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CIPS teams up with Procurious to drive social media knowledge

CIPS David Noble speaking at Procurious Big Ideas Summit 2015
CIPS David Noble speaking at Procurious Big Ideas Summit 2015

The Chartered Institute of Procurement & Supply (CIPS) has partnered with Procurious, the world’s first online business network for procurement and supply chain professionals, to form a social media knowledge partnership that will deliver enhanced learning and networking opportunities for Procurious and CIPS members in the digital realm.

The knowledge partnership will highlight how the growth of social media will impact the procurement and supply profession and encourage the wider community to embrace the new way of networking and information sharing [www.cips.org/procurious].

For CIPS members, the alignment with Procurious will greatly increase the opportunity to expand their network of like-minded professionals globally. Also, it will help them access best practice social media advice, webinars and interviews that will help them stay better connected with suppliers, mitigate risks and prepare for potential disruptions in the supply chain.

CIPS members will also benefit from being able to sign up for social media workshops in addition to the host of procurement and supply chain online learning modules already available on the site.

The agreement helps cement Procurious as the place to go for the best advice, discussions and online learning relating to social media. Specifically, the knowledge partnership will give Procurious members additional content including webinars, interviews, events and access to CIPS experts online.

Commenting on the partnership David Noble, Group CEO, CIPS, said: “Social media growth has been phenomenal over recent years and is having an increasing impact on the procurement and supply profession. Partnering with Procurious is enabling us to leverage the opportunities these platforms provide from both a networking aspect but also a knowledge and educational perspective for our members and the wider community.

Procurious Founder Tania Seary explained: “Procurious was set-up to help procurement professionals get connected and get ahead, and our partnership with CIPS is a terrific proof point of how we’re delivering on this promise.

“We live in an increasingly globalised world so those who master the opportunities such as Procurious offer will be at a huge advantage to those that don’t,” Seary added.

Procurious currently has over 5,500 active members across 100 countries who can use the platform to connect and engage instantly. Members come from organisations including Shell, Apple, HSBC, Rio Tinto, Qantas Airways and General Electric.

To find out more visit www.cips.org/procurious

Why is eSourcing adoption and utilization still so low?

The eSourcing alternative

By Jeff Gilkerson, Manager at The Hackett Group thglogo500

 

You would be hard pressed to find a TV viewer that would argue watching a show in standard definition is better than watching in High Definition. Similarly, it would be difficult to find a procurement executive that would argue a manual (excel/word/email) based sourcing process is better than utilising an eSourcing tool. It’s almost universally accepted that eSourcing is more efficient, improves quality/standardisation, and generates better results. Yet, eSourcing tool utilisation and adoption is still lagging. Approximately 70 per cent of large organisations have eSourcing tools. While at first this may seem encouraging, it begs the question: why do 30 per cent of organisations not have eSourcing tools when the benefits are widely known and accepted, the technology has been around for decades, and the tools can be obtained for a relatively low investment?

The picture gets even worse when you look at the actual adoption and utilisation of eSourcing tools in the 70 per cent of organisations that have them. Many of these organisations have “implemented” eSourcing tools, but what that really means is they have purchased the tools and have them available to use. It does not mean that the tools are embedded in the sourcing process, that the staff is adequately trained to use the tools, or that the tools are frequently and consistently used for sourcing projects.

We recently helped a mid-size manufacturing client in the midst of a procurement centralisation to design and implement an eSourcing program. While eSourcing was new to this organisation, some of their challenges and learnings are just as relevant to more mature organisation trying to understand why eSourcing utilisation and adoption has not reached its full potential.

Most eSourcing tool providers will tell you they are easy and fast to implement (some say it can be done in only a few days). However, true implementation of an eSourcing tool is more than just making sure the technology works.

The limits of adoption and utilisation go beyond the actual tool, and lay in a range of organisational and people issues:

  • Change is difficult: Former president Woodrow Wilson once said, “If you want to make enemies, try to change something.” Even if you know it’s for the best, change is difficult. Think of moving, even if it is to nicer house in a better neighbourhood, the process of packing, moving, and unpacking is difficult and not something most people look forward to. Similarly, moving from a manual sourcing process to an eSourcing process requires change on the part of users.
  • Required change: As mentioned, change is difficult, and transitioning to an eSourcing tool is change. Just like all change it requires effort and work. Users have to re-learn how to do things they have been doing for years, explain to direct reports, suppliers, and internal stakeholders why they are changing, and often times modify the process they have become accustomed to. Additionally, many of the things that make eSourcing tools efficient (e.g. templates, auto-scoring) have to be built or configured. This work is required upfront before users start to realise the benefits that eSourcing tools provide. It’s not just about having the technology, it needs to be embedded into the process and this requires work and change.
  • Lack of process standardisation: eSourcing tools provide a great resource to improve consistency in your sourcing process. However, in order to do this there must be a generally accepted sourcing process that is consistently followed throughout the organisation. In our experience, many organisations don’t actually have a standard sourcing process. Even in organisations that do have a documented sourcing process, it is common to find that the process is infrequently followed or applied inconsistently when it is followed.
  • eSourcing provides more visibility: A robust eSourcing tool and program gives management more visibility into the status, progress, and results of sourcing projects. While this is great in management’s view, users may not see this as a positive.

To address the organisational and people issues, procurement executives can:

  • Standardise the sourcing process: Ensure there is only one sourcing process for the organisation and that it is consistently and broadly followed. Just as teaching a young child two different ways to tie his shoes is certain to lead to confusion and frustration, designing an eSourcing program around an inconsistent sourcing process will inevitably lead to confusion and partial adoption.
  • Ensure proper training: eSourcing tools have become significantly easier to use, but for most users it is still change. A comprehensive training should be three-pronged:
    1. Basic Functionality: A “how to” use the tool. This is typically done as a classroom style training (in person or via webex) and focuses on the technical aspects of how to do things in the tool.
    2. Best Practices: Another classroom-style training that focuses on best practices for eSourcing (e.g. questionnaire design, eAuction design & set up)
    3. Hands on: The final piece of the training should be a hands on training in the form of pilot projects. The pilots reinforce the functional and best practice trainings.

Note: When planning the pilot projects, it is important to select the right projects and users. If the project is too simple it will not provide enough depth for the project team and if the project is too complex it may distract from learning the eSourcing tool. Users selected should also be carefully chosen as the early users of the tool will have a significant impact on overall adoption.

  • Develop comprehensive documentation: Ample documentation will ensure that when users have questions after the initial training and pilot phase they will be able to easily find answers and complete their projects. The documentation should be widely available and focus on both the functional “how to use the tool” as well as the business processes.
  • Track the outcomes: Too often an eSourcing program is rolled out with much fanfare, only to quickly fade into the background. To ensure successful adoption of eSourcing tools, it must be tracked and reported. In addition to tracking and reporting the results (i.e. savings) form eSourcing widely across the company, it’s just as important to continuously track and report to the procurement organisation on the use and adoption of the tool.

Comprehensively addressing these organisational and people issues will significantly improve the utilisation and adoption of your eSourcing tools.

UK Automotive Sector To Leave Other Supply Chains In The Dust

Healthy UK Automotive Industry

New investments, economic recovery, overseas demand and continued technological advances, all point to continued substantial increases in UK vehicle production in the coming years.

This means significant opportunities for those domestic suppliers able to respond.  (Currently only 40 per cent of components are sourced from the UK).

To ensure the industry is equipped with the right skills to support this growth, the Automotive Industrial Partnership – the recently formed body that brings the industry and government together to secure the sector’s skills pipeline – is conducting the biggest ever survey of its kind aimed at vehicle manufacturers and the 2,0002 UK based supply chain employers.

Jo Lopes, Chair of the Automotive Industrial Partnership is calling upon the industry to grasp this opportunity and participate to the full.

“This initiative is unprecedented,” said Jo.

“There have been many other surveys covering the engineering and manufacturing sectors as a whole – but none that drill down to this level of detail and meet the unique needs of automotive manufacturing industry.

“It’s vital that we know the views of employers of all sizes if we are to take the right action now to ensure an effective pipeline of future talent – from new entrant technicians through to the specialist engineers and managers we will need.

“By working together we have the opportunity to mould the future of our industry – and address the very real challenges that we face.”

The findings will be used by the Automotive Industrial Partnership to determine where, when and how future skills investment should be prioritised. In turn, this will inform the development of learning solutions that are relevant and accessible to the whole industry, including smaller employers.

Among the household names driving the Automotive Industrial Partnership are; Bentley, BMW, Ford, GKN, Honda, Jaguar Land Rover, Nissan, Toyota and Vauxhall.

Interested? Take part in the survey by visiting automotiveip.co.uk

The logistics of supplying humanitarian aid in the earthquake-ravaged Nepal

DHL Disaster Response Team extends stay to aid in the aftermath of the devastation that has rocked Nepal.

Aid being delivered in Nepal
Aid being delivered in Nepal

As earthquakes continue to rock the region and wreck lives for thousands, DHL has pledged to extend the deployment of its Disaster Response Team until the end of May.

The group comprises 18 highly-trained volunteers hailing from Singapore, Malaysia, Dubai, Bahrain, India, Hong Kong, Pakistan, Belgium, and UK.

The DRT was deployed less than 48 hours after the first earthquake struck on 25 April. As the country’s only international airport in a landlocked country, the airport is the main gateway for the international aid community to send relief goods into Nepal.

The volunteers – deployed in three waves – are all trained in disaster management to help coordinate relief aid and improve logistics operations at Tribhuvan Kathmandu International Airport. To-date over 2000 tons of relief aid has been distributed to the victims, including: food, shelter, medicines, water, solar lamps, tools for rebuilding, plastic sheeting, and a 35-ton inflatable hospital from Medecin sans Frontieres,

Faced with an increasingly demanding situation and with limited equipment, the volunteers move goods into centralised airside warehouses run by the United Nations World Food Programme for further distribution by international non-governmental organisations (NGOs).

Gagan Mukhia, Country Manager, DHL Express Nepal, commented on the challenges facing the relief effort: “Some of the huge air cargo pallets initially had to be dismantled before we could move them because there just wasn’t the equipment to unload them as a whole. With the latest earthquake on 12 May, we are still able to continue with our DRT operations as we now have the equipment and systems in place to deal with the ongoing relief effort that Nepal will desperately need for many months ahead. Planes can now be unloaded quickly and aid distributed more efficiently to the Nepalese community.”

In addition to the ongoing voluntary work of the Disaster Response Team, DHL’s Aid and Relief commercial service has moved over 100 tonnes of relief goods for organisations like ShelterBox and Norwegian Church Aid. Additionally, bookings for over 90 tonnes have already been received for the coming weeks.

Fallout Still Being Felt After Strikes At Port of Los Angeles

West Coast Port Strikes Start to Play Out

Port of Los Angeles Strike Effects

Earlier this year we covered a story about delays caused by industrial action at ports on the US West Coast. This week, the Port of Los Angeles has released some troubling statistics that point to the long-term impact of this action.

Despite a significant rise in container volumes for the month of March, cargo volumes at the port have dropped drastically in April.

Expectations of a full recovery were bolstered by strong showings in the month of March, after an agreement was finally reached with West Coast port employees and the longshore workers union. The agreement led to the clearance of a backlog of ships that had been present at the Los Angeles port for months.

March was in fact, the second busiest month in history for the Los Angeles Port facility. However, the huge 11.8 per cent drop in cargo volume recorded in April suggests that the increased activity was merely clearing the backlog and that cargo figures may remain low on an ongoing basis.

Major US ports have long been seen as an indicator of the health of the US retail sector. Normally, when shipping volumes are decreasing the retail sector follows and starts to slow. However, further highlighting the concerns of West Coast ports, is the fact that cargo volumes at Los Angeles are falling at a far greater rate than at other ports across the nation. This suggests that rather than broad sectoral problems, this issue is specific to the port and the industrial action.

It is thought that during the months-long dispute (where work essentially ground to a halt), many firms made alternate arrangements and instead shipped into Mexico, Canada or ports on the US east coast.

It will likely take some time to determine exactly where the chips will fall in this matter. Major importers will be reluctant to walk away from the huge infrastructure and warehousing investments they’ve made near the Port of Los Angeles and will likely return to shipping goods through the port. However, the many small and medium sized firms that established alternate shipping routes to deal with the delays brought on by industrial action may be less inclined to return to the port.

David Noble: Ethics In The Profession

“I do believe the impact of our profession – we underestimate it…”

Watch our fourth Big Ideas Summit keynote (part 1 of 4)

Watch David’s keynote in FULL here

David Noble, Group Chief Executive of The Chartered Institute of Procurement & Supply (CIPS), provides a fascinating insight into the profession from the point of view of the chartered body.

Addressing and shifting some paradigms about procurement first, David then goes on to speak about the importance of ethics and compliance and how licensing the profession helps professionals in their day-to-day roles.

Procurious members can find David’s full keynote here. Not a member yet? Register for free.

Watch: See more Big Ideas from our 40 influencers

4 challenges procurement faces & how to overcome them

Results from a newly published study shine a light on an assortment of internal challenges facing the procurement function, as well as its changing role as we enter an uncertain future.

4 challenges procurement must overcome

Xchanging has issued the first results from its 2015 Global Procurement Study of more than 800 procurement decision makers. 

These first set of results look at internal challenges and the new role of procurement, covering misaligned KPIs, lack of internal engagement, capacity issues and skills gaps.

Challenge #1: Misaligned KPIs

Despite the now wide ranging responsibilities of procurement decision makers, 47 per cent name ‘cost savings realised’ as their number one KPI. The top four KPIs listed are all cost related. CSR/Sustainability impact, by comparison, is ranked as the least important at just 1 per cent.

Chirag Shah, Executive Director, Xchanging Procurement comments: “These results strongly indicate that there is a problem with the current KPI structure. Procurement teams are responsible for many business critical functions. From risk management to sustainability impact, procurement is engaged in activities that far surpass its cost-cutter legacy. The metrics against which organisations track procurement’s performance do not line up with what procurement actually delivers.”

Challenge #2: Lack of Internal Engagement

63 per cent of procurement decision makers globally identify ‘internal stakeholder engagement’ as a challenge, with 14 per cent claiming it is as an extreme challenge.

Shah explains: “Procurement’s strategic capability isn’t being understood and because of that, it isn’t appropriately valued. Not only is this causing problems for procurement performance, it is also restricting business success; by not engaging with the procurement team and fully understanding what it can deliver as a strategic partner, companies are limiting their potential for growth.”

CPOs clearly feel more internally valued than procurement middle management; 60 per cent of CPOs feel that procurement is a C-level priority in their organisations compared to 37 per cent of procurement middle managers.

Shah makes a number of recommendations based on the findings: “To improve internal engagement, and properly communicate the value of procurement, procurement departments need to consider tactics such as introducing governance boards, using score cards to track deliverables, leveraging analytics and reporting tools to demonstrate results and even re labelling team members with non-cost centric job titles that relate to their roles, for example ‘Risk Manager’ or ‘International Consultant’”. 

Challenge #3: Capacity Issues

According to Xchanging’s numbers – 80 per cent of procurement decision makers identify ‘procurement team time pressures’ as a challenge, and 20 per cent as a major challenge – implying that the majority of procurement departments are facing major capacity issues.

Surprisingly, in comparison, ‘talent shortage’ is considered an operational challenge by far less respondents, with 59 per cent citing it as a challenge and only 12 per cent as a major challenge.

The number citing talent shortage as a concern drops to less than half (40 per cent) when asked if it’s a problem for the industry as a whole.

xchanging

Challenge #4: Skills Gap

The skills considered most important for procurement professionals are ‘relationship management’ (88 per cent consider important, 59 per cent very important) and ‘negotiation skills’ (88 per cent and 58 per cent).

Significantly, these are also the areas where procurement decision makers identify the greatest gaps in skill set provision; around a quarter cite ‘relationship management’ (26 per cent) and ‘negotiation skills’ (23 per cent) as areas with the greatest gap in skill set provision. 23 per cent also name ‘project management’.

Want to read more? The full report can be downloaded here.