsola de Castro, co-founder of Fashion Revolution, a not-for-profit group that campaigns for greater transparency in the supply chain, speaking to the Independent. 

“Designer fashion is still, undoubtedly, all about class – or, rather, about staying away from anyone not part of the elite,” said Billie Esplen for the News Statesman

In a world where there is increasing pressure for big brands to lead the charge on ethical and sustainable business, is Burberry’s behaviour completely unacceptable? Will the outrage sparked by this news story encourage luxury fashion brands to reconsider their approach to managing surplus stock? Let us know your thoughts in the comments section below.

In other procurement news this week…

Lidl revealed as worst supermarket for recyclable plastic 

  • Less than three-quarters of the food retailer’s plastic packaging is widely recyclable, found a Which? investigation that surveyed 27 popular own-brand groceries from the UK’s 10 biggest supermarkets
  • Lidl came bottom of the pile with 71 per cent of its packaging widely recyclable, Morrisons emerged as the frontrunner with 81 per cent
  • All the supermarkets surveyed by Which? signed up to the UK Plastic Past in April, which vowed to make all plastic packaging reusable, compostable or recyclable

Read more on Supply Management 

Rising trade costs could pose a ‘dairy dilemma’

  • Even if the government strikes a trade deal with the EU, impacts on the supply chain, such as non-tariff trade barriers and labour shortages, could lead to spiralling costs for dairy companies, a report by the London School of Economics
  • The report, commissioned by Arla, said longer waiting times for customs inspections at the border would increase trading costs because of longer hours for lorry drivers
  • The report warned of extra delays because the UK Customs Declarations Service would have to deal with 250m declarations per year after Brexit, 100m more than the 150m it was designed to handle, which could further compound the £111 figure

Read more on Supply Management 

Adidas pledges to go green by 2024 

  • Adidas will only be using recycled plastics for all their products beginning in 2024. Earlier this week, the Financial Times reported the move that will feature the company removing new plastics from their athletic wear, which includes polyester
  • Polyester is currently found in 50 percent of Adidas’ products, which has become a popular material to create athletic wear with
  • This is the latest sustainable move by Adidas, who has sold one million shoes that were made with recycled plastic from the oceans

Read more on Green Matters

One Year On: Has Grenfell Changed Procurement?

How can procurement professionals learn from the tragic events at Grenfell tower in June 2017? 

Sasa Wick / Shutterstock.com

It’s just over a year on from the Grenfell Tower fire, which claimed the lives of 72 people and marked the UK’s worst residential fire since World War Two.

With the Grenfell Tower Inquiry ongoing; there are still so many unanswered questions regarding the circumstances of the fire. And for those directly impacted by the events, the trauma experienced is still very present.

As several victims and commentators have pointed out; those who lost their lives should not be allowed to die in vain. There are opportunities to learn, to improve policies and to ensure that the mistakes that were made will never be made again. Procurement should be at the forefront of these changes.

Last month, Claire Curtis-Thomas, British Board of Agrément chief executive, spoke at a select committee hearing on Dame Hackitt’s review of Building Regulations. She labelled the procurement process a “fundamental problem” that has led companies to become “complicit in poor outcomes”.

Has Grenfell changed procurement?

Alan Heron, director of procurement at Places for People (PfP), is one who believes the landscape has now changed for procurement. “It took something as horrible as Grenfell for people to realise there’s a consequence to looking for the lowest price,” he asserts. “It’s refocused everyone away from ticket price and back to value, which is where it should have been all along.”

A recent report conducted by Fusion21 investigates how procurement professionals working in the housing sector are reacting and adapting to the tragedy.

Throughout April and May 2018  Fusion21 surveyed 80 procurement professionals working for organisations that
collectively own more than a million homes.

The results suggest that social landlords are placing a much greater emphasis on quality when making procurement decisions following the fire.

  • 50 per cent of respondents said the Grenfell Tower fire has meant their organisation now places greater emphasis on quality when making procurement decisions. Among those who said Grenfell had not affected their organisation’s approach, were many who stated that quality was already vital
  • These professionals stated that there is now a greater focus on quality especially in relation to fire safety, and ensuring contractors had completely up-to-date information
  •  75 per cent of procurement professionals described compliance as “extremely important” when achieving value for money

Sarah Rothwell, Head of Member Engagement at Fusion21 explained “we conducted our Procurement Trends research in order to find out what was most important to procurement professionals after a hugely challenging couple of years for everyone in the housing sector.

“It will surprise no-one that, in the wake of the Grenfell Tower tragedy, the work of procurement teams around compliance hasbeen the focus of renewed scrutiny. The research findings [confirm this].”
Concerningly, 55 per cent of respondents admitted to feeling  some pressure to procure at the lowest price and one respondent, wished Grenfell had altered the emphasis their organisation placed on quality.
In other procurement news this week…

EU warns the US and China against a trade war

  • US president Donald Trump, Russian president Vladimir Putin and China have been urged to work with Europe to avoid trade wars and prevent “conflict and chaos”
  • Last week, European Council president, Donald Tusk, lambasted the US president’s constant criticism of European allies and urged him to remember who his friends are when he meets Mr Putin
  • He said that Europe, China, the US and Russia had a “common duty” not to destroy the global order but to improve it by reforming international trade rules

Read more on The Independent

Could automation increase modern slavery?

  • In its annual Human Rights Outlook, Verisk Maplecroft warned “drastic” job losses caused by robot manufacturing were predicted to cause “a spike in slavery and labour abuses” over the next 20 years
  • It said more than half of jobs across the ASEAN-5 countries of Vietnam, Cambodia, Indonesia, Philippines and Thailand could be lost to automation, which could push already at-risk supply chain workers into forced labour
  • Women are likely to be disproportionately affected because of their high representation in the garment, textile and footwear industry, an area that is particularly at risk of automation, the report said

Read more on Supply Management 

Brexit puts food supply chains at risk

  • Perishable goods are particularly at risk when supply chains are delayed, and U.K. and EU food producers are on edge as the clock ticks down toward March 29, 2019
  • Earlier this year, food suppliers and manufacturers signed onto a manifesto advocating for frictionless trade and innovation-focused regulation
  • If, post-Brexit, enhanced border controls and regulatory checks are implemented between  nations, delays and even failed deliveries could result
  • With negotiations in flux, many U.K. and EU businesses have taken matters into their own hands. Several European companies are planning to relocate parts of their supply chain out of the U.K. About one-third of U.K. businesses with EU suppliers plan to replace them with British vendors

Read more on Supply Chain Dive

I Have Measured Out My Digital Transformation In Coffee Spoons…

Eager to lead your procurement team through a digital transformation?  We’ve got some advice from someone who knows the score… Grab a coffee and let illycaffè’s Procurement director talk you through the process… 

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Digital Transformation.

We assume that everyone is at it behind closed doors.

But how are they doing it? What’s the process? Are they doing a better job than us? Or is everyone simply floundering in the dark? Sometimes, you need the inside scoop from someone who knows the score!

Last month, at Jaggaer’s REVInternational 2018 event in Munich, Diego Pedroli, Procurement and Logistics Director – illycaffè gave us an overview of the organisation’s ongoing digital transformation and how he made it happen.

“What I’ve learnt over these two days” he began, “is that we are actually at the beginning of our [digital transformation] journey, and it’s one that will never end.  But at least we’ve started.”

illycaffè: A Brief History

illycaffè remains a family owned company with 1000+ employees,  100,000+ clients and B2B business in 140 countries.

Founded in Trieste, Italy, illycaffè prides itself on a century of innovation from launching the first high pressure espresso machine in 1935 to introducing the first single portion coffee pod in 1974.

Diego’s mission, as he sees it, is to uphold procurement excellence: continually advancing the procurement processes and supplier cycle management and managing the execution of the multi-year procurement programs.

The organisation’s digital transformation began back in December 2013 and has been evolving ever since.

Digital Transformation: The Beginning

Diego’s ultimate aim with leading illycaffè through this transformation was to streamline their processes organisation-wide, thus transitioning the procurement team from saving-hunters to value-hunters. “We wanted to try to digitalise the processes to add value and bring time for employees to actually look after the business.”

“At first it was all about developing and defining guidelines and procedures, changing the mindset of our people and the people working closely to us. We wanted to give procurement the responsibility to do procurement, not shopping!”

Between 2016 and 2017 Diego worked with illycaffè’s CEO and the board to approve the introduction of an SRM platform. After going through the bidding process and selecting Jaggaer they immediately kick-started the implementation.

Digital Transformation: The End Game

The hardest part of embarking on a digital transformation is often convincing key stakeholders, namely the CEO or CFO, of its necessity and potential value-add. Having a strong case to present and key objectives  is crucial. As Diego explained, “we were able to convince our CEO to implement the SRM system because of these factors:”

  1. Governance and Compliance
  • Allows for traceability of processes
  • Gives procurement professionals complete management of all suppliers, which greatly limits risk
  • Makes it easier to monitor suppliers and improve performance

2. Method

  • Implementation of a culture of shared method
  • Standardisation of procedures makes the business more streamlined
  • Increases the speed of response to internal and external stakeholders
  • Allows for continuous improvement, partly through sharing best practices

3. Transparency

  • Gives procurement greater accessibility and makes information easier to interpret
  • Having data in one place makes it simpler for everyone in the business to work and guarantees ethical practices and ethical processes

4. Economic Return

  • There are obvious economic benefits due to the workflow automation
  • Allows for a reduction of TCO in different purchasing categories

Diego’s parting words of advice? When it comes to digital transformation, “it is not enough to have the sponsorship of your CEO. And it is not enough to have a good tech partner. It’s important to have each and every person in your team on board.”

Learn more about Jaggaer and  REVInternational 2018 

Is Australia’s Proposed Modern Slavery Bill Well Below Par?

Australia’s new modern slavery bill is a welcome development in the fight to end slavery worldwide. But is the proposed legislation up to standard? 

In April 2016 the UK passed  new legislation, the first of its kind, making it compulsory for all businesses with a turnover of over £36 million to prove they have taken steps to remove slave and child labour from their supply chains.

Legislation like this, which also exists in France the Netherlands and the US,  forces big organisations to fully audit their supply chains and has consequently put pressure on smaller businesses to eradicate the practice too.

This week, Australia announced it would be following suit, proposing a Modern Slavery Bill, which uses the UK’s act as a model.

The bill, introduced by Assistant Minister for Home Affairs Alex Hawke, “seeks to stamp out the sale of any product in Australia that involves non-voluntary labor” and will require Australia’s organisations with an annual consolidated revenue of more than $100m (around 3000 businesses) to publish annual statements on the efforts they are making  to tackle modern slavery in their supply chains. These statements will have to be signed off at board level and published within six months of the publication of their annual reports.”

The Department of Home Affairs will also start publishing an annual statement on possible modern slavery risks in commonwealth procurement.

The proposed bill follows the Federal Government’s announcement in May that $3.6 million would be provided to the Department of Home Affairs for a new Anti-Slavery Business Engagement Unit to manage Modern Slavery Reporting Requirements by large businesses.

Part of this task will be overseeing a publicly accessible central repository of businesses’ Modern Slavery Statements, as well as providing support and advice to businesses on modern slavery risks.

The announcement was well received by anti-slavery charity walk Free Foundation. “The Australian Government’s commitment to support an Australian Modern Slavery Act with a new, well-funded unit is clear progress towards the Act’s effective implementation” said Jenn Morris,  Chief Executive.

Is the proposed modern slavery bill up to scratch?

Australia’s proposed Modern Slavery Bill has sparked some controversy amongst charities and human rights campaigners for a number of reasons.

  1. The bill proposes that only businesses with a revenue of over $100m must audit their supply chains. The Law Council has argued that the revenue threshold should be much lower – no higher than $60m to demand compliance from more organisations
  2. The bill doesn’t demand that there will be a public list of who must report. Without this information, if companies fail to act, this fact will remain hidden
  3. The bill does not propose any penalties for organisations that fail to report their findings or report incorrect or misleading information on the steps they have taken to combat modern slavery. Clare O’Neil, the shadow minister for justice said “we shouldn’t be leaving it to business to police themselves on slavery”
  4. The government have not established an anti-slavery commissioner to enforce the legislation nor vowed to provide access to a national redress scheme for victims of modern slavery

Keren Adams, director of legal advocacy at the Human Rights Law Centre, said “It’s absolutely the right step for the government to be introducing legislation to help flush out abuse, but today’s bill is missing some vital ingredients that would make it effective in doing so.”

Modern slavery: know the signs

Procurement and supply chain professionals are uniquely positioned to identify and tackle modern slavery in their supply chains. But you need to know the signs…

Firstly, it’s important to understand and look for the red flags, which might be extremely subtle. The likelihood of modern slavery is increased in conflict zones and unregulated sectors, particularly if the jobs are low-income and do not require education or specific skills. Migrant workers, women and children are among the most vulnerable.

Circumstances when passports or identification documents have been removed, excessive recruitment fees are subjected upon migrant workers or subcontractors further outsource work without prior consent are all indicators of exploitation.

Encountering one of these situations may not in and of itself amount to modern slavery but your organisation mustn’t assess anything  in isolation. It’s important to look for the series of signals in order to  decipher whether they paint a clear picture of modern slavery.

“Procurement teams are on the frontline,” Fiona David, former Executive Director Global Research  – Walk Free Foundation asserts. “They manage supplier relationships, they understand the business, the risks and the regions in which they operate. The indicators of modern slavery, being a grievous crime, is actually quite easy to identify, when you know what you are looking for.”

But advocacy groups and investigative reporters mustn’t be the sole figures doing the digging to reveal incidents of modern slavery.

“CSR and Procurement teams should work together across the sectors on these issues, as addressing modern slavery is a “pre-competitive” issue.  Companies can’t compete on sub-standard ethical and criminal practices.”

Have a listen to our recent webinar on modern slavery, Procurement Unchained. 


Jaguar Land Rover (JLR) warns of mega Brexit costs 

  • JLR has become the latest firm to warn of the costs of losing frictionless trade between the UK and EU.
  • JLR said more than 40% of parts going into cars built in the UK were imported from Europe and it spent £5.37bn with EU suppliers in 2017-18.
  • “A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile; we have spent around £50bn in the UK in the past five years – with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome” said Ralf Speth, CEO of JLR.

Read more on Supply Management  

Donald Trump imposes first tariffs on China

  • Punishing American tariffs on Chinese imports took effect early on Friday, marking the start of President Donald Trump’s trade war with the largest US trading partner and intensifying the anxieties of global industry.
  • The arrival of the long-threatened tariffs marked the failure of months of dialogue between the world’s two largest economies
  • An industrial survey confirmed that companies were white-knuckling their way through Trump’s intensifying, multi-front trade assault.

Read more on the Telegraph

Grenfell: Inspectors label procurement a ‘fundamental problem’

  • A leading industry certification and inspection body has labelled the procurement process a “fundamental problem” that has led companies to become “complicit in poor outcomes”.
  • Speaking yesterday at a select committee hearing on Dame Hackitt’s review of Building Regulations, British Board of Agrément chief executive Claire Curtis-Thomas said the procurement process for main contractors represented a “real problem”.
  • In Dame Hackitt’s post-Grenfell review of Building Regulations, it was suggested the industry should take the lead and decide for itself how to improve building quality and standards.

Read more on Procurious 

Disabled Does Not Mean Disqualified: Challenge Your Perceptions of Ability

How can procurement professionals make disability work in the workplace? 

This blog was written by Julie Gerdeman, General Manager, SAP Ariba. 


One of the greatest joys of my work at SAP Ariba is the opportunity to wear more than one hat; not only heading up our payments business but also serving as the executive sponsor of our diversity and inclusion efforts. At the core of our D&I strategy is an aspiration to build an inclusive culture around the customer, innovation, and employee experience to enable us to become the most diverse company in the cloud.

Recently, I had the honor of hosting SAP Ariba’s popular Diversity and Inclusion luncheon at Ariba Live Amsterdam. This year’s theme, Rising Above the Impossible, focused on the importance of disability inclusion and leveraging accessible technology for better business outcomes because SAP Ariba recognizes them as important to the future of the workplace. For the event we assembled disability inclusion experts from different parts of the globe, and I had the great pleasure to get to know a group of phenomenal and courageous women, including our keynote speaker Nicky Abdinor (Nicky’s Drive) and panelists Lesa Bradshaw (Bradshaw LeRoux), Tania Seary (Procurious), Susan Scott-Parker (BDI), and Stefanie Nennstiel (SAP). I’d like to share with you three nuggets of wisdom from my discussion with them that has left a lasting impression:

1. “If You’ve Got the Drive, the Destination Is Up to You.”

I will never forget Nicky Abdinor, a clinical psychologist, who touched our hearts and minds as she challenged all perceptions around ability with her core message to focus on what you can do versus what’s you can’t. She graciously shared her personal story of overcoming her disability by focusing on her ability to create sustainable change in her attitude, beliefs, and emotions to achieve the possible. She shared her mantra with the audience: “If you’ve got the drive, the destination is up to you.” I thought this was a great takeaway we can all relate to and apply in our lives because no matter if the disability is visible or invisible, we all have the power within us to choose to achieve the possible.

2. “Make Disability Work in the Workplace”

The talent pipeline and impact on the future of procurement is top-of-mind for our Procurement professionals. I see now more than ever that a diverse workforce is imperative for a business to survive in the digital era and is a topic that all our audiences want to discuss.

Our panelists were candid and offered some practical advice for all to use when they returned to their businesses, particularly around “making disability work in the workplace.” Companies must commit to building an inclusive culture that allows all employees, not just the perceived majority, to thrive at work. This begins with recruiting and retaining diverse talent.

At SAP Ariba, we are building our strong foundation by empowering employees to uncover their unconscious biases, which we all carry as human beings, and learning to eliminate bias from decision-making for better outcomes with our Business Beyond Bias training program. In addition, the panelists encouraged the audience to ensure their companies develop a disability and inclusion strategy to empower managers to make intentional decisions around reasonable accommodations that allow everyone the same opportunity to perform their job responsibilities. For example, SAP Ariba has made the intentional decision to participate in the Autism at Work Program because we value neurodiversity and are seeking a specific set of skills to enhance our workforce to widen our perspective on the business. Our disability and inclusion strategy enables our managers to go beyond traditional sources of talent, and this has made a positive impact in our overall employee morale.

From experience, we know that innovations often originate from unlikely sources.

3. Accessible Technology Can Make a Real Difference

Another critical component that enhances the success of disability and inclusion efforts is accessible technologies. The benefits extend from the home to the workplace, as accessible technologies transform the way people with disabilities contribute and thrive. They serve as a tremendous equalizer leading to retention, development and advancement. At SAP Ariba, we are deeply committed to ensuring that accessible technologies are integrated into our business.  We are amplifying this approach by promoting the importance of accessible technologies among buyers and suppliers and buyers on the Ariba Network.

The Important Role of Procurement

Procurement leaders play an important role in bringing visibility to the value of a supplier diversity strategy that can increase competitive advantage through an inclusive supply chain, offering opportunities to underrepresented suppliers. By now, we are all familiar with the research that shows companies that embrace diversity are more profitable. If you haven’t already, I recommend reading The 2018 Delivery Through Diversity Report by McKinsey for the latest data and insights.

As I reflect on my wonderful experience learning from our knowledgeable disability and inclusion experts, I feel hopeful and encouraged with the opportunities available to procurement professionals to make a positive contribution toward building an inclusive workforce and a diverse supply chain. Ultimately, as we embrace business with a purpose, the ability to contribute toward the greater good of society fuels my passion for leading and implementing diversity and inclusion within procurement.

Julie Gerdeman is GM and Global Head of Payments & Financing at SAP Ariba.