Category Archives: In The Press

2014 Best Year for Supply Chain and Logistics since Great Recession

The revelation comes from the Council of Supply Chain Management Professionals (CSCMP) 26th Annual “State of Logistics Report.

This year's State of Logistics Report

This year’s State of Logistics Report revealed that the supply chain industry experienced its best year since the Great Recession. The report examined the economic vitality and associated challenges facing each segment of the logistics industry. It also tracked and measured all costs associated with moving freight through the U.S. supply chain since 1988.

According to the research the transportation sector grew by 3.6 per cent in 2014 due to stronger shipment volumes rather than higher rates. The U.S. economy was on solid ground. New job creation was consistent, real net income and household net worth inched up, inflation was low-to-moderate and gas prices tumbled, providing consumers with additional buying power.

The report revealed total U.S. business logistics costs rose to $1.45 trillion in 2014, a 3.1 per cent increase from the previous year. However, the growth rate for logistics costs was lower than the U.S. gross domestic product (GDP), resulting in a slight decline in logistics as a percent of GDP from 8.4 per cent to 8.3 per cent.

Costs for the water sector rose 8.9 per cent, the second highest growth sector in 2014. Inland waterway traffic rebounded due to successful agricultural harvests, higher demand for coal and an expansion of petroleum transportation by barge. Shipments through the nation’s ports increased, with East Coast ports seeing the largest percentage of gains due to congestion and delays at West Coast ports caused by protracted labour issues.

And in 2014 air cargo sector costs declined 1.2 per cent as competition from other modes kept rates down; however, in 2014, a record $968 billion of high value merchandise was moved by air—$443.8 billion in exports and $543.3 in imports.

“Today’s market-leading companies use their supply chains to drive innovation and competitive advantage,” stated Marc Althen, president of Penske Logistics. “This in-turn drives demand for logistics providers. While demand for logistics is increasing, the industry faces a talent shortage and needs more logistics engineers, technology professionals, warehouse workers, and truck drivers to meet the needs of current and evolving freight fulfillment models businesses and consumers rely on for their goods and services.”

Intrigue, money laundering and arrests at the Alhambra

World’s collide as procurement fraud comes to my hometown of Granada.

Alhambra_-_Patio_de_los_Leones_in_the_morning_sun_-_July_2011

This morning, the Director of the Alhambra, an ancient Moorish palace that is now Spain’s most visited tourist attraction, along with some senior staff members were arrested and accused of money laundering.

The allegations centre on the dubious circumstances surrounding the award of a contract to service the Palace’s audio guides.

In 2007 the Alhambra held a tender for the provision of audio guide services, the contract was awarded and then renewed in 2011. The issues that have arisen are related to discrepancies between the bid that was submitted by the winning supplier Stendal and the actual contract terms.

Stendal’s 2007 bid stipulated that the company would contribute an annual fee of 77,000 Euros as well as 47 per cent of the revenues it raised to the Alhambra for the privilege of supplying the guides.

However, the final contract stipulates that Stendal would only contribute 30,000 Euros a year and 15 per cent of its revenues back to the Alhambra. Clearly the terms used to win the business were not implemented in the contractual agreement and this has raised concerns of bribery and kickbacks with the Spanish authorities.

While the flat fee of either 70,000 or 30,000 Euros does not seem a vast sum of money. When you consider that the Alhambra receives 2.4 million visitors a year and each audio guide rents for 4 Euros, you start to see there is serious money in the revenue sharing side of the agreement.

After facing questioning at Granada’s police headquarters, those arrested were released with charges and will face further hearings in the coming days.

If you can read Spanish or know how to work Google Translate, you can read more here.

We need data to combat slavery in supply chains

Thai fishing scandal

International news agency Reuters has announced that recent investigations into the Thai fishing industry suggest that fish caught by boats utilising slave labour could be finding their way into the global retail supply chain.

It is alleged that operators in the Thai fishing industry (the world’s third largest seafood exporter) are staffing boats with migrant workers under appalling conditions that have been likened to slavery.

There are concerns that due to a lack of transparent supply chain data, global retailers and fish buyers are not able to track if the fish they are buying were caught on these suspect vessels.

Lisa Rende Taylor, director of Project Issara, a program run by Anti-Slavery International highlighted as much when she claimed “One big problem in the Thai fishing industry is the lack of certification of good slavery-free shrimp versus bad-shrimp.”

Speaking at a the Trust Forum Asia conference, Nick Grono, the head of Freedom Fund, said his organisation would spend $5 million dollars on an initiative to increase awareness and transparency across these supply chains.

The issues present in the Thai fishing industry are replicated across a plethora of industries in the developing world. In attempts to access cheaper products and produce, global buying teams are now extensively leveraging the developing world’s low cost base. More often than not, this means creating relationships with third party suppliers.

These relationships are notoriously opaque, meaning that procurement teams often lose sight of what is happening in their supply chain. Only through improving supply chain data and encouraging procurement teams to take direct responsibility for the actions of suppliers (and indeed their supplier’s suppliers) can we hope to put an end to these worrying practices.

More than 3,000 mid-sized Thai vessels will have to stop fishing on July 1 under government measures designed to curb illegal, unreported and unregulated fishing, the Bangkok Post reported.

Uncovering The Truths Behind Supplying The Supermarket Giants

Supplier Rebates to be Discussed at Tesco Shareholders Meeting

Tesco supplier rebates under scrutiny

This Friday, Dave Lewis has the unenviable task of addressing the Tesco shareholders at the firm’s annual meeting. As the firm’s new CEO, the responsibility for explaining the company’s fall from grace over the past 12 months falls at his feet.

There is a lot to talk about. But it’s likely that the majority of the shareholder’s concerns will revolve around the £6.4 billion in pre-tax losses that were reported for the year ending February.

Who audits the auditor?

Serious concerns have been raised around Tesco’s relationship with its previous auditor, PwC. This relationship (which was terminated last month) appeared to have turned septic and has been used to explain some of the accounting discrepancies that contributed to company’s recent woes.

While it is easy to focus on the firm’s recent poor performance, perhaps the greatest challenge for Lewis will be explaining that the worst is potentially still to come.

The UK’s Serious Fraud Office has opened an inquiry into the supermarket chain over an accounting scandal that saw the retailer inflate its reported profits by £263m through incorrectly logging supplier rebates. Not only has this scandal cast doubts over Tesco’s reporting standards, it has brought the company’s ethics and supplier relationships into question.

Dodgy accounting brings dodgy supplier relationships into focus

Supplier rebates are nothing new in the supermarket space. In fact, it’s believed that this behaviour has existed since the 1970’s. However, in recent years the practice has been stepped up significantly. Suggestions have been made that UK supermarkets make as much money from supplier rebates as they do from operating profits.

Supplier rebates, which see suppliers making compulsory contributions to supermarkets in return for prime shelf space (or the allocation of marketing effort), have faced scrutiny for the way they are reported. These payments have traditionally not been well defined and recognised through financial reporting systems. In the wake of the Tesco rebate fiasco, the Financial Reporting Council has announced it will look more closely at the way rebates are managed from an accounting point of view.

The supplier rebate scandal not only carries implications for the firm’s reporting credibility; it has been a public relations nightmare. The mass media has jumped on the issue of supplier rebates and customers are now fully aware that supermarkets insist on large payments from suppliers, not only to market their products but also to secure in-store shelf space (this stuff fills column inches). In an era of increased supermarket competition (firms like Aldi are stealing significant market share from Tesco) these PR scandals are crippling.

Lewis’s moment of truth will come this Friday. Tune into Procurious on Monday, as we’ll be providing a review of the shareholder meeting, including an analysis of the way Lewis responded to the supplier rebate scandal.

Celebrating National Women in Engineering Day

National Women In Engineering Day is hoping to change perceptions and inspire more women engineers.

Supporting National Women in Engineering Day

What is it?

National Women in Engineering Day (NWED) was launched in 2014 by the Women’s Engineering Society (WES), as an inaugural event to celebrate the achievements of women in engineering and encourage more girls to consider engineering as a career. 

Who’s involved?

Approximately 400 schools and colleges across the UK are expected to take part in NWED celebrations this year with over 100 events listed on the NWED website www.nwed.org.uk. The organisations hosting the events include universities, schools, engineering societies, and multinational organisations, such as Ford Motor Company, Amec Foster Wheeler, Qinetiq, Atkins, DECC, BT, Pepsi, Selex ES, Dyson, Arup, DuPont, BP, Siemens, BAE Systems, TFL, Crossrail, and many more.

Is it just a UK initiative then?

Nope.

This year NWED has also gained interest on an international level with events happening all over the world to celebrate achievements of women engineers on a global level. For example, the Institution of Engineering and Technology in Kuwait are hosting a conference on NWED with talks from guest speakers, networking activities and awards.

How did it come about?

The Women’s Engineering Society (WES) is a not for profit organisation which was established in 1919 after the First World War to inspire and support women in engineering. For more information visit www.wes.org.uk.

Dawn Bonfield, Founder of National Women in Engineering Day and President of the Women’s Engineering Society said ‘We were absolutely amazed by the enthusiasm for National Women in Engineering Day last year, but this year the day has grown even more and we have seen an enormous number of organisations getting involved with the celebrations. This really is testament to the change in perception of women in engineering, and we need to do all we can now to maintain this activity throughout the year to ensure that girls see engineering as a real career choice for them.’

How many female engineers does it take to set a world record?

Among the events, a Guinness World Record has also been planned to coincide with NWED with the aim to have the largest gathering of women engineers on NWED 23 June at Horse Guards Parade.

Worrying Number of UK Organisations Lack Supply Chain ‘Plan B’

Nearly two and a half years since the oft reported ‘horsemeat scandal’ and many organisations are still lacking a Plan B for a supply chain crisis, according to a survey by CIPS.

Most organisations don't have a plan B

CIPS quizzed senior supply chain managers from across the globe on a number of topics, with the research throwing up a number of surprising statistics, all of which show that many organisations are just not learning the lessons of past failures in the industry.

No Risk Mitigation

At the most basic level when considering a subject like a supply chain scandal is the concept of risk mitigation strategies. These can be for ensuring continuity of supply in the event of a natural disaster or alternative suppliers if sourcing has to be changed due to ethical issues.

CIPS found that two-thirds of the respondents didn’t have, or weren’t aware of, a mitigation strategy covering all tiers of their supply chains. Compounding this is a lack of close relationships with suppliers (only 11 per cent) and the majority (65 per cent) of the managers only having relationships with Tier 1 suppliers or not at all.

Not Managing Relationships

With procurement often focused on reducing cost, reducing supplier lists and eliminating tail spend, relationships can often be overlooked with larger, more critical suppliers. These relationships can help to build trust, maintain ethical standards and can also help to reduce cost in the long-term.

And the statistics back this up too, with the survey results showing a big difference in organisations suffering a supply chain crisis in the past year.

  • 67 per cent with relationships with Tier 3 suppliers and beyond highlighted zero supply chain crises
  • Only 45 per cent with Tier 1 supplier relationships could say the same

Supply Chain Fog – Low Visibility

When considering supply chain transparency (reported recently on Procurious here and here), these relationships can also be a key pillar for buyers in avoiding disruptions. According to the survey:

  • 56 per cent with relationships with Tier 3 suppliers and beyond had complete visibility of their supply chain
  • A worrying 13 per cent with only Tier 1 supplier relationships were able to say the same

A similar difference is seen with malpractice and ethical violations in the supply chain too.

  • 49 per cent with Tier 3 supplier relationships could be certain of no supply chain malpractice, compared to just 16 per cent with Tier 1 supplier relationships
  • Of these, 62 per cent with Tier 3 relationships would take responsibility for malpractice, versus 32 per cent with Tier 1 relationships

Taking Responsibility

In light of these results, David Noble, Group CEO of CIPS, stated that it was time for UK organisations to take responsibility for the conditions in which their goods were being produced.

“As UK companies are increasingly using suppliers in emerging markets to maintain their price competitiveness, they are becoming more exposed to reputational risks such as poor health and safety standards for workers or even enforced slavery, bribery and corruption, as well as environmental degradation.

Having visibility and strong supplier relationships at the first tier of the supply chain is clearly no longer enough, as these risks do not always exist in the first tier, but often further down supply chains.”

Procurious wants to make it easier for companies to do this, and has proposed the idea of a ‘Supply Chain Wiki’, which would enable organisations to have access to the full picture in their supply chains. It’s only by working together that the profession can create something like this and allow us to get to the stage where transparency is a given, rather than an option.

Do you want to get involved with helping build a Supply Chain Wiki? What examples of the practices above have you seen? Get in touch with Procurious and let us know.

Meanwhile, some light reading for you all with your weekly procurement and supply chain headlines.

Supply chain wary as Airbus and Boeing push output envelope

  • Suppliers to Airbus and Boeing are worried they might lose out if they invest to meet higher commercial jet production targets that ultimately prove unsustainable
  • The manufacturing giants plan to raise production rates of best-selling single-aisle planes by 25 percent to 50-52 a month in 2017-18, with the possibility of output going up to 60 or more
  • This prompted public pushback from major suppliers such as GE and partner Safran, who said they needed to secure the start of a steep rise in output before committing to even higher targets
  • Concerns were also raised over how long any higher production rates may last, although Airbus CEO Fabrice Bregier dismissed talk of a bubble

Read more at Business Insider

Made in Britain: Booming UK automotive industry must re-shore IT to future proof supply chain

  • The UK automotive industry is back on track after years of decline, with many pointing to the important role it plays in improving the economy
  • According to the Society of Motor Manufacturers and Traders (SMMT) UK car plants last year produced more than 1.5 million vehicles, the highest number since 2007
  • One of the factors underpinning the increase has been the decision by car makers to re-shore many of the processes, including production, that have been systematically transferred overseas over the past couple of decades
  • The survey found that cost was but one driving factor, and was in fact eclipsed by the desire to improve quality, create shorter, more responsive supply chains and streamline communication with customers

Read more at IT Pro Portal

Mattel looks to overcome supply chain talent shortage

  • Mattel Inc. is revamping its supply chain operations but says there is a limited pool of people with the right skills
  • Companies are looking inward to find people to manage increasingly complex supply chains, amid a shortage of skilled labor
  • Peter Gibbons, the company’s chief supply chain officer, said in an interview, “Finding really good people who’ve been there and done it before is a challenge.”
  • The company is now hiring college grads directly from supply chain or business programs in hopes of moulding them into supply chain leaders down the line. It has also changed the metrics it uses to evaluate its supply chain managers to take a more “holistic” view of the job function

Read more at Wall St Journal

US to import egg products from Netherlands to ease shortage

  • With an increasing egg shortage due to the widespread bird flu outbreak, the United States will soon allow imported egg products from the Netherlands to be used for commercial baking and in processed foods.
  • It’s the first time in more than a decade the U.S. has bought eggs from a European nation, and comes as consumers are seeing a surge in shell egg prices and a Texas-based supermarket began limiting purchases.
  • The H5N2 virus — which began to spread widely through Midwest farms in the early spring, including in Iowa, the nation’s largest egg producer — has left nearly 47 million birds dead or dying
  • “Our members are not able to get their hands on enough eggs to continue their production. It’s very much a crisis for us right now,” said Cory Martin, director of government relations for the American Bakers Association, a trade group representing wholesale bakeries including cookie and cracker maker Pepperidge Farm, Krispy Kreme Doughnut Corp., and White Plains, New York-based Linden’s Cookies.
  • Prices for egg products used by food manufacturers and bakeries jumped more than 200 percent in the past month, and even large bakeries have been forced to buy eggs by the carton and crack them individually to continue production, Martin said.

Read more at US News and World Report

Industry body launched to support timber supply chain

  • The ethical, social and environmental risks in the timber supply chain are to be addressed by a newly-formed umbrella organisation which aims to provide a unified voice for the timber industry and ultimately grow the UK’s low-carbon economy.
  • The Confederation of Timber Industries (CTI) will represent the timber supply chain from forest to end-of-life recycling and energy recovery; consolidating and enhancing the various links in the timber supply chain and building more relationships with new industry partners.
  • Dr Peter Bonfield, chief executive of BRE, launched the CTI. He said: “This Industry has needed a stronger joined up voice for a very long time. This is a great moment for the Timber Industries to demonstrate their combined strength and showcase the Industry.
  • The timber supply chain contributes substantially to the UK’s construction and manufacturing industries; providing jobs across the skills spectrum and adding value of around £20bn to the UK economy. It is among of the most complex in the world with a huge diversity of operations worldwide and a downstream process that involves many steps from harvesting through to sawmill, wood processing and distribution.

Read more at edie.net

US Pacific-Rim Trade Deal Hanging in the Balance

The future of a massive US trade deal looks to be in jeopardy following a US Senate vote on Friday.
United States Capitol Building

Democrats voted against a major part of the bill, despite a last-minute personal plea from the President himself. Without this bill being approved, there is a danger for Obama that the deal will fail to progress into law.

With many seeing the deal as ‘legacy defining’ for President Obama, it is clear that he will need to work hard to heal a schism in his own party before a second vote this week.

In a Nutshell

Nearly a decade in the making, the Trans-Pacific Partnership (TPP) would partner the USA with 11 other countries around the Pacific Rim, securing enhanced trade relations and lower tariffs on exports, ultimately strengthening the US economy.

Significantly, China would not be involved in this partnership, with the US aiming to increase their influence in the region and have a greater say in policies and standard. This could then be used to improve labour and environmental standards in a number of countries.

With US trade in the region valued at an estimated $1,607 billion, this would further increase the revenues US service organisations, give organisations greater access to big markets in Japan and Canada, while providing protection for holders of patents and intellectual property in a region where infringements are common.

This would be particularly good news for California, which counts trade as a key driver of its own economy. Much of California’s trade, plus exports that are shipped through its major ports, goes to the Pacific Rim region and the countries involved in the wider negotiations.

Sounds Great, What Happened?

The key component of the bill, which was ultimately passed, centred on giving ‘fast-track authority’ to the President to negotiate future trade deals. However, this was one part of a two-part bill, with both parts needing to be passed in order for legislation to be created.

The second part of the bill dealt with Trade Adjustment Assistance (TAA), assistance for retraining workers displaced or negatively affected by the movement of trade. US Democrats have traditionally been strong advocates for these provisions, but were unhappy with the strength of legislation within the bill protecting US employees.

Such weak legislation has been blamed in the past for a fall in US manufacturing and growing inequalities. Fearing similar consequences from the trade deal, the party rebelled and voted against the second half of the bill, halting its progress and creating an awkward situation for the President.

With the deal not hanging in the balance, its supporters fear that a failure will lead to countries such as Vietnam and Japan reversing economic reforms and policies allowing them entry to trade zones with the USA, as well as China strengthening its own position in the region.

All is Not Lost

There are positives to take on both sides. For the President, he has managed to pass half of the bill, for the trade deal itself, while keeping his own party on side, but at the same time garnering significant bi-partisan support from the Republican party.

This support is likely to continue this week when votes are recast. For the opponents of the bill, this allows a further week of negotiations and potentially concessions from the White House in their favour.

Whatever the outcome, the vote, and potential passing of the bill into law, will have a huge impact not only on the remainder of Obama’s presidency, but also the legacy he leaves behind.

Are you following this story in the US? Do you have an opinion on the trade deal or are you directly affected by its outcome? Get in touch with Procurious and let us know.

Meanwhile, here are the key headlines in the procurement and supply chain space this week.

Walmart’s corporate spin can’t defend shady food suppliers

  • A new report from the Food Chain Workers Alliance (FCWA) dives into the labor and environmental records of 22 of Walmart’s suppliers of popular food items, from chicken to bread to blueberries. The report, “Walmart at the Crossroads: the Environmental and Labor Impact of Its Food Supply Chain” (PDF) uncovers far more important problems than relaxing the worker dress code and increasing store temperatures…
  • According to Walmart’s “ethical sourcing” standards (PDF), all suppliers and their manufacturing facilities at a minimum “must fully comply with all applicable national and/or local laws and regulations, including but not limited to those related to labor, immigration, health and safety, and the environment.”
  • The report finds that Walmart has failed to enforce supplier compliance with its code of ethics for labor practices, environmental sustainability and local sourcing of food. Workers in Walmart’s stores and in its food supply chain endure a slew of labor abuses, including gender and racial discrimination, unfair treatment of immigrants, low pay, violations of freedom of association and even workplace accidents and fatalities.

Read more at Aljazeera America

Build Australia’s submarines in Adelaide, says former commission of audit chair

  • Tony Shepherd, a former president of the Business Council of Australia, said the government should have confidence that future submarines and frigates could be successfully built in Australia, if given the right procurement procedures and contractual arrangements and with construction in privately operated dockyards. .
  • He said it wasn’t fair to use the troubled air warfare destroyer project, running three years late and $1.2bn over budget, as the key criterion for decisions about local defence industry capability to undertake future naval construction in Australia. “We should have confidence that we can successfully build complex warships here, adding to our high technology base and giving us the intellectual property and local capability to maintain, modify and update naval vessels over a 30-year operating life,” Shepherd said in an article on the Australian Strategic Policy Institute website.
  • The government is now evaluating three international contenders for replacements of the ageing Collins-class submarines. It hasn’t stipulated that the new vessels be constructed in Australia. “The Abbott government should follow this well-proven, risk-reduction path,” he said.

Read more on The Guardian

In 2 years, 40,000 tonnes of grain went down the drain

  • At a time when fears of another drought year are looming large, an RTI application filed by TOI has revealed that the quantity of foodgrains damaged in Food Corporation of India godowns across the country recorded a drastic jump over the last two years when the country lost more than 40,000 tonnes.
  • Though the losses are attributed to natural calamities like cyclone and floods, experts say it is also an indication of poor storage facilities, pilferage and transit loss. The reply from FCI, responsible for procurement and distribution of foodgrains, shows that the damaged quantity rose threefold in five years — from 6,346 tonnes in 2010-11 to 18,847.22 tonnes in 2014-15.
  • The FCI reply is especially significant after a recent United Nations annual hunger report estimated that India had the highest number of hungry people in the world at 194 million. As on June 1, there were 568.34 lakh tonnes of foodgrains with the FCI’s central pool.
  • Former Union minister of state for food K V Thomas told TOI that the percentage of foodgrains damaged had reduced from 2.5 per cent of the total procurement in 2010 to 0.07 per cent of the total procurement in 2013. “The UPA government had taken several initiatives to bring this down. We renovated most of the existing godowns and also increased the storage capacity. The procurement rate of foodgrains was also higher compared to the current year.”

Read more at The Times of India

Boeing believed to have slashed hundreds of millions from Apache helicopter bid

  • Aerospace giant Boeing is believed to have sliced hundreds of millions of pounds off of its bid to make 50 Apache attack helicopters for the UK Ministry of Defence (MoD).
  • In a dramatic step taken to improve its chances of securing the contract, the US aircraft manufacturer has reportedly offered what is a “very significant discount”, according to sources cited by the Mail on Sunday.
  • The company has made the move in the face of a rival bid submitted by AgustaWestland, a UK company owned by Italian defence group Finmeccanica. It made the Apache helicopters that are currently used by the Army under licence from Boeing.
  • According to the newspaper, sources from Boeing said the maintenance of the helicopters could be carried out by its UK arm, ensuring the majority of the government’s spend remained in the UK.

Read more at Digital Look

CCG abandons NHS 111 procurement after being unable to find ‘acceptable’ provider

  • One of the largest NHS 111 services in the UK has had to ‘abandon’ re-procurement of its service after they were unable to attract an adequate permanent provider.
  • NHS Sandwell and West Birmingham CCG have been unable to find a NHS 111 provider to take over the service across 16 West Midlands CCGs from the local ambulance trust, which took over from NHS Direct on a temporary basis in November 2013.
  • Commissioners said that no bid – including the West Midlands Ambulance Service Trust – had demonstrated ‘value for money’ in delivering the scheme’s future ambitions, such as integrating with GP services or offering better mental health support.
  • The procurement process to deliver 111 services in the region for the next four years was launched on 28 November 2014, but now WMAST will retain the existing contract until the CCG launches its second procurement attempt this autumn.

Read more at Pulse

Lenovo expands commitment to supply chain visibility

Lenovo has run its supply chain on GT Nexus since 2010.

Lenovo expands commitment to supply chain visibility with GT Nexus

GT Nexus has renewed its cloud supply chain commitment to support business growth on the GT Nexus platform.

Supply chain visibility combined with analytics, rooted in deep trading partner connectivity on GT Nexus, enables Lenovo to operate a customer-centric supply chain and drive data and analytics in the chain, while continually identifying opportunities to improve performance and reduce cost. 

A $39 billion global Fortune 500 company, Lenovo is the world’s No. 1 PC manufacturer and a leader in providing innovative consumer, commercial, and enterprise technology. 

In comments supplied to Procurious Gareth Davies, director of Global Provider Management – Lenovo, said “GT Nexus gives us greater visibility and insights into the supply chain, enabling us to reduce transportation lead time variability, decrease in-transit inventory, and improve our customer centric perfect order fulfillment goals.” He continued: “Operating smarter and more efficiently through cloud based connectivity helps us better serve our customers.”

Lenovo tracks products as they move from manufacturing locations to retailers and end-consumers, using GT Nexus. Visibility spans transportation modes, geographies and business lines, enabling Lenovo to more accurately manage supply chain performance and segmentation. Orders often consisting of dozens of units are organised and tracked to provide the end customer direct visibility into expected arrival time.

“Supply chain visibility and intelligence are essential attributes at Lenovo, but the real competitive weapon is the ability to rapidly execute on this intelligence,” said Sean Feeney, CEO of GT Nexus. “Operating as a network allows Lenovo to be agile, responsive and adaptive to changes on both the supply and demand side. This is essential in the high tech industry where challenges such as product obsolescence, complex outsourced supply chains and demanding customers are prevalent.”  

Google reports progress in removing conflict minerals from supply chain

Google HQ

Google has reported on the company’s continued commitment to removing ‘conflict’ minerals from its supply chain.

In a report (which makes up part of the level of disclosure required by the US government to eliminate the sale of raw materials from West Africa and Asia to fund violence and terrorism), the tech giant filed significant improvements in its performance over the last year.

The firm can now say with some certainty that 57 per cent of its facilities do not pull on ‘conflict’ minerals to support production. While this figure may appear meagre, when you consider that last year the firm could only manage the same claim for 36 per cent of its facilities, it’s clear to see that significant progress has been made.

Apple too has shown similar improvements in this area, with the firm reporting in February of this year that 60 per cent of its facilities met a requisite level of compliance as opposed to only 30 per cent in the previous year.

These moves further highlight the fact that both consumers and governments now see supply chain activity as a direct reflection (and responsibility) of the buying organisation.

The Apple Company came under intense scrutiny earlier this year when a BBC inquiry and television show highlighted both slavery and questionable environmental practices taking place within the firm’s downstream sourcing activities. Read more here.

Regulation, relationships and waste leave a nasty taste in the mouth

All facets of the food supply chain came under scrutiny this week, but all for very different reasons. From relationships with suppliers to a sustainable way of cutting down on food waste, the supply chain that impacts us all is working hard to stay ahead of the game.

Why the food supply chain is making headlines this week

Conservative estimates put weekly food spend for families in the UK at £58.80, making for approximately £3,050 per year. In the USA, the figure is an average of $127 per week ($6,602 per year). However, it could be argued we could all do with taking a keener interest in where our food is coming from.

The often-cited examples of the Tesco horse meat scandal, the Nanna’s berry re-call in Australia and the potential large-scale issue of undeclared peanut use have all highlighted that organisations need a greater focus throughout their supply chains.

Poultry Supply Chain

New measures have been announced by a number of UK retailers to reduce campylobacter levels in chickens.

Between February 2014 and February 2015, the Food Standards Agency (FSA), found that nearly three-quarters of all chickens tested positive for the campylobacter. For those of you who are unfamiliar with this particular parasite, it’s the biggest cause of food poisoning in the UK.

In light of this, UK retailers have begun working with supply chains to reduce instances of the bug. Measures include rapid surface chilling, on-farm testing, new scientific research and the sharing of best practice, all aimed at increasing the levels of biosafety and reducing infection rates.

Supply Chain Exploitation

A recent report in Australia has highlighted ‘slave-like’ conditions in the food supply chains of some of the country’s biggest retailers. Four Corners, a ABC network programme, found that the biggest culprits were some labour hire contractors, using migrant workers with expired or invalid work visas.

It is widely believed that these practices are linked to supermarkets’ ‘race to the bottom’ on pricing. Increasing price pressures have lead to other companies in the supply chains looking at alternative methods to bring costs down.

Supply Chain Practices

Unethical practices and organisational responsibility have been pinpointed in a new report published regarding Wal-Mart’s supply chain. In the report, the Food Chain Workers Alliance (FCWA) alleges that Wal-Mart has not made good on promises to improve labour and ethical standards in its supply chain.

The report also details a number of violations of Wal-Mart’s own sourcing code of ethics in relation to workers, environmental impact and treatment of animals. Although Wal-Mart has yet to respond to the report, it is hoped that it may compel the retail giant to make changes to its supply chain.

Relationships and Regulations

Many of these issues can be traced back to the importance of having good relationships in the supply chain. At the British Meat Processors Association annual conference last week, BMPA president Peter Mitchell, argued that good supply chains are vital to the success of the meat industry.

Mitchell also argued that closer relationships with the FSA and UK government departments, as well as tighter regulations, were vital to the future of the meat supply chain.

Malcolm Johnstone, president of the Food Storage & Distribution Federation, also cited regulations in relation to meeting the exacting standards of the UK food industry. He called on the members of the Federation find new ways of managing facilities in line with regulations to increase efficiencies and keep pace with the market.

Food Waste

And finally, to finish on a positive note, Tesco have been in the news for good reasons as they announced new measure to combat the volume of food waste its stores produce.

A partnership with Fareshare, a food distribution charity, will link Tesco to local charities in order to hand over some of the estimated 30,000 tonnes of wasted food. Initially this will cover 10 stores, but Dave Lewis, Tesco CEO, hopes to roll this out across the UK and in other countries where Tesco operates.

The company is also backing proposed legislation in the UK to ban supermarkets from throwing away food that is approaching its best-before date, instead giving it to charities.

Do any of you work in the food supply chain? Do you have any examples of good practices that could be shared? Get in touch with Procurious and let us know.

Meanwhile, here are some of the procurement and supply chain headlines from this week.

Amazon Just Changed Its Iconic Shipping Boxes

  • As reported by Time magazine, Amazon now gets the honour of reportedly being the first company to use its packaging to advertise an un-related product. This marks the first time Amazon has allowed a third party to feature on its delivery material, reports the LA Times.
  • The company is rolling out ads on its delivery boxes in bright yellow to boost the new Minions movie from the Despicable Me franchise.
  • Boxes began being sent to customers last week. There are three different types of ads.There’s also a link on the box to a Minions page on the e-commerce site.
  •  While Amazon has used its packaging in the past to market its own products, this is the first time that it has done so for a non-Amazon product.

Read more at SupplyChain247

Cath Kidston promotes supply chain director to COO role

  • Cath Kidston has promoted its director of global supply chain and product development, Geert Peeters, to the role of chief operating officer.
  • The move comes after what the home furnishings and fashion brand described as “three successful years” of managing the business’s global supply chain.
  • Peeters’ supply chain career to date spans more than 25 years, and he has previously held senior roles at the likes of Levi’s, Bacardi and VF Corporation.
  • Commenting on his promotion, Cath Kidston CEO Kenny Wilson said: “I am very pleased to be recognising the significant contributions that Geert has made in helping Cath Kidston grow to where it is today.

Read more at Essential Retail

Shadow banking boom pushes China to edge of debt sustainability

  • Booming shadow banking growth has pushed China to the outer limits of its ability to service debt and keep its economy functioning smoothly, though spillover risks from a bursting of the credit bubble are containable, experts said on Monday.
  • With total leverage in the Chinese economy now topping 280 per cent of gross domestic product, it was clear that credit quality was deteriorating, Primavera Capital Group founder and chairman Fred Hu told delegates at a Fung Global Institute forum. “It is not yet the end of the world, but it is approaching the limit of debt sustainability,” Hu said.
  • Debt sustainability, the ability to service debts, is a key measure of solvency. Analysis by the McKinsey Global Institute earlier this year showed debt in the Chinese economy had roughly quadrupled between 2007 and the middle of last year to US$28 trillion, leaving it with a debt-to-GDP ratio more than twice that of crisis-wracked Greece.

Read more at South China Morning Post

The case for exempting projects from open procurement

An opinion piece from Public Finance.co.uk says that the proposed Garden Bridge across the Thames is an object lesson in how political initiatives can rub up against technocratic process. Reforming EU procurement legislation could allow big ideas to bloom.

It continues: Open and transparent procurement is an important defence against corruption, kickbacks and simple waste, but the European regulations set technocratic process against political accountability.  Mayors and other politicians will be approached with bright ideas from time to time. Surely they should have political space to judge how bright these are, and to implement them, subject to safeguards and controls – not least, the electorate’s ability to eject politicians who pursue vanity projects?

Read more at Public Finance

G7 leaders urge tough line on Russia at Alpine summit

  • Group of Seven (G7) leaders vowed at a summit in the Bavarian Alps on Sunday to keep sanctions against Russia in place until President Vladimir Putin and Moscow-backed separatists fully implement the terms of a peace deal for Ukraine.
  • The Ukraine conflict and a long-running debt standoff between Greece and its European partners dominated the first day of the annual meeting hosted by Chancellor Angela Merkel at Schloss Elmau, a luxury Alpine hotel in southern Germany.
  • Merkel is hoping to secure commitments from her G7 guests to tackle global warming ahead of a major United Nations climate summit in Paris in December.

Read more at Reuters