Category Archives: Generation Procurement

Pizza, Medicines and Death Rays: The Future of Drone Delivery

We’re still a long way away from drone deliveries and drone-run supply chains being the norm – so what’s the current state of drone delivery worldwide?

There’s no question that the world has gone drone mad. If you didn’t receive one for Christmas (bad luck), you’ll probably know someone that did. But, despite all the hype, we’re still a long way away from drone deliveries and drone-run supply chains being the norm.  

So what’s the current state of drone delivery worldwide?

The idea of drone deliveries for useful things is a lot more fun to think about than drones being used for dropping bombs or killing people with death rays – so let’s focus on that for the time being.

Drones are already capable of being deployed for many types of delivery services such as pizzas in urban environments and desperately-needed medicines flown by drones to remote, inaccessible villages. 

In many instances, drone technology has advanced so quickly that it runs afoul of the local laws. For example, the Federal Aviation Administration (FAA) in the United States says that, without special permission, a drone needs to be flown in the line-of-sight of the operator and that a drone cannot be flown from a moving vehicle. 

Perhaps pizza-delivery observation towers could become a new industry in America?

In this article I outline some of the societal benefits of drone delivery, the risks associated, the prevalence of drone delivery today and what the future holds.

Societal benefits of drone delivery

Some of the societal benefits of drone deliveries include economic considerations, improvements in emergency response systems, overcoming delivery problems to remote areas and pollution reduction. 

  • Economics

The most difficult part of any delivery challenge is “the last mile” (metaphorically speaking). This is the portion of the supply chain pathway from the warehouse to the customer’s/buyer’s home or office. Drone delivery is faster and saves money on fuel costs, fleet maintenance of commercial vehicles and labour costs for human drivers. 

  • Emergency Response and Healthcare

In some medical emergency situations, a few minutes could make the difference between whether someone lives or dies. Delivery drones can bring first aid supplies, needed medicines, blood for transfusions, and medical equipment. For example, those suffering from a heart attack might get help from an emergency drone, which maintains communication with paramedics and can deliver a portable defibrillator.

The paramedics are able to observe through a remote video what is happening and instruct those giving aid to the heart-attack victim on how to use it.

  • Pollution Reduction

If drone batteries are recharged via renewable energy systems, such as solar power, the air flight is pollution free. The only downside to drone use is noise pollution. Whilst it might not be very noticeable when a single drone is flying, imagine a future where there are overly-active, drone-flying corridors.

To address this problem an inventor, Edgar Herrera, has developed a blade-less drone, which flies in complete silence. The drone is not yet in production but the design is spectacular; solar-powered, silent-flying, drone delivery is nothing short of revolutionary.

Drones and Privacy

Privacy is a big concern for many people when it comes to commercial drone use and the main reason that legislation came into being all over the world. In many places, using drones for surveillance is a crime. Authorities are increasingly concerned about delivery drones being used for terrorist acts or criminal purposes. In Europe, a study published by RIMMA noted that drones had been flown over nuclear power plants and used to smuggle items into prisons and carry drugs across the U.S./Mexican border

These are just a few of the reasons that legislation has been put in place all over the world – to protect critical infrastructure from unauthorised drone surveillance or attack.

Commercial drone flyers that operate a drone delivery service need to be careful not to break these laws or lose control of their drones because the penalties are harsh.

Consumers have other concerns regarding drone delivery services besides safety, privacy, and security. eMarketer reports than 72 per cent of consumers worry about problems with packages, such as theft or damage. Drones equipped with video surveillance technology can reduce these criminal risks but these cameras raise further questions about privacy and security.

This is an area of opportunity for supply chain managers and entrepreneurs to focus on providing solutions. 

Drone delivery around the world

USA

In the USAThe FAA has been slow to allow commercial drones for delivery services. Drone flying is still restricted to line-of-sight, which makes drone delivery less efficient and not possible in all areas. 

  • In 2015, the USPS starting testing postal delivery using Horsefly drones and since October 2017, REMSA, an ambulance and emergency services company partnered with Flirtey to deliver portable defibrillators for 911 emergency calls in northern Nevada. 
  • Fortune reports that Uber is testing food delivery by drones. Google, FedEx, Intel, and Qualcomm are working with the Department of Transportation on commercial testing of drone delivery services. 
  • Forbes reports that big efforts are being made by Amazon, Target, Walmart, and many others to incorporate a viable, commercial drone-delivery service in their long-term strategic and logistics plans. 

UK and EU

  • The UK is moving faster than the US to approve the widespread deployment of commercial drones, which should hit the market in 2019 or 2020. Amazon has made significant advancements in the UK. 
  • The European Union is in the process of creating laws to regulate commercial drone-flying corridors of airspace called U-Space to allow a wide deployment of drone delivery services. 
  • Since March 2017, in Switzerland, Matternet has been working with the government mail system, Swiss Post, to deliver emergency medical supplies.
  • In December 2014, the French postal service, La Poste began testing drone delivery systems. 

The future of drone delivery

If the regulators cooperate, commercial drone delivery will become a widespread reality to be enjoyed by consumers and those in need of urgent medical supplies and emergency services worldwide. 

It is most-likely that large-scale, commercial drone-delivery deployments will occur in Europe, the UK, and Australia during 2019 with Amazon and Google leading the way. In China, JD.com is moving ahead with widespread deployment very quickly and Alibaba is advancing as well using drone delivery to support offshore islands. 

McKinsey reports that the drone delivery industry in the USA alone, grew from $40 million in 2012 to $1 billion in 2017. Madison estimates the global market depends on what happens with the regulations. Ultimately, the global market for commercial drones may reach over $127 billion annually. 

This article, written by Mark Sheehan, was originally published on My Drone Authority.

Best Of The Procurious Blog: The Key Procurement And Technology Trends for 2019

The times, they are a-changing, and so are the markets and environments that procurement operates in. What then are the key trends in procurement and technology you need to watch for in 2019?

View Apart/ Shutterstock

Iit’s time to start looking forward to what’s coming in the next 12 months.

2019 is set to be a seismic year around the world. Major changes, such as further geo-political upheaval, the looming spectre of global trade wars and tariffs aplenty, have the potential to disrupt supply chains and set metaphorical trip wires for procurement professionals everywhere. And, as we’ve already heard, it’s rarely been more important to get a solid grips on the key factors in the market and external environment.

So gather round as we gaze into the opaque mists of the future and make some educated insights into the key procurement and technology trends waiting around the corner.

  1. Supplier Management

Let’s start with an oldie, but a goodie. Wait, I hear you cry, supplier management isn’t a new trend! We’ve been talking about this for years. Well, if we’ve talking about it for years, why aren’t we any better at it? And why is it that it’s one of the key areas a large number of procurement teams fall down on?

Like it or not, your suppliers hold the key to all your wildest procurement dreams. Innovation, top and bottom line cost reduction, avoidance and savings, stress-free supply of services and goods and free cake for all! (Ok, maybe not that last one!)

In their Vision 2020 publications, pwc state that the top 25 per cent of procurement functions will have gone beyond incremental improvements and be implementing fundamental change to process and policy alike. This includes how they interact with suppliers and shifting focus from cost and value to Return on Investment (ROI).

These outcomes all hang on better supplier relationship management in order to tease out further innovation from suppliers (who are seen as partners, rather than sponges to wring cash out of) and closer collaboration to source solutions to problems we don’t even know we have yet.

At the heart of this is great communication. Select the right suppliers and talk to them more. You never know, you might just learn something!

  1. Blockchain and Digital Adoption

Unless you’ve been living in a cave on a remote hillside (or perhaps a Faraday cage in your basement), you should have heard by now about blockchain.

From blog articles to webinars, it’s one of the hottest topics in procurement right now, and is likely to still be throughout 2019. Blockchain is and will continue to be a key tool in shaping the transparency of a supply chain. Information is shared and transmitted easily and safely, while the technology allows an “immutable signed and time stamped record of identity, ownership of assets, transactions or contractual commitments”.

This transparency will have the added benefits, and some drawbacks, of making procurement and CPOs more visible in the public environment, say EY. Procurement will wield greater power and have greater opportunity to interact with external stakeholders. But, at the same time, organisational processes and procurement will play out in a public setting like never before.

In line with blockchain’s increasing influence, there is a predicted rise in digital adoption and use of the Cloud. An estimated $1 trillion of IT spend will be moved to the Cloud by 2020, according to Gartner, as organisations look to make their IT services more agile.

  1. Social Value

There is a prevailing opinion amongst the procurement professionals I speak to that 2019 will be the year for social value and sustainability to really take hold. Organisations have begun to realise that cost and quality are only a part of the overall package and not only do they need to be seen to be doing more in the community, but they need to follow through on it.

That goes for the wider supply chain too. Using work practices and value-adding benefits for communities into tenders will become the norm and procurement will no longer be able to award contracts on cost without taking the wider impact into consideration.

  1. Next-Gen Workforce and Automation

Disregard what you’ve heard very recently regarding automation, machine learning and AI as scaremongering. Yes AI will take on tasks and people may have to move to new roles, but it’s not a future that we should be burying our head in the sand about. It’s a natural human reaction to fear change, but procurement needs to muscle up and be brave in order to evolve and survive.

Infosys estimates that AI and procurement automation will eliminate human intervention in 15 per cent of digital spending by 2019. If that’s the case, then procurement needs to embrace the change and develop, train and retain its Next-Generation workforce to meet the demands of new roles where human interaction and input is still key.

  1. Risk

From Brexit to trade wars, risk is going to be possibly the biggest trends for businesses as a whole in 2019. The organisations who will thrive in this unstable environment will be the ones who are best prepared to deal with the unexpected.

Deloitte believe that procurement will become the forecasters of risk in an organisation, raising the profile of the function as it factors total cost of risk and risk mitigation in supply chains into contracts and tenders.

Risk runs throughout the other trends that have been suggested above. Brexit, protectionism and trade wars make supplier and supply chain management all the more important. The increasing need for cyber security as technology advances is something that cannot be ignored.

Procurement is ideally placed to deal with all of these risks, but it needs to put its hand up and be at the front of the queue, or face being left behind and marginalised at a time when the function has a crucial role to play.

How The Robots (Nearly) Stole Christmas

“Every Who down in Whoville liked working, a lot … until one day The Boss met a clever robot.” Continuing the tradition of a festive poem in the run-up to Christmas, check out this modern retelling of The Grinch from Procurious’ Content Director, Hugo Britt. 

Every Who down in Whoville liked working, a lot…
until one day The Boss met a clever robot.
It was sleek and terrific, with shining chrome knees,
and could do the work of fifteen FTEs.

The Boss called upon her executive team
and said with a grin that was grinchy and mean
“We’ll buy ten of these robots – that’s one hundred and fifty
Whos off the payroll – won’t that be thrifty?”

The head of HR gave a horrified gasp
“But the timing!” he said. “It’s a bit much to ask
your Whos to take a redundancy now!
It’s Christmas next week and there’ll be a huge row!”

The Boss’s brow wrinkled; her face set in a leer,
“Alright” said she, “Here’s another idea …
We’ll bring in the bots – my decision is set,
but we won’t dump the Whos for a little while yet.
They can work side-by-side for two weeks or more,
and come New Years Day, they’re right out the door.”

The very next day when the Whos came to work
They marched through the door and then stopped with a jerk
For sitting there, gleaming, daunting and massive
At the end of ten desks was a robot, impassive.

And then when the Whos all cried out “What’s the deal?”
They were shocked when the robots replied with this spiel:
“We’re your new metal workmates – we’re starting today!
We’re cognitive, clever, and can dance the ballet.
We’ll work round the clock and charge not a cent …
The ROI on us is 10,000 per cent!”

The Whos stomped as one to the Head of HR.
Seen dimly through the haze of his half-smoked cigar.
“What’s with the robots? ‘Workmates’ indeed –
You’re going to replace us! They work twice our speed!”

The head of HR, while stroking his beard
assured them it wasn’t so bad as they feared.
“They’re just here to assist. Fear not for your jobs.
Robots are the future! Stop being such snobs!
You’re quite safe (for now) so help them onboard
and we’ll have another discussion … moving forward.”

* * * * * * *

Two weeks passed quite quickly; the new year dawned bright
the Boss checked her calendar and smiled in delight.
“Today I’ll cut costs in a manner abundant –
I’ll tell one hundred and fifty Whos they’re redundant.”

She leapt to the lift and pressed second floor –
preparing to show all non-robots the door.
But when she arrived she received a surprise
At the hustle and bustle before her two eyes.

The head of the Whos leapt straight to his feet
and said “Thanks for the robots! They’re totally neat!
We worried that they would steal all our careers
but now it turns out these were unfounded fears.”

“We no longer need to do tactical chores –
mind-numbing spreadsheets and other such bores –
These robots are handling all of those tasks …
Now we have time to be strategic at last!”

The Head of HR stepped forward, then. “It’s true!
The robots are great, but your humans are too.
They’re thinking new thoughts; they’re stepping outside
the box we created with the tactical side.”

“Innovation is up! Relationships too!
Soft skills are unlocking new value for you.
These Whos are terrific – we never foresaw
that with time on their hands they can do so much more.”

The Boss raised her voice to address the whole throng
and shouted aloud “It turns out I was wrong!
I’d thought that these bots would make you inessential;
instead they’ve unlocked your hidden potential.”

“So just let me wish you a most festive season,
secure in your jobs, and having new reason
to be joyful about this happy yuletide:
humans and robots, at work side-by-side.”

Could Blockchain And AI Help Procurement Change The World?

At last month’s London CPO Roundtable we explored how to enable smarter procurement, using blockchain for social good and anticipating disruptive forces…

What are the obstacles to more informed, strategic decision-making in procurement?

How can procurement pros use blockchain for social good to change the world?

What disruptive forces are heading your way in 2019 that could impact your supply chain?

These are just some of the questions we discussed when we gathered a dozen procurement leaders in London last month for a CPO roundtable sponsored by Ivalua.

Enabling smarter procurement

A new study by Forrester, commissioned by Ivalua, surveyed 433 procurement, supply chain and finance leaders across Europe and North America. The results, which Alex Saric, CMO Ivalua took us through at the roundtable, provide a practical look at how to enable smarter procurement.

The obstacles to more informed, strategic decision-making are quite consistent. The study, entitled “Enabling Smarter Procurement” found three common issues

  1. Firstly, despite efforts at automating processes, too much capacity is still consumed by operational or manual activities. Teams must free capacity to work on new projects, conduct analysis and plan, but are struggling to do so.
  2.  Secondly, leaders struggle to access relevant insights when and where they are needed. The volume of information now available is of little help if not digestible, simply leading to information overload.
  3. Compounding this, respondents also cited poor data quality as a key challenge. Duplicate supplier records, inaccurate data and poor integration between systems all were cited as sources of data quality issues.

A common viewpoint today is that Artificial Intelligence (AI) is the answer, the magical light at the end of a dark tunnel that will improve automation and give us the magical answers we need, when we need them. But what isn’t discussed is ensuring you have a solid data layer that feeds the intelligence layer, where the algorithms lie and all the talk lies.

Organisations must implement AI in conjunction with cleaning up their data, rather than using poor data quality as an excuse for inaction.

Empowering procurement to make more informed, strategic decisions is no longer an option. There is simply no other way to effectively meet the broad set of objectives now expected.

Using blockchain for social good

Olinga Ta’eed, Director, Centre for Citizenship, Enterprise and Governance became the world’s first Professor in Blockchain and Social Enterprise at Birmingham University in 2018. He led a discussion surrounding his research into using blockchain for social good, which focuses on studies into methods to alleviate problems and provide significant intervention into society.

“No one grows up saying mummy I’d like to be a CPO,” he begins. “And that’s because we value non-financial value. We grow up wanting to do things that have value in society – things to do with life and sentiment, we want to change the world.”

“In institutional life we often succeed in stripping that out – any kind of intangible value. But this attitude doesn’t occur in real life, only within institutions.”

In our own lives we use our personal values to procure things “I’d like to have products that are aligned to my values, I’ll use this coffee shop not that one, I’ll eat this ice cream not one from that place, price is this important to me but slavery is this important. We talk about our feelings”

Blockchain could enable procurement to change the world by bringing our values back into the workplace.

“My honest belief is that procurement will be the single largest instrument in the world to change the world – children will say they want to be a procurement officer because they will want to change the values of the world – what we buy, what we eat, what we sell, the values by which we transact. Blockchain and AI will change our processes dramatically.”

Preparing for the disruptive forces heading your way

Given the rate at which technology is evolving and how global events are impacting the world, it is increasingly difficult for companies to keep up without considering risk in real-time.

Intelligence about the world we live in drives business operations and the better informed we are the easier it is to drive progress. Mark Joyce, Head of Analysis, Sibylline revealed the most disruptive forces headed our way in 2019.

The four baseline trends include:

  1. Geopolitical reconfiguration – Chinese growth and assertiveness and a US retreat from global leadership
  2. Deadly conflict on the rise – Total conflict deaths fell enormously from mid-nineties up until the last decade. Since 2012 they’ve sparked to the highest since 1990s. Conflict deaths are concentrated in North Africa, Middle East, Syria Libya and Yemen. Middle Eastern countries have accounted for 70 per cent of battle deaths over the last five years.
  3. Disruptive populism
  4. Weakening of frameworks – including nuclear weapon control

These trends impact procurement in four ways:

  1. Strategic uncertainty – Impacting high-level decision making; blurred lines between politics and business -and criminality
  2. Tactical challenges – Geographical, technological, legal and reputational
  3. Cross-functional working – Procurement, legal, communications, HR and IT are increasingly stakeholders in political and security risk information
  4. Decision advantage – The importance of precise, actionable information and analysis to avoid paralysis and enable business in an uncertain external environment

Adventuring against adversity 

Kris King, Ultra-runner and adventurer extraordinaire specialises in the safe delivery of life-changing challenges and expeditions in the world’s most remote and demanding areas.

He inspired our roundtable attendees with his personal story describing how his best friend’s dad was diagnosed with Huntington’s disease and his commitment to raising as much money as he could for medical research.

Kris become the youngest gym owner in the country, started running marathons, which turned into running ultra-marathons, which turned into extreme adventuring across the world, and started to see what a difference he could make.

In his own words “adventuring doesn’t pay well” so he found a way to monetise it – designing extreme adventures for clients, as well as for himself. Whether it’s expeditions in the Arctic Circle and Namibia, driving over a frozen lake with Daniel Craig, catapulting David Hasselhoff or bungee jumping a car of a cliff – nothing seems to be out of reach.

As Kris pointed out “it’s not about skill it’s about how stubborn you are.”

The London CPO roundtable was sponsored by Ivalua. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation. 

From Hype to Help – Making AI Real For Supply Chain Professionals

AI can help supply chain professionals make better decisions, more efficiently and in a more repeatable way over time.

At this point, supply chain professionals might be getting a bit impatient with AI. You’ve likely heard how this technology is poised to revolutionise the supply chain. But as a supply chain professional, you’re not working in R&D; you’re responsible for P&L. The obvious question is: what’s in it for me and my bottom-line performance? Supply chain professionals need to understand how AI will reduce costs and/or increase revenues.

To answer this question, we need to back up a bit. While various sectors have very different concerns, there are some challenges that affect nearly all supply chains. I’ve worked as a supply chain practitioner, myself, with a large industrial manufacturer and with one of the world’s largest transportation services companies. To my mind, there are four challenges all of us understand very well, whether we are moving consumer goods, food and beverages, or cars.

1. Visibility

Where are all of the moving pieces at any point in time, from our suppliers, to our warehouses, to our carriers and finally to our customers? How could improved visibility impact core cost and revenue components across the business?

2. Sales

Could improved visibility of the total supply chain help us to get the right products in the right place at the right time, based on our specific demand profile? Could we then hit product launch deadlines with more certainty?

3. Inventory

A lack of inventory visibility can lead to increases in working capital – the lifeblood of any business. If there is an issue with inventory, how do we fix it? And if we can’t fix it right away, how do we interact with our customers and suppliers in a way that protects these critical relationships?

4. Change

Keeping up with the pace of change is a constant issue. The acquisition trend in our industry means we are frequently incorporating new supply chains and systems, and building bridges between platforms, all the while ensuring on-time delivery and minimising costs.

Right now, solving these challenges involves a combination of dashboards and ad hoc decision-making. The dashboard alerts you to a problem. You reach out to subject matter experts and come up with the most efficient resolution. (Much of this happens via email.)

There are two problems with this mode of problem solving. One: you’re limited to the internal data your dashboard is tracking. Two: once that problem is solved, the knowledge and insight that helped fix it disappear. If the same problem happens a year later, you’re starting from scratch, especially if people have changed roles or left the company altogether.

AI addresses both of these problems, helping supply chain professionals do what they do best – but more efficiently and with better data.

Specifically, IBM Watson Supply Chain brings in a broader range of data to help you quantify the impacts of any incident. For example, if the two cities most critical to your supply chain are Shanghai and Rotterdam, Watson can track world events – weather, geopolitics, finance and more – that could disrupt this specific trade lane flow. It’s not looking at everything for everyone; it focuses on the parts of the chain that matter most to you. Ultimately, you improve your awareness of potential issues while sharpening your calculations of the impact on your business.

Next, Watson captures all of the conversations, inputs and outputs used to solve the problem. This institutional knowledge becomes permanent and searchable, so you can reach an even faster resolution if the same problem happens again. In fact, Watson will learn from this data to recommend better alternatives.

IBM is already taking advantage of AI in this way. After a Japanese tsunami disrupted our supply lanes in 2011, we asked ourselves how to get better insights. IBM Watson Supply Chain is the result. We created a transparent supply chain app that alerts key decision-makers when disruptions occur. Then we collaborate in a virtual “resolution room” to share expertise, get real-time updates and make quick decisions. All of this detail gets fed into Watson for future decisions. To date, we’ve reduced our data retrieval times by 75 per cent and saved $40 million in freight and inventory costs.

Other customers are benefiting from AI too, like Lenovo, which is using IBM Watson Supply Chain Insights to rapidly predict, assess and mitigate the risk of disruptions to its supply chain. With AI, Lenovo can shrink average response time to supply chain disruptions from days to minutes – up to 90 per cent faster than before.

To bring it all home: AI can help supply chain professionals make better decisions more efficiently in a more repeatable way over time. It doesn’t replace people; human expertise is too vital to the process. What it does instead is augment your team’s capacity and capability, so you can spend more time resolving issues and less time gathering data and responding to emails.

AI may seem a bit futuristic, but it’s certainly not an abstract concept – it’s here and now. And it can provide a demonstrable bottom-line impact across all supply chains structures.

To make AI relevant to your supply chains, download IDC Technology Spotlight: The Path to a Thinking Supply Chain 

Procurement Isn’t Lighting Up The World…Yet

“Procurement itself – let’s face it – isn’t going to light the world currently, but I believe it will be the new instrument in 2030 to change the world.” – Olinga Taeed, Visiting Professor in Blockchain at Birmingham City University

As we hurtle towards the new year, you might be starting to look ahead and reflect on your personal and professional development goals.

But why wait until January 1st to put your plans into action?

Next week, we’ll be addressing a huge range of critical areas for procurement and supply chain professionals at Big Ideas Zurich.

And, for the first time ever, we’ll be filming and streaming the entire day’s event via the Digital Delegates group on Procurious.

If there was ever a time to register for one of our summits, it’s now. Featuring presentations and interviews from some of Europe’s top procurement leaders, we’ll be discussing procurement and supply management towards 2030, the future of talent, automation, blockchain, diversity and so much more.

Check out our teaser trailers below for a little sneak peak of what’s to come.

Procurement isn’t lighting up the world

“Procurement itself – let’s face it – isn’t going to light the world currently, but I believe it will be the new instrument in 2030 to change the world.”

Olinga Taeed, the world’s first Professor in Blockchain and Social Enterprise, reveals how blockchain can be used for social good, why procurement isn’t currently lighting up the world and when that’s set to change. 

On December 10th discover…

  • What skills you need to perfect to drive peak performance in your career
  • The latest intel on blockchain 
  • How procurement can close the gender pay gap 
  • The latest updates on game-changing technology 
  • How to develop strategic partnerships 
  • Why supplier diversity is best for business
  • What procurement and supply chain will look like in 2030
  • How to stand on your supplier’s shoulders 
  • How to make your key business stakeholders love you
  • The ways to shift your procurement mindset 
  • The importance of having a digital endgame

Win a Parrot Bebop drone worth £450

We know that everyone loves a prize. And believe us when we say we’ve got prizes falling from the tops of the Swiss Alps.

As a registered digital delegate you’re in with a chance of winning one of eight amazing giveaways including the big-ticket item – a Parrot Bebop drone worth £450.

Plus, we’ve got Patagonia t-shirts, a Fjallraven backpack, stashes of Swiss chocolate and Herschel beanies up for grabs.

We’ll be doing eight prize giveaways throughout today with winners selected every half an hour. To put yourself in the running you simply need to get involved on the digital delegates group – posting your comments, insights and questions.

Sign up as  a digital delegate for Big Ideas Zurich (it’s free) 

Piracy Still Rules On The High Seas

Piracy may not quite be the world’s oldest profession, but for thousands of years plundering and pillaging on the high seas has struck terror into the hearts of more honest seafarers… 
Are you responsible for sending your people into danger? In a new Procurious blog series, The World’s Deadliest Supply Chains, we investigate the most high-risk supply chains out there.

Piracy may not quite be the world’s oldest profession, but for thousands of years plundering and pillaging on the high seas has struck terror into the hearts of more honest seafarers.

Along the journey – or should we say voyage – these seafaring brigands have developed a cuddly reputation as harmless Captain Featherswords with bushy beards and eye patches, bearing a Jolly Roger for show more than anything.

Even the feared 17th century English pirate Blackbeard was romanticised posthumously after a life of pillaging and murdering in 1718.

Of course, there’s nothing innocuous about latter-day piracy, which remains the scourge of merchant shipping in some of the world’s busiest transit lanes.

For a start, cutlasses have been replaced by high-speed landing boats, automatic weapons and even rocket-propelled grenades.

Modern cargo and tankers might not look vulnerable, but despite their gargantuan size they’re crewed by just a handful of people who – by convention – are unarmed.

The extent of piracy has always ebbed and flowed, but it re-entered the public consciousness when the disintegration of the Somalian state in the early 2000s spurred a surge in piracy across the Indian Ocean and the Red Sea.

Recent activity has focused on the Gulf of Guinea and, more specifically, Nigerian waters.

Other modern piracy hotspots are the Straits of Malacca, Gibraltar and the Philippines. There have even been reports of ‘river piracy’ on the Danube in Serbia and Romania.

The enforcement problem with modern-day Blackbeards is that most of the piracy occurs on international waters, with many countries willing to turn a blind eye.

Over the last 10 years, the trends look to be heading the right way: according to the International Maritime Bureau’s Piracy Reporting Centre, in 2017 there were 180 reported incidents of piracy and armed robbery, compared with 267 attacks in 2007.

Of these, 15 resulted in 91 crew being taken hostage, with another 13 attacks resulting in 75 crew being kidnapped (that is, taken off the boat).

Sadly, three crew members were killed and six were injured.

The IMB’s updated figures suggest some slippage: in the first six months of 2018 there were 107 reports of successful or attempted attacks, compared with 87 for the same period last year.

Of these, 69 resulted in the pirates boarding and 11 in the ships being fired upon.  Across seven incidents, 102 crew members were taken hostage, compared with 63 previously.

Geographically, piracy is an ever-shifting activity: none of the 107 reported attacks was in the old hot spot of Somalia, while 31 were in Nigeria and 25 in Indonesia.

Unlike in Captain Phillips – the 2013 celluloid account of the US mariner’s struggle with Somali pirates in the Indian Ocean – the US navy is unlikely to steam to the rescue.

But the long-term trends suggest increased vigilance on the part of ship owners and a somewhat belated response from navies and maritime authorities.

In a celebrated case, the Malaysian Maritime Enforcement Agency recently apprehended 16 pirates attempting to board a tanker six nautical miles off the coast of Pulau Tinggi.

Given the vastness of international waters and extent of shipping activity, no boat can rely on protection being close at hand, and captains are adopting their own measures to protect crews and cargoes in vulnerable regions.

These remedies include razor wire on decks, hoses converted to sea water cannons, hardened bridges and even the use of mannequins as ‘armed’ guards. The high-end yachting sector has deployed laser dazzlers that can temporarily blind attackers before they board.

Not all of the solutions are high tech. Earlier this year, pirates attempted to board the merchant ship MV Kudos near the island of Sibago in the Philippines. They were fought off after the crew adopted the medieval siege trick of pouring boiling water on the assailants.

Of course, prevention is better than cure and crews in vulnerable areas are advised to maintain a 24-hour watch and radar vigilance.

The IMB’s not-for-profit piracy reporting centre provides an around-the-clock service for Masters to report hijack attempts and suspicious activity, with regular updates.

Despite the distress caused by modern pirates, at least their demands for monetary gains are clearer and easier to accede to than, say, the demands of politically inspired terrorists.

Unlike the chest of gold doubloons in the past, loot can take several forms.

In some cases, the culprits demand hostage money, leading to delicate negotiations as ship owners determine just how ambit the claims are.

(The 2012 Danish movie A Hijacking documents the bewilderment of a ship’s crew as the hijackers and the ship owner’s dispassionate head office bean counters quibble about what their lives are worth).

In extreme cases the pirates hijack the ship itself and take it to a friendly port for a new identity. In other cases, the contents of the ship’s safe and the crew members belonging will suffice.

The resilience of piracy is linked with poverty and upheaval resulting from civil war: they’re desperate acts carried out by desperate people. In the case of Somalia, fishermen became pirates after foreign boats took advantage of the lack of government by overfishing or dumping toxins in the waters.

In other cases, it’s the work of highly organised gangs.

Given the varying motives, we can never quite be sure why pirates are pirates, so let’s just say it’s because they ‘arrrr’.

Six Reasons You’re Still Stuck In Procurement 1.0

Robobai surveyed 250 procurement specialists and asked them what their pain points are within a growing organisation. Chairman and Founder, Julian Harris, shares the top six reasons you’re stuck in procurement 1.0…

Every business has the desire to grow and succeed and as a result of this targets are set to support the overall objectives of the GDP. It is natural to encounter many roadblocks along this journey and procurement is seen as an important area as it can both block or support growth.

We have recently surveyed 250 procurement specialists and asked them what their pain points are within a growing organisation. We then established the six biggest pain points from their perspectives.

1. The companies had outgrown their supplier base

79 per cent of the people we spoke to said that their businesses were not driving innovation in supplier relationships. The common theme being their existing suppliers weren’t adapt enough to support their growth model and that they did not have the correct systems in place to evaluate potential new supply partners in an efficient and fast manner.

2. Their current systems were inadequate

85 per cent of our survey said that they overall procurement process was to complex and resource heavy. The existing systems and processes simply aren’t up to the job and as a result Account Payable are constantly battling to keep on top of the processing and payments of invoices.

3. Poorly equipped for investment or acquisitions

According to our results, 76 per cent of procurement specialists said that with their current systems and processes, they would not be able to provide the relevant due diligence to any potential investors. This is a massive barrier to a company that is looking to expand in anyway.

4. Managing rising costs

81 per cent of companies admitted that they don’t challenge suppliers enough on cost or performance. The truth is, they are struggling with rising costs against income which is effecting profits, but they have inefficient systems in place that don’t allow them to manage their supplier contracts properly in these areas.

5. Ineffective supplier management

44 per cent of our specialists said that they need to manage their suppliers more effectively. They basically don’t have access to enough good quality data on suppliers to allow them to effectively challenge and negotiate the best deal for them.

6. Not enough control over spending

In our research 40 per cent of respondents said that they need to improve their budgeting controls. There are compliance issues surrounding using approved suppliers, and to fix this change is required to both their systems and culture to give the required visibility of spend.

Is Data really the answer?

For optimum results, you need optimized data

The benefits of good data are no secret. You will constantly see things written and hear conversations about how powerful data can be with regards to driving efficiency, reduce costs and even keeping customers within any business. But, in the world of procurement it is a must have. Why? Because with the right data you can massively improve your return on purchasing goods and services.

High quality, cleansed data helps to drive a more strategic view of procurement. It enables teams to make informed decisions, earlier in the procurement lifecycle. If you don’t have it, then sure you can view total spend, but in a very inadequate way doesn’t allow you to understand the size of the cost saving opportunities that exist. These opportunities may include variance in pricing, contract terms, consolidation, payment discounts or duration. You need cleansed, granular data to be able to provide good insights to make the right purchasing decisions. You simply can’t do this efficiently without having access to a platform that provides this quality of data in a timely manner.

Often, one of the biggest challenges in an organization sits in the realms of data. Without good quality data cleansing and data classification you will never have a genuine spend visibility.

When a company has good spend visibility they get timely, accurate, complete, and detailed data which offers invaluable intelligence and insight on their spending patterns, compliance and performance. These insights help them identify savings opportunities, drive compliance, and develop purchasing strategies which reduce cost.

Julian Harris, Chairman and Founder – Robobai, spoke at Big Ideas Summit Sydney. 

3 Steps To Kickstarting Your Marketplace Strategy

Our latest webinar, Going to Market(place): The Future of Procurement sponsored by Amazon Business is now available on Procurious. Sign up now to listen!

William Potter/ Shutterstock

Everyone’s talking about the benefits of procurement marketplaces, particularly when it comes to managing tail spend – but actually adopting one as part of a procurement strategy is another matter entirely. If it’s something your team is talking about, but not yet investing in, how do you get started? And if you’ve already taken the leap, how can you ensure you’re making the most of it?

In a recent webinar Going To market(place): The Future of Procurement we defined marketplaces, in short, as places where people gather (in person or digitally) to buy and sell goods and services. For B2B purchasing, marketplaces are gaining steam, with recent announcements indicating that millions of businesses globally use Amazon Business.

What’s driving this trend?

The global business environment is challenging organisations of all sizes to be increasingly agile and remain competitive with slim margins. Procurement teams have an opportunity to contribute to business performance through digital innovation, new technologies, and other strategic projects. However, they need the bandwidth to do so and that’s often a key challenge.

According to the 2018 Deloitte CPO Survey, 51 per cent of procurement leaders shared that they did not believe their teams had sufficient capabilities to deliver on their procurement strategy. And recent Procurement Leaders research found that administrative and non-strategic work can take up to a third of a category manager’s time.

A B2B marketplace offers the opportunity to offload a significant amount of time spent on administrative work through a solution that offers you choice, competitive offers, and transparent pricing – with tools that help you to maintain procurement control and visibility. Perhaps most importantly, this opens up your resource to focus on more value-adding strategic activities.

How do you get started?

We think about getting started as a three step process.

  1. Build your business case and understand the potential savings

We believe in working backwards from the customer. First, determine who your customer is – whether that’s your buyers, your procurement team, or your company more broadly. Then identify what your customer actually needs and the problem you’re trying to solve. From there, work backwards to ensure your strategy delivers on that customer need.

For example, if you’re looking to empower your end users by increasing stakeholder satisfaction and collaboration, and offload administrative burden so that you can focus your procurement team on strategic initiatives, build your business case there.

When you estimate your potential savings, consider both hard savings, including product costs and shipping fees, as well as soft savings: the cost of managing suppliers – with Hackett Group reporting the average cost between $700-$1400; the cost of search time in finding the items that are needed; and the cost of PO processing time. Make sure to consider both hard and soft savings when looking at your total potential value saved.

  1. Register for your account

With Amazon Business, registering for an account is free and takes minutes to complete. When you have registered your account, take some time to configure your account according to your needs. This could mean thinking through what categories you want to allow and those you want to restrict, including curating what’s available for buyers to purchase. For example, if you have an existing contract for IT hardware, you may want to restrict purchasing of those items, but leave office supplies, janitorial, and other categories open for miscellaneous purchases. Amazon Business also allows you to curate purchasing to only those items that offer a VAT invoice

You may also want to consider how to streamline payments on the marketplace. Do you have a p-card or corporate card programme, or do you wish to pay on terms? Do you need to set up shared payment between groups? Establishing these points up front will make purchasing easier for your buyers.

And depending on your set-up and internal initiatives, you may want to integrate a marketplace as a punchout catalogue in your eProcurement system rather than purchasing directly on the marketplace.

  1. Roll out

Rolling out a marketplace, like any other implementation, will require some change management with your stakeholders. However, the idea of using a B2C marketplace that is familiar and easy to use for B2B purchases requires little to no training. And it’s easy to convince your team of the benefits!

Keep in mind that it always takes more than one email to get your audience’s attention, and you should plan for a regular cadence of messages to reinforce the new process. In addition, we recommend that you plan milestone evaluations with stakeholders to reinforce adoption and review key metrics.

Finally, don’t forget to communicate often with your marketplace account manager to keep up to date on new releases. B2B marketplaces are quickly growing and developing, with new functionality frequently coming to market. If you want a feature that’s not available today, odds are that it’s around the corner.

Using a B2B marketplace for tail spend can save your team a great deal of time and money, and it doesn’t have to be complicated. And if you need help, you can always reach out to your Amazon Business account representative.

To learn more about Amazon Business and register for a free account, visit amazon.co.uk/business.

Our latest webinar, Going to Market(place): The Future of Procurement sponsored by Amazon Business is now available on Procurious. Sign up to listen.  

How To Enable Smarter Procurement Today

If AI is the light at the end of the tunnel, why are there so few success stories to be found? How do we enable smart procurement?  

Success with today’s broad set of complex objectives requires Procurement leaders to think strategically and process ever greater volumes of diverse information. Unfortunately, this is an area with significant room for improvement at most organisations. A survey of over 400 procurement leaders by Forrester found their top priority to be “improv[ing] business insight on purchasing activity through reporting and analytics.”

The obstacles to more informed, strategic decision-making are quite consistent. The study, entitled “Enabling Smarter Procurement” found three common issues

1. Firstly, despite efforts at automating processes, too much capacity is still consumed by operational or manual activities. Teams must free capacity to work on new projects, conduct analysis and plan, but are struggling to do so.

2.  Secondly leaders struggle to access relevant insights when and where they are needed. The volume of information now available is of little help if not digestible, simply leading to information overload.

3. Compounding this, respondents also cited poor data quality as a key challenge. Duplicate supplier records, inaccurate data and poor integration between systems all were cited as sources of data quality issues.

Fortunately, new technologies are available that can empower procurement to address these and other challenges and rise to the occasion. AI in particular is finally coming of age and often viewed as the answer to many of Procurement’s challenges. The same survey found that 71 per cent of business leaders plan to adopt AI in procurement over the next 12 months. Yet if AI is the light at the end of the tunnel, why are so few success stories to be found?

A key reason is the approach taken to implementing AI solutions to date. As vendors struggle to burnish their innovation credibility, there has been significant marketing ahead of capabilities which has led to unmet expectations post implementation. As capabilities are now coming in line with past marketing, this problem will subside. Of greater concern, the innovation race has led to nearly an exclusive focus on the algorithms, leading to poorly designed implementations. Less innovative but equally important areas, especially data quality, are being ignored. AI relies on a solid foundation of data, in terms of volume and quality, so solutions that offer clever applications alone are sure to disappoint.

To remedy this problem, organisations must implement AI in conjunction with cleaning up their data, rather than using poor data quality as an excuse for inaction. Source-to-Pay suites that are built upon a unified data model partially address the challenge by generating clean data that can be mined by AI applications across all processes. For example, suites with a single supplier record can provide true 360 degree visibility of supplier performance and activity, and enable AI applications to predict potential risks.

That still leaves issues with existing data or data in other systems. Here, master data management solutions should be leveraged that can actually fix issues in back end systems, linking vendor and item master records across systems. This further improves visibility and the potential for new and better insights.

Empowering procurement to make more informed, strategic decisions is no longer an option. There is simply no other way to effectively meet the broad set of objectives now expected. Fortunately, new technologies are finally reaching the level of maturity where they can have a transformative impact. By implementing AI applications in parallel with initiatives to improve their data foundation, leading organizations are both enabling smarter procurement today and ensuring they are well positioned to leverage tomorrow’s innovations.

Ivalua sponsored today’s London CPO roundtable. If you would like to attend or sponsor a Procurious roundtable please contact Olga Luscombe via [email protected]