Category Archives: In The Press

The Best Companies to Work for 2016

The Sunday Times released its “100 Best Companies to Work for 2016” last week, and there was a new name at the top of the list.

Best Companies to Work for

London-based online insurance retailer, Simply Business, beat the competition to top the main list this year. Not only has the business never been in the top spot before, it was a completely new entry for 2016.

The retailer beat telecoms reseller, Chess (up one place to second, from third in 2015), and Red Carnation Hotels (first in 2015, but third this year), into first place.

How To Be ‘The Best’

The Sunday Times has been running their Best Companies survey since the year 2000, attracting the big names in UK business, all trying to make one of the high-profile lists – Best Companies; Best Small Companies; Best Not-for-Profit Organisations.

The organisations register themselves to take part – 925 did so this year – but it’s their employees who decide if and where they make the list. This year, over 240,000 employees completed anonymous surveys about their employers, rating that on the following categories:

  • Leadership – the head of the company and senior leaders
  • Wellbeing – stress, pressure and work-life balance
  • Giving Something Back – if companies are putting back into the local community and society in general
  • Personal Growth – whether staff feel stretched and challenged by their job
  • My Manager – how they feel about immediate and day-to-day managers
  • My Company – how they feel about the company, rather than the people
  • My Team – how they feel about their colleagues
  • Fair Deal – how happy they are with pay and benefits

It’s not a one-time thing either. Firms choose to enter on a year by year basis, and it’s clear that they need to keep engaging with employees and working hard to stay on the list. There were 79 new entrants in the three lists for 2016, meaning some companies will have to work hard to regain their place next year.

Secret to Success

Analysing the survey results this year, The Times has highlighted team spirit as one of the key factors in enabling companies to succeed. Although many of the survey participants said their workplace stress was increasing, this was frequently outweighed by the benefits of a strong staff identity.

Jason Stockwood, CEO of Simply Business, also highlights employee empowerment as part of his business’ success. Since taking over as CEO in 2010, Stockwood has worked to build an engaged workforce, aimed at bringing benefits to all business stakeholders.

He says, “It’s a fact of modern business that by investing in a happy, engaged workforce you’re also investing in your customers. Getting it right internally is good for everybody, including the SMEs buying our products.

“Six years on we have grown from 130,000 to 350,000 small business customers and the workforce has doubled in size. This has only been possible by making every single member of the team feel empowered to achieve their full potential.”

Not All About Rewards

And working towards being one of the best companies doesn’t necessarily mean spending more money. In fact, strong leadership, a focus on employee engagement for all employees, and ensuring a good work-life balance were all seen as more important factors for the top companies this year.

It was also found that small companies were out-performing their larger counterparts across all the categories this year. According to Dr Ian Dennis, Best Companies’ Director of Research, the teamwork found across the small organisations that is making the difference.

The Table Toppers

It was all change at the top of the Best Small Companies list, while two of the top three from 2015 were up at the top again in the Best Not-for-Profit Organisations.

Best Small Companies to Work for 2016

  1. Paragon Interiors Group (New Entrant)
  2. Phaidon International (23rd in 2015)
  3. Educ8 (New Entrant)

Best Not-for-Profit Organisations to Work for 2016

  1. SLH Group (1st in 2015)
  2. Wales & West Housing (3rd in 2015)
  3. B3Living (7th in 2015)

To see the full “Best Companies to Work for” lists, and get more information on all the companies involved, visit The Sunday Times.

Why It’s Critical to Keep Your Skills Up to Date

Technological change is disrupting every industry and profession around the world, and obliging professionals to ensure their skills are up to date.

Keep your skills up to date

In recent weeks, Procurious has published a number of articles on personal development, training and up-skilling. The idea of keeping skills up to to date, and making time for learning and development, are applicable not only in procurement, but also to virtually every profession in every country.

However, this is not to say that all the onus is on the individuals to take responsibility for their development. It’s important also for organisations to ensure that resources are made available to allow employees the opportunity to take advantage of the training that is available.

AT&T – Remaining Competitive

AT&T is a US-based telecommunications company, currently owned and operated by SBC Communications. In the USA, the company is the second largest provider of mobile phone services, and the largest provider of fixed phone services. The company also provides broadband services.

The rapid pace of technological change in the telecommunications industry has left AT&T vying to remain competitive against larger technology organisations, such as Google and Amazon. Part of the strategy for remaining competitive in this industry is ensuring that employees’ skills are up to date.

It was estimated that approximately 280,000 employees need to update, or learn, coding skills, something that the organisation is supporting through the provision of eLearning. The company will reimburse around $8,000 (USD) per year per employee for this training, although this will still mean employees are funding some of the training themselves.

Up-skill. Or else…

While this may sound like the organisation is being supportive of employees’ efforts to ensure they have the skills they require to perform their job, there is something of a darker undertone. In essence, AT&T are forcing their employees to learn these skills, or find that their career choices are “very limited”.

CEO, Randall Stephenson, has been quoted as saying people who do not spend 5 to 10 hours per week in online learning will “obsolete themselves with the technology”. The time commitment involved means that many employees are now working evenings and weekends, on top of their day jobs, just to keep up to date.

The company also plans, eventually, to include personal development and learning as part of performance reviews too. This will be based on what people have studied, how well they did, and whether they are willing to keep learning.

The Right Reasons

It would be easy to point the finger at AT&T and say that they are being unfair. That they shouldn’t be forcing employees to learn skills, or essentially be out of a job. However, there are many organisations who do not offer the support that AT&T are giving their employees.

Yes, employees own time and money are required in order to keep pace, but if these employees don’t have the same skills as those at competitor organisations, then the chances are good that AT&T will cease to exist, and those employees will be looking for new jobs in an ultra-competitive job market.

It is also not to say that AT&T are leaving their employees to fend for themselves. The company has a programme called “Vision 2020”. It combines online and classroom-based work in subjects like digital networking and data science, but also looks at old skills that can be transferred to new careers.

AT&T management want to ensure that the company has a future, and the employees have got on board with this, and are actively working to make sure that they have the necessary skills to do so.

Stay ahead of the personal development game by making use of all the eLearning resources at your disposal. Check out the Learning Hub on Procurious for over 80 free video and audio resources, from learning about procurement, to learning from the experts.

It Takes a Perfect Procurement Programme to Cut Costs

How would you define perfect procurement? We’ve spoken a great deal recently about how saving money or getting the best deal is no longer the be all and end all in procurement.

Perfect Procurement

Customers demand and expect a more transparent, more ethical, and more sustainable supply chain. This ultimately means that procurement priorities vary globally, and across companies. This week, however, we are singing the praises of some perfect procurement strategising which has led to some serious savings.

The Aircraft Carrier Alliance announced savings of $139 dollars on the UK’s two new aircraft carriers, South Africa plans to reform public procurement to save R25 billion, and Australia’s fifteen-year-long infrastructure plan aims to to save the average Australian household $3,000 a year by 2040.

And, under the pressure of a slow economy,  sources have suggested that Russia plans to cut defence procurement by 5 per cent this year.

The Aircraft Carrier Alliance

The Aircraft carrier Alliance (ACA) have just announced savings of £139 million on the construction of two new aircraft carriers at the CIPS Supply Management ‘Best in Procurement‘ event in Manchester. Having initially been tasked with saving £86 million, the ACA significantly exceeded this thanks to their implementation of an effective procurement programme with PwC.

PwC supported a savings delivery team using their procurement cost savings methodology following a five week assessment phase and prioritising of opportunities to cut costs. Currently, savings have come from 67 areas but there are still three years to go on the project.

Ross Elliott, director at PwC said “We had a very robust process, but you have got to take your shareholders with you. As a result [of this project], we have got an organisation that looks for savings and is more cost aware.”

The ACA won 2015’s  Best Procurement Consultancy Project of the Year at the 2015 CIPS Supply Management Awards. The 2016 awards will be announced in April.

South Africa’s Public Procurement Plan

The South African Government is holding talks with suppliers, with the hope of reducing prices and renegotiating contracts for banking services, ICT infrastructure, health technology and learner support materials.

The reforms to public purchasing processes should save the Government R25 billion, out of an annual procurement spend of R500 billion.

South African Minister of Finance, Pravin Gordhan, stated, “It is clear that we can achieve considerable savings to the government, while also ensuring that procurement processes are streamlined and service providers are paid on time.”

Australia’s Procurement Plan

Australia has launched its very first fifteen year infrastructure plan in which procurement has a key part to play.

A report from Infrastructure Australia has detailed a number of reforms to infrastructure to be undertaken by 2040. Among the procurement responsibilities is a suggested increase in competitive tendering.

The report cites how Sweden has increased competitive tendering in public procurement, leading to lower subsidies and 20 per cent cost savings, and calls for the same approach in Australia.

In addition to this, infrastructure projects should take account of the government’s Indigenous Procurement Policy which will “contribute to growing indigenous businesses and increasing employment through remote infrastructure procurements.”

Throughout the plan, whole-of-life costs will be accounted for in procurement when new infrastructure projects are commissioned, including future maintenance costs as well as initial capital expenditure. It is estimated that the plan will save the average Australian household AUD $3,000 by 2040.

Defence Procurement Cuts in Russia

Sources have suggested that the Russian government might be pushed to make a 5 per cent cut in defence procurement spending this year. Despite President Vladimir Putin making military growth a national priority, it seems that the slowing economy could put a halt to his plans.

Russia has entered into its second year of recession as oil prices continue to decline.  Four official sources have said that the cut proposals are to be put forward for discussion at a cabinet meeting.

The finance ministry have argued that Russia can no longer afford a multi-billion-dollar revamp of the armed forces, so will consider the realisation of this plan to be a significant victory.

In today’s current climate saving money is definitely the aim of the game. Perfect procurement might not be possible all the time. But, as proven by this week’s news, a methodical and meticulous procurement plan can make all the difference and ensure money is saved in the right places without compromising quality or ethics.

We’ve scoured the net to keep you updated with some more top procurement news stories from the past week.

Procurement Plans at the zoo

  • Hyderabad zoo animals are soon to find new partners thanks to the biggest procurement plan the state has ever seen.
  • The Central Zoo Authority accepted proposals put forward by the state forest department which permits animal exchange as well as procurement of them.
  • The Nehru Zoological Park (NZP) will soon be procuring a whole host of new animals to complement its existing residents including a pair of barking deer, an Otter, a hyena and an Indian wolf.
  • The NZP’S assistant director said “With the upcoming exchange and procurement, most of the single animals will be complemented with partners.”

Read more at New Indian Express

Deliv Partners with UPS

  • Same-day delivery startup Deliv Inc. is getting a funding boost from an unlikely source: United Parcel Service Inc.
  • As more and more commerce moves online, retailers must match the next-day and even same-day delivery speeds made commonplace by Amazon.
  • Surveys indicate that just by having the option of same-day delivery increases purchase conversion during the checkout process by 20-30 per cent.
  • Deliv, which offers enterprise-grade integrations into point of sale, has completed a $28 million Series B round of funding, adding a key strategic partner and investor in UPS. The company looks set to be the platform that powers this new on-demand future.

Read more at Supply Chain 247

Jacobs’ Procurement Pilot

  • California-based technical services provider Jacobs Engineering Group (Jacobs) has confirmed it is fronting a procurement programme in Australia
  • The programme features a new contracting model designed to enhance efficiencies in military acquisitions.
  • The model is centred on tasking original equipment manufacturers with overseeing project management activities from the funding approval stage through to programme closure.

Read more at Janes

Procurement to help ex-offenders

  • Procure Plus has been awarded a five-year contract to help ex-offenders access employment and training.
  • The not-for-profit organisation, which buys goods and services for several housing associations in the North West of England, will place 24 ex-offenders into employment, apprenticeships or training with contractors in its supply chain every year.
  • Ann-Marie English, senior regeneration manager at Procure Plus, said: “What’s different about our approach [to helping ex-offenders] is a focus on the long term, via sustained career opportunities and support.”

Read more at Supply Management

Test-Tube Meatballs – The Path to Sustainable Dining?

As we continue to waste obscene amounts of food and question the ethics of animal farming, some companies are taking steps to tackle the issue of sustainable dining head on.

Sustainable Dining - Meatball

This week, following an initial successful trial, Asda announced it will be selling its wonky vegetable boxes in hundreds of stores, while Memphis Meats revealed a “cultured meat” meatball at a San Francisco conference.

And, in an effort to bring the idea of sustainable dining to a global audience, The Rockefeller Foundation has launched a campaign called ‘Yieldwise’, which has endeavoured to halve the world’s food loss by 2030.

Asda’s Vegetable Boxes

In an attempt to cut waste in its supply chain, Asda are selling boxes of misshapen vegetables which would otherwise have been thrown away. The boxes contain a variety of veg including potatoes, parsnips, cucumbers, peppers and leeks and are sold at a cheaper price than their regular-shaped counterparts. Currently, 20 to 40 per cent of fruit and veg produced by UK farmers ends up wasted.

In addition to these boxes, Asda has “relaxed specifications” on regulations for carrots and sweet potatoes. This will result in a staggering extra 640 tonnes appearing on our shelves.

The UK alone wastes approximately 15 million tonnes of food each year. Despite households being responsible for around 50 per cent of this, supermarkets can still make a huge difference by stocking our shelves with more diverse produce, and thus aiding farmers too.

Asda’s move, campaigned for by chef Jamie Oliver, is certainly a promising start and with any luck will continue to be well received by customers. 550 stores will receive the vegetable boxes from March, as Oliver continues to try and make “ugly produce the norm.”

Are supermarkets doing enough to make their supply chains more sustainable? Definitely not. But it’s a move in the right direction which will hopefully inspire supermarkets worldwide.

At the end of the day, does the size and shape of your vegetables really matter?

Memphis Meats

Next on the sustainable dining menu is a new method for meat production unveiled in San Francisco last week. Memphis Meats have created a new kind of farming which produces meat without all the drawbacks such as environmental degradation. The company presented, cooked, and served the very first test-tube meatball, complete on a bed of pasta, a process you can watch here.

They claim the process is “healthier, safer, and more sustainable than conventional animal agriculture.” As well as omitting the need to farm livestock, which CEO Uma Valeti believes will be a practice made “unthinkable” by the new process, cultured meat such as this uses 90 per cent fewer CO2 emissions than traditional agricultural methods.

The meat will also be free of antibiotics and other contaminants often found in the meat we currently eat and will cost less energy to produce (23 calories needed per one calorie produced vs. 3 calories needed per one calorie produced).

It certainly seems like a no brainer, even if the idea of lab-grown meat is a little unnerving at first. Valeti believes they can have their products on supermarket shelves within the next five years, so it might not be long until you can try it for yourself!

The Yieldwise Campaign

The Yieldwise Campaign has been launched by the Rockefeller foundation to cut waste in supply chains. It has vowed to cut the world’s food loss by 50 per cent in the next fifteen years.

The initiative will start in Africa, where the loss of fruit and veg is most significant, and will help farmers gain access to the latest and best technologies, including better storage options, and drying to increase shelf life. Cutting post harvest lost by half will yield enough food to feed 1 billion people.

As well as educating suppliers, Yieldwise will also be working with, and challenging, global businesses to encourage them to address and account for the amount of waste within their supply chain. The global economy wastes $990 billion each year on food.

Hopefully this programme, and the work campaigners like Jamie Oliver are doing, can get more people on the sustainable dining bandwagon and help to significantly reduce this figure in the future

We’ve been searching the Internet high and low for the procurement and supply chain headlines. Here are some of the top ones…

UK Procurement Boycotts

  • The UK Government are banning public organisation and council boycotts of Israeli goods because the practice undermines “community cohesion” and Britain’s “international security”.
  • Councils across the UK have been putting pressure on suppliers to cease business with the country because of Israel’s occupation of the Palestinian West Bank and its embargo of Hamas-controlled Gaza.
  • All countries that have signed up to the World Trade Organisation Government Procurement Agreement are required to treat suppliers equally, which is why Matthew Hancock has described the boycotts as “divisive.”
  • Labour, however, has criticised the new anti-boycotts policy as an “attack on democracy”, while the Campaign Against the Arms Trade said it was an attack on “the rights of all local people and campaign groups across England”.

Read more at Local Gov and The Independent

Procurement to Help Fight Zika

  • The global Zika outbreak is now affecting more than 3m people in 33 countries.
  • The virus is linked to microcephaly, a birth defect where a baby’s head is smaller than normal, and, more recently, to the neurological disorder Guillain-Barré syndrome.
  • Governments and businesses are aiming to combat the spread of Zika by investing in nets, fumigators, insect repellents and genetically modified mosquitoes.
  • Procuring mosquito nets has been made easier thanks to a consortium including the Department for International Development (DFID) and the Global Fund to Fight Aids, TB and Malaria (GFATM), who simplified the tender process for mosquito nets, saving around £86.1 million.

Read more at Supply Management

Asda Joins European Marketing Distribution

  • Asda have been in the news again this week after joining the European Marketing Distribution.
  • They become the fifteenth member of the group of national food and non-food retailers in 14 countries across the continent.
  • EMD pools the collective buying power of 250 supermarket chains to improve their competitiveness.
  • According to EMD, Asda will be able to “increase its buying power, generating significant savings from its supply chain which it can reinvest in lowering prices, further increasing product quality”.

Read more at Supply Management

EMEA Region Cargo Theft at 5 Year High

  • The reporting of cargo theft and crimes in the EMEA region reached a five-year high last year, according to the Transported Asset Protection Association (TAPA)
  • 1,515 freight thefts were reported during 2015 to the Association, a 37.4 per cent increase on the figures for 2014
  • The TAPA report suggests that this reflects the growing awareness of cargo crime among law enforcement agencies in the EMEA region
  • TAPA EMEA chairman, Thorsten Neumann, said that this may still only represent a low percentage of the overall cargo crime, as many authorities still report this as commercial property or vehicle crime

Read more at Arabian Supply Chain

Higher Employment Costs Threaten UK Jobs Figures

Rising employment costs in the UK look set to temper the positive mood around the latest unemployment figures in the country.

Rising Employment Costs

The number of people out of work in the UK fell by 60,000 for the period of October to December 2015, maintaining the decade-low unemployment rate of 5.1 per cent. However, wage growth in the same period was only 2 per cent, lower than its peak during 2015.

Although more than 31.4 million people are in work in the UK, the highest figure since 1971, this has not translated into expected wage rises, despite unemployment figures being their lowest since before the global financial crisis.

Governor of the Bank of England, Mark Carney, has previously said that inflation rates are likely to remain low until global economic growth has picked up, and other price pressures, such as wage levels, are alleviated.

Global Story

A similar pattern in employment figures has also been reported around the world. In the US, unemployment figures decreased to 4.9 per cent, in spite of a sharp decline in the number of jobs being created during the period.

There was a similar story in the Eurozone, with unemployment levels dropping to their lowest level for four years. According to Eurostat, the unemployment rate across the 19 countries in the Eurozone decreased from 10.5 per cent to 10.4 per cent in November 2015.

“Bright Spot”

However, the picture is not entirely rosy on the jobs front. Experts in the UK warned that new government policies coming into force in 2016 could raise employment costs for businesses. This, in turn, could have a major impact on the number of jobs being created.

The Institute of Directors said that the UK’s strong record on employment remained a “bright spot” in an otherwise turbulent global economy. However, they also argued that schemes such as pension auto-enrolment could raise employment costs, ultimately pricing low-skilled workers out of the jobs market.

James Sproule, Chief Economist at the IoD, said: “With pension auto-enrolment kicking in for many small firms this year, at the same time as the apprenticeship levy – essentially a payroll tax – and the National Living Wage, the cost of employing people is shooting up.

“How businesses will respond to these policies remains open to debate, but cumulatively, they are set to cost firms billions and could lead to low-skilled workers being priced out of the job market. The government must be aware of this, and resist any further moves which make it even more expensive to create jobs.”

Stalling Momentum

The IoD’s warning about rising employment costs comes at a time when a number of organisations are already cutting jobs. Over the next few months, both the UK and Europe are set for tens of thousands of job losses across virtually every sector.

Some of the major firms include:

  • Canadian aerospace giant Bombardier is cutting 7,000 jobs globally over the next two years.
  • Virgin Media plans to cut 900 jobs from its UK workforce by 2017.
  • Asda is cutting 200 jobs at its head office in Leeds.
  • Lloyds Banking Group is cutting a net 1,585 jobs and closing 29 branches across Britain.
  • BP is laying off 7,000 more people.

With the global economy already experiencing a slowdown, there is a high chance that these job losses will not be the last. What remains to be seen is how the new UK policies will impact the employment figures one way or the other.

How Do You Survive a Zombie Apocalypse? Ask Amazon

Amazon has been keeping us on our toes throughout the last fortnight. There have been rumours about their intention to open hundreds of bookstores, not to mention the white bald eagles that are being trained to keep control of the company’s drone deliveries.

Amazon in the News

However, I’m not sure any of us could have predicted that the next Amazon news story to hit headlines would entail self-preservation in the event of a zombie apocalypse.

The retail giant also plans to build a global shipping business to rival those of UPS and Fedex.

Amazon Terms of Service

Amazon made an intriguing alteration to its terms of service this week following the release of its new Lumberyard Materials development tools.

Lumberyard is a game engine and development environment designed for professional developers. It supports the development of high-quality, cross-platform games, which can be run on Amazon’s AWS servers.

Clause 57.10 of the organisation’s Terms of Service, which refers to Lumberyard, states that the Materials tools should not be used with systems such as nuclear facilities, manned spacecraft, or military use in connection with live combat.

Fortunately, there is one, potentially useful, exception. The clause states that “this restriction will not apply in the event of the occurrence of a widespread viral infection, transmitted via bites or contact with bodily fluids, that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue, and is likely to result in the fall of organised civilisation.”

So, if you think that you can utilise a game engine to your advantage in the event of a zombie apocalypse, you’re in luck. But, as The Guardian rightly points out, we’ve learnt from Shaun of the Dead that a cricket bat to the head works best of all.

Global Shipping Business

Bloomberg News revealed this week that Amazon plans to expand its ‘Fulfilment By Amazon’ service to directly rival FedEx and UPS, a claim that the company has repeatedly denied in the past.

The service, which could potentially launch a global shipping and logistics operation later this year has been named “Dragon Boat”.

Bloomberg claims that there are documents detailing Dragon Boat as a “revolutionary system that will automate the entire international supply chain, and eliminate much of the legacy waste associated with document handling and freight booking.”

‘Fulfilment By Amazon’ currently oversees storage, packing and shipping for third-party merchants on the site. Dragon Boat, however will enable these sellers to use Amazon to deliver products from warehouse to customer.

There are also plans to remove further intermediaries from the shipping process, theoretically simplifying things and further reducing prices in Amazon’s supply chain.

This move will put Amazon in the position to rival Chinese e-commerce powerhouse Alibaba, as well as Fedex and UPS.

Colin Sebastian from Baird Capital commented, “Amazon may be the only company with the fulfilment/distribution sophistication and scale to compete effectively with incumbent service providers [UPS, FedEx].” His thoughts reinforce what most of us already believe, if anyone can do it, Amazon can.

We’ve been keeping up to date with the other top procurement news stories from the past week. Check out what’s been going on.

Deloitte Global CPO Survey 2016

  • Almost two-thirds of CPOs do not believe their teams have the skills and capabilities to deliver their procurement strategy according to Deloitte’s 2016 CPO survey.
  • The survey profiles the views of senior procurement leaders from around the world on key issues facing the procurement function.
  • The survey, involving 324 responses from 33 countries, also found 45 per cent of CPOs reported a rise in procurement related risk, such as volatility in emerging markets and geopolitical uncertainty affecting supply chains.
  • CPOs are primarily focusing on consolidating spend, increasing supplier collaboration and restructuring existing supplier relationships to deliver value over the coming year, the survey found.

Read more at Supply Management and check out the full CPO Survey 2016 here

Lord Carter Review Promotes Procurement Transformation

  • A report on Productivity in the NHS, published by the UK Department of Health, has highlighted the need for procurement transformation across NHS Trusts.
  • Lord Carter, the report’s author, that although some trusts are doing well, others “still don’t know what they buy, how much they buy and what they pay for goods and services”.
  • The report recommends the implementation of a new Purchasing Price Index (PPI) for all NHS Trusts in England from April 2016
  • It also recommends that Trusts collaborate more to “aggregate sourcing work and reduce variety”

Read more at Future Purchasing

Pentagon Reduces Aviation Procurement Budget

  • The Pentagon has reduced aviation procurement by 7.2 per cent to $45.3 billion in its fiscal year 2017 budget submission.
  • This lower funding level buys eight fewer fixed-wing aircraft, and 35 fewer rotorcraft for the US Army and Navy.
  • The budget has been designed to offset perceived threats by Russia, China, Iran, North Korea and global terrorist organisations that are running amok in Iraq, Syria and now Libya.
  • Deputy Secretary of Defence, Robert Work, says in crafting the budget, the Pentagon focused on shape, not size, and modernisation versus readiness for today’s conflicts.

Read more at Flight Global

The ICC Academy Announces Speakers

  • The International Chamber of Commerce (ICC) Academy has announced its keynote speaker lineup for the 4th annual Supply Chain Finance Summit in Singapore on 9-10 March.
  • The Summit will gather over 50 speakers and 150 participants from across Asia, and will focus on topics such as supply chain financing in Asia, and the global growth of supply chain finance.
  • This year’s speaker lineup features leading players and industry experts from some of the largest organisations in the region, including ANZ and Standard Chartered Bank.
  • The ICC have said that the speakers have been selected to reflect “the progress of the industry, and provide unique insights into the trends, opportunities, and challenges affecting supply chain finance”.

Read more at ICC

The Cost of Breaking Health and Safety Laws Just Went Up

It might seem like a fairly obvious objective for organisations, but ensuring the health and safety of employees pays off.

Health and Safety Worker

As of the 1st of February, Crown and Magistrates Courts in England and Wales are bound by tough new guidelines when sentencing offenders who have been convicted of breaking health and safety law.

For the first time, courts in England and Wales will be required to follow comprehensive sentencing guidelines. They will be required to take into consideration a new set of factors to determine the level of fines for offenders: the degree of harm caused, the culpability of the offender, and the turnover of the offending organisation.

The new legislation has been described as the biggest change in Health and Safety legislation since the introduction of the ‘Health and Safety at Work Act’ in 1974.

Increasing Fines

The changes will also result in increased fines for offenders, although not across all organisations and all prosecuted cases. Instead, fines will be proportionate to the size of the organisation and their financial means.

For large organisations with a turnover of £50 million or more, penalties for health and safety breaches could total in excess of £10 million, with companies found guilty of corporate manslaughter facing fines of upwards of £20 million.

Neal Stone, Policy and Standards Director at the British Safety Council, said: “We broadly welcome the new guidelines and in particular that in future that three factors will be key in determining fines for health and safety offences: the degree of harm caused, the culpability of the offender, and the turnover of the offending organisation.

“Having consulted our members we were able to say in response to the Sentencing Council’s proposals that there was overwhelming support for this change which would help ensure greater consistency in the sentencing practice of our courts and a level of fines that fit the crime.”

Long Overdue

Stone continued by stating that there was a consensus that the changes to the regulations were “long overdue”, particularly when in the past the fines that have been handed down have not matched the seriousness of the offence.

In the UK, the largest fine handed out for breaking existing health and safety legislation is £15 million, given to Transco in 2005, following an explosion in Larkhall, South Lanarkshire, which caused the deaths of four people. With these changes now in place, this fine may be exceeded in the near future.

Business have been urged to make changes to the way they deal with health and safety procedures, especially to those firms which have cut training budgets as a way of cutting costs. As a result of potentially larger fines, businesses can no longer rely on paying a small fine occasionally versus proper investment in H&S training.

Stone concluded, “The new guidelines, which will in some cases, result in far greater fines than courts are currently imposing, reflects a shift in not only public opinion but concerns among certain members of the judiciary, including Lord Thomas, the Lord Chief Justice. As he has made clear in recent appeal court decisions the purpose of fines is to reduce criminal offences, reform and rehabilitate the offender and protect the public. 

“If the changes in sentencing practice do not help achieve these objectives – particularly ensuring compliance and discouraging law breaking – then they count for nothing. What we will need to see is clear evidence that the new guidelines have played their part in improving health and safety. Extra money through increased fines going into Treasury coffers should not be the name of the game. The objective must be to reduce the deficit of fatal and major injuries and occupational ill health.”

Tackling Exploitative Conditions in Global Supply Chains

Hardly a week goes by in the world of procurement without news of slave labour, corruption and exploitative working conditions within supply chains and, sadly, this week is no different.

Exploitative Working Conditions

The Business & Human Rights Resource Centre has revealed that Syrian refugees, including children, are being exploited in the fashion industry in Turkey.  

The organisation has asserted that clothing brands are not doing enough to ensure supply chains are safeguarding Syrian refugees fleeing conflict into Turkey. It has urged companies to take further action, and ensure that desperate refugees are not escaping into exploitative working conditions.

No Targeted Approach

Last week, Turkey’s government decided to issue work permits to Syrian refugees in order to help minimise exploitative labour practices. However, many refugees will remain in Turkey illegally, and join the ‘informal’ workforce, where they will be at their most vulnerable.

Some of the clothing brands questioned in the survey are actively taking steps to prevent these exploitative conditions, for example, in cases of child labour. However, most do not have a targeted approach to the treatment of refugees.

The Centre has has urged brands to develop action plans, increase scrutiny, and work more closely with Turkish partners in order to protect vulnerable Syrians.

Palm Oil Supply Chains

The Guardian has also drawn our attention to the plight of palm oil workers in South-East Asia. According to research published by US-based NGO Verité, palm oil plantations are rife with exploitative practices due to their remoteness and size.

Workers on the plantations are often trafficked, undocumented individuals which makes them vulnerable to, amongst other things, being paid below minimum wage, having their passports removed, and physical abuse.

On the 17th of February at 10am, The Guardian are hosting a live chat on how to improve the livelihoods of these workers. As preparation, you can read what Procurious has written on the subject in the past.

Positive Signs

However, we are also looking to the positives, and fortunately there are a few! The UK is leading the way as one of the first nations to sign an agreement to combat exploitative conditions, such as forced labour, people trafficking and other forms of modern slavery.

The International Labour Conference’s agreement, which has also been signed by Niger and Norway, will require signatories to “take steps to prevent forced labour, provide victims with protection and access to effective remedies and to carry out due diligence to prevent and respond to the risk of forced labour.”

It’s hoped that the UK’s move will encourage other countries to get on board and sign the agreement. ILO director-general, Guy Ryder, believes that this “is a clear sign that global momentum is building in the fight against these abhorrent practices that demean and enslave millions around the world”.

Simplifying Sustainability

Alongside this, it is also fantastic to see the work that SEDEX are doing to drive change ahead of their  ‘Simplifying Supply Chain Sustainability’ conference next month.

Sedex is a not for profit organisation, which strives to improve working conditions and encourage global supply chains to share ethical data more effectively. Next month’s conference will feature speakers from the Kellogg Company and Mars, and aims to help organisations take a fresh approach to managing supply chains issues.

CEO of Sedex, Jonathan Ivelaw-Chapman, spoke with Pioneers Post this week about supply chain sustainability, cleaner supply chains and his five-year-goals. You can read the full interview here.

It’s great to see different organisations and governments contributing to ending exploitative working conditions worldwide. Hopefully these positive steps can inspire others to make changes in their supply chains.

Meanwhile, here are some of the other stories making waves in procurement and supply chain this week…

Shanghai Moving to Greener Future

  • The city of Shanghai has launched a programme calling for enterprises from all industries to work out their own plan on a green supply chain campaign
  • The programme invites multinational companies, state-owned enterprises, and private firms in Shanghai, to submit proposals for their green supply chain projects to the city’s environmental authorities before March 31st
  • Fang Fang, deputy chief of the Shanghai Environmental Protection Bureau, said “Promoting green supply chain management is an effort to use market forces to promote higher environmental standards among enterprises.”
  • Shanghai has set a goal of cutting down on the density of PM2.5 particles — a major contributor to air pollution — to 42 micrograms per cubic meter by 2020, down from 53 last year.

Read more at Shanghai Daily

New Solar Plant for Morocco

  • Morocco’s agency for solar power, Masen, has opened the tender for project developers for a 400MW solar plant in the centre of the country
  • The projected Noor Midelt site will cover around 6,000 acres 15 miles Northeast of the town of Midelt. Construction is expected to start in 2017.
  • The move comes just weeks after the completion of the first phase of the country’s ambitious project to generate half its electricity from renewable sources by 2020.
  • Simon Gray, World Bank country director for the Maghreb said “apart from creating jobs, the construction of the plant and the development of Morocco’s Solar Plan will establish a future source of reliable green energy,” Simon Gray, World Bank country director for the Maghreb.

Read more at Supply Management

Amazon Targets Bookstores and Drones

  • Amazon dipped its toe into the waters of brick-and-mortar stores with the opening of a bookstore in its home city of Seattle in November.
  • The expansion of bookstores, which the company has not confirmed, would be a surprise reversal from the online retailer credited with driving physical booksellers out of business.
  • US regulatory impediments have made it difficult for the e-retailer and others to roll out drone tests. In April, the Internet retail giant sent the Federal Aviation Administration (FAA) a letter that urged it to ease up on its drone testing regulations.
  • While the Dutch government may have agreed to allow drone testing, it has adopted an innovative approach to anyone that breaks the rules – white eagles!

Read more at Supply Chain 24/7 and Supply Chain Digital

Nigeria Introduces New Procurement Pricing Guidelines  

  • The Nigerian government hopes to save at least N12 billion annually from the services of the newly-established Efficiency Unit (E-Unit) of the Federal Ministry of Finance.
  • The head of the unit, Patience Oniha, explained that the government would introduce price guidelines and shared services policy among MDAs to increase transparency in the procurement process.
  • The E-Unit will aim to generate savings for the Government from procurement, elimination of wastage, excess capacity and minimising duplications
  • The head of the E-Unit said such savings would be channelled to priority projects, to improve infrastructure, encourage domestic production and attract fresh investors.

Read more at Premium Times

Will Online Video Trump TV Advertising at Super Bowl 50?

Global brands are beginning to question how worthwhile Super Bowl adverts are, thanks to the rising consumption of online videos.

Online Video Advertising

On Sunday, Levi’s Stadium in Santa Clara, California, will play host to arguably the biggest event in American sport. Super Bowl 50, featuring the Carolina Panthers facing off against the Denver Broncos, is expected to draw an audience of over 114 million people.

Traditionally, and as we reported this time last year, TV advertising slots during the game are a much-coveted entity. And there is plenty of opportunity with the game lasting over 3 hours, with regular breaks in play and an extended half-time interval.

However, just as technology is disrupting industries around the world, it appears that online video is changing the advertising game.

Jaw-Dropping Prices

With the main event just a few hours away, a few brands have already paid for their advertising slots. This combined spend comes in at a staggering (and record) $377 million. Each 30-second slot is costing advertisers a jaw-dropping $5 million – just over an 11 per cent increase on 2015.

And many marketers will see this as money well spent. With the size of the global TV audience, and the Super Bowl being broadcast to all corners of the earth, it represents a unique opportunity to get their brand into the public consciousness. It is also frequently referred to as the last “safe bet” in TV advertising.

The adverts themselves can make or break a marketing effort for a brand or product. Come Monday morning, anyone not talking about the final score of the match will be discussing the adverts. Do it right, like this selection from 2015, and it can have a phenomenal impact on sales.

Changing the Game

However, in the aftermath of last year’s Super Bowl, research was released showing that over half of people who viewed a Super Bowl ad, viewed it exclusively online. The findings also showed that the adverts were shared online more than ever, with the best advert getting shared 9 million times.

This disruption of how we consume advertising could potentially spell the end for the huge advertising revenues that surround the Super Bowl. Brands have now realised that there is great potential in the online market, which at the same time, saves them considerable sums of money.

By moving away from the traditional TV advertising, marketers can put their money into creating more reactive, up-to-date campaigns, directly related to the game itself.

“Dunk in the Dark”

The first brand to hit the right note when it came to the online advertising around the Super Bowl was Oreo. Back in 2013, Super Bowl 48 was halted after the lights failed in the stadium. Within minutes, Oreo had created an advert that caught people’s attention:

Super Bowl 48

Simple, catchy and very shareable, Oreo’s advert was probably the most memorable that year. And it was only ever created for use on social media. Seeing the success of Oreo, other brands appear now to be trying to follow suit.

Christoph Pleitgen, Senior Vice President, Sales and Business Development, EMEA and APAC, of Wochit said: “Consumers, on average, watch more than five hours of video per day, making video the single most popular media activity. In addition to this, video advertising is starting to seriously threaten this status quo and is considered to be just as, if not more, effective as TV advertising, at a fraction of the cost.

“Ever since Oreo monumentally stole the online show with their simple ‘Dunk in the Dark’ Super Bowl stunt, other brands have been scrambling to follow. Many will forgo the huge costs associated with a paid-for super bowl ad-slot and instead put their budgets and efforts into ensuring they are ready to grab public attention with responsive video content, based around the game.”

 Game On

Super Bowl 50

Is this a sign of the times? Or will marketing and advertising cope with the disruption and come out stronger? It remains to be seen whether or not this will create a trend. There is always a possibility that savvy advertisers will work out how to best leverage both channels within their budget.

After all, it’s the biggest party of the year, and you wouldn’t want to be the only brand not attending.

Chinese New Year – Avoid a New Year Dip in Profits

Chinese New Year is just around the corner, but is your supply chain prepared for the impact of a national holiday like no other?

Chinese New Year

First here are some facts about Chinese New Year 2016:

  • Chinese New Year will be celebrated on February the 8th
  • Estimates forecast 350 million people will travel in China during this period – an increase of 8.2 per cent over 2015
  • It’s the largest migration of people in the world at any one time
  • Many workers started their holiday before February 8th and many will extend it until after February 13th
  • Effects from reducing production during January, as well as ongoing issues, run until March
  • The event is calculated on the lunar calendar and dates change each year (Chinese New Year 2017 is January 28th)

You cannot avoid Chinese New Year – you have no other option than to plan ahead. The event is often a topic of conversation when companies are hiring Supply Chain Specialists. There is a lot to discuss, plus details on steps to take to avoid supply problems. Here are some of my observations and recommendations.

What are the Effects?

The Chinese New Year celebrations run from February 7th to February 13th. This period is also known as the Lunar New Year or Spring Festival. It is the most important Chinese celebration of the year. But its effects can be seen over a far longer period, and these add significantly to any financial impact. 

Travel for the 2016 celebrations started on January 24th and will last until March 3, meaning your supply chain will almost certainly be disrupted. Production sites will be closed for the entire week, but disruptions will last significantly longer.

Most workers travelled far to find their work, and their families still live far away, so they extend their holiday to spend more time back home. Travel by these workers to their home regions creates an enormous movement of people, and places huge strain on the rail network in China.

Companies often allow staff to leave work well in advance, sometimes up to two weeks before the New Year. Some companies also allow a holiday extension for a further week after New Year. This means many factories are not up to full production until late February or even March. This can mean 4 weeks or more of production outages.

There are also reports of workers not returning following the celebrations. This can lead to reduced production runs, as well as product delays and production quality issues.

Delivery Delays, Price Rises, No Product

Global carriers expect a reduced volume over this period. This is reflected in their shipping capacities, which can be cut by nearly 40 per cent. You should contact your logistics company and reserve space for your needs.

Companies who completed this task in advance, and secured their products at the port ready for shipping by no later than the middle of January, prevented many problems. Ports do stay open over Chinese New Year, but only with a skeleton staff. Prior to New Year congestion grows.

Review your other delivery options – even if they are more expensive, at least you can supply your customers and retain their goodwill. However, airports will look abandoned as ground staff and air crews are at home. No freight company can get over these issues. All the while you need to watch carefully for changes in transport rates. If there are price rises in this period, check they return to ‘normal’ in due course.

Lessons learnt from Chinese New Year also apply for holiday periods in other parts of the world. After all, supply chains often demand a global focus. Here, while we normally see the well oiled just-in-time ordering system working well, there is a spike in production (and demand) as New Year comes closer.

Production staff work hard to get ahead of demand and attempt to reduce future supply problems. Suppliers in the USA have taken more notice of Chinese New Year recently, as other labour issues in China, such as overall costs and labour shortages are amplified at this time. Unfulfilled orders damage profits – so ordering well in advance is important.

Cashflow

Like anyone else, Chinese workers value their holidays. They are seen as a really good benefit, especially when compared to US companies. Workers’ journeys home can take a number of days, but employers pay a bonus of one month’s salary. However, this may also impact your organisation, as your suppliers in China may ask for payment of all invoices before Chinese New Year.

You should also be aware that any e-mails you send to suppliers during the week of the celebrations will go unanswered. Senior staff do usually live closer to the workplace, but nevertheless you should plan for this email silence.

The Holiday Cost

Putting a cost figure on the national economy for a holiday in any country is not practical. It depends a lot on the sector. Production revenues suffer, but leisure, travel and tourism should benefit. In the retail sector, there may be purchases that are just delayed to the next day. There is also a potential positive result when workers work faster in the run up to the holiday in anticipation of the closure.

It also depends on the number of holidays per year in individual countries. In the UK, estimated costs for one extra national holiday vary – some predict a loss of £3 billion, while others showed a gain of £1 billion.

Long term impact for China?

There are those who report a change in demand, moving away from Chinese manufacturing. This is often reported to be due to increased prices and/or issues during and after Chinese New Year, which disrupts deliveries. But it is hard to quantify the real cost for this period.

A global view is required. This annual event has been clearly marked in diaries across China, but it is now recognised by more companies worldwide. The solutions to Chinese New Year logistics issues are not hidden and complex, but measures do need to be implemented.

We wish all those travelling a safe journey and a wonderful Chinese New Year.