Category Archives: In The Press

Colin Powell Talks Security, Trade and Trump at #ISM2017

While many attendees at #ISM2017 were waiting to hear what General Colin Powell would say about President Trump, the former Secretary of State also provided some valuable insights into supply management.

“An army marches on its stomach,” says Powell to a packed ballroom at #ISM2017. “It’s the logistics that allows you to face an enemy.”

Powell draws on his experience in the Vietnamese jungle 55 years ago to illustrate how dramatically the military supply chain has improved. “We just didn’t have efficient supply systems then.” The young Powell was eating plain rice 21 times a fortnight with the occasional slaughtered pig thrown in, because the supply chopper would only come once every two weeks.

Fast-forward to Operation Desert Shield and Desert Storm, the biggest military operation since the Normandy landing. “We realised that it was logistics that would matter. We had to change some rules of behaviour.” Powell talks about some of the creative solutions to logistical challenges in the Gulf, including sourcing trucks from Egypt to move American tanks, early adoption of bar-code tech and using GPS to track those trucks (“we cleaned out every Radio Shack in America”), water scarcity and a vast amount of mail for 425,000 troops that had to be flown in: “I had to get three extra C5A’s, just for the mail.”

Powell believes there’s a lot the military and commercial worlds can learn from each other. “Both sides have to learn what’s going on the world today in terms of speed, service, quality of product and keeping up with the information revolution.” 

On Global Security

“America is not facing existential risk to our existence as it was in the Cold War,” says Powell. “There are problems that are real, but they’re overplayed and blown up.”

Powell gives North Korea as an example. After noting the poor state of their missile technology, he says there simply isn’t going to be an attack. “Give me a strategic reason why North Korea would shoot a missile at Honolulu or San Francisco. What would that achieve apart from ensuring the destruction [of Pyongyang] the following day? All that counts there is the preservation of the regime.”

Similarly, Powell believes concerns around China are overblown. “China won’t be an enemy. They won’t block the routes … It’s a nation that’s extremely important on the world stage. They want to create more influence around the world, [and they’re doing so by] building train systems in Africa, Latin America, the third world. They’re building because they want influence.”

Powell also points out that China is holding a trillion dollars of US paper. “It’s a complex country, but we have to welcome their products and an open, fair trading relationship. China has brought 400 million people out of poverty, not by raising taxes or invading people – they did it by selling stuff. Predictably, as people became more wealthy, they want more. Chinese labour costs will rise.”

On Trump

“I think what Mr Trump has to do now is reverse some of the campaign promises he made that frankly could never have been implemented, such as declaring China a currency manipulator,” says Powell, noting that Trump is maturing in his understanding of these issues.

“It’s in our interest to see him do well. Countries around the world [are] waiting for stability and clarity,  and for these campaign promises to settle down. The rest of the world wants to see coherence and consistency over time in what we say and do.”

Responding to a question about the political and economic impacts of withdrawing from the TPP, Powell says it was an unfortunate decision. “It was in our interest and would have benefited us over time.”

Powell says that the real beneficiaries now will be the Chinese, who are putting together their own trade agreement. “All our [trade] allies are joining China, and we’re standing aside.”

“The world is globalised. I’ve watched our factories going up in China – that’s just the nature of it. Success [can be had] by playing in that game, not wishing it would go away.” Speaking of globalisation in general and NAFTA in particular, Powell says that being mad about problems with trade doesn’t get you anywhere. “Fix it, but don’t throw it away.”

On Generation Next

“I have faith in the millennials and faith in the kids coming afterwards,” Powell says. “I do a lot of work with youth. I can’t change the past, I can [only] watch the present, but I can influence the future through the hearts and minds of young people.”

Getting The Biggest Bang For Your Buck At A Procurement Conference

Game-on! There’s a right way – and a wrong way – to approach a major procurement conference. With your company making a significant investment to have you there, here are five tips to help you demonstrate an impressive ROI. 

 

This morning marks the start of the world’s biggest procurement and supply management conference. Let’s imagine, for a minute, that you’ve hit the fast-forward button and find yourself on the other side – bags packed, standing outside your hotel and waiting for a cab.

How do you feel? Exhausted but satisfied that you’ve made the most of every minute? Or a little bit … guilty? As your taxi pulls away and heads for the airport, will you wonder whether you should have spoken to just a few more people? You’ve attended plenty of sessions, but why didn’t you take more notes?

I know the feeling. It’s so easy to snooze your way through a conference, but it’s crucial that you don’t!

It’s my third year attending ISM’s annual extravaganza, and I’m starting – just a little – to feel like a bit of a veteran. As such, I want to do what old-timers do best, and share some advice to other conference-goers. Whether it’s through attending the best of the best speaker sessions, or through networking like a champion, I’m going to show you five ways to get the most bang for you buck.

It’s not a vacation

Remember the glory days when going to a work conference was, essentially, a bit of a treat? Sure, you had to attend a number of presentations but, in exchange, you were gifted a few days out of the office, possibly at a semi-exotic location, and a few cocktails at the bar with your peers.

Today it’s considered an absolute, and rare, privilege to be selected to represent your company at a major professional-development event. Budgets and headcounts are increasingly slashed, which means getting the approval to attend a conference borders on the extraordinary. As such, you can bet you’ll need to demonstrate a pretty sizeable ROI.

But you’ll only make the most of it if you’ve prepared well in advance and bring your A-game to the event itself.

  1. Have a plan

I’ve been busy interviewing members of the ISM2017 Conference Leadership committee (including  Lara Nichols, Naseem Malik and Howard Levy), and they’ve all stressed the importance of having a plan for the next four days.

It’s absolutely crucial to understand your key conference objectives in advance. What do you, and your organisation, want to achieve? Maybe your employer is keen for you to find new suppliers, gain market intelligence, or benchmark information? You might have some personal objectives such as finding a mentor or even a new job, or want to use the opportunity to position yourself as a thought leader.

The crucial point is that these events are no longer just about the individual attending.  Attendees need to multiply the investment and make sure that everyone in the team benefits from their learning from this event. This is why it is important for you to “amplify” what you learn back into your team. 

  1. Familiarise yourself with the agenda

Depending on the conference’s size, there could be dozens of sessions, many of which will happen in tandem. Take some time to constructively assess the schedule with your own objectives in mind. Select topics and sessions that are most relevant to you, and think about what will be relevant to your company, too.

Prioritise and plan your itinerary, but don’t overdo it! Be realistic about how much you can achieve, how many sessions you can logistically make it to – and how much information you can actually absorb.

  1. Become a social-media anthropologist

Nothing says “conference efficiency” quite like an advance perusal of the speakers and attendees list. It might seem extremely forward, but an invitation to connect ahead of the event via LinkedIn, Twitter or Procurious is actually pretty flattering. And, if you’ve got the courage to go one step further and send a personal message, you’ve got a great conversation starter when you eventually meet in person.

If online meet-and-greets aren’t your style, you can still benefit from researching the backgrounds and careers of attendees or speakers. This will help you to decide who you are most keen to talk to and if attending certain sessions will be worth your while.

Make sure you upload your full biography and a fabulous profile picture onto the conference App so people can find, and reach out to, you too!

  1. What’s your end game?

You started with the end in mind, you arrived at the conference armed with your objectives and a commendable knowledge of the agenda and speakers. Now you need to decide what sort of report you’re going to present back to your team.  A PowerPoint? Notes?  It’s useful to have an idea of this before the conference kicks off so you can simply fill in the gaps because,  let’s face it,  if you promptly present a comprehensive report to your peers after the event, you’re far more likely to be selected to represent the team going forward.

So, armed with this “straw-man” of your report, attend your sessions of choice and take notes. Engage with your peers to learn their views and insights, and include those in your report too. Go directly to speakers and suppliers and ask them for material that you can incorporate.

At ISM2017, don’t forget there’s a group of media professionals (including the team from Procurious) reporting on the conference – keep an eye out for blog articles with insights from the event, and catch the news from sessions that you weren’t able to attend.

  1. Share Your learnings

Use Twitter, Procurious and LinkedIn to share key learnings live from the event. Live updates and posts from the event can make you really popular back at the office and ensure that your whole team benefits from your attendance. Don’t forget the hashtag!

Are you at ISM2017? Don’t miss out on Procurious Founder and CEO Tania Seary’s top tips on how to Network Your Way To The Top on Tuesday May 23rd, 3.45pm.

And, when you drop into the Exhibit Hall, be sure to visit The Procurious team at booth 439 for advice on how social media can supercharge your procurement career.  

How To Survive a Social Media Storm

Media personality, author and columnist Bernard Salt weathered a social media storm last year after his provocative article about the spending habits of millennials went viral. Today, he shares his top tips for businesses under attack on social media.

Six months ago, Bernard Salt wrote a tongue-in-cheek article about what he called the “evils of hipster cafes”. The article lightheartedly poked fun at hipsters’ apparent preference for low chairs, hard-to-read fonts on menus and thumping music. But it was this paragraph that ignited a storm:

I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.

What followed was nothing less than a nation-wide reaction. Inter-generational battle-lines were drawn between the over and under-40s, a flurry of rebuttal articles were published in competing newspapers, and the issue of housing affordability – a major problem in Australia’s capital cities – was thrust firmly into the spotlight.

“The smashed avocado article was written to highlight the division in cultures”, says Salt. “And certainly, it did that. Everyone over the age of 50 thought it was terrific, and everyone under the age of 40 thought it was terrible. It exposed divisions, and prompted a discussion that will hopefully lead to a better solution.”

But it was online that the brunt of the storm took place, with critics and trolls lining up to attack Salt in 140 characters or less. Having experienced it first-hand, Salt now has some advice for other individuals – and businesses – who find themselves getting smashed on social media.

Hold fast, don’t panic, and wait one week

“It’s all about getting through the first week”, Salt says. When something happens – whether through misadventure or entirely by accident – and there’s a reaction on social media, my advice to businesses is to hold fast, don’t panic, and wait.”

Salt has broken down the lifecycle of a social media storm:

Day 1: The first day will be quite impactful, as the issue – whatever it may be – begins to trend on social media. This is when the storm front is approaching.

Days 2 to 4: The worst part of the storm. “From days 2 to 4, people will come out of the woodwork to throw petrol on the fire. The trolls, the haters, and any enemies you may have will jump at the chance to further their own interests at your expense. Hold fast! The thing to remember is that this is NOT the mainstream community – these are fanatics and social media warriors. Don’t mistake their opinions for the common sense of the majority.”

Days 5 to 7: At this stage, the main storm will have passed, and more reasoned voices begin to come to the fore. People who are more qualified to comment on the issue don’t put their hands up to contribute to the debate immediately – they generally wait, and take some time to produce a well thought-out response, either in support or otherwise.

Six months later, Salt’s smashed avocado article has been warmly embraced and is frequently referred to in discussions around housing affordability. It may have even influenced federal policy. The article has also, undeniably, helped Salt’s own career and propelled him into the role of one of Australia’s leading social commentators.

Consider starting your own storm in procurement

What can CPOs learn from Salt’s experience?

The lack of attention paid to procurement and supply management across many organisations is an ongoing frustration, illustrated every time we have to explain to people what procurement actually does. There are some lessons to be drawn, therefore, from Salt’s very successful method of grabbing attention and getting noticed.

A savvy CPO could consider putting out a deliberately provocative statement within the business that will force their colleagues to pay attention, kick-start the conversation about a particular issue, and put procurement onto peoples’ radar.

If there’s an issue that’s troubling procurement but isn’t a priority in the wider business, Salt’s advice is to “expose it, and bring it onto the agenda”.

Bernard Salt will deliver a keynote speech at PIVOT: The Faculty’s 10th Annual Asia Pacific CPO Forum.

Desperation: Somali Piracy Back On The Rise

After a relative hiatus over the past five years, international supply chains are once again threatened by a resurgence of piracy off the coast of Somalia.

At the height of the Somali pirate crisis in 2011, 151 vessels were attacked in one of the world’s busiest shipping routes. Thousands of hostages were taken and billions of dollars were lost in ransom, damage and delayed shipments.

An unprecedented international response saw the dispatch of over two dozen vessels from the EU, the U.S., China, Russia, India and Japan, which succeeded in reducing the number of attacks down to only 17 in 2015, mainly involving smaller fishing vessels.

However, last month, dozens of armed men in two small skiffs captured the Aris 13, an oil tanker flying the flag of Comoros, and escorted it to be ransomed in the semi-autonomous northern Somalian region of Puntland. The vessel was attempting to pass through the Socotra Gap, a route between Ethiopia and the Yemeni island of Socotra, when it was boarded by pirates. The route is often used by vessels as a shortcut to save time and money, but has been identified as a high-risk area by anti-piracy groups. According to reports, the Aris 13 was “low, slow and too close to the coast”, making it an easy target for armed attackers.

The Aris 13 was the first large commercial vessel to be captured since 2012, when the Greek-owned MV Smyrni, carrying 26 crew and 135,000 tones of crude oil, was held in a pirate anchorage for 10 months before being released for an undisclosed ransom.

Speaking at a news conference in late April, U.S. Defence Secretary Jim Mattis told reporters there have been “five or six” piracy incidents in the region in the past two months. An anonymous defence official told The Washington Post  that the increase in pirate activity could be linked to complacency among shipping companies, who may have relaxed their security procedures (such as carrying anti-boarding devices and armed contractors) in recent years.

What drives people to risk piracy?

Whilst the international naval response to the piracy crisis has been effective, the situation is expected to continue until the root cause is tackled – the lack of authority of Somalia’s central government. The country has been labelled a “failed state” since a bloody clan-based civil started in 1991. Other factors that drive piracy include:

  • Widespread drought and famine
  • Local anger over illegal foreign vessels fishing in Somali waters
  • Extreme unemployment with no factories or industry
  • Very low earning for fishermen (approximately US$5 a day)
  • The lure of high potential earnings from piracy and ransom money
  • Cash from piracy providing the first boom in living memory in coastal towns.

Reports are also emerging of piracy on the rise on the other side of Africa, along Nigeria’s coastline. Pirates have taken to kidnapping crew members for ransom along the major oil shipping route. Previously, hijackers would siphon off oil from commercial vessels, but now that oil prices have fallen, abductions have proven more lucrative.

In other news this week:

Uber to unveil flying taxi service by 2020

  • Uber has announced “Elevate”, a flying taxi service featuring electric vehicles capable of a vertical take-off and landing.
  • Users will be able to book a ride with their mobile phone app, with Uber’s marketing team already spreading the message of “push a button, get a flight”.
  • The biggest selling point of the urban air network is that it would be able to avoid congested streets in busy cities. The service is expected to launch first in Dubai and Dallas.

Read more at Smartcompany.com.au

 ISO 20400 launched to support sustainable procurement

  • The world’s first international standard for sustainable procurement was launched last week. ISO 20400 was created with the input of experts and industry bodies from over 40 countries and is expected to increase supply chain transparency globally.
  • The Standard is applicable to any organisation, public or private, irrespective of size and location.
  • Read more about the background to ISO 20400 in Procurious’ interview with committee member Jean-Louis Haie.

Access ISO 20400 here.

Everything You Need To Know About Bitcoin In One Super Infographic

 The precise workings of Bitcoin are still a mystery to many but here’s everything you need to know about the rise of the digital currency. 

Bitcoin is a digital currency which uses peer-to-peer technology. It doesn’t require a bank for making online transactions worldwide and is also known as the first cryptocurrency that does not use central repositories. As such, it’s classified as a decentralised currency by the U.S. treasury.

The currency was first introduced in 2008 to a cryptographic mailing list. On 9th January 2009, the first version (1.0) of Bitcoin was released and on 12th January, the first transaction took place.

Presently, Bitcoin prices are climbing and there’s a whole host of significant, and widespread, clients. Pennsylvania was the first state in U.S. to  accept Bitcoins back in 2013.

UK bank, Barclays, have revealed that they will be the first to facilitate  users in making charitable donations using the currency outside their system.

Total Processing has created an infographic to explain The Rise and Rise of Bitcoin since 2008.

Toby Dean works on behalf of Total Processing in content creation and marketing. He creates engaging graphics and content that help businesses stand out from the crowd. Over the past seven years has worked with dozens of SME’s in both an agency and freelance capacity.

Negotiation, Trump-Style – The Winner Takes It All

Negotiation with suppliers can be done using hardball tactics, so long as there is no genuine need for an ongoing relationship.

In the New Yorker last year, Tony Schwartz, the ghostwriter for Donald J Trump’s The Art of the Deal said:

‘He lied strategically’.

‘I put lipstick on a pig’.

Rather than inviting more in-fighting than a Taiwanese parliament, let’s focus on the negotiation trap inherent in Trump’s behaviour.

Whether you’re for or against him, Trump’s negotiation tactics are more obvious than a bogey hanging out of your left nostril on a video conference call. Let’s look at his top five tactics:

  1. Huge ambit opening positions – if he wants $2.50, he asks for $1 Billion.
  2.  Flattery – ‘You’re a good guy, a great guy, the best’!
  3.  Bluster – ‘This is going to happen my way, it always does … believe me’.
  4.  Anger (feigned or real) – ‘This deal is so bad, so wrong, you’re making me really mad’.
  5.  Insult and intimidation  – ‘You’re a loser, you’re crooked, you are going down big time’.

These tactics may or may not have worked, but it’s fair to say that at best, they are transactional.

The Winner Takes It All

A deal can be done using these tactics as long as there is no genuine need for an ongoing relationship. The winner takes it all, the loser’s standing small. (Sorry, too much ABBA in adolescence).

Interestingly, a lot of people have asked me if I think Trump’s tactics could be useful for them.

My short response is ‘If you plan on renewing that client, want referrals or would like to be treated as a trusted adviser for a while, then probably not’.

However, when I ask them if they’ve been subjected to these, and other, tactics from clients including senior managers and Procurement, most say ‘All the bloody time’.

Many sales managers and sales people are aware of these tactics being used against them, yet are so keen to get the deal that they succumb, subjecting their company to poor margins, ridiculous stress to meet deliverables and a culture of subservience.

How to address the key tactics in Trump’s playlist

  • Huge ambit opening positions: Plan your own positions, especially your walk away. Politely refuse to discuss offers outside that range. Get back to discussing what the client is trying to achieve
  • Flattery: If you’re desperate for approval, ring your best friend, your mum or ask your dog if he loves you mid-lick. You don’t need approval and validation from clients.
  • Bluster: Ignore or say ‘thanks for sharing that, so let’s look more closely at the issues on the table’.
  • Anger: Keep asking questions like “Why is this so bad? Why do you want to still pursue this then? What would you like to do from here? (my personal favourite).
  • Insult and intimidation: See Anger, or coolly refuse to continue until the behaviour stops.

Unless you don’t care whether your client gets a great result or not, transactional negotiation styles won’t work very well.

Equally, whether they are the President of the United States or the Chief Procurement Officer, you should build a skilful, tactical wall and get them to pay for it.

Elliot Epstein is a leading Pitch Consultant, Keynote Speaker, Corporate Sales, Negotiation and Presentation trainer who gets sales results rapidly. He has coached and trained high profile corporates globally in presenting, selling, negotiating and pitching. Visit Salient Communication for more information.  

This article was first published on LinkedIn.

Game-changer: Elon Musk intervenes in Australian energy crisis

Energy politics has reached fever pitch in South Australia, where an increasingly fraught situation has been disrupted by a single tweet from Elon Musk.

Take a moment to feel sorry for your procurement colleagues working in the Australian energy sector. Since former Prime Minister Tony Abbott’s now-famous “axe the tax” campaign against a national carbon trading scheme in 2011, Australia has been without a clear federal energy policy, leading to very little certainty about future direction for the sector.

This is a problem, as power companies plan three to four decades ahead. A lack of bipartisanship on this issue means that even if a policy is put in place, any future change of government (from Coalition to Labor) would mean a rollback of the hard-won legislation of their predecessors. Power companies know that at some stage in the near future, a carbon trading or emissions intensity scheme will need to be put in place, but they don’t know what form it will take, when it will happen and what the targets will be.

Compounding the issue, the Federal Coalition government is at odds with Labor-majority state governments around Australia on energy policy, culminating in this tense exchange last week between South Australian Premier and the federal energy minister, Josh Frydenberg. South Australia has drawn the lion’s share of criticism from the federal government on its energy situation. The state has an aggressive renewable energy target of 50% by 2025, with a high reliance on wind power.

South Australia’s energy crisis started in earnest on 28th September last year, when the state experienced a once-in-50-year storm event. Gale force and storm force winds, including tornadoes and 80,000 lightning strikes, damaged 23 pylons on electricity transmission lines. As a result of the initial damage and automatic safety features shutting down undamaged parts of the network, the entire state power grid cut out for at least three hours while emergency repairs were underway. 

Power gets political

Even before the power was switched back on, a number of politicians in the federal government commented on the crisis, linking the storm damage with the state’s renewable energy target. Prime Minister Malcolm Turnbull said South Australia had paid “little or no attention to energy security”, while the Deputy Prime Minister, Barnaby Joyce, told the ABC that “Wind power wasn’t working too well last night, because they had a blackout”. One Nation senator Malcolm Roberts took the opportunity to urge all government to “exit all climate change policies.”

Much of the news cycle following the storm was dominated by a debate over renewables and energy security, and whether the storm damage or the state government’s policy was to blame. The situation was compounded by a series of further blackouts while calls increased for an urgent review of energy security at the state and national level. The debate spilled over into the international media, with South Australia rapidly becoming a much-cited example of a failure for renewable energy. Renowned Danish wind farm expert Soren Hermansen, who helped create the world’s first 100% renewable island, defended wind power by saying, “I’d have to go to Australia to deal with a blackout. We have a very powerful grid – we don’t experience any failure.”

Musk intervenes

Dropping unexpectedly into this politically-charged debate, billionaire co-founder of Tesla and SpaceX Elon Musk presented a game-changer with a single tweet earlier this month:

The offer was originally made by Lyndon Rive, Musk’s cousin and Tesla’s vice-president for energy products. Tesla has offered to install the 100 megawatt hours of battery storage that would be required to prevent further power shortages, price spikes and blackouts in South Australia. When pressed on Twitter by Mike Cannon-Brookes (Australian co-founder of Silicon Valley start-up Atlassian) on the seriousness of the offer, Musk himself doubled down with the pledge to “get the system installed and working 100 days from contract signature or it is free”.

Tesla’s confidence in its ability to deliver stems from the stepped-up battery production out of its new Gigafactory in Nevada, along with a recently-completed installation of an 80MWh grid-scale battery farm in southern California. The Californian project took 90 days to complete and cost US$100 million.

After a flurry of tweets and an hour-long phone call between Elon Musk and Prime Minister Turnbull, the debate around energy policy in Australia appears to have switched to an entirely new (renewable) direction. South Australia has announced a $550 million energy package, with:

  • $150 million for a 100MW grid-scale battery
  • $75 million in grants and another $75 million in loans to eligible projects which support private innovative companies and entrepreneurs
  • A $360 million state government-owned gas-fired 250MW power station to provide energy security when needed.

Meanwhile, Prime Minister Turnbull has unveiled $2bn expansion plans for the Snowy Mountains hydro-electric scheme, aimed to add 2,000MW to the scheme’s 4,100MW  capacity, or enough power for 500,000 homes. In a sign that the tension between federal and state energy policies continues to play out, Turnbull told reporters that the hydro-electric scheme will provide 20 times the capacity of the South Australian battery system.

Encouragingly, in the past month the national debate seems to have shifted away from the decades-long opposition between renewables and coal, to the state and federal governments trying to outdo each other on renewable projects. Cannon-Brookes wrote the following in a series of tweets that capture this shift:

“The national energy conversation seems to palpably have changed. We’re debating lithium ion vs flow vs pumped hydro storage solutions … whether 100MW is enough [or whether] 2GW is too much. $150m [investment in grid-scale batteries] in South Australia, $30m in Victoria, $2bn Federally. I’m confident there will be a series of good bids [for battery storage tech providers] in South Australia. Super funds, power operators, HNWs and many individuals wanting to invest. Most importantly, Australian people and the tech community and speaking up, loudly, that they want change.”

In other news:

Heavy construction equipment manufacturers waiting on Trump’s infrastructure plan

  • Executives in the construction industry are concerned that President Trump has not yet invested time to win congressional backing for his $1 trillion spending plan for large road, rail and bridge projects.
  • Equipment manufacturers have experienced low activity from farming, construction and mining clients in recent years, and are reportedly impatient for information about what form the investment will take.
  • The administration has indicated that an infrastructure plan would come after Congress deals with complex health care and tax reform.

Read more at The Wall Street Journal.

Kids @ Work: Children crash professor’s live interview with BBC

  • In a now-famous video interview, Professor Robert Kelly’s children burst into his room while he is discussing the impeachment of South Korean President Park Geun-hye with a BBC anchor.
  • The interview was interrupted first by his daughter, who dances into the room to join her father, then a baby in a bouncer and finally by his wife rushing in to herd the children out of the room.

Read more about incorporating your children into your work day on the Procurious blog.

SpaceX, Red Cross Millennials Amongst 30 Under 30 Rising Supply Chain Stars

Procurement and supply leaders as young as 24 are impacting major companies including SpaceX, A.T. Kearney, Cisco Systems and the American Red Cross. 

ISM and THOMASNET.com today announced the 2016-17 winners of the 30 Under 30 Rising Supply Chain Stars award, presenting the profession with an inspirational batch of role-models who are sure to attract more Millennials to supply management.

Tom Derry, CEO of ISM, says the quality of this year’s crop of stars is inspiring. “Younger generations in the workforce are stepping into leadership roles earlier than their predecessors. This year’s winners are leading the charge, and show that our future is in capable hands.”

“Capable” is an understatement when you look at the achievements of some of these professionals. Andrew Paulsen is a Senior Buyer at SpaceX, one of the highest-profile and most sought-after companies to work for in the U.S. There, he has helped transform the castings commodity into a strategic organisation focused on the reduction of risk and the amplification of innovative designs and production processes.

Amanda DeCook of A.T. Kearney spent nearly a month in Tanzania leading a supply chain diagnostic on life-saving commodities (such as antibiotics) for the remote Sengereme District near Lake Victoria. She was able to make recommendations that would help reduce the likelihood of stock outs in the future, resulting in more lives saved.

Subhash Segireddy, Supply Chain Program Manager at Cisco Systems, led a team which developed a strategy for a manufacturing project which enables resiliency in the supply chain, reduces greenhouse gas emissions and drives millions in cost savings with a vertically aligned supply chain.

In a rapidly changing supply and demand environment, Jaime Todd has created innovative projects for the Red Cross, including a first-ever toolkit for category managers, along with supplier risk frameworks, policies and procedures.

There’s a common thread in the careers of these four Rising Stars, in that they’re all contributing to a wider cause beyond immediate business goals. Whether it’s reducing greenhouse gases, ensuring the supply of life-saving blood, assisting a remote African community or even helping humanity reach Mars, each role taps into the social aspect that has been identified as a major draw-card for Millennial talent.

Three winning characteristics of 30 Under 30 Stars:

According to THOMASNET.com’s Donna Cicale, the judges looked for three main characteristics in this year’s batch of Rising Supply Chain Stars. The 30 winners are:

  • Multi-talented: “We look for people who demonstrate and excel at a wide range of skills beyond business acumen. We’re searching for fast learners, effective communicators, quick thinkers and natural leaders.”
  • Influencers: “Supply chain stars must be ‘movers and shakers’ in their organisations. They need to be skilled in getting others engaged, bringing colleagues on-board, and working towards common goals.”
  • Trailblazers: “We look for individuals with ‘firsts’, or accomplishments not previously realised by their organisation. A ‘first’ can relate to timing, budget, initialisation, integration or adoption.”

Each winner will receive a one-year membership to ISM; complimentary admittance to ISM2017 annual conference in Orlando, Florida (May 21-24); and a THOMASNET.com Team Training Lunch and Learn session for them and their colleagues.

Visit www.thomasnet.com/30under30 for the full list of 30 Under 30 winners.

World Trade and Procurement in the Trump Era

Trump’s trade  policies will greatly affect our global supply chains. How will increased protectionism and bilateral deals impact the procurement function?

Frantically attempting to understand the new modern world, commentators and experts are struggling to digest the political earthquakes of 2016. It remains wholly unclear what binds together the widespread nationalism, populism and division in countries around the world.

The threat to global supply chains

Trump has a clear dislike of international trade, preferring to shield the USA’s economy from competition. He has a disdain for businesses moving operations to other countries.

Whether or not organisations source much directly from non-domestic sources, they are dependent on global supply chains and networks. These networks are responsible for sourcing the goods and services to meet the needs of stakeholders. Threats to free trade pose challenges to procurement professionals and their ability to source goods and services efficiently and cost-effectively.

For many years, there has been a trend for opening up procurement markets. This trend has entailed removing tariffs on imports, opening up non-discriminatory bidding on public contracts to non-domestic businesses and harmonising regulatory regimes to make cross-border trade less bureaucratic and more efficient. This has allowed procurement teams to drive down costs and increase competition and product choice.

Trump’s abolition of free trade agreements

Since inauguration, Trump has honoured his commitments to abolish pending free trade agreements (FTAs) with the European Union and eleven Pacific Rim countries. Both contained provisions which would have opened up the procurement markets to non-discriminatory bidding for businesses across participating countries. This eases importing processes.

Trump also vowed to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which has been critical in creating and sustaining supply chains in North America.

With this move away from free trade, what are the prospects for continued integration of procurement markets in the Trump era? There are two points to cover – new bilateral FTAs including the USA and the movement towards free trade driven by powers beyond the USA.

The prospect of new bilateral deals

Firstly, whilst Trump has expressed a strong distaste for multilateral FTAs such as TTIP, TPP and NAFTA, he has sung the praises of bilateral deals. This has been strongly signalled with the UK in particular.  Trump has made some ambitious comments that there is a  deal ready to sign once the UK departs the EU.

If this were to happen, tariffs and perhaps other barriers would be removed, with the intention of easing cross-border trade.

The prospects for this are not great, however. With Trump’s “America first” agenda, it is not clear how easily any deals could come to fruition. FTAs are based on compromise, whereby countries grant reciprocal access to each others’ economies. For American companies to gain the ability to win public contracts as part of a deal with another country, access to American government contracts would need to be provided to businesses from the other country.

It is far from clear whether the new administration would accept the American government awarding contracts to more foreign companies, effectively moving the jobs associated with that contract to other countries.

China could be the driving force behind liberalising trade

The second topic is perhaps more pertinent then; this is the possibility that other countries or systems will emerge as the force behind liberalising procurement markets to replace a more protectionist and isolationist USA.

China’s global economic influence is steadily increasing. The TPP’s death presents China with the opportunity to be the leader in free trade. It is the lead behind the proposed Regional Comprehensive Economic Pact (RCEP), which includes sixteen countries, such as Australia, Japan, India and South Korea. In total, RCEP covers 30 per cent of global GDP and around half of the global population.

The agreement focuses on tariff removal, with some harmonisation of standards and intellectual property rights. RCEP is not equivalent to TPP in integrating procurement markets in different countries, however. Whilst procurement teams would benefit greatly from cheaper imports from elimination of tariffs, RCEP does not include detailed provisions of government procurement – non-discrimination does not look likely to be included. The eventual, and lofty, ambition of RCEP is to create a free trade area across the Asia Pacific.

Driving integration in procurement markets

Aside from China, multilateral institutions are perhaps the most likely to drive integration and liberalisation of procurement markets over the coming years. The European Union has long been a driver of liberalisation of procurement markets.

In 2016, the EU signed a detailed FTA with Canada,   including detailed provision for procurement.  It has pending agreements with countries such as Singapore and Vietnam and is in long-term discussions with an array of countries and trading blocs.

The World Trade Organization’s (WTO), Agreement on Government Procurement (GPA), consisting of 47 members (including the EU28), reciprocally opens procurement markets. It is looking likely that Australia will accede to the GPA in 2017 and discussions of China becoming a full member, further opening up procurement markets.

Also within the WTO, the Trade in Services Agreement (TiSA) is a proposed agreement to ease trade in services. This would include 50 countries, including the EU countries and the USA. With this, trade in services between the countries would become  frictionless and there would be elimination of preference for domestic suppliers, which might apply without a minimum value threshold for all government agencies.

Access to global markets is core for procurement

Globalisation continues to be much maligned by electorates and the media. But for procurement teams who rely on sourcing goods and services from around the world, either directly or indirectly, access to global markets is core to maximising value for money and ensuring public services are as effective and cost-efficient as possible. Without engaging in the broader political debates, it is clear that one industry needs access to suppliers of goods and services, without unnecessary barriers – the procurement industry.

The Flaw At The Heart Of Trump’s America First policy

5.6 million U.S. manufacturing jobs didn’t move to China and Mexico – they simply disappeared with the march of technology. And that’s the flaw in America First! 

Trump’s stunning election win has been linked to his successful portrayal as both a friend of Corporate America and a champion of the working class. His business-friendly policies include large-scale deregulation, slashing tax rates and a huge infrastructure spend, which (in theory) are designed to boost jobs through trickle-down economics.

But the support of Corporate America isn’t enough to remain in power. In order to retain the presidency for another four years after the 2020 election, Trump will have to deliver on the key promise that won the support of the disillusioned working class – bringing industry home and reviving jobs in America’s once-thriving industrial rust belt.

However, there’s a miscalculation at the heart of the rhetoric around bringing jobs back from overseas factories.

Robots, not overseas workers, have taken 85% of manufacturing jobs

A recent study from the Centre for Business and Economic Research at Ball State University found that:

  • Employment in the manufacturing sector fell by 5.6 million between 2000 and 2010.
  • Productivity growth (automation) accounted for more than 85% of jobs lost in manufacturing in this period.
  • Only 13% of the overall job loss resulted from trade (including Chinese imports).
  • Meanwhile, U.S. manufacturing output has risen steadily, growing 17.6% between 2006 and 2013.

Simply put, American factories – and factories worldwide – are producing more goods with fewer people. Automation is rendering millions of low-skilled jobs redundant, yet Trump’s key policy aim to “bring back jobs” seems to be mistakenly focused on increasing trade protectionism.

Protectionism could backfire by further accelerating automation

ABC’s business editor Ian Verrender writes that even if Trump “slaps massive import duties on Chinese goods and forces his country to start producing everything at home via the magic of ‘America First’”, it risks leading to a domino effect where business will be forced to find efficiencies in order to survive.

  1. The loss of access to low-cost labour would drive up the cost of consumer goods, meaning Americans would find themselves unable to afford the goods to which they’ve become accustomed.
  2. This lack of affordability would spark demands for wage rises.
  3. Firms would respond by pushing even further into automation, using robotics and AI to cut costs.

Verrender comments: “Where once corporations scoured the globe for low-cost labour, and duly shifted their operations, they [would] now seek ways to eliminate labour altogether, particularly in manufacturing.”

Accelerating automation is inevitable

The loss of jobs to robots is only expected to broaden and accelerate. A report from two Oxford researchers found that an incredible 45% of U.S. jobs, across all sectors and professionals, are vulnerable to being automated within the next 20 years.

For example, self-driving technology alone could lead to the unemployment of 1,000,000 truck drivers in the U.S., along with approximately 160,000 Uber drivers, 230,000 taxi drivers and over 600,000 bus drivers.

Some of the big names to comment on the coming social disruption include Stephen Hawking, who wrote last year: “The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”

In February, Elon Musk asked the audience at the World Government Summit in Dubai: “What to do about mass unemployment? This is going to be a massive social challenge. There will be fewer and fewer jobs that a robot cannot do better [than a human]. These are not things that I wish will happen. These are simply things that I think probably will happen.”

Bill Gates commented: “You cross the threshold of job-replacement of certain activities all at once. Warehouse work, driving, room clean-up – there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, [will go away].”

What’s the answer?

Marc Benioff, chief executive of Salesforce.com, warned the World Economic Forum in Davos of the “digital refugees” that would be created by AI. “This is the moment … when we have the highest level of anxiety because we can see advances in AI that are beyond what we had expected,” he said. “It’s happening at a rate and a capability that we are worrying about how it will impact the everyman, the broad range of workers around the world . . . There is no clear path forward”.

One hopeful sign is that a public discourse on the disruptive effects of automation has begun. Thought-leaders have already put forward some solutions, although they may seem politically unpalatable at present. Elon Musk recommends that the U.S. adopts a universal basic income (such as that being trialled in Finland) to keep the economy going and guarantee a standard of living for the millions of workers expected to be displaced by automation. Bill Gates has suggested taxing robotic workers to recapture some of the money displaced workers would have paid as income tax. Education, too, will need to transform to equip future generations with the skills needed to find work in a highly-automated future.

Although Trump appears to be currently focused on the wrong job-stealing “villain” (China), there is hope that leaders will listen to the likes of Bill Gates and Elon Musk and start planning ahead for the social upheaval of what has been dubbed the fourth industrial revolution.

In other news this week:

France passes “duty of vigilance” supply chain law

  • Last week, France passed a law that pushes for accountability for multinational companies sourcing from global supply chains.
  • The “duty of vigilance” law requires companies to establish safeguards designed to ensure that labour rights and other human rights are respected in the production sites they source from.
  • The law requires large companies based in France to create a document that sets out their procedures for evaluating suppliers and mitigate human rights abuses. Violating the “duty of vigilance” law can lead to a penalty of up to €10 million.

Read more at Supply Chain Dive

Trump seeks historic increase in military spending

  • President Trump’s first budget seeks to boost military spending by $US54 billion. The US currently spends about $US584 billion annually on defence.
  • If passed by Congress, the 9% increase will be funded by cuts to non-defence spending, including environmental programs, diplomacy and foreign aid.
  • Last year, the rest of the world combined spent a total of $US317 billion on defence. The highest-spending countries under the US were China ($US146 billion), Saudi Arabia ($US82 billion), Russia ($US66 billion) and the UK ($US56 billion).

Read more at ABC News