All posts by Procurious HQ

What is procurement like in your country? Next stop – Ukraine

Procurement expert, former CPO and current Procurement consultant, Elena Kononenko, talks about the profession in her home country of Ukraine.

What is procurement like in the Ukraine?

How do you think procurement differs in your country, as opposed to elsewhere in the world?

Up until April 2013, procurement in the Ukraine was mainly focused on reverse auctions (which were used poorly, causing lost savings), RFP/RFQ techniques and local tender procedures, with little or no e-procurement. Procurement professionals rarely shared their experiences and the profession was closed off.

This only changed following the I Procurement Forum in March 2013 and after the launch of the Ukrainian Association of Procurement Professionals. E-auctions were opened up, achieving savings, and procurement professionals had the opportunity to expand their networks and share their experience and knowledge.

Procurement is still a passive function in most organisations and tends to be reactive, based on requests from other functions. It doesn’t play a strategic role in the organisation and strategic tools like category management, strategic sourcing and outsourcing are rarely used.

Fewer than 10 per cent of organisations co-operate with the three PO providers there are and only 5-10 per cent use an automated system for e-procurement. There aren’t any companies whose procurement process is fully automated.

The current trend in procurement is to focus on more modern, specific techniques in the areas of vendor selection, sourcing spend management, e-procurement and contract and inventory management.

Do you know how many other procurement professionals are in your country?

A few hundred, I suppose. Maybe 200-300.

In terms of accreditation,there is a lack of certified procurement professionals in Ukraine due to the lack of knowledge about CIPS and ISM. Only around 1 per cent of procurement specialists and CPOs know about these institutes, their certification and its advantages.

How did you get started in procurement?

Absolutely by chance! I decided to try something new and sent my CV to Metro Cash & Carry and got a job as a Purchasing Manager’s Assistant. After that, I went back to work for the World Bank, firstly as a Financial Manager, then as Procurement Manager for one of Bank’s projects in Ukraine.

What do you see in procurement’s future in your country and how can social media play a role?

The future of procurement in the Ukraine depends on a few things:

  • Education and continuous professional development of procurement professionals
  • Strong external and internal PR campaign showing procurement as a strategic function
  • Changes in senior managers’ attitude to procurement
  • Progress on advanced development opportunities for the profession

Social media can help by providing a platform for peers in different countries to connect, share positive experiences and success stories. It can also be a source of knowledge on the latest best practice, instruments and soft skills and act as a global supplier database.

Why did you join Procurious?

Procurious fulfilled a few key things for me. It allows me to communicate with colleagues and peers from around the globe, find new sources of knowledge and understand what I have to learn and improve to build successful international career in procurement.

What are you hoping to get out of the network?

Everything that’s mentioned above and more!

How are you going to get your peers involved?

I’ll be getting them involved by putting links across my social networks (Facebook, LinkedIn, Twitter) and inviting them to join.

Moving on up: the ascendency of the Chief Procurement Officer

Big CPO moves in both Myer and Honda

It’s been a big few weeks for the ascendency of the CPO. Since Procurious ran this post discussing Tim Cook’s rise through the supply chain ranks to the top job at Apple, we have seen two more procurement professionals ascend to top position at major businesses.

Honda

Last week saw the Honda Motor Company promote Takahiro Hachigo to its top role. Hachigo joined Honda in 1982 initially working in research and development He became a manager of a purchasing division in 2008 and in 2013 was promoted to the role of representative of development – purchasing and production (China).

His promotion, which came a surprise to many, comes off the back of a number of challenging years for the automaker. Ito Tankanobu is leaving the post of CEO after having guiding the company through the financial crisis, the earthquake and subsequent tsunami that wreaked havoc on supply chains across the island nation, an extended period of unfavourable exchange rates and more recently concerns over product quality of airbags used in the company’s vehicles.

Despite news agency Reuters labelling Hachigo a ‘low profile engineer’ the new CEO was hand picked by the outgoing boss, has 32 years experience at the automaker and has risen through company ranks holding executive roles in the US, Europe and China.

Myer’s stocktake

The Second major announcement for procurement professionals with aspirations of holding their company’s top job is the recent appointment of Richard Umbers to top role at leading Australian retailer Myer.

Umbers replaces Bernie Brookes as the company’s CEO after holding the position of chief information and supply chain officer for the retailer. The new CEO has also held senior roles with supermarket chains Aldi, Woolworths and at Australia Post.

Analysts have questioned the timing of the announcement, which comes just three weeks before the company is set to release its half-yearly results. Myer has not listed profit forecasts ahead of the announcement, but neither has it corrected analyst’s predictions of an $89 million profit, a significant decline from the figures the firm recorded in 2014.

Investors too, seem to be a little spooked with the new appointment with the company’s share price dropping 10 per cent on Monday with news of the leadership reshuffle.

The appointment of Umbers (not a traditional retailer), suggests an intention from Myer to clean up its internal operations. It’s thought that as the retailer received a more 70 per cent upturn in traffic to its online store last year it’s possible that the company’s future lies in the way it integrates technology, back office process and distribution to support a shopping model that will be based increasingly online – an area that Umbers has significant experience in.

Procurious wishes both former Procurement bosses all the best in their new roles.

How Generation Y is shaking up retail and digital marketing

It is expected that by 2026 the main consumers of luxury will be millennials (or generation Y). This is notable for two reasons… The ways in which we consume digital content is steadily changing, and our newfound reliance on social networks will also have a profound effect on our shopping habits.

Some Millennials, tomorrow.
Some millennials, tomorrow.

This is a guest blog post from fashion entrepreneur Daniela Cecilio, Founder and CEO of ASAP54 (and previously of Farfetch.com).

It’s a well known fact that the world’s population is ageing , but what are the consequences from a marketing point of view for brands and consumers? The teenagers and young adults of today, often referred to as millennials, are expected to be brands’ center of attention in the near future. While at the moment their contribution to brands’ profits is small, they will soon increase their consumption capabilities as they will have their own families and reach senior and managerial positions professionally.

By 2026, the main consumers of luxury goods are predicted to be digital natives i.e. people born between 1980 and 2000 who’ve had technology penetrate every aspect of their lives from a young age. .

The main challenge here for brands will be to understand and adapt to this generation. Luxury companies are known to be reluctant to develop their online presence as it is often seen in the business as harming the image of exclusivity – but these companies might not have a choice anymore.

Shopping codes and references are evolving, being deeply linked to digital innovations: the path-to-purchase is getting more complicated and dense as the number of potential touch-points increases with new social and technological innovation. Social media is playing a bigger role in people’s lives, with consumers expecting to be able to interact with brands in the same way, whether online or offline.

The consequence of a missed interaction can be devastating for brands, as word of mouth coupled with the speed of the Internet is enough to spread negative perceptions and sentiments.

With 1 billion active users on video platform Youtube and 420 million users on blogging and image-sharing platform Tumblr, for example, brands cannot stick to traditional touch-points anymore and are forced to leave their comfort zones and to experiment – often for the best.

By teaming with social platforms, brands are creating immersive shopping experiences, enabling shoppers to discover and buy products at any time, anywhere. This ‘World Wide Window shopping’ concept is pushing messaging in a seamless way, taking digital strategies beyond the retailers’ websites. The American clothing brand Gap recently developed its own Instagram micro-series with a Valentine’s Day hook to showcase its line of jeans in a new and more integrated format, while luxury brand Burberry is now seen as a digital leader, being one of the first to live stream its fashion shows.

That being said, 2015 should be all about mobile apps, which were the biggest growth area in the mobile world in 2014. Internet shopping via computers and laptops dropped from 78 to 63 per cent last year, whereas smartphone and tablet shopping nearly doubled; from 8 to 15 per cent and 5 to 10 per cent respectively.

In the near future, I expect to see a significant development in integrated shopping experiences, as the number of users of visual social channels such as Instagram is consistently growing. Recently, we chose to integrate a new update within our visual recognition-based fashion app ASAP54, allowing users to access all their Instagram photos as well as all pictures they liked on the platform, to use within the service without having to switch platforms. I wonder then, what could be next? 

Receiving too many notifications? Show your inbox who’s boss!

Show your inbox who's boss

We’ve had a few emails from Procurious members asking how to better tailor email notifications to suit their preferences. Take control back and customise the notifications you see by following our quick tips.

We provide you with the option (by default) to be notified whenever a fellow Procurious member invites you to connect, accepts your invitation to connect, or sends you a message.

Obviously you are free to silence some or all of these as you please, and it only takes a second to put the changes into action…

How to turn your notifications on or off

To do this look towards your Procurious header bar and open the drop-down menu under your profile picture/name. From here click ‘Settings’.

Scroll down until you locate your ‘Email Notifications’ (they’re right below the ‘Change Password’ area).

Procurious notifications

To stop receiving a specific notification just untick the relevant box, making sure to click ‘Save Changes’ to make good your choices.

What about weekly Procurious newsletters?

You can also control the arrival of our Procurious newsletters that pop into your inbox on a weekly basis. We currently publish two: a best of the blog where we highlight some of our favourite editorial from the past week, the other focuses on a news story that is making the headlines that week.

Read more about our weekly newsletters here.

Accenture acquire Brazilian supply analytics firm Gapso

Accenture acquire Brazilian supply analytics firm Gapso

Management consultancy Accenture, announced last week it had acquired the Brazilian supply chain analytics firm Gapso. The merger will see the Brazilian firm’s operations integrated into Accenture’s Analytics division.

Analysts have suggested the decision by Accenture to purchase Gapso will benefit the firm in two ways. The first is that it will provide a solid foothold for the company in the rapidly growing Brazilian market, allowing the firm to explore opportunities in the region’s lucrative mining, oil and gas and agricultural sectors.

As well as opening up Latin American markets, the purchase of Gapso also points to the future of supply chain management and Accenture’s role within it. Gapso specialises in using data and advanced analytics to solve complex supply chain and logistics challenges. Accenture’s purchase of Gapso sees the firm acquiring a team of skilled data scientists, analysts and developers, suggesting the consultancy is keen to explore different approaches to supply chain management.

This position is strengthened further when you consider that less than 12 months ago Accenture acquired i4C Analytics, an Italian provider of advanced analytics software programs.

Rodolfo Eschenbach Accenture’s Digital lead in Latin America, said: “Accenture are happy to be extending its analytics reach in Brazil through the acquisition of Gapso.”

“By combining Accenture’s and Gapso’s broad analytics skills and capabilities, Brazilian companies in the natural resources and agribusiness industries will have access to the best data scientist talent and solutions in the market for driving real, data-driven, operations outcomes at scale. When businesses harness, optimise and analyse their data for insight, value in the form of improved productivity or a competitive advantage can be realised,” he said.

Oscar Porto Gapso’s Business Director, was quoted saying: “Over the past twelve years, Gapso has curated an impressive team of analytics experts and capabilities that enable faster and better outcomes in connection with a client’s most critical logistics issues.

“By joining Accenture, we will be able to build on our achievements and engage in a more powerful, broader-scope of analytics conversations with clients. I’m proud of the Gapso team and I am looking forward to taking our methodologies further and continuing to disrupt the resources and agribusiness industries through insight-enabled decision-making.”

Robotics in the supply chain will enhance humans, not replace them

The mind of the machine

Could automation actually lead to humans enhancing their skills, and ultimately enable them to perform their job functions better?

Could robots replace humans in the supply chain?

Discover how Jon Gibson (Head of Logistics at global supply chain consultancy Crimson & Co) believes the growth of robotics and automation in the supply chain will actually enhance the role humans play, not replace them.

Recently, the government announced its intentions to be at the forefront of driverless technology following the approval of a new code of practice, which will be launched in the spring allowing for testing of autonomous cars. While supporters have been quick to champion the benefits of driverless technology, in terms of road safety, emissions and congestion, there are notable concerns, particularly the knock-on effects for the British supply chain industry.

Last year, a report by the Confederation of British Industry (CBI) underlined the importance of strengthening the British supply chain industry, which could potentially add a further £30bn to the British economy. A key factor within this report focused on addressing the skills shortage which exists amongst British supply chain firms, notably the need for greater STEM graduates inducted into the industry.

In light of an industry skills shortage and the growth of robotics, there have been suggestions that this could be the beginning of the end for humans across supply chains, but Gibson does not believe this to be the case:  

“If removing humans is about driving up productivity through standardising processes, improving design and sharing components across different products, it could be argued that this has always been the case in the supply chain industry. When looking particularly at the emergence of driverless cars, yes, it will mean changes to the industry but to suggest this is the start of a new era in which humans will be rendered effectively useless across the supply chain is very wide of the mark.

“Essentially, the introduction of robotics can do two things – firstly, it can replace humans. Secondly, it can make them do their jobs better. Examples of where humans might be replaced could be for tasks that require greater accuracy, such as precision cutting, or in instances where there is a need to process vast amounts of data. Processes like these are traditionally very labour intensive, so from a budgetary perspective it’s understandable why organisations pursue this route. It can also improve safety while reducing the chance of human operating error, risk of thefts, as well as the need to address wage inflation.

“What is often misunderstood is how robotics can assist humans in doing their jobs better – barcode scanning for example, reduces human error, providing huge cost savings to a business. In reality, organisations automate their supply chain to improve cost efficiencies. This might be to address issues with skills and labour shortages or align budgets – it is not always at the expense of people.”

Gibson continues: “Ultimately, we are likely to see an evolution of roles and responsibilities. For instance, machinery will need to be maintained and this could result in retraining and reskilling staff to do this. Also, in the event of an error occurring during the production line, humans need to be on hand to address this. As we get better at analysing operational effectiveness it will become clear that organisations will need to strive for a balance between automation and human involvement across their supply chain – there is no one size fits all.” 

The UK High Street – terminal decline or natural change?

Another traditional high street store has announced store closures due to falling revenues and profits – is this the latest step in the terminal decline of the UK high street?

Is the UK high street in decline? Thorntons in the news

UK chocolate retailer Thorntons has reported a fall in revenues for the six months to January 2015 of 8 per cent to £128.2m. This comes hot on the heels of the pre-Christmas profit warning issued by the company and the closure of just under half of its stores.

Thorntons has suffered from falling sales and unprofitable stores for a couple of years and made the decision to move more of its sales to other outlets and retailers. This move has since been compounded by the announcement of the loss of shelf space at two major UK supermarkets.

High-profile casualties

Thorntons are far from alone. According to a report issued by PwC, there was an average of 16 shop closures per day in the UK in 2014. Coupled with a reduction in the number of new shops opening, this is leaving many high streets full of empty units.

In the past year alone, a large number of high-profile names have either been forced to close high street stores or have collapsed entirely. Phones4U and La Senza both collapsed last year, while 2015 has already claimed its first big victims in Bank, USC and Austin Reed (all fashion retailers) and Radio Shack in the US.

Why is this happening?

For many, the main cause is seen as the out of town retail parks, complete with free parking and everything in one place. However, even these shops aren’t immune to the changing environment.

The Office of National Statistics retail statistics have shown an average 12 per cent increase on online sales to the same period the previous year throughout 2014.

Many organisations have failed to keep up with the pace of the digital economy. Poorly designed shops with unclear offerings, poor customer service and unsuccessful marketing just don’t cut it against the convenience of shopping online and having everything delivered to your door.

Organisational Benefits

It’s not just the consumers who are benefiting either. There are major positives for organisations and supply chains for having an online operation. Not having to run a high street store means reduced overhead costs and monthly outgoings and the ability to be located in low-rent areas.

With fewer staff required, the goods or services can be offered at a lower cost, as companies require less mark-up to make a profit. Stock can also be ordered in bulk, further reducing costs, while at the same time ensuring that there is sufficient stock to cover customer orders.

Hope for the Future?

All is not lost though. Many consumers still want shops that they can visit and often, the convenience of online shopping is outweighed by the risk of not getting what they want first time, or not being able to see what it is they are buying.

It is widely felt that organisations that successfully merge the two worlds of digital and physical shopping can help to save the high street. For example, the John Lewis Group now offers ‘click-and-collect’ to any of their department stores or Waitrose supermarkets for online orders.

Special offers can be sent to a smart phone when customers are in store, while augmented reality (think Google Glass) can be used to show you what a sofa would look like in your house. The companies who can tailor their offering best will be the ones who populate the high streets of the future.

So, terminal decline? Probably not. Natural state of change? Arguably yes. And it looks as though it will be for the better.

Read on for the other procurement and supply chain stories making the headlines.

MoD spent £33 million on ‘botched’ defence procurement outsourcing

  • The Ministry of Defence (MoD) must “sharpen up” its reform of procurement, after “throwing away” £33m on botched changes.
  • This follows a report from the National Audit Office (NAO), Reforming Defence Acquisition, which examined the MoD’s plans to improve the skills of Defence Equipment & Support (DE&S) staff, its systems and the way it interacts with the armed forces.
  • The NAO concluded that improving the performance of DE&S remained the most challenging part of the department’s strategy, although progress has been made. “There is now a clearer separation of responsibilities between the commands, which request equipment, and DE&S as the organisation responsible for delivering the equipment,” the report said.
  • It also outlined how the department had spent two-and-a-half years and £33 million trying to implement its preferred option of a government-owned, contractor-operated (GoCo) model to reform DE&S, before it was deemed undeliverable and halted in 2013.

Read more at Supply Management 

Will a new UK law eradicate supply chain slavery?

  • Whether it is high street fashion, bedding from a department store or eggs from a supermarket, few British shoppers would stop to ask whether slave labour was involved in making their goods.
  • Yet forced labour often lurks along the supply chain as a product and its individual parts are manufactured, packaged and distributed in a process linking multiple suppliers in many different countries, business ethics experts say.
  • Globally, the International Labour Organisation estimates that 21 million people are victims of forced labour. In Britain alone, the Home Office (interior ministry) says up to 13,000 people are forced into manual labour, sold for sex in brothels, or kept in domestic servitude, among other forms of slavery.
  • A government-backed draft law aims to tackle exploitation by requiring businesses in Britain to disclose what action they have taken to ensure their supply chains are slavery free.
  • The clause will provide guidance to companies about the kind of information they could disclose. However, the Home Office said firms will not be told what must be included, and that it expects disclosures to differ from company to company.

Read more at Reuters

SLG’s SCOR expert recognized for supply chain leadership

  • Satellite Logistics Group (SLG), a leading supply-chain solution provider for the beverage industry, announced today that Dan Swartwood, the company’s vice president of process and technology, has been named one ofSupply & Demand Chain Executive magazine’s 2015 Pros to Know.
  • The annual Pros to Know Awards recognize select supply chain executives who have helped their clients, companies, or the supply chain community at large to prepare for the significant challenges in the year ahead.
  • “This honor highlights the many thought-leaders who are helping to shape the Supply Chain industry and advance Supply Chain as a respected discipline in the enterprise,” said Barry Hochfelder, editor of Supply & Demand Chain Executive. “Their efforts in developing the tools, processes and knowledge base necessary for Supply Chain transformation, and in promoting new approaches to supply chain enablement, have earned them a place on this year’s Pros listing.”
  • Swartwood has guided a number of U.S. and international companies in various industries through the methodologies and has seen the results firsthand. On average, opportunities for improvement equate to two to six per cent of revenue.

Read more at PR Newswire

Apple under scrutiny in Labor’s tax loophole crackdown proposal

  • Large international tech companies operating in Australia such as Apple and Google could come under increased fire over their local tax treatment under a new proposal by the federal Labor Party to clamp down on loopholes.
  • In what Shadow Treasurer Chris Bowen described as an “opening salvo in the battle of ideas”, Labor’s first major policy announcement in opposition is to introduce a range of measures to stop billions of dollars of tax from bleeding offshore.
  • “This announcement today sets a blueprint for Labor’s approach in office,” Bowen told reporters in Canberra on Monday. The federal opposition’s tax package, which has been costed by the independent Parliamentary Budget Office, is worth AU$1.9 billion over four years in additional revenue.
  • It includes tightening of the so-called “thin capitalisation” rules, which allow companies to offset profits against debt servicing costs in high-tax jurisdictions such as Australia to reduce their taxable income.

Read more at ZDNet

Drones still useful in supply chains despite FAA regulations

  • Last week the Federal Aviation Administration published its rules and regulations for the oversight of drone usage within the United States. Many will and have argued that these rules are too restrictive for companies such as Amazon or Google to truly take advantage of the technology. The basic parameters of the guidelines set by the FAA:
    • Drones must be less than 55 lbs in weight
    • Can only fly during the day in good weather
    • Must not fly close to airports
    • Cannot fly faster than 100mph
    • And must be within visible site of the operatorLast week the Federal Aviation Administration published its rules and regulations for the oversight of drone usage within the United States. Many will and have argued that these rules are too restrictive for companies such as Amazon or Google to truly take advantage of the technology. The basic parameters of the guidelines set by the FAA:
    • On the surface these restrictions severely limit the dreams of the likes of Jeff Bezos. One of the great opportunities for drones within the supply chain and particularly with the delivery side is the ability to enhance the last mile portion. The last mile is always a challenge since you have to break down the orders to the individual level. Drones seem to offer an affordable and flexible solution – but not if the FAA rules are in place. This does not mean there are not some use cases that supply chains can take advantage of immediately:
    • These include: Asset monitoring and remote delivery… read more over at ZDnet

C-Suite reluctant to stick their head in the Clouds

UK businesses are reluctant to stick their head in the Clouds, says KPMG.

Businesses scared of the Cloud

A global study of almost 2,100 contracts covering deals worth £7.8 billion suggests that Cloud-based services are failing to capture the popular imagination of UK businesses.  It also suggests that organisations are increasing the level of IT services they outsource to improve service delivery, with many investing budgets saved over the past few years on HR, sales and finance support.

Published by KPMG, the 8th annual ‘Service Provider and Performance Satisfaction’ study includes detailed analysis of current corporate IT spend in Britain, by examining more than 330 UK-based contracts.  It reveals that 71 per cent of UK organisations are spending a mere 10 per cent, or less, of their IT budget on Cloud services. Many organisations are also continuing to rely on ‘tried and tested’ outsourcing models and the survey shows that favoured destinations for IT support services remain India (51 per cent), Poland (8 per cent) and South Africa (8 per cent).

Asked why they are reticent about employing Cloud services, the top 3 reasons cited by UK C-suite respondents centred around data location, security and privacy risks (26 per cent), concerns over regulation and compliance (16 per cent) and cynicism around the ease with which Cloud services can integrate with legacy IT systems (15 per cent).

“Despite widespread acceptance that Cloud services offer access to the latest technologies, and make IT more accessible, adoption remains relatively sluggish.  While concern about the security risks surrounding new technology is understandable it may also be disproportionate, as Cloud options are just as safe as other outsourcing solutions.  Of course, investors and stakeholders will welcome caution on the part of the buyers, but they also want to see innovation, meaning that UK plc will need to find the right balance to remain competitive,” says Jason Sahota, director in KPMG’s Shared Services and Outsourcing Advisory team.

The survey goes on to reveal that, despite the economy picking up, some companies across the UK are still nervous when it comes to committing to long-term investments.  Asked about their IT outsourcing plans for the next two to three years, just 43 per cent said they plan to increase spending.  This figure contrasts with 77 per cent, this time last year.

However, where budget has been set aside for outsourcing, it is clear that organisational thinking is maturing.  When the survey was first undertaken, respondents focused primarily on cost savings as their reason to outsource – but this year’s survey shows that the search for quality improvement (20 per cent), access to skills (16 per cent) and a desire to reduce the time it takes to ‘get things to market’ (6 per cent) are driving the rationale behind IT outsourcing decisions.

The findings also suggest that satisfaction levels remain high in the UK, with 77 per cent of respondents reporting that they are comfortable with the support they receive.  Worryingly, however, the research shows inconsistencies in how businesses are approaching integration and governance of the services they outsource.  The majority (70 per cent) said that their IT function currently performs the role of service integrator, whilst only half (50 per cent) have partially met the expected benefits of service integration and management.

Sahota concludes: “As IT forms an inseparable part of the wider business strategy in many organisations, technology decisions are now rarely left to the CIO alone.  It means that, with the potential for conflict over the choices being made, organisations should dedicate a greater level of investment towards governance than they may have in the past.  If they fail to do so as they move towards more complex delivery models, poor governance can impact their ability to provide quality services, increasing risks around cost, service quality and delivery.”

China removes world’s leading technology brands from approved state purchase lists

China blocks tech brands

A Reuters report released on Friday has confirmed the Chinese government has implemented procurement restrictions on its agencies preventing them from buying US produced technology products.

The report outlined that US Companies like Apple and Cisco no longer appear on the list of approved technology vendors Chinese government agencies can purchase from.

But Why?

Two theories exist as to why these steps have been taken. The first relates to security concerns that have arisen between the US and China, particularly pertaining espionage activity between the two countries.

In 2013, the now exiled, Edward Snowden released a series of leaks that suggested the US government routinely accessed the internal data of US owned companies to gather intelligence on other nations.

Snowden also accused the NSA (an organisation he used to work for) of intercepting routers produced by Cisco that were being shipped to China and inserting surveillance devices inside that would relay data back to the agency.

Cisco remains adamant that it was unaware of this practice, however the Chinese government, with good reason, responded by removing all 60 of the previously approved Cisco products from its purchasing list.

The spying allegations prompted serious privacy concerns from the Chinese who, if the allegations are true, have every right to minimise the impact such espionage.

Tu Xinquan, the Associate Director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing highlighted Chinese concerns over the espionage allegations. “The Snowden incident, it’s become a real concern, especially for top leaders. Some sense the American government has some responsibility for that; (China’s) concerns have some legitimacy” he said.

An interesting side note that must be mentioned when discussing this case is that Chinese owned Huawei; the world’s largest network equipment provider, is banned from bidding for US government contracts over similar concerns that the firm may use its technology to spy on US government interests.

Protecting Local Interests

The second potential motivation for removing foreign companies from the approved supplier list is to strengthen China’s domestic tech industry.

IDC (a market research and advisory firm) suggests that the Chinese ITC sector is set to grow by 11.4 per cent to $465.6 billion USD in 2015. China’s technology sector is currently trailing the US both in terms of maturity and product capability, however it is understood to be catching up rapidly.

The Reuters report quotes an unnamed executive of a western technology firm who claims “There’s no doubt that the SOE segment of the market has been favouring the local indigenous content,” He went onto claim that the Snowden security concerns were merely a ‘pretext’ to support the development and growth of the Chinese technology industry.

Close the Windows

Despite these claims, Chinese government officials have pointed to weak product guarantees and poor support offered by foreign firms as the driving reason as to why the products have been removed from the list.

In 2014 the Chinese government announced that its offices would no longer be allowed to purchase any technology that runs the Windows 8 operating system, a move that was prompted by Microsoft electing to suspend support for Windows XP, a system used most in Chinese government offices. According to Chinese news agency Xinhua, the government was keen to “avoid the awkwardness of being confronted with a similar situation again.”

Whether the motivations for this move were based on security concerns or out of a desire to protect and promote local industry, we’ll likely never know. However, Chinese officials do seem to have created a policy that will support the growth and development of Chinese owned tech firms. Furthermore, it seems that US government policy, combined with the Snowden leaks, has provided ligament justification for making such moves.

Zero Hours Contracts have “protected UK from European unemployment levels”

Zero Hours Contracts have “protected UK from European unemployment levels”

Recently-released figures show the number of people reporting to be employed on a Zero Hours Contract has risen to 697,000. That’s 2.3 per cent of the workforce, in 2014…

We’ve been provided expert comment from Christian May, Head of Communications and Campaigns at the Institute of Directors – here is what Christian has to say:

“There doesn’t appear to be much difference between the Coalition and the Labour Party when it comes to Zero Hours Contracts. All parties now support a tough clamp down on the use of exclusivity clauses, and the IoD led the charge in calling for this change during the consultation process. After all, it’s the flexibility that makes these kind of contracts so valuable to the labour market and there’s nothing flexible about restricting and controlling an individual’s freedom to seek work.

“Given the consensus that now exists on ending the exploitative use of exclusivity clauses, what remains of the debate is largely semantic. Those who wish to hold up Zero Hours Contracts as a symptom of an unfair economy will continue to do so, but they must appreciate that for hundreds of thousands of workers and employers these contracts represent an extremely attractive proposition. Despite efforts to portray all those on such contacts as exploited, the truth is that there are plenty of engineers, contractors and professionals whose willingness to be flexible adds significantly to their market value and, therefore, their earning power”.

Christian adds: “It’s also worth remembering that a flexible labour market, of which Zero Hours Contracts are a vital component, has protected the UK from European levels of unemployment. Indeed, the UK’s labour market has been singled out for praise by the OECD. The alternative is a rigid labour market and high unemployment. 

“With a focus on best practice and a commitment to ending the use of exclusivity clauses, Zero Hours Contracts will remain, for some people, an attractive and convenient way into work.”