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Half Of Supply Chain Managers Lack The Skills To Do Their Jobs

A new poll from CIPS reveals that half of supply chain managers lack the necessary skills.

Supply chain professionals lack the skills needed

If the results of a new survey undertaken by CIPS are anything to go by, almost half of supply chain managers fear they lack the necessary skills to carry out their jobs.

The poll found that 45 per cent of respondents felt they had not received the necessary training.

The survey was made up of 460 CIPS members who hailed from the UK, Australia and South Africa.

Commenting on the results, David Noble – CIPS’ chief executive, believes that the recovery of the UK economy is being threatened by a lack of skills. “Supply chain managers are the first line of defence for British consumers and businesses.”

He continues: “They protect shoppers from harmful products, stop our businesses from being ripped off and keep slavery out of Britain’s supply chains.

“These new figures show that our tentative recovery is being undermined by a lack of skills. Without them, we risk building our growth on human rights abuses and malpractice abroad. Supply chain professionals are doing the best they can with insufficient training but as the threats to British supply chains continue to evolve, so skills must be continuously renewed to keep up.“

Confidence takes a knock

60 per cent went on to add that procurement (as a profession) is not looked upon favourably within their business.

The figures set a worrying precedent indeed, as those without training are unlikely to conduct annual supplier audits, and just 16 per cent stated they have eyes on their entire supply chain.

Out of those polled, those who felt inadequately trained also revealed their fears over malpractice in the supply chain.

Do you agree with the results of this survey, and if so do you share the same fears? If so, what do you think can be done to improve the outlook in the short/long term?

If you haven’t had time to check out the big stories in the procurement and supply chain space this week, here are some of the main headlines.

Procurement Bill to correct ‘unsound’ practices in Zimbabwe

  • In a State of the Nation address last week, Robert Mugabe announced a new Procurement Bill would be drafted and tabled in Parliament before the end of the year.
  • The Bill will incorporate COMESA procurement guidelines which emphasise devolution of power to award tenders to procuring entities. These organisations will include government ministries, parastatals, state enterprises and local authorities, Mugabe said.
  • The State Procurement Board will also be transformed into a new non-executive procurement authority tasked with setting standards and guidelines as monitoring compliance by procurement entities and act as advisor to the government on Public Procurement Policy.
  • President Mugabe said economic growth was expected to be 1.5 per cent in 2015, instead of the initially projected 3.2 per cent, which he mainly blamed on the negative impact of drought in the agriculture sector.

Read more at Supply Management

Fast fashion is becoming a family affair

  • Step aside, H&M, there’s a new fast fashion king in town, and it’s not just for teens and 20-somethings buying $8 crop tops and $18 skinny jeans.

  • Primark, an Irish retailer owned by Associated British Foods, is the latest European so-called fast fashion brand to dive into the U.S. market. The retailer will open its first U.S. store on Sept. 10, 2015, in Boston and it has confirmed the opening of a second store in King of Prussia, Pa., this fall, with plans for seven more over the next two years.

  • The chain, with more than 285 stores across Europe – and amazingly, no e-commerce presence – is set to compete with other fast fashion European brands that are household names in the U.S., including Sweden’s H&M, Spain’s Zara, and U.K.-based TopShop.

Read more at Yahoo! Finance

UK Police forces wasting millions by paying 10x more for items

  • Police forces are wasting millions of pounds of taxpayers’ money because of the chaotic way they buy supplies, with some paying up to 10 times more for similar items.
  • Mike Penning, the policing minister, said that it makes “no sense” for forces to continue buying almost identical items separately when they can save money by acting together.
  • The Home Office published figures revealing huge disparities in the amount paid for basic equipment ranging from shirts and batons to high performance vehicles and radio sets.
  • Mr Penning said: “For too long the police have approached the market in a fragmented way, buying equipment in small amounts and to varying specifications.

Read more on The Telegraph

The most important procurement agreement you’ve never heard of

  • Australia is seeking to be admitted to an international trade group on government procurement. The agreement will mean local suppliers will gain access to the government procurement markets of all member states, which include the 28 members of the European Union and the US.
  • The group is called the WTO Agreement on Government Procurement (GPA). The WTO – the World Trade Organisation – initiated the GPA in 1981 as the ‘Tokyo Round Code on Government Procurement’. It has been expanded and renegotiated ever since, with the most recent round concluded in 2014.
  • The Government says that joining the GPA will mean “legally-binding access to government procurement markets estimated at US$1.7 trillion”, a number so large it is difficult to comprehend. China, which is also seeking to join, could add another trillion dollars to the sum.

Read more at Government News

iPhone supply chain makers set to see strong sales in September

  • Makers in the iPhone supply chain are set to see strong sales in September thanks to incoming orders for new iPhone devices which are due to be unveiled in early September, according to sources from the supply chain.

  • Most suppliers have become more positive about shipments of the updated iPhone devices recently due to higher than expected orders from Apple, which were originally perceived to be affected by sluggish global economy and weakening smartphone demand in emerging markets, said the sources.

  • Incoming parts and components orders for the new iPhones are even stronger than orders for the iPhone 6 devices in the corresponding period of a year earlier, indicated the sources, adding that shipments of updated iPhones will once again squeeze sales of other vendors including Samsung Electronics, Sony Mobile Communications and LG Electronics, commented the sources.

Read more at Digitimes

Procurious Big Idea #39 – Creating Awareness At University Level

Huey Chan, Analyst at The Faculty, believes a lack of awareness at the university level is harming procurement’s ability to attract the right talent.

Huey says this talent drought can be combatted by CPOs spending time getting in front of students and talking about what a job in procurement entails.

See more Big Ideas from our 40 influencers

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

Why Collaboration May Encourage Corporate Corruption

A new scholarly study has looked into the collaborative roots of corruption, and the results may come as a surprise…

New research claims that collaboration may encourage corruption

New research from Nottingham University suggests that collaboration encourages corrupt behaviour.

“Collaborative settings, not just greed, can provide fertile ground for corruption, as typified by recent scandals in the football and banking worlds. But while much is known about individual immoral behaviour, little is known about the collaborative roots of corruption,” researcher Dr. Ori Weisel said in a statement.

Weisel and his team focused on cases where working together meant violating moral rules, by lying, at a possible cost to the larger group, or the organisation to which they belong.

For the study, researchers created a die-rolling game in which study participants could adhere to one of two competing moral norms: collaborate or be honest. In the main experiment, the outcomes of the two players are perfectly aligned.

“Humans are an exceptionally cooperative species, which is at least partly driven by deeply ingrained moral sentiments that help to build trust and achieve mutual beneficial outcomes. However there can be tension between two fundamental moral obligations — to tell the truth or to join forces in collaboration,” said Weisel, a research fellow who specialises in group cooperation and decision-making.

Researchers found that the highest levels of corrupt collaboration occurred when parties shared profits equally, and were reduced when either player’s incentive to lie was decreased or removed.

Weisel said the findings support the view that collaboration might have been a liberating effect, freeing people to behave unethically.

The researchers suggest that organisations may be paying a (corruption) premium for having their employees team-up and work together.

“From the point of view of an organisation seeking to reduce corrupt behaviour, assuring a decent base salary that does not depend on performance can reduce the likelihood that its employees engage in brazen lying,” Weisel added.

4 key collaboration takeaways that will make your job easier

Threat of extreme weather events could trigger global food shocks

The global food industry currently undergoes a production shock every 1 in 100 years. But newly published guidance claims we can expect 1 (or more) in just 30 by 2040.

Threat of extreme weather could affect food supplies

The threat of extreme weather looms large over our global food supplies…

With weather records being broken like they’re going out of fashion, it isn’t just the threat of a soggy commute or a windswept day at the beach that should be top of our concerns… Lest we forget the livelihoods of those struggling against the elements to grow crops, transport their wares and ultimately feed their families.

Traditionally the food system we’ve all come to rely on is a truly global enterprise, with extreme weather having little discernible effect on the logistics of getting produce from A to B.

However as we’re hearing more and more about the threats posed by extreme weather events, we have to ask – how prepared are we for just such an eventuality? The question is made all the more worrying when we consider our food system has become efficient to a fault, yet less resilient as a consequence.

In answer to the growing volatility, a taskforce of academics, industry and policy experts was commissioned to examine the resilience of the global food system to extreme weather. Its report is available at the following link [read the report], but the executive summary (republished below) highlights some of the overriding issues that need to be addressed.

Understand the risks better

Our knowledge of how extreme weather may be connected across the world, and hence the precise probability of multiple bread basket failures, is limited by available model simulations (therefore more research is required).

Modelling limitations also constrain our ability to understand how production shocks translate into short run price impacts.

Explore opportunities for coordinated risk management

As knowledge emerges regarding plausible worst case scenarios, it will be possible for governments, international institutions and businesses to develop contingency plans and establish early warning systems with agreed response protocols. Other opportunities include coordinated management of emergency and/or strategic reserves.

Improve the functioning of international markets

History demonstrates that the actions of market participants in response to production losses, or the behaviours of other actors, are a crucial determinant of price impacts. Other problems that can exacerbate price spikes include low levels of stocks relative to consumption, poor transparency of market information and physical limitations on trade such as infrastructural constraints.

Bolster national resilience to market shocks

Governments should also consider policies to bolster national resilience to international market shocks. This is a particularly important policy agenda for import dependent developing countries with high numbers of poor food consumers, and/or high risk of political instability. The precise mix of appropriate policy measures will vary according to national context.

Adapt agriculture for a changing climate

Agriculture faces a triple challenge. Productivity must be increased by reversing declines in yield growth and closing the gap between actual and attainable yields in the developing world, whilst also reducing its environmental impact (eg 50:1 degradation, depletion of freshwater supplies, increasing greenhouse gas emissions or eutrophication). However, given the increasing risk of extreme weather, this cannot come at the expense of production resilience. Increases in productivity, sustainability and resilience to climate change are required. This will require significant investment from the public and private sectors, as well as new cross-sector collaborations.

How Do You Turn A Technical Expert Into A Leader Of The People?

How to turn technical staff into leaders

Procurious recently caught up with Karen Morley to discuss her upcoming presentation at the CIPS event in Melbourne, Australia. In the first part of our interview we learnt what separates good CPOs from great CPOs and discussed the impact truly great procurement leaders can have on their business. That article can be found <here>

Today, for the second part of our discussion with Karen, we’ll be covering the development of technical experts into leaders of people and pointing out what procurement professionals should be doing to continue their progression up the leadership ladder.

Procurious asks: In a recent LinkedIn Pulse article you published, you discussed the difficulties organisations face in transitioning technical experts into managers and leaders of people. Can you provide some commentary on that? 

Karen: I’m coaching a young woman at the moment who trained as an engineer. She was promoted into her first management role in 2011 but did her first leadership program in 2014. She has joking said that it would have been pretty handy if it had been done that the other way around.

It wasn’t until she got into the management program that she started to understand the concepts of leadership and the need to think differently when you are leading other people as opposed to when you are the functional expert or an individual contributor.

This sort of transitioning is something that I’m constantly working with people on.

When you are a functional expert, or an individual contributor, you are responsible only for yourself. But when you start managing other people or when you are moving to general management areas, you are the authorizer of the work that other people do. People are looking to you to be the authority figure and I think that is a very significant part of the transition.

Again, this is consistent with those leadership attributes we discussed earlier. People who are able to demonstrate all of those things, particularly presence, integrity and the professional advocacy are able to make a big difference.

Procurious: Do you feel that by moving technical experts into managerial positions we are promoting them towards failure rather than celebrating their specific expertise? 

Karen: I think this is an important point and I really wish we thought of career paths in quite different ways. I think that some people are great technical experts, who are vital to the success of an organization and perhaps we don’t see enough value in their technical expertise. In a sense, we run the risk of shutting down on their brilliance and technical capability by promoting them.

I would like to see organisations promoting and recognising people for their scientific, engineering or procurement expertise without necessarily having the need to move them into big leadership roles.

I think when you are in the front line leading, you still need to be across the functional areas in a very big way. You might even be doing some functional work as well as leading the team. When you get to a general management level, you lose the ability to have deep knowledge into the technicalities of the functional areas.

Promoting experts to managerial roles also presumes that everybody has the same level of ambition and everyone wants to move up the line as far as they can.

Some people just want to be really good at what they do. Some people want to be the best category manager out there. There are a lot of things you can do for these people to ultimately improve their performance and their value to your organisation. You can allow them to have a mentoring role with other category managers, perhaps outside of their own group. They can help to train or advise non-procurement people in category management and how they integrate into the business. It’s a huge opportunity not only for the employee but also for the business.

Procurious: Any final tips for procurement professionals out there looking to continue their progression up the procurement ladder?

Karen: Raise your game; raise your voice. I would highlight the importance of spending the time to focus on what I call the leadership narrative. So often people wander through their careers and things happen or don’t happen, maybe they set goals and maybe they don’t. But the idea with the leadership narrative is that you are thinking about where you want to end your career right now and being more focused on how to move towards that end goal.

Also, I would suggest, you need to understand your own identity, values and core purpose and you should look to create a link between those things and what you’re trying to achieve from a career perspective. These help your to retain your own authenticity and natural approach. Being able to talk about and articulate these things are critical steps for those trying to get ahead.

Read the first part of this article

The Imminent Impact of 3D Printing on Manufacturing

A triple-whammy of recently published reports highlight current and impending trends in 3D printing.

Impact 3D printing will have on manufacturing

The global market for 3D printing is set to grow from $4.5 billion today to $17.2 billion by 2020, finds research by A.T. Kearney.

According to the analysis titled ‘3D Printing: A Manufacturing Revolution’, the 3D printing market – defined as the market for hardware, supplies and services – is set to boom over the coming five years. Today the market is worth approximately $4.5 billion, with Aerospace (including Defence) and Industrial (including Construction) both accounting for18 per cent of the pie, followed by Healthcare at around 16 per cent. The Automotive and Jewellery sectors both represent a 12 per cent market share, while Energy holds 5 per cent, with the remainder taking about 20 per cent of the share.

Benefits of 3D printing

The boom in the application of 3D printing is based on several benefits the technology has over traditional forms of manufacturing, which according to A.T. Kearney can be bundled across five dimensions.

1. Mass customisation – the technology will allow people to create items build to the specifications of customers, with custom-built designs opening up a wealth of possibilities.

2. New capabilities – items can be mass produced without high-fixed capital costs related to specific design.

3. Lead time and speed – the technology allows for = printing in a wide range of mediums on the basis of data templates, benefiting the whole design and production process, ultimately leading to reduced lead time and speed to market.

4. Supply chain simplification – with printers easily deployable and moveable, the whole process can be enacted close to markets, thereby requiring less inventory.

5. Waste reduction – unused base material can be used in a variety of other products, and only what is needed is used, thereby reducing the waste of offcuts, among others.

There’s riches in the 3D material supply chain…

Research compiled by Smartech examines the future of current material supply chains for the key plastics used today in 3D printing.

Many 3D printer firms are racing to fill out their plastic material portfolios and are using them to create competitive advantages. At the same time, major materials companies are also starting to see 3D printing as a profitable niche market worth jumping into now, with the promise of large opportunities down the road.

The quantity and quality of plastic materials available for 3D printing systems are key determining factors in the number of 3D printer purchases.

The report hereby goes into detail on the idea of plastics as a source of competitive advantage for 3D printer firms. Since many OEMs are looking to plastic materials as a source of substantial revenues over the next few years, 3D printing firms have set about acquiring materials to force development themselves. This inexplicably raises questions about the future role of the OEMs – will they even be needed in the 3D printing factories of the future?

A further piece of research taken on by leading 3D printer manufacturer – Stratasys, proves that 3D printing is THE trend of the moment…

Stratasys’ report is based on an independent survey of 700 designers, engineers and executives – 40 percent of whom are employed by companies with over $50 million in revenue.

“We needed to look beyond our factory walls to get a more complete sense of where 3D printing is headed, so we turned to those who live and breathe the technology just like we do – professional users,” said Joe Allison, CEO of Stratasys Direct Manufacturing. “We set out to uncover the common themes among companies who are on the spectrum of larger-scale adoption and integration of 3D printing into their manufacturing process. We’re sharing our findings to help advance adoption and help manufacturers’ maximise the business benefits.”

Trends in 3D printing

The report indicates what applications, business benefits and challenges, equipment, materials and services are capturing the attention of 3D printing’s most committed users – and where their companies will invest. Among the more attention-grabbing of the results are the following:

  • The majority of respondents – representing the aerospace, automotive, consumer and medical sectors – strongly believe more end-use parts will be designed specifically for additive manufacturing (AM) in the future
  • Additive metal use is expected to nearly double over the next 3 years
  • The majority of respondents said that regardless of their company’s in-house AM capabilities, they believe there will always be value in partnering with an AM service provider to augment internal capabilities

“The results may serve as a wake-up call to take swifter action,” added Allison.

Air Cargo Takes A Dive In Half-Year Industry Report

Government meddling in China, the Greek debt crisis, and West Coast Port shutdown all have a role to play in the industry’s downturn.

Is the air freight industry in trouble?

The International Air Transport Association (IATA) has released its report on the state of global air freight markets – and it doesn’t make for happy reading…

By delving deep into the data we are able to observe that regional performance varied widely across the board. Asia-Pacific, North American and Latin American carriers reported year-on-year declines (-0.3 per cent, -3.3 per cent, and -1.6 per cent respectively) while European carriers reported that markets were flat. This was offset by the strong performance of Middle Eastern (+15.3 per cent) and African (+6.7 per cent) carriers to keep growth in positive territory.

The general trend of a weaker 2015 compared to 2014 can be seen in the half-year data. Air freight markets expanded by 5.8 per cent in 2014; however year-to-date growth for 2015 stands at 3.5 per cent.

Tony Tyler, IATA’s Director General and CEO comments: “The half-year report for air cargo is not encouraging. With growth of just 1.2 per cent over June last year, markets are basically stagnating. Some carriers are doing better than others at picking up the business that is out there. But overall it has been a disappointing first half of 2015, especially considering the strong finish to 2014. The remainder of the year holds mixed signals. The general expectation is for an acceleration of economic growth, but business confidence and export orders look weak. Air cargo and the global economy will all benefit if governments can successfully focus on stabilizing growth and stimulating trade by removing barriers.”

The data goes into granular detail for the June period – showing a clear slowdown in growth for air cargo demand. Air freight volumes measured in freight tonne kilometers (FTK) rose just 1.2 per cent compared to a year ago. This is consistent with falling trade activity and weaker than expected global growth.

How did each region fare?

IATA has provided analysis for every region detailed in the report – a summary is provided below:

Asia-Pacific
The region has experienced a notable slowdown in imports and exports over recent months, and latest data shows emerging Asia trade activity down 8 per cent. Growth for the year-to-date was 5.4 per cent. In addition to generally weak trade growth, the region is the most exposed to the China market where government policies are more focused on stimulating domestic markets.

Europe
Improvements in Eurozone business confidence have not led to increased air freight demand, and consumer confidence has been hit by the Greek crisis. Growth for the year-to-date was -0.6 per cent.

North America
The positive impact of a modal shift to air as a result of the West Coast ports strike has faded and economic performance, despite some improvement in the second quarter, is subdued. Growth for the first six months of the year was -0.4 per cent.

Middle East
Airlines in the region have pursued a successful hub strategy connecting both long- and short-haul markets. Although some major economies in the region have seen slowdowns in non-oil sectors, economic growth remains generally robust, which is also helping to sustain demand for air freight. Growth for the year-to-date is running at 14 per cent.

Latin America
Regional trade activity has grown in the first half of 2015, despite continuing weakness in Brazil and Argentina. Unfortunately this has not translated into stronger demand for air freight. Growth for the year-to-date was -6.9 per cent.

Africa
The Nigerian and South African economies have under-performed for much of the year so far, however regional trade has held up. Demand growth for the first six months was 4.8 per cent.

To Make A Difference CPOs Must Have The X Factor

Do You Have The X Factor?

Ahead of the upcoming CIPS Australia event, Procurious caught up with Dr. Karen Morley, one of the event’s distinguished presenters. Karen has extensive experience working with organisations, teams and individuals to increase their leadership effectiveness.

Over her career Karen has led a broad range of leadership development, succession and talent management assignments. She emphasises evidence-based approaches tailored to suit the organisation/firm’s context.

Today Karen is talking about what makes great procurement leaders and how to successfully move technical procurement experts into managerial positions.

Procurious asks: At the upcoming CIPS Australia conference you will be discussing a piece of research you produced for The Faculty that looks to distinguish the very best CPOs from the rest. What would you say are the traits that separate the great CPO’s from good CPOs?

Karen: That’s right, I will be presenting the findings of our X Factor research. The report addresses the importance of great leaders in the procurement function.

To answer your question, I would say the two things that make the great CPOs stand out from the rest are their interpersonal leadership attributes and the way they go about linking these relationships to the commercial direction of the organisation.

It is clear that the really outstanding CPOs nail commercial leadership. This stems from the fact that they possess an in-depth understanding of the whole business, not just procurement. They are engaged across the entire organisation and are speaking to other functional leaders on a strategic level. They are engaging with the board and CEO on what has greatest strategic value, and they interpret this through their procurement initiatives.

Once that strategic dialogue has been established, the next critical step is to ensure these messages are reaching staff further down the chain. It’s here that interpersonal skills become critical. Great CPOs have very close relationships with the people that report into them. They are able to align the goals and expectations of the business to activities of their staff.

Procurious: Can you provide any insight into what difference these ‘great CPOs’ can make for their organisation?

A lot of organisations are still focused solely on cost cutting. It’s a vital part of what procurement teams do and this will certainly continue to be the case. I think the difference that really great CPOs make is around moving discussions and activities to a more strategic level. They are not simply focusing on what can be cut out, but where savings can be made and value added at the same time.

I think that’s a pretty rare mindset. A lot of procurement leaders talk about value, but only a few can actually deliver it.

The costs cutting initiatives will always be there. It’s something that you can do successfully for a couple of years and come up with some impressive saving numbers. But, the challenge comes in finding what’s next. Once you’ve delivered those initial savings, then what are you going to do? The great CPOs realise they need to understand the business broadly and create close relationships across functions to see where procurement can best add value.

Which Of These Sixteen Personality Types Are You?

Which of these sixteen personality types fits you best?

Which of these personality types are you?

Isabel Briggs Myers created the sixteen personality types with the help of her mother, Katharine Briggs, and the theories of psychologist Carl Jung. Since then, much research has been done into how each type functions at work, at home, and in relationships.

A recent post in the Harvard Business Review pours salt on the Myers-Briggs Type Indicator (or MBTI for short), saying:

“Myers Briggs—and I would argue any personality assessment—is neither valid nor reliable. These tests identify a black and white version of people, a reduction of who they really are. They offer us the illusion of understanding at the cost of truth and freedom. Sure, they may make people more comfortable (‘Oh, I understand you now’). But it’s a trick.

It continues: “Self-assessments, by definition, reinforce a person’s self-image. You tell the assessment what you think you are like and then the assessment tells you what you are like. Which, of course, would incline you to think they’re valid. But they’re just telling you what you told them… Personality tests reinforce our blind spots.”

Not to be downhearted back in July we asked the Procurious community whether they thought there was a ‘typical’ Myers Briggs profile for procurement pros. There’s been 33 answers to-date, so it’s clearly a talking-point among members.

We’ve helpfully wrapped-up the results thus far (25/08)

ENTP 9, ENTJ 6, INTJ 5, ENFP 2, ISTP 2, ENFJ 1, ESTJ 1, INFP 2, INFJ 2, INTP 1, ISFJ 1, ISTJ 1

It appears the most common trait is ENTP and from 33 responders E is included in 19 out of 33 profiles.

Things to consider

Mike is just one of many who has asked an interesting question on the findings. He wants to know:

“Do you think you have a different profile depending on the role your fulfilling in the company? I run a consulting business and recently created a new commercial model for procurement, so maybe its no surprise I am currently a ENTP but I haven’t always been one.”

A few of you have picked-up on the changing classification too. Monica Palacios said: “I agree with the idea that we evolve with our roles. I took it at the beginning of my career ENTJ; some years before I found it was ENTP.”

Glen Lovett: “I’m an INTJ but given the changing face of procurement I would suggest that ‘E’ is becoming more valuable.”

Chris Roe notes: “We seem well represented for a type that makes up 3 per cent of the population in this sample…
I guess making decisions based on logic and facts rather than emotion is a desired trait!”

Judging by your individual test results there just may be some common traits among procurement professionals after all. Matt Cockfield exclaims: “Wow, what a great question. I’m not sure I ever thought of connecting the two — MBTI with the procurement discipline. Apparently, there is a correlation here!”

Do you see value in such tests, or are you like Iain Wicking who claims they’re just “a superficial way of assigning traits… I would not take it too seriously.”