All posts by Procurious HQ

Austrian Wastewater Solution Wins Procurement Innovation Award

This year’s Public Procurement of Innovation Award has been won by the Austrian Federal Procurement Agency for its work in delivering a ground breaking wastewater solution.

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The award, which was presented to the Austrian delegation at a ceremony in Paris, aims to recognise successful public procurement practices that have been used to purchase innovative, more effective and efficient products or services.

This year’s finalists included entries from Sweden (medical imaging for optimisation of care flows), Italy (integrated energy service framework contract), Netherlands (learning space self supporting river systems) and Spain (Galician Public Health Service).

Innovation led to Sustainability

Ultimately it was the Austrian solution that came out on top. According to the Awards panel, the project, which recycles wastewater by vaporising it to remove waste particles, was chosen as it not only involved the application of innovation-friendly procurement procedures, it also ensured increased resource efficiency and improved environmental sustainability.

“We felt that the procurement of the vaporising system best showcased the impressive work being carried out, as well as the type of solution that public procurement of innovation can achieve, the procurement brought together the institutional knowledge of public procurers with the ingenuity of the private sector” said Wouter Stolwijk, Director of PIANOo, the Dutch Public Procurement Expertise Centre, who presented the award to the Austrian delegation (pictured below). 

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The solution, that will be used to clean the residual water left over from the production of coins and notes at the Austrian mint, is said the reduce the amount fresh water used in the process by 97 per cent. It is believed that the machine could also have uses in other industry sectors.

 

 

2015 marks the second year of the PPI award with last year’s award being won by an impressive robotic bed washing facility at the Erasmus Medical Centre in Rotterdam. That innovative solution reduced bed-washing costs by 35 per cent and cut the CO2 footprint by 65 per cent.

See the full list of finalists here.

Are Supply Chains Taking IT Security Seriously Enough?

The IRS, the CIA, Sony Pictures, TalkTalk, Kaspersky – what do all of these organisations have in common? Security

If you said that they have all been victims of cyber attacks during 2015, you would be right. With each high-profile incident, the profile of IT security and cyber crime is raised further.

For procurement and supply chain, this is something that needs to be considered, but is it being taken seriously enough?

Supply Chain Security

A recent poll carried out at IP Expo Europe by cyber security firm Tripwire, revealed a startling statistic when it came to IT security. Nearly a fifth of respondents to the poll said they would be prepared to use IT suppliers who do not meet their IT security standards.

Additionally, nearly half of the respondents (47 per cent) admitted that they currently do not carry out audits before working with suppliers, although 23 per cent did say they were planning on introducing this in the near future.

This is not a new issue, as this 2013 article highlights. So why, in 2015, are so many organisations not taking this issue seriously? With brand, reputation and share price at risk, not to mention potential regulatory fines, what should organisations be doing?

As simple as it seems?

While these statistics do not exactly paint a rosy picture, the truth is that the reality is not as simple as it might seem. One of the victims of a hack this year was Kaspersky, an Internet security and anti-virus software organisation.

Symantec, a global provider of Cloud, mobile and virtual security, was held to account by Google this month for issuing fake security certification for websites. These certificates could be used to intercept and subvert SSL/TLS protected traffic, which underpins e-commerce, banking, government and other important services.

Following two audits, Symantec has uncovered an incredible 2458 certificates for unregistered domain names, and Google has demanded an explanation and resolution to the issue.

Even the US Senate, taking action to pass a version of the Cybersecurity Information Act (CISA) that allows companies to share any and all information about their user base with the Department of Homeland Security, has come in for criticism.

John McAfee, founder of the IT security and anti-virus software company that bears his name, points out that while this Act helps the cyber security fight within the US, it doesn’t help with attacks from foreign soil, where the majority of the US hacks in 2015 are believed to have originated from.

What’s to be done?

If you weren’t already aware, the UK Government released new training in June this year to help procurement professionals stay safe online. The training is free and can be accessed via CIPS.

The Chartered Management Institute has also offered these tips to business leaders, which can be implemented in every organisation:

  • Understand the potential threats – review any internal and external vulnerabilities in business web systems, such as any easy entry points for hackers
  • Integrate cyber security policy within corporate culture – security policies must permeate throughout every process and decision with a company. This includes audits of suppliers.
  • Practice an incident response plan – have a ‘go-to’ plan of action for responding to a cyber incident

Good IT security comes down to good education, not only employees, but also stakeholders and suppliers, as well as good communication. Equally, one of the best ways to beat the cyber threat is by collaboration – with governments, regulators and even rival companies.

If organisations put their differences to one side and work together, there may be light at the end of the tunnel yet.

We’ll leave the last word to Jeh Johnson, the United States Secretary of Homeland Security – “Cyber security is a shared responsibility and it boils down to this: in cyber security, the more systems we secure, the safer we all are.”

Do you work in IT procurement? Do you have any good tips that you could share with your fellow professionals? Let Procurious know and we can spread the word.

We’ve scoured our sources to come up with the key headlines in procurement and supply chain this week…enjoy!

Boerum Showcases Supply Chain Transparency

  • Boerum Apparel, a clothing company based in Brooklyn, has released a sweatshirt which shows off its entire supply chain
  • Each garment’s journey from plant or animal to the finished product is is written on its label, and includes where the raw materials were sourced and where it was turned into a sweater
  • The organisation is working hard on its “radical transparency” programme, and hopes that it will lead others to follow suit
  • You can get more information by search for the Twitter hashtag #knowyoursources

More at Treehugger.com

Toyota Breaks with Supply Chain Tradition

  • Japanese car manufacturer Toyota launched its new Corolla model this year, but departed from their traditional supply chain process of keiretsu
  • For the first time, Toyota chose to source a key component, a crash prevention system, from German manufacturer, AG Continental, rather than a Japanese-based firm
  • The decision is regarded as a symbol of Japan’s automotive suppliers falling behind the rest of the world when it comes to cutting-edge technology
  • Toyota plans to keep its keiretsu, but wants suppliers to be more globally successful and spend more on technological development

Read more at the Wall Street Journal

Living Wage on the Rise

  • The voluntary living wage in the UK is set to rise by 40 pence per hour, rising from £7.85 to £8.25 per hour in London
  • The rise is set to be officially announced this week, with organisations having six months to implement the changes
  • The move follows a report from KPMG that claimed almost six million workers in the UK were paid less than the living wage
  • In the last Budget the UK government announced a new compulsory National Living Wage that will come into force from April 2016, starting at £7.20 per hour

Read more at The BBC

Volvo to Test ‘Kangaroo Avoidance’ Technology

  • Around 20,000 kangaroo collisions are reported on Australian roads each year
  • Volvo has conducted a trial in Canberra last week aimed at adapting and using existing technology to help avoid the creatures on the nation’s roads
  • The technology uses radar and cameras to sense kangaroos along the road ahead and automatically brake as necessary
  • The technology has been used in the past for cows, moose and reindeer but requires calibration due to kangaroos’ more erractic behaviour

More at The Verge

Procurious Big Idea #46 – Shift Perceptions Of Contractors

Samantha Coombs, Consultant at Procuri, talks about why procurement managers should change their perceptions of contractors.

Samantha argues that by communicating better with these workers, managers can stop them being a transient workforce and start to benefit from their knowledge.

See more Big Ideas from our 40+ influencers

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

Halloween – A (Trick or) Treat for Supply Chains

It’s that time of year again. No, not Christmas (yet…), but Halloween.

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The ghoulish ‘holiday’ has, in the past, only truly been embraced by our compatriots across the Atlantic. However, in recent years it has gained a strong foothold in the hearts, minds and, importantly for retailers, wallets of the Brits.

In America, an estimated 157 million people will celebrate Halloween in some way this year, with spending set to total $6.9 billion. An increasing number of ‘pop-up’ stores focusing on Halloween is just one reason behind this level of spend.

Creating a Monster Spend

In 2014, total spend related to Halloween in the UK was estimated at £443 million, made up of the following spend:

  • £148 million on clothing and costumes
  • £132 million on Halloween themed food
  • £92 million on decorations
  • £70 million on entertainment and stationery

If you think that is scary, then further research has also found that in 2015:

  • 29 per cent of UK consumers plan on purchasing some form of Halloween related goods
  • Just 23 per cent of males will purchase something, but will spend an average of £48 each (£20 more than females)
  • 40 per cent of parents will spend on Halloween goods
  • 55 per cent of buyers will be purchasing clothing
  • 52 per cent of shoppers will purchase food and drink

Jack ‘No’ Lantern

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However, despite it being part of the traditional Halloween offering, only 45 per cent of people plan on buying a pumpkin this year.

The news gets worse for any amateur pumpkin carvers out there, as a wet August and less than ideal growing conditions has led to a shortage of pumpkins this year, with yields down to 50 per cent.

Nightmare on Supply Chain Street?

Supply chains will be well prepared for Halloween far in advance of actually getting products into the shops. But the variety of goods on offer could spook many organisations.

Going crazy with seasonal products can put a huge strain on supply chains, cost organisations considerable sums of money, but ultimately not provide a return should the product fail.

From a Logistics point of view, goods need to be delivered at just the right time to stop competitors ghosting in, but not going so early that consumers are trying to carve mouldy pumpkins.

Take into account planning this around Thanksgiving, Black Friday, Cyber Monday and Christmas and it could suck your resources dry.

Trick or Treat

As these holidays continue to get bigger, it provides both manufacturers and retailers with some tough choices. Don’t get involved enough and you might miss out on that sales bump, make too much and you may end up discounting products you can’t use for another 365 days.

The most successful will asses the situation and work out the best way to be involved, while the consumers will just enjoy the ever-expanding list of products they can get their hands on.

But, if Halloween isn’t your thing, just think, it’s only 53 shopping days until Christmas…

Sharp announce Dave Dwyer as New Supply Chain Head

Sharp Imaging and Information Company of America (SIICA), a division of Sharp Electronics Corporation (SEC) has announced that Dave Dwyer will be promoted to the role of Vice President of Supply Chain and Operations. Dave Dwyer

Mr Dwyer brings more than 20 years of logistics and supply chain experience to his new role, having previously held management positions with Nabisco Biscuit Company and Kraft Foods before taking the moving to Sharp in 2002 as the Director of Supply Chain Planning.

Mike Marusic the Senior Vice President, SIICA Marketing and Operations made the following remarks on Mr Dwyer’s appointment, “Dave has done an outstanding job in his previous role running the SEC Logistics Group, through his efforts in working with all of the SEC business areas, he developed strong relationships across the organisation and with third-party partners in driving improvements to the logistics process.”

Dwyer will hold responsibility for the end-to-end supply chain management at Sharp. A direct focus will be given to enhancing alliances with the firms supply chain partners in support of the Sharp Consumer and Business Products companies. As part of an efficiency drive within the firms supply chain, Dwyer will lead a consolidated team comprised of members from various functional departments.

Speaking on his new appointed, Mr Dwyer was quoted saying, “I am extremely excited to join a great team in SIICA, with their support, I look forward to enhancing the supply chain and operations processes across the organisation to achieve a more unified and efficient operation.”

Can Good Procurement Lead to a Successful IPO?

IndiGo, a budget Indian airline, may well have procurement to thank for a successful IPO launch today.

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It has been suggested that a frugal business strategy, including a strict focus on reducing costs has primed the airline for success in the hugely competitive Indian aviation market.

India’s aviation market is growing at roughly 18% a year and offers huge opportunities for investors looking to cash in on this demand spike.

Despite this boom in demand, high operating costs and taxes have hindered the progress of many airlines operating in the subcontinent. A debt-racked Kingfisher airline was recently grounded and Spicejet, another Indian carrier, is facing similar issues.

Cost Conscious Culture Drives IPO Interest

Aviation experts point to IndiGo’s cost conscious culture as the leading reason as to why the business is performing so well. IndiGo’s procurement strategy is simple – they buy just one type of plane from one supplier (the company’s recent order with Airbus was the largest single order in the manufacturers history). This simplicity allows the firm to save time and money on maintenance, and reduces the amount of effort that needs to be allocated to supplier management.

IndiGo also has an enviable record when it comes to punctuality. This has not only encouraged more passengers to fly with them, but has improved the airline’s forecasting and reduced fuel costs, ultimately contributing to a more profitable operation.

Interest Domestically and from Abroad

The IPO is has been seen by investors as a huge opportunity to capitalise on growth of IndiGo. The firm’s market share has increased from 12.5 per cent five years ago to 34 per cent at the end of March. The funds raised in the IPO are earmarked for the purchase of new planes that are expected to further spur the growth of the firm.

Interest from both foreign and Indian firms (including Goldman Sachs and Singapore Sovereign Wealth Fund) in the IndiGo IPO has already been strong. The IPO will be launched today.

Disruptors and Global Networks in Procurement

Last week, Procurious founder Tania Seary was the special guest on a webinar hosted by Procurify, speaking on the subject of ‘Disruptors and Global Networks in Procurement’.

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If you weren’t able to join the webinar on the day, then worry not. Catch up with the full webinar below.

During the discussion, Tania highlighted some of the key facts and figures around several major forces having an impact on procurement professionals, including markets, ethics, transparency, and optionality.

She went on to explain why global networks, like Procurious, and social media are key to CPOs and procurement professionals understanding these issues and best mitigating the risks associated with them.

 

If you have any thoughts on these topics, or would like to engage Procurious to help you get your social media activities moving, get in touch with one of the team, or send us a message at [email protected]

Is the UK’s position as a global innovation leader at risk?

New research shows that a majority of UK organisations suffer from “innovation inertia” or a lack of consensus in where to invest their resources. Does the UK need to re-focus its efforts so as not to be left behind?

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The research from Hitachi Data Systems found that 75 per cent of organisations are being hampered in their investment decisions by a lack of clarity and access to business data. Additionally, a staggering 90 per cent of IT leaders believed their organisation was not in a position to respond to rapid change in it industry.

Although there is a much-increased volume of data available to business leaders, it appears that many are not being able to leverage this effectively. From a long-term point of view, this leaves British organisations potentially lagging behind their global competitors.

Lack of Investment

Alongside the “inertia” caused by a lack of organisational investment appears to be a significant decrease in investment in innovation at a national level.

The Confederation of British Industry (CBI) has revealed that the UK spent the least on innovation and science of any of the G8 nations in the past year, with only 0.49 per cent of GDP invested back in these areas.

The CBI also argued that more Governmental support was required in order to make innovation more attractive for businesses, a stronger framework and a re-thinking of business rates two of its key suggestions.

Industry leaders have also warned that innovation could be harmed should the Department for Business, Innovation and Skills change innovation and R&D grants from the UK Government, to loans.

Representatives of the aerospace, automotive and pharmaceutical industries have warned that this could lead to fewer R&D projects in the UK, and organisations shifting new R&D projects abroad.

Falling Behind?

Although there is much talk about the UK falling behind, the situation is perhaps less perilous that it seems.

The 2015 Global Innovation Index (GII) places the UK as one of the world’s top five most-innovative nations, both from a volume and quality point of view. This ranks the UK alongside economic peers such as Sweden and the USA, as well as being ahead of Germany and growth economies such as China and Brazil.

It could be argued, based on the comments from the CBI, that an increase in investment in innovation is required to keep the UK in its current position, rather than have the country play catch up with its global peers.

Ambition is Key

Yet, the UK and UK-based organisations need to continue to innovate and create in order to maintain its position. How best, though, to kick-start more innovation projects?

Richard Jones, pro-vice chancellor for research and innovation at the University of Sheffield, believes that universities will play a major role in rebuilding the UK’s innovation programmes.

In a speech to the Association for University Research and Industry Links’ annual conference, Professor Jones argued that universities needed to see what they could contribute to wider society and be more “ambitious” to achieve their goals.

Lead by Example

In the past 12 months, two of the UK’s most famous innovators, James Dyson and Richard Branson, have both invested in programmes to help boost innovative and entrepreneurial activities in the country.

Having figureheads leading by example, as well as investing time and money into this, could potentially give the UK the lift it needs in the coming years to keep its place at the top of the tree.

Do you think the UK needs to be more innovative? Is the country at risk of falling behind, or are the reports over-stated? Start the discussion on Procurious!

Stuck for a conversation in the coffee queue this morning? Procurious has gathered all the big headlines in procurement and supply chain for you…

Talk Talk Boss Warns of ‘Arms Race’

  • Talk Talk Chief Executive, Dido Harding, has warned that all UK companies are under threat of a “cyber security arms race”
  • The hack on the telecommunications company happened last Wednesday and has affected millions of customers, although no losses have been directly attributed to the hack as yet
  • Harding warned that any company in the UK could be vulnerable to a cyber attack
  • She went on to say, “This is happening to a huge number of organisations all the time. The awful truth is that every company, every organisation in the UK needs to spend more money and put more focus on cyber security – it’s the crime of our era.”

Read more at BT.com

London Mayor Contradicted on Garden Bridge Procurement

  • Claims that the procurement process behind the Garden Bridge was ‘robust’ made by London mayor Boris Johnson have been directly contradicted by TfL’s director of internal audit
  • Clive Walker, the man who oversaw mayoral body Transport for London’s internal investigation, conceded that the process was neither ‘open’ nor ‘objective’
  • Critics have suggested that TfL made attempts to ‘water down’ the audit and introduce elements which reflected well on its performance

Read more at Architect’s Journal

Technology Means Traffic Jams Could Be ‘Thing of the Past’

  • Motoring and technology engineers are hard work on the next generation of connected vehicles, which could completely transform British roads.
  • The concept revolves around cars talking to the city and guiding drivers through the busy streets with minimal delay
  • Siemens and NXP are in the process of designing the in-car chips and infrastructure to build ‘intelligent road systems’, allowing drivers to be kept up to date with conditions in real time
  • The technology giants believe the systems will be ready to go in the UK by 2020

Read more at The Express

Hyperloop Test to Start within ‘Weeks’

  • Hyperloop Transportation Technologies (HTT) has announced it will start work on the $6bn Hyperloop test track within the next two to three weeks
  • The Hyperloop system, originally the concept of Elon Musk, has had to overcome a number of issues to get to this stage, aims to create super-fast, cheap transportation between major cities
  • The system, which will be solar powered, could transport over ten million passengers during testing

Procurious Big Idea #45 – Procurement Raising Its Voice

Cath Hill, Group Marketing and Membership Director for CIPS, talks about her idea to get procurement to raise its voice as a profession.

Procurement has long been the unsung hero in the organisation, but now it’s time to make both internal and external people aware of the great work the profession does.

See more Big Ideas from our 40+ influencers.

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

Future Technology That May Change The World

As Artificial Intelligence and Digital Currencies (like Bitcoin) seek to transform our lives, what effects will these new advances have on commerce and the world’s supply chains?

Future technology that will change supply chains

There’s a change happening on factory floors the world over, as robots and automation increasingly replace the manual (human) workforce of old.

With the recent innovations in artificial intelligence, will the supply chains of tomorrow be at the mercy of robotic overlords? If so, do we have anything to fear?

Elon Musk has previously aired his own warnings while giving a talk to students from Massachusetts Institute of Technology (MIT), saying:

“I think we should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is, it’s probably that. So we need to be very careful… I’m increasingly inclined to think that there should be some regulatory oversight, maybe at the national and international level, just to make sure that we don’t do something very foolish.”

Of course it’s perfectly natural to fear change. We must also be mindful that artificial intelligence is still very much evolving, and at this stage it’s an unknown quantity. There are some camps that fear the worst, that AI represents the destruction of mankind, with robots and humans embroiled in a bitter battle for survival. Flesh vs. circuits, the human condition vs. sentience…

Future Shocks

Not so according to Mustafa Suleyman – Head of Applied AI at Google DeepMind, who instead believes that this modern intelligence will help tackle some of the biggest problems facing the world today (think access to clean water, financial inequality and stock market risks). Indeed, the work of DeepMind was something Wired Editor David Rowan touched on at Procurement Leaders’ London gathering earlier this year.

David told us how DeepMind had created a “generalised artificial intelligence” – the earliest example of which was able to not only play Space Invaders, but master it to become the best player in the world. While this demonstration is certainly impressive, how can it translate to real-world scenarios?

The answer lies in Big Data as DeepMind observed: “We have global information overload from overwhelming systems complexity – they’re so complex and interlinked it’s possible that the US financial crash in 2008-9 caused the Egyptian revolution” [a time of widespread corruption and a stagnant economy that led to a national bread shortage].

If all of this (Big) Data is just sitting around, waiting for consumption, then why shouldn’t we make it available to robots for analysis and dissemination?

A Calculated Risk

Indeed, the significance of Big Data has not gone unnoticed by procurement’s leading lights…

A 2010 paper entitled ‘Artificial intelligence in supply chain management: theory and applications’ reviewed the past record of success in AI applications to SCM and identifies the most fruitful areas of SCM in which to apply AI.

Similarly, author of Supply Chain Visability.com -Jonah Saint McIntire, observed: “In time, as new generations of the AI are deployed, something truly game changing will occur. This is because machine learning will cross human learning capabilities fairly slowly. Remember that intelligence is modular and, as a result, machines may exceed humans in some forms of learning while lagging in others. The real breakthrough occurs when all necessary forms of learning are dominated by AI rather than human intelligence.”

If AI can help us realise that we have a problem, why then should we be fearful of this new technological dawn?

John McAfee – infamous programmer and creator of the world’s first antivirus software, has long insisted “that if you are a ‘routine cognitive worker’ following instructions or doing a structured mental task,” then it is your job that’s most at risk from the inevitable rise of the machines…

Payments Are Going Digital Too…

Bitcoin is an online payment system that is perhaps more widely recognised as the first decentralised digital currency.

Supported by open source technology, Bitcoin is not owned or operated by one individual or organisation. It is free to use (apart from an optional transaction fee) and can reduce the costs of transactions for merchants compared to credit cards.

The technology behind it is referred to as ‘blockchain’. The blockchain records all the transactions in a publicly available ledger. The ledger keeps track of what users are spending, provides authentication and keeps track of where the currency is.

Safety In (Digital) Numbers

New electronic payment systems and virtual currencies are expected to make paper currency the horse and buggy of the 21st century.

In a report commissioned by HP, the Ponemon Institute has made a number of interesting finds. Its “Security & Compliance Trends in Innovative Electronic Payments” paper reveals that support for digital currencies and new electronic payment systems are perhaps stronger than originally thought. And while 79 per cent of the US organisations that took part in the research plan to adopt digital currencies, a key barrier to the adoption of innovative electronic payments remains. Namely: the issue of security.

While new payment models are evolving, the same security fundamentals for maximum protection in the underlying payment process are still needed. The most critical are one-time passwords or tokens, federated identity and authentication systems and multi-factor authentication.

There is also the perception that the pressure to quickly migrate to the use of innovative electronic payments is making it difficult to address the security and privacy issues.

Digital wallets (or e-wallets) are used to hold virtual currency – and high profile names in technology like Google and Apple already have solutions in place to drive the adaption rate.

In-fact belief is so strong that almost half (46 per cent) of respondents predict that virtual currencies will overtake paper currencies within the next five years.

Perhaps there’s some truth in this… we are increasingly looking to financial institutions and credit card companies to make the inroads needed to take such practices to the next level.

They’ll be the ones to create new approaches to the security and privacy of the electronic payment platform. These organisations are closer to the consumer experience with electronic payment systems and might have a greater incentive to innovate and improve both security and privacy.

Transparency In The Digital Age

Is it such a leap to suggest that Bitcoin technology has the ability to transform the future of digital payments and aid supply chain transparency?

We already know that it’s possible to adapt Blockchains to keep track of what is going into a product, who has handled it etc. Using an app or website, an individual could stand in a shop holding a piece of clothing and be able to trace it all the way back to the farm that supplied the cotton. The information could be used to highlight working practices on the farm, use of pesticides, Fairtrade considerations and more, leading to far greater transparency.

Tracing the supply chain through the use of a ‘product passport’, showing the change of ownership of items through the supply chain and highlighting each step in the process would ultimately help to facilitate an understanding of the transactions from end to end.

What do you make of this brave new world: is more time needed to fully realise the benefits (and drawbacks) of such innovations?