Category Archives: Big Ideas Summit

Leading with Value – The Uber-ization of Procurement

Disruption in industries, heading towards major disruption in procurement too. Gabe Perez talks about the uber-ization of procurement.

Uber-ization of Procurement

We’re off to a flying start after lunch here at the Big Ideas Summit 2016. Sometimes a graveyard slot at conferences, Gabe Perez, Vice President, Strategy & Market Development at Coupa Software, got the audience energised discussing the disruption heading our way in procurement.

Gabe challenged our audience to start with the outcome, changing the way we traditionally look at going to the market as procurement professionals. The Uber-ization of procurement starts here, with a focus on value, rather than features.

Just What us ‘Uber-ization’?

Put simply, ‘Uber-ization’ is about being able to access value in real-time. In our personal lives, everything we need, we can get in real time – products within the hour from Amazon, cars from Uber, even setting up a site to sell our product on Etsy.

According to Gabe, you don’t have to do the same legacy tasks now in order to sell things. From selling or buying products, to driving a car for Uber, you just need to have a pulse! There is a new type of workforce, making money in ways that have never been imagined before.

In the real world, there’s little enablement. It’s totally the opposite in the business world, where we’re really just at the beginning in terms of this real-time penetration.

Issues in Procurement Technology

The biggest issue in procurement technology is that it is was originally developed and evaluated in a legacy way. That means is was evaluated on the features and functions, built for the organisational ‘power users’ years ago, and not with the best practice and innovation that is available in today’s economy in mind.

Gabe told the delegates that an RFP isn’t the best way to start. A better approach might be an RFV – a Request for Value. Procurement needs to start with the value proposition, and then work backwards, starting with who the best partner to achieve this outcome will be.

The issue for organisations is they are trying to do the same things over and over, not making any changes, and not making any difference. Features and functions shouldn’t be the focus, but the tools that allow procurement to get to value.

Organisations need to frame evaluations of procurement technology on the value delivered based on the business outcomes your organisation is looking to achieve.

Power of Networks

Gabe went on to talk about business networks, and involving more suppliers. The more companies, or “suppliers” procurement are connecting with, the more opportunities they have to leverage knowledge and expertise for innovation.

A lot of this innovation is coming from the suppliers in the ‘tail’, ones who are traditionally consolidated or ignored.

These smaller organisations don’t always have the opportunity to work with larger companies, thanks to traditional processes, protocols and business portals. All of this adds up to a higher business cost for small companies, making doing this work unprofitable.

There are so many processes and boxes to tick in most companies processes and evaluation, that small companies are out of the work at the beginning either because they did not get an opportunity, or did not see the value because of the cost of doing business.

Failing Networks

Business networks have historically failed in the supply chain, as they have been designed by the software vendor, with the vendor’s priorities and strategies in mind. They are not designed to be open networks, and because of this, they don’t drive value on both sides of the equation.

The other problem is that they only cover a fraction of the total number of suppliers worldwide. There are close to 200 million suppliers in the world. Traditional procurement methods and business networks only enable access to approximately 1 to 2 million, which is a dismal result.

An open network turns this on its head completely. What suppliers need is the simplest way to connect with buyers, other suppliers and collaborate with them. This is the key to unlocking innovation and value creation in the supply chain.

In a perfect world, there would be no user interface at all, but we need to open up the networks before we can get to that stage. And then we will have found the path to the Uber-ization of procurement.

Advancing the Social Value Cause

How can procurement help to advance the social value cause? Our thought leaders in the first Big Ideas panel tell us how.

social value cause

In the first panel of the day, our delegates grilled our social value and sustainable procurement experts on how procurement can advance the social value cause, and help to bust some myths around social enterprises.

Timo Worrall, Senior Category Manager FM EMEA, introduced the work that Johnson & Johnson are doing with their Social Value through Procurement. The organisation is aiming to spend 3 per cent of its total spend in the UK with social enterprises by 2020, as well as creating 150 jobs for people who are furthest from the job market today.

Peter Holbrook, CEO of Social Enterprise UK, talked more about his organisation’s announcement of the ‘Buy Social Corporate Challenge’. 10 major global organisations, including RBS, Santander and J&J, will commit to spending £1 billion social enterprises by 2020.

Lucy Siegle, journalist and broadcast, expanded on her keynote around the true cost of supply chains, and how we can change our consumer behaviour to help make greater, global change.

  • Do we think there is a shifting social attitude for social and sustainable procurement? – Tom Derry, ISM

Timo – Don’t assume that businesses aren’t interested in social value. We’re not involved to sell more products, it’s more about how we choose as an organisation to engage with our customers. The social value cause is larger than just a single programme, it’s part of a greater movement. I just hope that in 10 years we’re not talking about this as something new, but how we are all spending our money with social enterprises.

Peter – There is a new generation of products that people are getting involved with. I have a Fairphone – it’s the first smartphone in the world that is free from conflict minerals. It has a better spec than the iPhone, and it’s also half the price. The social value cause will also help organisations with recruitment and retention. Companies are realising that they need to make commitments, and make CSR part of their DNA, or millennials will go somewhere else to work.

Lucy – There is some aspirational research out there. Environmental and social value isn’t far off the idea of social consumers, but now there is more willingness to engage with brands. Companies can’t second guess the consumer wants, they need to be authentic and decide on their own values.

  • In the procurement world, measurement is based on cost reduction. Social value is not incentivised in corporate procurement – are companies changing their measurements to account for social value? – Gabe Perez, Coupa

Timo – Procurement are second guessing their corporate stakeholders, and what their stakeholders want. We have much more engagement around social enterprises at J&J, and are opening up new conversations with business stakeholders. Cost is still paramount, but we’re conscious that there still needs to be social value.

Peter – There is a rapidly growing industry around integrated reporting, particularly in the accountancy profession. They realise that this reporting will have voluntary or mandatory adoption in the coming years. Public procurement is beginning to adopt the social value cause. If we can encourage public procurement to take this on, then we can change practices in the rest of the organisations around the world. The change just needs to be faster.

Lucy – We all have our parts to play. Taking something like how stock is traded, how do people have the time to understand the wider impact of the businesses involved in the trades, when everything happens in under 10 seconds.

  • We work for a fundamentally corrupt profession. When we look at procurement across the globe, 30-40% of spend is lost through fraud and corruption. Where do you see the agenda going from fraud and corruption, to the social value agenda? – Chris Browne, The World Bank

Peter – There is a Social Value Innovation Unit at the World Bank, just so you know! One component of the change is transparency –  businesses need to be rewarded for transparency, for airing their dirty linen, as well as the glossy CSR agenda. The fraud economy is bringing together an alliance of organisations, all of whom want to get transparency into supply chains. We’re not moving fast enough though.

Fortune will favour the bold and the brave in this – you will attract the best talent, and win more business by leading this agenda.

  • There is a myth to bust that social enterprises cost more. How can we bust this? – Helen Mackenzie

Peter – Evidence has demonstrated that social enterprises out-innovate private sector, and are cheaper than them too, in 52 per cent of cases. The social value products are using materials that would have otherwise been discarded. Even my underwear is made by a social enterprise (Pants to Poverty)!

  • What Big Ideas are there to introduce authenticity and accountability into the social value process? Alex Kleiner, Coupa 

Timo – We use accreditation from the experts at Social Enterprise UK. You shouldn’t let it become a barrier to working with social enterprises – the story is much stronger than this.

Peter – Transparency, transparency, transparency is the key, we have to build it into the process. This is a road and journey that will be filled with challenges, but the future depends on it. Procurement are the new superheroes in this – they are the people who can deliver the sustainable procurement goals, and bring redundant materials into the supply chain.

Lucy – There will be mis-steps along the way. There needs to be more of a holistic view, right throughout the the supply chain. There is a lot more communication in the brand and the supply chain now.

Certainly an enlightening panel, with some very thought-provoking thinking from our experts (as well as finding out what kind of underwear our leaders wear…). Stay tuned for more from our experts, and more panel discussions, as the Big Ideas Summit 2016 progresses.

Harness the Power of Unstructured Data

Do we still need the smartest guys in the room if we have the smartest machine? IBM paint a vision for the future of procurement and the power of unstructured data.

Unstructured Data

“Are you going to be relevant in 3-5 years’ time?”

What a start to the day! Barry Ward, Senior Procurement Brand Manager at IBM Global Procurement, has just left the stage, leaving the assembled thought leaders with something big to think about.

Barry, a 27-year veteran in supply chain at IBM, is currently European lead for commercialising Procurement Analytic Solutions with IBM’s clients. This leaves him ideally positioned to provide context for all the discussions that will be happening throughout the day at Big Ideas.

Summarising the global business environment that procurement is currently operating in, Barry described a fast and relentless pace of change, major disruption across markets, and high levels of external upheaval.

Technology as a Disruptor

With increasingly stretched resources, organisations are being asked to do more with less, all the while trying to stay on top of information which, given a greater speed of dissemination, could quickly impact the brand and reputation of the company.

According to Ward, there are “mountains of data” available to organisations. However, as it’s 80 per cent unstructured, and needs sifted before use, it isn’t useful. Procurement needs to harness the power of this unstructured data. This is where the development of cognitive technology looks to be a boon to procurement.

The potential for these cognitive technologies, such as IBM’s own Watson, are just mind-blowing. As the technologies are developed, they will be able to do everything that a human can do, but in a fraction of the time. This is more than AI, it’s like have a computerised “colleague”.

Upskilling Procurement

These technologies will take over the manually intensive activities currently done in procurement, facilitating the ability for work to be carried out anywhere, at any time, in line with increasing mobile access and social collaboration.

The Watson Buying System is just one facet of this technology. IBM are at the stage of proof of concept of this technology. The system will assist with purchasing, based on needs of buyers. It can match pictures of items, or match speech too, to catalogues, and get goods bought for users and delivered anywhere it’s needed.

Systems will provide real-time data, showing potential risks in the supply chain, and how they are being mitigated. According to Barry, mitigating risk through predictive technology will no longer be a “nice to have”, but will become essential for organisations.

Procurement will play a major role in this cognitive revolution, using it to drive value-adding activities for the business, such as a focus on innovation. However, this will bring a challenge of ensuring that procurement have the correct skills to leverage this opportunity.

Procurement professionals will focus more on a data science-type role, as well as on SRM activities. Innovation will be found through building proper, collaborative relationships throughout the supply chain.

Challenge to CPOs

Barry ended by issuing 3 calls to action to procurement leaders:

  1. CPOs need to adjust the design of their organisation.
  2. Enabling success for procurement will be driven by using the right technology.
  3. Procurement needs to upskill in order to drive value-adds for the organisation.

There is no time to waste. There’s no time for incremental steps. As Barry says, it’s time for CPOs to be bold.

The Big Ideas Summit 2016 Is Underway!

We’re off and running here in London but there are still ample opportunities to get involved in Big Ideas Summit as a Digital Delegate!

Big Ideas Summit Speaker Banner

It feels like revisiting an old friend – familiar faces in the room, influencers and keynote speakers, a fabulous location at the Soho Hotel, and a buzz of excitement for things to come.

Yes, that’s right, the Big Ideas Summit – the world’s largest procurement online think tank event, is back and after weeks of planning, discussions and anticipation, we’re less than half an hour from our first keynote of the day.

With a nutrition-free breakfast now packed away (or do danishes and coffee count as ‘clean eating’?), Procurious’ Founder, Tania Seary, is welcoming our delegates, setting the ground rules and pointing our delegates towards the Procurious iOS App so they can engage with you – like, right now!

Setting out our Stall

As with the Big Ideas Summit 2015, there are just 50 Top Influencers here at The Soho Hotel. However, the unique nature of this online event means that all 13,500+ Procurious members are invited to shape the agenda, steer the conversations and share their own Big Ideas.

Conversations among Digital Delegates have already been lively with procurement pros the world over submitting questions for our Influencers via Twitter and sharing their own Big Ideas 60 second video challenges on Procurious.

Here in London, we’ll be tackling the thorniest issues for procurement, from the true cost of retail fashion supply chains, to procurement’s blind spots, and why traditional models of leadership are failing us.

We have an amazing speaker and influencer line-up for 2016, with thought leaders, senior executives and experts from world-renowned organisations.

I had the chance to catch up briefly with IBM’s Mike Murphy O’Reilly – one of the first movers on Procurious nearly two years ago – and no prizes for guessing he’s most excited to hear from Elizabeth Linder, Facebook’s Government Communication specialist.

“Like Social Media, Procurement, continues to evolve and the importance of collaborative sharing  events like Big Ideas allows us to harness the collective knowledge and information to further their careers and the function,” Mike told me over coffee before revealing his own Big Idea will be on The Information of Everything!

(Remember: You’ll be able to catch Mike’s and all our Top Influencers’ Big Ideas videos on Procurious in the coming days)

How can I Participate?

Screen Shot 2016-04-19 at 17.29.25

If you’ve got any questions for any of the influencers here or your fellow Digital Delegates, get in touch and we’ll do our best to get you an answer. We also have a number of other ways that you can get involved:

  • Download the App – By popular demand, we’ve just launched the Procurious iOS App! It’s  available free through the iTunes store so you can stay up to date with Big Ideas and connected with Procurious on the go!
  • Keep your eyes peeled – The group will be the place for a digital delegate to get updates from London as they happen.
  • Check out our Twitter feed – We’ll be live-tweeting from the event all day, keeping you up to date with all the discussions. Join in and Tweet us your questions and ideas @procurious_ using #BigIdeas2016
  • Like our Facebook page – If you’re a keen Facebooker, you can get all the day’s updates via our Facebook page, including photos of behind the scenes action as our Influencers take to the Big Ideas film studio. If you haven’t already, you can like Procurious on Facebook here.
  • Follow us on LinkedIn – If LinkedIn is your platform of choice, you can follow Procurious, and join our company Group too. We’ll be sharing our content on LinkedIn with our followers and looking for even more people to get involved.

We’re looking forward to a great day – we hope you are too!

Showcasing Your Big Ideas – Volatility as an Opportunity

Kicking off the day of the Big Ideas Summit, we’re looking at another of your Big Ideas. Mike Robertson shares his thoughts on why volatility represents an opportunity to procurement.

At the Big Ideas Summit 2016 today, we will be asking our speakers and attendees to record their ‘Big Ideas’ live on camera for the whole of our Procurious community to see.

But we also believe that every single procurement and supply chain professional has a unique vantage point in the industries, communities and businesses they work in. Thank you to all who have submitted their Big Ideas to us – we think they have been great!

Mike Robertson, CEO of POD Procurement

According to Mike, markets are more volatile than ever before, and this volatility is now impacting bottom line profits. Traditionally, procurement has looked at volatility as a risk within contracts.

However, Mike’s Big Idea focuses on changing the way procurement addresses volatility, from viewing it as a risk, to viewing it as an opportunity.

How to Submit Your Big Idea

There’s still time for you to send us your Big Idea for procurement! We don’t mind if you film your submission on your phone, tablet, laptop or PC. However, to help you out we’ve compiled a list of some of our recommended methods for reaching out.

Once you’ve completed your film, you can reach us by email (Procurious@Procurious.com); on Twitter (@procurious_) or via Google Drive or Dropbox (using Procurious@Procurious.com).

You can find all the information you need on recording and submitting your Big Idea here.

You can still register for the Big Ideas Summit 2016, which takes place today! Visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register now!

Why Procurement Should Invest In Social Enterprise?

Have you ever bought the Big Issue? Watched Jamie Oliver’s Fifteen? Shopped at a Co-op?

These are social enterprises which are in our communities, on our high streets; and range from coffee shops and cinemas, pubs and leisure centres, to banks and bus companies.

social enterprise

What is a social enterprise? The simple answer is an organisation that seeks to be financially successful while creating social and/or environmental impact. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organisation, a social business, or a charity organisation.

As the diagram below indicates, what differentiates social enterprises from other businesses is that their social mission is at the core of their offering, with profits reinvested in the company or local communities.

Social Enterprises
Social Enterprise Structure

 

The unique structure of social enterprises means that a financial goal may not exist to benefit investors, but rather local communities and social activities.

Social Enterprises in Action

Social enterprises are an integral part of the United Kingdom. The Key Fund is the biggest UK regionally-based social investor, operating across Northern England. The Key Fund focuses on supporting disadvantaged communities, offering to invest in community projects which aim to have an impact on the local community and the environment.

Other examples of social enterprises in the UK include:

  • Higher Rhythm Ltd – a not-for-profit company established in 2001 to offer high quality musical, media and creative services, and  opportunities to local communities.
  • The Create Foundation – a debt information provider aimed at helping people get themselves out of debt and living a normal life, free from financial problems. Their social goal is to provide education on finance and making informed decisions with money.
  • Refurnish – a company which aims to reduce landfill waste by providing both new and pre-owned furniture and electrical goods to the community.

Social Enterprises UK is the national trade body for social enterprises. Members comprise of social enterprises, private businesses, charities and public sector organisations, who all support the vision of a world where social enterprise involvement in business is common practice.

Society Profits: Social Enterprise UK 

Peter Holbrook & Social Enterprise UK

Peter Holbrook is Chief Executive of Social Enterprise UK. Social Enterprise UK’s key activities centre on informing and influencing the policy agenda, promoting the benefits of social enterprise, and undertaking research to expand the social enterprise evidence base.

Holbrook says that, through Social Enterprises UK, “we have a unique opportunity to promote an economic model that can change not only the way we do business, but also society at large.”

The Guardian has highlighted Peter Holbrook’s innovative, community-led approach to regeneration, tackling health inequalities, and providing public services in some of the UK’s most deprived regions. This has also lead to a host of admirers, including the former prime minister, Gordon Brown, and current Prime Minister, David Cameron.

Timo Worrall & Social Impact Through Procurement Initiatives

Timo Worrall is responsible for the procurement of Facility Services at Johnson & Johnson. He is a key driver in implementing the ‘Social Impact Through Procurement’ initiative in the UK, and introducing social enterprises into the facilities supply base.

In 2012, the UK passed a law designed to transform the way public bodies buy services. It required all relevant organisations in England and Wales to consider how the services they commission and procure might improve the economic, social and environmental well-being of an area.

One way for companies to meet this legal obligation is by working with social enterprise suppliers. J&J choose to buy from social enterprise suppliers, as it aligns with the company’s initiatives of backing supplier diversity, improves the company’s reputation, and can potentially increase revenue over time.

J&J are leading the way in taking these steps, and ensuring that their procurement activities generate positive social impact. Commercial Procurement Lead at J&J, Hugh Chamberlain, stated that they are taking action and supporting people often termed “furthest from employment”. The ‘Social Impact through Procurement’ initiative aims to create at least 150 jobs for these people by 2020.

“From a procurement perspective it means we can help people to lead happier, healthier lives simply by the way we spend money in our supply chain,” Chamberlain  says. “We can provide a holistic healthcare solution and play our part in things that we wouldn’t normally. It’s a tremendous opportunity and it really resonates with procurement folks.”

J&J’s current social enterprise suppliers include film company Inside Job Productions, and grounds maintenance and facilities services supplier Blue Sky, both of which support ex-offenders. Another is Haven Products, which employs disabled people and provides contract packing, quality inspection, secure storage, printing and mailing.

Why should procurement invest in social enterprise?

An increasing number of organisations are ‘buying social’ and bringing social enterprises into their supply chain.  By procurement investing in buying goods and services from the social enterprise sector it will improve the company’s overall social and environmental footprint.

There are 70,000 social enterprises operating in the UK across almost every industry. They are reinvesting their profits for good, benefitting the people and the planet. When a social enterprise profits, society profits.

Social enterprises, and procurement’s role in supporting them and creating social value, will be a key theme at the Big Ideas Summit 2016.

There’s still time to register for the Summit! Visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

Big Ideas in Procurement in Asia-Pacific

With a huge geographical area and diversity of cultures and industries, procurement in Asia-Pacific is both highly complex and fascinating.

Procurement in Asia-Pacific

Ahead of the Big Ideas Summit 2016 on April 21st, we are taking a look at the key issues facing procurement in the coming years. We have asked experts and influencers in our community to share their Big Ideas on the themes we will be discussing on the day.

Here, experts who work in procurement in Asia-Pacific, share their thoughts on the Big Ideas impacting organisations and industries in Procurious’ second largest market.

Gordon Donovan, Procurement & Supply Chain Manager, Metro Trains

Gordon DonovanTalent – With the release of the recent Deloitte CPO survey, attention has once again fallen on talent – acquisition, developing and retaining.

Over 60 per cent of CPOs feel that their teams do not have the skills needed to perform their roles. However training budgets have largely stagnated, if not fallen.

There is a feeling that the traditional methods of training are not delivering the results required, therefore the onus now falls on more applied learning programmes that have a direct correlation to the workplace.

The big idea here is to focus on these types of learning activities which will deliver an immediate ROI as well as taking the theory from the classroom to the application.

Supplier Pre-qualification – Procurement needs to be agile in responding to its stakeholders, both internally and externally. Procurement also needs to “get more done with less”. Therefore, attention is turning to dealing with a set of suppliers who have already passed the hurdles required to supply to an organisation.

The need to ask the same question multiple times adds to the lack of turnaround time in procurement, and frustrates suppliers. Pre-qualification allows these questions to be answered once, and also will allow procurement to have pass fail/rates for areas such as supply chain transparency and accreditation.

Accreditation – Accreditation of your supply chain is becoming the hot topic in procurement. Do you know who you are dealing with and how your suppliers operate? Are we are aware of the ethical and sustainable issues within procurement and within the wider supply chain?

The hot topic now for procurement in Asia-Pacific, and across the globe, is how do we accredit our suppliers/supply chains and how do we ourselves gain accreditation for our policy and process to deliver value to our organisation.

Madeleine Tewes, Project Manager, Australian Maritime Safety Authority

Madeleine TewesInternationalisation – Traditional, family-controlled businesses across Asia are increasingly choosing to internationalise. Some Governments are supportive of this internationalisation. For example, one of the core tenants in China’s 2016 – 2021 Five-Year Plan is internationalisation, with many Chinese companies expected to ‘go global’ in this period.

As part of this process, many businesses are now looking to American, European and Australian consultancies and technology providers to radically overhaul their business functions and processes including procurement.

The overhaul includes tasks like introducing business English into meetings and contracts, expanding supplier bases, implementing technology to automate processes and provide greater spend visibility and even setting up procurement teams where before all that existed was purchasing clerks within a Finance team.

Mark Gibbs, President of SAP Greater China, notes that China is SAP’s second home, and that the trend of internationalisation is continuing to support the “massive cloud computing and e-Commerce expansion” that has been in progress over the past few years.

Innovation driving competitive advantage – Singapore has a focus on pioneering advances in innovation and driving competitive advantage for growth according to Teo Lay Lim, MD, Accenture Singapore and ASEAN.

More broadly in Asia, innovation is increasingly being recognised as the key to sustainable growth by companies around the world and as Capgemini research points out, innovation has evolved from a purely internal capability, to a collaborative process with the external network of supply partners.

Therefore, the ability of procurement to work with suppliers to identify and execute innovation within existing contracts, and to stimulate innovation outside of existing arrangements, is a key part of the procurement value proposition.

Some simple observations from Singapore include having incentive schemes in place relating to innovation in supplier contracts, having innovation as an agenda item on regular meetings with key suppliers as well as internal stakeholders, and having KPI’s in place which reward procurement team members for focusing on innovation, rather than relying purely on traditional savings or throughput metrics.

Corporate Social Responsibility – Research conducted by the Harvard Business School found that organisations who focus on corporate social responsibility (CSR) significantly outperform their competition in terms of stock market and financial performance.

One Singapore-based organisation, Fuji Xerox, describes their view of CSR very clearly, “…forging a link between long-term competitiveness and the sustainable development of society and the company…”. This seems to be a view echoed by a growing number of organisations across Asia.

Each of these organisations will have a different ways of using their procurement team to support their organisation’s focus on CSR. However, an IBM IBV CPO study found that 97 per cent of successful and influential procurement teams are significantly involved in their organisation’s CSR initiatives, compared to 61 per cent of average procurement teams.

Regardless of the current maturity of a procurement team though, or if it is the organisation driving these initiatives or procurement lobbying for them, clear KPIs (results driven rather than process orientated ideally) will allow procurement to demonstrate the value it is providing to the organisation.

Do you work in procurement in Asia-Pacific? What’s your Big Idea for the future of the profession? Let us know and we could be discussing them on April 21st.

Want to know more about Big Ideas 2016? Then visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

How Technological Megatrends Are Transforming Manufacturing

Technological megatrends are leading to major disruptions in manufacturing. And it’s affecting the way procurement and supply chain professionals plan for the future.

Technological Megatrends

It wasn’t that long ago that manufacturing was a noisy and dirty process that involved huge numbers of staff and required significant factory floor space.

But that’s all changed. A number of megatrends have disrupted the manufacturing sector at a rapid rate, which Paul Markillie, Innovation Editor at The Economist, has documented in a number of articles and papers.

Given their disruptive nature, these technological megatrends are of significant interest to the procurement and supply chain professionals. Paul has been invited to speak on these mega-trends, and other technological advancements, that are disrupting and transforming manufacturing, at the Big Ideas Summit 2016.

“I’m particularly looking forward to the Big Ideas Summit because many of the things I talk about attract interest and curiosity. That can lead to some lively interaction, from which I often learn things from people who are already having to confront profound changes to the way they will do business in the future,” Markillie writes.

During his keynote, Paul will explain how manufacturing is going digital and how that will disrupt the conventional economies of production, and overturn established supply chains. He’ll also explain how companies are responding to these trends.

Changing the Manufacturing Rules

According to Paul Markillie, a handful of industrial revolutions have occurred, depending on who you ask. And, as has happened in other industries, such as publishing, music, films and electronics, the move to a digital world in manufacturing changes the rules comprehensively.

Developments like new materials, robotics, 3D printing, and computer-aided design and simulation, replace the old notions of economies of scale. This changes not just where companies locate factories, but also how they organise themselves, and arrange their procurement and supply chains.

As part of his work, Markillie has documented the dramatic pace of change in manufacturing around the world. This includes the carbon-fibre composites making light work of aeroplanes, and now cars too. BMW’s car factory in Leipzig produces a variety of vehicles, with a group of robots in one area moving in perfect synchrony as they assemble body section, with a precision no human could hope to match.

But there’s no thundering metal-stamping machines or showers of welding sparks here, as he documents. Instead, these car parts are black, and made from a composite material called carbon fibre. And by the mid-2020s, carbon fibre will be widely adopted in car making, he says. And this is just one of the technological megatrends we need to be keeping track of.

Advanced Manufacturing Methods

There’s many other examples of major innovation in the car industry in other parts of the world, too. Researchers in Tennessee have created an automated system endearingly known as Big Areas Additive Manufacturing (also known as a 3D printer), which is used to print cars.

The researchers work at the Oak Ridge National Laboratory, which is exploring a number of advanced manufacturing methods. In one experiment, it made most of the body and chassis for an electric replica of a classic 1960s sports car, and took just six weeks to design, print and assemble the car.

The dramatic pace of change proves that first-tier suppliers will need to work much closer with companies in the development process. While this already occurs to some extent, there will be huge opportunities for companies further down the supply chain to innovate.

For example, second-generation robots are more affordable for medium and small companies, while 3D printing processes are less wasteful of raw materials and allow greater production flexibility at lower volumes.

There are plenty of other new approaches to manufacturing, which give procurement professionals plenty of food for thought, likely to be explored by Markillie at the Big Ideas Summit. No matter how you look at it, manufacturing is a world away from yesteryear, he says.

Paul Markillie will discuss these disruptive technological megatrends in greater detail during his keynote at the Big Ideas Summit 2016 on April 21st.

Want to know more about Big Ideas 2016? Then visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

Creating our Vision: Why Procurement Needs an Avenger

Procurement needs a vision to help it overcome the challenges facing it. And this is why Procurement needs to be an Avenger rather than an ageing Godfather to survive.Procurement Vision & Avenger

Since being asked to attend the Big Ideas Summit 2016, I’ve been thinking about my own big ideas. I’ve drawn on my own experience, reviewed the ideas submitted in 2015 and for the 2016 summit, and read a range of materials, including the book ‘Thinking the Unthinkable’ which I would highly recommend to everybody.

Having reflected on all this information, I’ve got a couple of ideas of my own that I look forward to discussing with you all in person next Thursday. Before then, I have one that I want to offer for discussion amongst the Procurious community.

My big idea is simple. Procurement is simply not thinking big enough! As a function, we appear constrained and timid in our outlook, believing ideas that have been circulating over the last decade to be the strategic answers that will propel us forward into the next decade.  Procurement must demonstrate greater ambition towards its future role than it does today. 

We need a Procurement Vision!

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Just as The Vision emerged in The Avengers to defeat Ultron, Procurement needs its own vision to help guide it through the challenges it faces.

Procurement’s vision needs to be ambitious and practical, demonstrating to the senior leaders of an organisation a clear sense of purpose and direction that shows how Procurement will benefit the organisation.

If this vision exists, I believe that initiatives such as SRM, Innovation, Collaboration and Big Data, all areas that have been discussed in countless articles in recent years, will realise their intended benefits, as their aims and objectives will have been clearly explained and understood by all participants to support the most successful possible implementation.

If no vision exists, how can we succeed? It may seem simple, but clearly articulating this vision can prove difficult for organisations. I am shocked when I talk to organisations today to hear that they are unable to tell me their organisational objectives or why they implemented a particular solution. Colour simply drains from the faces of individuals when asking them to try to quantify some form of business benefit achieved from an investment in a particular solution or project.

When I speak at Universities and business schools around the World, the role of Procurement is confused. Students are unclear on what it actually represents, whilst academics provide a wide range of explanations of what Procurement is, usually including it as a minor topic within Supply Chain discussions.

Unless Procurement Leaders, be they Public, Private or in connected areas such as media, show a clear sense of direction and unity on what Procurement is, the function could easily disappear.

Remember the scene from ‘The Godfather Part 3’ where Michael utters what are probably the most memorable lines from that film:

Pull me back in

Michael and the Corleone family have allowed themselves to become constrained by the expectations that others have for them.  Any intent to move forward is being hampered by the legacies and expectations from their past.

Procurement faces a similar challenge. If it lacks a vision on its future direction, it runs the risk of always being portrayed as a back office compliance function, simply ensuring adherence to purchase orders. Please don’t misunderstand me. These are important activities that need to be done properly. My point is that when no vision exists, attempts to implement new strategic initiatives will be thwarted, because organisations may not allow us to move beyond the self-imposed boundaries that Procurement has established for itself.

A limited historic scope for Procurement will not inspire the next generation of potential talents to come and work within our function. When talking about Procurement at Universities and Business Schools, current students already assume a number of our historic activities to have been automated and are certainly not seeking to join organisations if their immediate future is spent ensuring contractual compliance or managing tail-spend.

The next generation is interested in how Procurement shapes Sustainable Sourcing strategies, how Procurement supports top-line growth initiatives and how Procurement provides a platform to a wider career in an organisation.

Creating the Vision

How can we create this vision? A simple idea would be to imagine that Procurement did not yet exist. How would you create it today? What would you want to include in its remit? Where do you believe you should focus your biggest minds, and what could be automated?

Clarifying how Procurement will operate both in the short and longer term within your organisation will start to create a vision behind which your team can unite and move together. This will require Leadership to seek new opportunities for Procurement to drive and manage opportunities. It may require Procurement Leadership to conduct some ‘skunk-work’ initiatives, dedicating resources to ideas that they believe will benefit the organisation in the medium to long term.

I believe that establishing a vision is equally applicable to both Public and Private Sectors. I remember witnessing some of the earliest work on sustainable sourcing, ethical purchasing and talent diversity emerging in the public sector and student unions.

Procurement has the ability to devise a very bright future in terms of areas of responsibility and contribution to organisational growth. Let us ensure that we build the future we want to participate in, rather than face a future whose boundaries and expectations have already been determined for us.

Mark will be discussing procurement vision and clarifying the role of procurement during one of our panel discussions at the Big Ideas Summit on April 21st.

There’s still time for you to get involved with Big Ideas, by visiting www.bigideassummit.com, joining our Procurious group, and Tweeting your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

ISM: One CEO, $1 Trillion in Procurement Power

The Institute for Supply Management (ISM) represents 50,000 supply managers responsible for US$1 trillion in procurement power. Procurious talks to the man in charge, CEO Tom Derry.

ISM Mastery

ISM has been the hand at the tiller of the US procurement and supply chain profession since 1915, setting the standards as the responsibilities and expectations of procurement professionals grow at an incredible pace.

Since 2008, ISM has trained over 60,000 professionals in more than 30 countries. But in an ever-changing environment, the skills and capabilities that make procurement professionals successful today will not be the same as those required to be successful in the future.

No-one knows this better than ISM CEO and Big Ideas Summit keynote speaker Tom Derry. Tom joined ISM in 2012, and is charged with ensuring that the Institute moves forward at the same pace as the procurement profession.

Leveraging the Platform Economy

ISM’s knowledge programme has become increasingly agile in order to meet the needs of professionals in a continuously evolving business environment. And that’s where the ISM/Procurious partnership comes into play.

ISM is excited to partner with Procurious to bring their ground-breaking think-tank event, the Big Ideas Summit, to procurement professionals around the world on April 21st 2016. This unprecedented digital forum will enable Procurious’ 13,000+ members to innovate and crowdsource ideas with the most successful executives and thought leaders in the profession.

ISM’s partnership with Procurious is part of its strategy to leverage the ‘platform economy’, and to dramatically upskill the procurement profession. The rate at which technologies and the markets move now means we need to be constantly upskilling just to stay up to speed.

Tom is a major advocate for the use of social media within procurement. In the future, he sees it as a key tool for the profession in order to connect, collaborate and share knowledge.

Tom states, “I honestly I don’t see how anybody could plan to be an effective professional in our field without using the social media tool kit. Social media is a vital part of the way we work – the opportunities for procurement and supply chain professionals in social media are huge.”

Critical Skills for future CPOs

And as the profession expands its role and responsibilities, procurement teams will require the right skills to make sure they can succeed in this environment. And, of course, this will be led from the top by the CPO.

At the organisation’s centenary celebration last year, Tom launched the ISM Mastery Model, using the 100-year milestone to create a model that will drive standards into the next millennium.

The Mastery Model is designed to standardise roles and drive procurement success by deepening a team’s expertise and increase employee engagement through a clear career path to procurement mastery.

“It’s time to change the ‘soft skills’ label to ‘critical skills’ to reflect the importance of hard-to-learn competencies, as you’ll absolutely need these skills to advance in modern-day procurement,” Tom says.

Tom is a towering figure in global Procurement, and a major advocate for the profession. He talks passionately about bringing more young people into the profession, and how we can best engage Millennials. “If I was 25 again, I couldn’t think of a field that I would personally find more fascinating than a corporate career in procurement and supply chain.

“Here’s an opportunity to be based in almost any region you choose. You’ll learn new cultures and dramatically impact the success of the business that you work for. You’ll be working on some of the most interesting and creative projects your firm is involved in.

“In the past, procurement and supply chain have been seen as backward-looking functions. It was our job to get the most effective pricing put in place to support the existing legacy business processes.

“Now we are thinking about and acting on the future of our businesses. Business acumen, understanding and strategic planning are three skills that I believe are critical for successful procurement professionals.”

Tom DerryTom Derry will discuss driving procurement success and ensuring teams have the necessary skills to succeed during his keynote at the Big Ideas Summit 2016 on April 21st.

If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.