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Procurious Big Ideas Panel Discussion #2 – Where Are Procurement’s Blind Spots?

What risks does procurement face in the coming years? And what are the profession’s major blind-spots?

This was the question for the second panel discussion at the Big Ideas Summit 2015. There was plenty of passion on display, and at some points the conversation got a little heated, but there were also some fantastic points raised.

With a panel containing Tim Hughes, Olinga Ta’eed, Chris Lynch, Giles Breault, Nic Walden, Jason Busch and Lance Younger, the discussion took in hot topics like social value, procurement transformation, procurement moving away from Finance and leveraging external innovation. This is one not to be missed.

Watch the full discussion here.

See all the keynotes and panel discussions from the Big Ideas Summit, plus Big Ideas from our 40+ Influencers.

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

Is ‘Free’ a Dirty Word in Procurement?

How can you resist something that is free? Even when something is genuinely free, there’s still that voice at the back of your mind that sounds a warning. 

If someone offers you something for free do you automatically say no? Do you sometimes get curious and wonder why it is free? If you ask more questions and find out that it is truly free, do you still say no? Or do you wait until you find out that there aren’t any strings attached either before you take a chance and say yes?

It doesn’t matter what walk of life you are from, or which profession you work in, there is something that has changed in the human psyche that has made us all inherently suspicious of the word ‘free’. And in procurement, this suspiciousness only appears to get worse.

Something for Nothing?

We now live in a very skeptical society. Long gone are the days where you took someone at their word, without question. Now, recommendations and references are gladly accepted, but further research and checking is carried out before anything is done with them.

It’s probably true to say that there are few things that can be offered that are truly free or come with no strings attached. Entering a competition or signing up to a ‘free’ service online puts your e-mail address on a mailing list, to allow you to be sent future opportunities. Even ‘free’ products are likely to be being used as a loss leader to make you think about spending real money.

Perhaps the reality of it is that we are no long as trusting in nature as we once were, and trust has to be earned, rather than being given until proven otherwise.

Trust me, I’m a Procurement Professional

Trust comes in a variety of guises in procurement and supply chain, two of which we can look at here. First there is the trust between the buyer and supplier, the buyer and end user, or between any two links in the supply chain. This trust is based on the idea that what has been ordered or requested is what is delivered, at the right time.

This is trust that needs to be earned, and is a particularly fragile form of trust, which can be shattered by one missed delivery, one failed quality inspection, one wrong phrase in a negotiation. What is key though, is that this trust is crucial to the smooth operation of a supply chain.

Trust can be built in the supply chain through providing great, consistent service, and delivering on promises. Transparency in operations is a good tool to build trust – many organisations are building consumer trust in this way by making their supply chain operations transparent to the public.

 Everyone Likes a Freebie

The second type of trust is between the procurement or supply chain professional and their stakeholders, such as their employer, shareholders or the public. The trust in this case is based on the professional doing their job in an ethical fashion, and not being in receipt of ‘free’ things in return for contracts and business.

The ‘free’ items on offer could range from being taken out for dinner or being taken for hospitality to a sporting event, to kick-backs and bribes. There have been numerous reports of bribery and unethical behaviour in procurement, all of which have succeeded in eroding trust in the profession, as well as giving the word ‘free’ negative connotations.

However, it could be argued that not every ‘freebie’ is given with strings attached or with ulterior motives. In fact, giving and acceptance of gifts can help to create goodwill in the supply chain, or show appreciation for a job well done, or a successful relationship.

While strong governance regulations help to ensure transparency and ethical behaviour, requiring endless forms and registers to be filled in for low value gifts is potentially punishing the honest many, for the actions for the dishonest few. Now that procurement has begun to earn that trust again, maybe it’s time for the profession to be trusted more.

After all, free isn’t such a bad word, is it?

We would be interested to know what you think? Have regulations gone too far? Or are they entirely justified in light of past events? Is there such a thing as a ‘free lunch’ in procurement?

Is Brand Paranoia Stifling Debate on Social Media?

More and more people enter the world of social media every day, each with their own thoughts, opinions and values. Surely this is a recipe for open debate? Perhaps not.

True, you see plenty of heated conversations on social media – people airing their views on a host of subjects, from television programmes to films, restaurants to products – but all too often they descend into arguments, instead of a proper debate.

Argument vs. Debate

Take the Scottish Independence Referendum in 2014 as an example. Social media was full of posts from both sides’ supporters, but in many cases these posts only contained campaign rhetoric, rather than hard facts, and frequently resulted in personal insults being thrown around.

When we talk about debate, we mean what you might have learned at school or university – two sides with structured, well-informed and well-supported arguments for or against a topic, which were presented and listened to respectfully, even if you didn’t agree with it.

Social media platforms seem to be set up perfectly for this to happen. Take the concept above, add in a global audience, all with different facts, figures and experiences, and you should have the recipe for quality, informative debate.

But this sort of debate is so seldom seen on social media. Why?

Personal and Professional Brand

The rapid growth of platforms like Facebook, LinkedIn, Twitter, et al., have enabled people to have a publicly visible account of their CVs and career histories, likes and dislikes, thoughts and opinions and pictures of their favourite things.

From a personal point of view, this is great. Our most meaningful social networking interactions happen within a group of friends, most of who will probably shares these interests in some way.

However, taken from a professional point of view, you have a diverse group of users and stakeholders, all of who have access to this public information, and who are able to link you as a person to all of these accounts.

Try as you might to remain anonymous, or limit your public exposure, as soon as you have a social media account, you are there for everyone to see. And in a professional sense, this means your peers, colleagues, managers, right up to the CEO and owner of the organisation.

Brand Paranoia

Like it or not, your public digital face represents your organisation. What you post, Tweet or share could potentially be attributed to both you and your employer. Even the ‘magic’ words, “My views are my own”, used as an attempt to separate individual and organisation may not stop people making the connection.

And there are plenty examples, like this one, of an employer taking a hard line if they think their brand is being misrepresented or negatively impacted by association.

The key here is brand. Whether it is personal brand, something that has taken on a much greater relevance in the digital world, or organisational brand, people are very (and rightly) concerned about how their brand is perceived by the public.

For organisations, it could mean the difference between retaining and losing customers. For individuals, it could damage their chances of landing their dream job, thanks to an errant post on a social network.

A friend recounted a story to me about how she had been contacted by a colleague regarding a post of hers that was “out of the norm”. It turned out it was her son who had posted, while logged into her account. No harm done, but an object lesson on the reach of social media.

Bringing Debate Back

However, I think this has all gone a bit too far. For sure, I would expect to be hauled over the coals by my manager if I insulted someone on Twitter, which was then associated back to the company.

But engaging in a real debate with one or more other parties, where an argument is built around facts, and everyone is treated fairly, where’s the harm in that?

Procurious has over 9000 members in its community, with another 20,000+ followers across its various platforms. The chances are high that not everyone will agree with me (even about this article), and that’s great.

We want to stimulate debate – it’s one of the best ways to learn and develop as a person and a professional. The Procurious Discussion forum is a great place to start, and everyone can get involved.

So the next time you see a point that someone has made on social media that you don’t agree with, and you can back up your opposing point, don’t shy away, post and start a dialogue. You never know what will come of it.

Big Ideas in Technology: 2016 and Beyond

We’ve rounded up some of the biggest disruptive technology trends we expect to see in workplaces the world over in the next twelve months.

Drones and drone lanes

What: As drones have begun to take over our skies in 2015 concerns have grown over the fight for airspace.

Currently the FAA only prohibits drones from flying near airports and their associated airspace, but is this enough?

How: As we peer into the future we expect commercial delivery services from Amazon (and others) to begin rollout, as well as increased numbers of hobbyist pilots carving out lanes for themselves.

Tighter regulations will likely divide the sky with pilots of commercial and business drones utilising the 200-400 ft zone, while those using drones for recreation are limited to 200 ft and below. This will not only better promote safety in the skies but keep lanes clear for priority transport. This advantage will come into its own for those looking to improving logistics solutions in disaster zones, battlefields or delivering aid to inhospitable terrain.

Despite being used for good we should also remember that drones are already being used to the detriment of our profession. Drone surveillance is increasingly on the rise and advancements in camera technology mean drones are capable of spying on factories, warehouses and ports from afar. Thus firmly putting the threat of corporate espionage, competition and imitation back in the spotlight.

Bots

What: Chances are if you’ve been active on the Internet since the late 90s you’ll already be familiar with one of the surprising new trends for 2016: Bots. But while the bots we’ve likely grown accustomed existed solely to frequent chat rooms or perform basic monitoring tasks, the bots of the future are intelligent and much like us, learn with each interaction.

Not to be confused with the likes of your Siri or Cortana (smart virtual personal assistants) living on our mobile phones and tablets, those in the know believe that bots capabilities are now so advanced they could quietly boost our productivity levels and help transform time-consuming processes.

How: In business press offices and newsrooms bots will be poised to automatically sort and tag articles, as well as actively monitor and react to social media. While we’re not a point where bots can realistically replace your social media teams, automation could be used strategically to help manage the strain. Elsewhere bots will be utilised to manage stocks and HR teams will rely on them for getting new employees up to speed. We can also expect to see more automation in services like Slack, making the organisation of meetings and status updates a thing of the past.

Virtual reality

Virtual reality

What: Virtual reality (VR) has been the word on the lips of tech tastemakers since the sixties, now it looks like 2016 will finally be the year to usher in the VR dawn.

VR is best described as a computer-simulated reality. Modern technology grants us full immersion within the imagined environment through the use of a head-mounted display.

How: With backing from some of the biggest names in interactive technology (Oculus VR, Sony, Valve and Google to name but a few),

Unlike Augmented Reality (AR) which uses text, graphics and sound to add a useful extra layer of data to your immediate surroundings, VR transports the user into a carefully constructed world.

Although synonymous with gaming, virtual reality also offers-up an intriguing wealth of uses in the manufacturing, health and transport industries. Dassault Systemes – a European software company that specialise in 3D design and product life cycle management, works with organisations to ensure that costly mistakes are confined to virtual reality and the products rolling off production lines are perfect. Vehicle designers can explore the chassis of a car (both inside and out), food and drinks manufacturers can see their products on shelves, while advanced 3D modelling techniques have even recreated the Pyramids of Egypt and the Normandy D-Day landings.

Wearables

What: Despite wearable titans like Apple, Samsung, Microsoft, Fitbit, Pebble, Garmin, Xiaomi and Jawbone sewing the market up in the last few years, wearable tech is only just beginning to deliver on the promises teased at its inception.

How: Fitness bands, sports watches and smartwatches are clever pieces of kit for sure but we’re on the cusp of welcoming wireless body area networks, neuroenhancers and earables which will shift wearables away from the wrists of the consumer and into real-world applications.

Think of earables as little computers that sit in your ears – according to patent reports, Apple is working on earbuds that are capable of both monitoring and relaying temperature, perspiration and heart rate. Head gestures could also be used to control electronic devices paired with the earable.

Wireless body area networks will also share similar recorded data with medical servers, computers and other interested parties. Utilising data from body-mounted sensors or ingestible devices, they will be able to keep tabs on every minutiae of employee wellbeing and the monitoring of trigger points like stress.

Plus location-aware services will be able to track movements – as manufacturing.net has noted, think of the improvements in efficiency such technology would mean in production lines: “The wearable device tracks their location, “knows” that they have moved to a new production line, creates a job transfer, assigns a new work order, and automatically starts tracking their work. There is no need for employees to interact with a computer or time clock. The technology has already taken care of that for them so they can focus on what’s really important — the work at hand.”

Neuroenhancers will monitor your brainwaves through electrical activity and over time collect data and make assumptions based on its recordings and observed patterns. Crucially this will allow it to pinpoint those times your concentration is at its highest, when you’re at your most productive and when you should take a break.

Such innovations in wearable tech could help to lead a revolution on productivity and effectiveness in workplaces across the world, no matter what the field.

Cost Control and Consolidation in Consumer Goods Supply Chain

A lack of growth in key markets will lead global players to seek opportunities in the developing world. 

Forecasts show that 2016 will continue the trend of minimal year-on-year growth in consumer goods spending, both in the UK and across Europe. In this environment manufacturers will carry on looking for opportunities to consolidate and pare down costs, focusing on developing world markets with higher growth potential.

However, competitive pressures are substantial: manufacturers based in the developing world are leveraging their low cost base and local knowledge to win both in their home and international markets.

Slow Global Growth

2015 saw a continuation of the effects of the ‘Great Recession’ that started in 2007, with historically low revenue growth, margins and shareholder returns. In the eurozone for instance, growth slowed to 0.3 per cent in November, with growth in Italy as low as 0.2 per cent.

China has also experienced significant slow-down, with economic growth at a six-year low of 6.9 per cent in Q3 2015. The impact of the slow growth has spilled over into 2016, with continuing falls in the Chinese stock market and slow demand for commodities having an impact on the wider global economic market.

Nick Miller, head of FMCG at Crimson & Co commented: “Seemingly as a result of this growth, some of the largest acquisitions and takeovers in 2015 have focused on cutting costs in supply goods and services to market. Kraft and Heinz’s merger last July has led to multiple cost cutting measures, as has the more recent take-over of SABMiller by ABInbev.

This trend in the supply chain is surely set to continue, with larger companies merging to create greater economies of scale to further leverage low cost methods in order to reach their target audiences.

In this way, supply chain innovation will also be driven by a need to curb costs and expenditures. Small companies, that are more flexible than larger corporations, are able to react to market developments faster, changing their strategies to bring fresh ideas for supply chain excellence. Larger players, unable to invest in this dynamic way of working, have tended to buy innovation by acquiring smaller companies. Coca Cola has already purchased Innocent drinks with this aim in mind.”

Global vs. Local

Given the lack of growth in Europe and China, many organisations are looking to the developing world for growth opportunities. However, these opportunities can be difficult to tie down, with organisations typically losing out to regional players more comfortable with the local environment.

The smaller companies in the developing world have significant advantages over global organisations seeking to expand in the region. As these companies are already present in the area, they will have an existing customer base, as well as an in-depth knowledge of the market, giving them an edge over external players.

In addition, they have immediate proximity to this rapidly expanding customer base, with naturally greater flexibility to be able to react quicker to market developments. 

Miller added, “Just as with innovations in the supply chain, large businesses will likely look to purchase small companies in developing areas to speed their time to market, instead of building their own on-the-ground agencies. This will be a more cost-effective way of speeding growth in these regions, as well as providing immediate expertise into valuable areas.”

Embracing Technology and Bring Dynamism to Your Workforce

Decision makers can bring dynamism to their workforce in 2016 by embracing technology. Paul Statham, CEO and Founder of workplace technology expert Condeco Software, examines the office trends of 2016.

The office world is changing beyond recognition. Within a generation, the cigarette smoke-filled paper world has been streamlined and replaced by one of personal computers, tablets and clouds. As we move further away from the traditional hierarchical structures of the past, to a much flatter organisation, the need for new technological solutions facilitating this framework becomes more pressing.

In 2016, business leaders will be increasingly turning towards innovative tech to create a full picture of their companies’ office and meeting room requirements. This wider viewpoint of how their workplace operates will not only allow decision makers to rescale their office space and make significant savings in running costs globally, but also introduce lasting organisational change fostering better working cultures and environments across the world.

  • Dynamic Working

One of the main office trends is the push for dynamic working, necessary to accommodate a younger and more tech-savvy workforce that does not share the idea that they should be sat at their desk all day to prove they are doing a good job, but who feel rather that they should be up and about, keeping in touch with colleagues and clients anywhere and at anytime through the use of mobile technologies.

Dynamic working also reduces the need for desks and meeting rooms, which can be an expensive business as they often remain under-utilised, as highlighted by a study by Condeco Software which discovered that overall desk utilisation is as low as 58 per cent.

  • Hot Desking

Hot desking offers another solution to office space waste, as it renders unused space immediately available and allows for a smaller number of desks. Furthermore, hot desking can also contribute in the push for a less hierarchical organisational culture, as senior and junior employees share more and more desk-space together, which encourages a  more collaborative and informal working culture.

By utilising the power of technology and gathering vital analytics, companies can redesign their working space according to the newest organisational needs. This can promote better communication, improve collaboration, and help create a streamlined work environment.

  • Flexible Working

At the same time, hot desking and dynamic working fit perfectly well with new trends in flexible working, where working from home or from different locations is becoming more and more common.  This trend is only set to increase in 2016, as 82 per cent of managers believe that flexible working benefits their business.

However, flexible workers do need to return to the office from time-to-time, so it is vital to have a system in place which allows workers to easily check where available desk space is, rather than having to search around the office looking for an empty chair.

  • Greater Internationalisation

Businesses also need to adapt to the greater internationalisation of workforce. Technology can enable overseas workers to find a place to work in any foreign office while on a business trip, helping firms overcome one of the complications intrinsic to transnational teams. It can also help foster greater interaction and unity in dispersed teams.

  • Big Data and Artificial Intelligence

Another growing trend is the current push for big data and artificial intelligence, whereby data can be stored an analysed in order to inform business decisions. The reliance on data and automated systems is becoming ever more pressing and, in the future, many more management solutions will be performed by automated intelligent systems, capable of gathering and processing data.

Previously innocuous human tasks, such as booking a meeting room, could now be conducted by smart systems. By using intelligent systems, allocating work-space efficiently, and utilising big data, companies can implement the required workplace changes needed to succeed in the 21st century.

Exposing the Risk of Conflict Minerals in Supply Chains

As Intel declares that its supply chain will be free from conflict minerals this year, we take a look at what other organisations are doing, and what impact these materials can have on a supply chain. 

Nada B/Shutterstock.com

Conflict materials are raw materials sourced from a particular part of the world where conflict, such as civil war, is occurring and affects the trading of those materials. The proceeds from the trade of these materials, such as conflict diamonds, are often used to fund armed groups in these regions.

Conflict minerals are the raw materials columbite-tantalite (coltan), cassiterite (tin), gold, wolframite (tungsten) and their derivatives, the vast majority of which are found in the Democratic Republic of Congo and adjoining countries, a region which has been ravaged by civil war and other conflicts for over 20 years.

These minerals are used in a wide variety of manufactured products, including consumer electronics such as computers, laptops, tablets, smart phones and even washing machines.

Global Regulation

In 2010, US President Barack Obama signed The Dodd-Frank Wall Street Reform and Consumer Protection Act into law. Section 1502 of the Act required all American companies to determine whether their products contained conflict minerals through due diligence carried out in their supply chain, and to report this to the US Securities and Exchange Commission (SEC).

There were criticisms of the law on both sides, with some groups arguing that it didn’t go far enough and ban the sourcing of such products entirely, while others argued that over-zealous enforcement of the law could adversely impact legitimate workers in the region, who relied on trading these materials for their livelihoods.

Since the law was passed, it has been estimated that it has helped to reduce funds going to armed groups in the DRC by up to 65 per cent.

In the UK there is no strict regulation on conflict minerals, although there are initiatives that have been created to stop these materials entering the supply chain. These initiatives require organisations to provide a ‘proof of origin’ on raw materials, or carry out similar due diligence in their supply chains to assess where funds from trading are going.

During 2015, the European Parliament voted in favour of a mandatory monitoring system for minerals originating in conflict areas, similar to the provisions in Dodd-Frank. The system suffered similar criticism to Dodd-Frank in relation to provisions for legitimate traders and miners.

Supply Chain Transparency

Growing public scrutiny of organisational practices, and the rise of consumer power when it comes to sustainably manufactured or procured products, will lead to a requirement for a vast improvement in supply chain transparency in the short-term future.

With Intel now reporting that its supply chain will be free from all conflict minerals in 2016, many other high-profile organisations, particularly those in the electronics industry, will be keen to follow suit.

Apple reported progress in the removal of conflict minerals in its product in April last year, but cannot yet claim to be ‘conflict free’ as all of their suppliers are yet to complete the auditing process. A further 120 companies,including Dell, HP, Nokia and Microsoft, have signed up as members of the Conflict-Free Smelter Program (CFSP), which aims to ensure that metals and minerals are worked with in conflict-free factories.

However, there appears to be a lot of work for a number of organisations to do. A report released by Amnesty International last year showed that 79 per cent of a sample of companies who had filed reports to the SEC in 2014, had failed to meet the minimum disclosure requirements.

Supply Chain Risk

Organisations must undertake a considerable volume of work to ensure that their supply chains are free from conflict materials of any kind, including conflict minerals. The management of this issue, and the associated risks, needs to be handled proactively, or the organisations will have to deal with any repercussions.

As political and socio-economic climates grow more unstable, global supply chains face increasing risks when doing business, and even the best prepared can fall foul of the actions or activities of a third party in the chain. However, there are steps that can be taken to minimise these risks.

Increased collaboration with suppliers and supply chain partners and creating greater visibility through the use of data, as well as policies and processes governed by procurement, can all help to reduce these risks. It’s down to the individual organisations to work out what is best for them.

Procurement risk, including supply chain transparency and ethics, will be one of the major themes at the Procurious Big Ideas Summit 2016. Stay tuned in the next couple of months for more information on the event, and learn how you can get involved.

Meanwhile, we’ve scanned the news feeds and Internet to find the major procurement and supply chain headlines this week.

‘Non-Compliance’ Issues Alleged at Co-op Group

  • Kath Harmeston, former Procurement Director at the Co-operative Group, has alleged that procurement policy non-compliance were as high as 70 per cent
  • The claims were made during an employment tribunal where Harmeston is seeking £5.2 million from the organisation for unfair dismissal
  • Harmeston alleged that staff “across the business were placing commitments with suppliers without going to the procurement department first”, including on up to 50 capital projects
  • The Co-operative Group responded that Harmeston’s claims were a “smokescreen”, covering up poor performance and the hiring of a firm of consultants who had previously been subject to whistleblowing claims
  • The case continues

Read more at Supply Management

Domain Registration Shows Apple Car Progress

  • Technology giant Apple has registered three car-related internet domains, raising speculation that they are ready to unveil plans for a driverless car
  • Reports in 2015 contained speculation that Apple would be ready to launch a driverless vehicle by 2019, fuelled by CEO Tim Cook’s comments that the automotive industry should expect “massive change”
  • The company has made a number of high-profile appointments from the car industry in the past 12 months, with new staff from the likes of Volkswagen being brought on board
  • Apple will face stiff competition in the industry from already established organisations such as Tesla and Google, both of whom have already revealed plans for similar cars

Read more at The Telegraph

Police to Save £7m with Collaborative Procurement

  • A collaborative procurement agreement on the purchase of vehicles for 34 police and emergency services organisations in the UK will create savings of up to £7m
  • The agreement, the largest of its kind ever put together in the UK, will see the supply of over 3,000 vehicles, 1,200 of which will be manufactured in the UK itself
  • The suppliers – General Motors UK trading as Vauxhall, Ford, Volvo and BMW – were selected from a list of companies on the national government framework agreement
  • David Wilkin, West Midlands Police’s director of resources and the national policing lead for the procurement of vehicles, said “All suppliers in the process had to demonstrate their working relationship with local dealerships to ensure that going forward maintenance of the vehicles such as warranty repairs are carried out locally, ensuring we continue to support the local economy”.

Read more at Supply Management

TRAFFIC Traceability Review to Show Supply Chain Tracking

  • TRAFFIC, the wildlife trade monitoring network, has conducted and released a ground-breaking traceability review of how trade in endangered species can be tracked along the supply chain
  • The tracking of products will help to ensure that all national and international legislation on the trade of wildlife is being adhered to throughout organisational supply chains
  • The traceability systems will help consumers access information on, amongst others, fisheries supply chains, to see that the products they are purchasing come from sustainable suppliers
  • It is also hoped that these systems will help to arrest the decline in shark and ray populations around the globe

Read more at Traffic.org

Deficit Reduction ‘Top Priority’ For UK Government

The Chancellor’s warning of a “cocktail of new threats” to the UK economy shows that deficit reduction must be the top priority for the UK Government, says the Institute of Directors.

A slow start to 2016 for global markets, particularly in China, Brazil and Russia, the ongoing tension in the Middle East and stock market falls were all highlighted by George Osborne in a speech made in Cardiff on Thursday.

Although only just over a week into the new year, economic alarm bells are sounding around the world, with China suspending trading on its stock market twice last week due to heavy losses, as well as the continuing fall in global oil and other commodity prices.

What is the Deficit?

The deficit is the total amount of money a national government borrows, with the UK’s current deficit estimated at just under 5 per cent of GDP. Net borrowing for the UK in 2015-16 is forecast to be £69.5 billion, which is equal to 3.7 per cent of the UK’s GDP.

However, it’s not quite as simple as being just the money that is borrowed, as the deficit can be impacted by a number of macro-economic factors, such as economic growth and the strength of overseas markets who the UK is exporting to.

The “cocktail of threats” that Osborne warned about shows a picture of the global economy that is in sharp contrast to the rosier picture painted by the Chancellor in his Autumn Statement, when he said that the UK economy was “growing fast“.

However, with planned welfare cuts set aside, and targets for borrowing exceeded in 2015, many experts are also warning that the Conservative’s plans for a budget surplus by 2020 may prove to be very difficult.

Importance of Deficit Reduction

With a less positive outlook for the coming year, the Institute of Directors has stated that reducing the UK’s deficit is now more important than ever, to allow the country to cope with any future financial crisis.

James Sproule, Chief Economist at the IoD said: “Osborne’s warning comes at an important time for the world – and British – economy. With turmoil on the stock markets, interest rates still at extraordinary lows, and various surveys painting a less than rosy – albeit more realistic – outlook for the developing world, the UK must be prepared for all eventualities. First and foremost, that means a continued focus on eradicating the deficit. 

“85 per cent of IoD members support the Chancellor’s plans to run a small budget surplus by the end of this parliament. They know that without bringing public spending under control, the UK’s debt pile will continue to grow. That means when – not if – the next crisis strikes, it is unclear how well we will be able to weather the storm. 

“The IoD warned last year that the Chancellor did not leave himself much room for manoeuvre by relying on a £27 billion accounting windfall in the Autumn Statement to balance the books. Now those concerns have come into sharper relief.

 “Without a concerted effort to bring ever rising public spending under control, tax hikes like the apprenticeship levy will always be tempting, and the promised increase in income tax thresholds and cuts to corporation tax may not materialise. The fact the sun seems to be shining a little dimmer highlights the importance of fixing the roof sooner rather than later.”

Procurious Big Ideas Panel Discussion #1 – What Does it Mean to Be An Authentic Leader?

What does it mean to be an authentic leader in procurement?

In the first of the panel discussions from the Big Ideas Summit 2015, Sigi Osagie, Sarah Trota, Helen Mackenzie and Andrew MacAskill discussed this question, and helped to provide a diverse view on the best answer.

From the power of public sector procurement and the figure of the leader clearing the path through the procurement jungle, to the brand of the profession and setting the belief, the discussion created some fascinating points.

Watch the full discussion here.

See all the keynotes and panel discussions from the Big Ideas Summit, plus Big Ideas from our 40+ Influencers.

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

What are the Key Procurement Trends for 2016?

Did you successfully predict the key procurement trends in 2015? Chances are good that you were able to pick out at least a couple of the major themes appearing in the news and industry reports. But what does the coming 12 months have in store for the profession? Ethics, sustainable procurement, relationship management, technology and social media – these were just a few of the topics highlighted by the Procurious community when asked this question in 2015. Sure enough, a number of these themes were prominent in news stories and organisational strategy last year.

Roll on 12 months and there is a fresh set of trends to keep up with in order to remain relevant. We’ve picked out a few that we think will be making headlines, prompting discussions and keeping organisations on their toes in 2016. 

Technology

  • Rise of the Cloud

Last year we spent a lot of time discussing the Internet of Things (IoT) and its growing impact on procurement. However, it’s clear that many procurement teams have yet to get to grips with the Cloud. However, procurement has a great opportunity to leverage Cloud software in a number of ways, including as part of supplier collaboration.

The Cloud will allow ordering to be streamlined, increase visibility across the supply chain and allows for changes to be made more easily, even when goods are in transit.

Del Monte has already taken this step by moving its supply chain data to the cloud. The company can now access a wealth of global data, create orders, place contracts with suppliers and collaborate with partners, all in real time. Thus far, it has led to a 56 per cent saving in customs broker costs, better visibility and a 26 per cent reduction in inventory due to better information on goods in transit.

  • Improvements in eProcurement

As technology advances, systems that have been around for a number of years will have to play catch-up. Spend management and eProcurement systems are just a couple of those platforms that are in need of a reboot (while taking into account that organisations still need to be more selective when choosing theirs).

Better technology will allow for faster purchasing activities, and eventually enable an experience more comparable to what we are used to as individuals when we shop online. This will, in turn, mean that rules are less likely to be bent to “get the job done”, maverick spending and policy breaches should decrease, and procurement can stop being seen as a roadblock.

People

  • Meeting the Needs of Millennials

In truth, this could have fallen into the Technology section, but it’s important from a people perspective too. Millennials have high expectations, sometimes unrealistic, as to how procurement could and should be done, particularly when it comes to technology. Businesses need to be up to date as far as technology and connectivity go in order to meet these expectations and retain their millennials, as well as deal with other millennials working in the supply chain.

Why is this a people issue? Because if you’re not doing this, someone else will be and the best millennial talent will get a job with them instead.

  • Meeting the Students

Organisations need to know where they are going to get the best people to fill their job roles, plus meet the rising expectations of the business. Universities and colleges are prime places to be doing this.

Work experience, apprenticeships, placements and sponsorship are all great options for organisations to attract current students and new graduates and school leavers. 2016 could be the right time for you to speak to the educational institutions near you and see what you and they can do together.

Risk 

  • Cyber Security in Contracts

Research suggests 78 per cent of organisations have experienced a data breach within the past two years. This goes beyond the high-profile examples of 2015, but puts a spotlight on the need to account for this risk as part of procurement contracts.

A lack clarity on who is responsible for the data within supply relationships, and how it can be stored securely, as well as plans for contingencies should a data breach happen, could leave both procurement and large parts of their supply chains exposed.

  • Supply Chain Transparency

Ok, so this isn’t necessarily a new procurement trend, but it’s one that’s going to get even more focus than in previous years. You just need to look at the new towards the end of 2015 (think Nestlé) to see stories of slave labour in supply chains.

From paddock to plate in restaurants and the food supply chain, to tracking clothes from the plant they were created from, there are a variety of areas that can and will be tracked.

Technological advancements (such as the Cloud), increasing mobile empowerment and increasing public scrutiny in this topic will certainly cause this to be close to the top of the vast majority of procurement departments’ risk agendas.

What do you think will be the key trends? If you have your own ideas, why not start a Discussion and share them with the rest of the community.