Category Archives: In The Press

Why Do Procurement People Leave Their Jobs?

A report released by the Corporate Executive Board in May of this year has highlighted the key reasons procurement professionals leave their roles.

Despite a number of great success stories depicting the fantastic opportunities the function presents and positioning a career in procurement as a ‘job for life’, the study revealed that procurement professionals are among the most likely employees to want to leave their jobs. Only 29 per cent of the CEB survey respondents suggested they had a high intent to stay on in their current roles.

The following chart provides some insight as to the reasons that procurement professionals want to leave their roles.

Why Procurement People Leave their Jobs

Increased compensation, benefits and workplace flexibility are motivations to leave that are likely shared regardless of industry, so it is difficult to address these in a procurement specific context. However, CEB has outlined some strategies that procurement managers can follow in order to keep their staff.

“Procurement managers should take time to explain to their employees how and why they are valuable to the company and the function, and seek to show employees how they can fulfil their personal career goals by staying at the company”

CEB also outlined the following characteristics of procurement employees:

  1. Procurement staff are more likely to switch jobs for more senior positions than their counterparts in other parts of the business
  2. The prospect of working with more talented colleagues is a motivator for procurement professionals. This again feeds into the ongoing importance of the need for procurement teams to attract top talent.
  3. Procurement staff are more satisfied with the strategic nature of the work they are doing than staff from other functions. The report showed that procurement employees are less likely to want to change jobs for more engaging day-to-day work than their counterparts from other parts of the business.

Supply chain transformation: Airbus 3D Prints Aeronautical Parts

Airbus A350 XWB

The new Airbus A350 XWB, an extra wide aircraft first delivered in December of last year, was built using over 1000 parts that were produced with a 3D printer.

The airplane manufacturer began a relationship with Stratsys, a 3D printing and additive manufacturing firm, in 2013 in an effort to increase supply chain responsiveness and simplify its internal processes in order to meet strict project delivery deadline for the new aircraft.

The fact that the firm is now utilising 3D printing in its supply chain, means that replacement parts can be produced on-site rather than at an interstate or overseas manufacturer. This drastically reduces lead times, as the requisite parts no longer need to be produced, processed and shipped to where they are needed.

1000 parts may sound like a lot, but in reality it is a tiny portion of what is needed to build an aircraft. However, Airbus’s move suggests that 3D printing is about to start disrupting our supply chains. These technologies have the potential to vastly change the way modern supply chains operate. If implemented properly 3D printing could slash lead times and transportation costs allowing businesses to become more self-sufficient. Stratsys certainly see it that way, defining their approach as a transformative alternative to conventional manufacturing processes.

China services PMI climbs again

hsbcchina

The HSBC China Services Purchasing Managers’ Index climbed again in March, reaching its highest level for the year. This metric, used to measure the activity of purchasing managers across China, indicates that despite a slow-down in the nation’s factories, China’s services industry is reporting reasonable growth.

The details behind the rises, which caused a significant rally in the Chinese stock market, are were outlined by Qu Hongbin, HSBC’s chief economist for China, who said in a statement “The latest set of PMI data indicated that Chinese service-sector companies had a strong start to the second quarter, with activity and new orders both rising solidly in April.”

Serving China 

China’s services industry is enormous and accounts for roughly 48.2 per cent of the nation’s economic output (significantly higher than any other sector). This sector is expected to continue to grow as the country’s citizens become increasingly wealthy.

Some analysts have issued caution over the recently released PMI figures and indeed, remain concerned over China’s economic future. When the stats used to generate the metric are reviewed more closely, it can be seen that seen the final prices charged by firms involved in the data collection are, in fact, at a 15 month low. This has prompted some analysts to suggest that firms have simply reduced costs in order to meet sales targets.

Despite these concerns, the services sector does seem to represent a shining light for the Chinese economy. Housing, exports, manufacturing and investment have all slowed in recent months. However, jobs and activity in the services industry appears to be growing.

Big Ideas Summit 2015: what the press said

Last week the world’s brightest procurement minds all collaborated at the Big Ideas Summit 2015 – powered by Procurious.

What the press were saying about Big Ideas 2015

Here’s what press and professionals alike have been saying about it…

Spend Matters:

UK editor Peter Smith reported: “Meeting Goddard was a highlight for me…

“Given it was the first Procurious event, and one that tried to do something a bit different compared to most conferences, we thought it was a real success. More to come on the day, well done to their team and I’m sure it won’t be the last Procurious event we’ll be reporting on.”

Peter’s US colleague Jason Busch added – “The Soho Hotel has a truly great small conference facility – the event, being simulcast live online, kicked off with Professor/emcee Jules Goddard, a wonderful host, facilitating an icebreaker to get the audience engaged…

On first keynote speaker Sigi Osagie, Jason commented – “I was left wanting for Sigi to flesh out his ideas a bit more as the topic is a clever one. He’s a truly gifted speaker”. If (like Jason) you want to hear more from Sigi, let us direct you in this direction: Sigi Osagie’s Big Idea on Unlocking Our People’s Passion

Jason also had the following to say about McKinsey’s Theano Liakopoulou:

“Immediately following lunch yesterday at the Procurious Big Ideas Summit, Theano, a partner and procurement and operations expert at the consultancy, woke everyone up by delivering a presentation on measuring and exploring procurement value.”

Thank you Peter and Jason!

Supply Management:

CPOs: Remember everyone can be extraordinary – Paul Snell leads with a story on Sigi. Read it here.

Three customer service lessons procurement can learn from Uber – spotlight on Chris Sawchuk’s keynote (The Hackett Group). Read it in full

Giles Breault:

We’ll just leave this Tweet from The Beyond Group’s Giles Breault right here…

giles

Lance Younger:

Lance Younger, CEO of Statess writes on LinkedInBig Disruptive Ideas – RIP The Procurement Function.

“There were some fantastic themes and insights from the participants… The debate around procurement 2030 during the Big Ideas Summit also helped to push our thinking about procurement.

Lance continues: “In reality, many big ideas merely shape the agenda, and the speed of change is limited by aspiration and ambition.  Culture and innovation within individual companies also will shape the direction and procurement’s role.” Before concluding… well, you’ll just have to pay his article a visit to find out!

How can access control technology strengthen security across the supply chain?

Simon Birchall, managing director of leading workforce management solutions developer timeware (UK), discusses how sophisticated access control technology can be used to increase the security of supply chains at the most crucial point. 

Using biometrics to control supply chains

A recent study conducted by Allianz found that disruptions to the supply chain, such as major security breaches, are considered to be the top concern for UK companies.

To help combat this, effective security measures must be put in place at every point. One effective security measure is to deploy access control systems at the manufacturing sites that carefully monitor employee movements helping to increase visibility across the whole chain.

According to Allianz, the number of multinational companies has increased from 7,000 50 years ago to 104,000 today. In this globalised era transparency is becoming increasingly difficult as operations expand across continents. This is not just a challenge but a need for globalised control and management of each process throughout the supply chain. One way to monitor operations more closely is to ramp up the security at each individual stage. By limiting authorisation to key personnel and monitoring worker behaviour it is possible to regulate the whole process. As well as the problems that arise through increased globalisation, cyber-crime is becoming more and more commonplace and also poses significant threats to supply chain stability.

These increased risks to supply chains have meant that businesses must put stricter security measures in place at each link. As failure to do so can not only affect revenue but can also have a significant effect on business reputation. Increasing the level of control across the whole supply chain can also improve visibility and control over the overall process.

Even with supply chains that span country borders and even continents, increasing the overall control and visibility of the whole process starts locally. Supply chain protection has to begin with ensuring the necessary security measures are in place at the actual manufacturing site, for example, carefully screening any contents of cargo being shipped.

A recent survey from security firm Pinkerton cited one of the most common security problems associated with supply chains as being poor security at the manufacturing site. This included poor security practices within the shipping and receiving departments and poor access controls. The study also found that the security weaknesses are well known by staff internally 90 per cent of the time.

The need to deploy robust access control measures

To overcome this and to strengthen those security weak spots, businesses must deploy robust access control measures to monitor movements and improve visibility. Because when it comes to supply chains, total control over the manufacturing site has a powerful reinforcing effect across the whole process.

Access control can be described as the selective restriction of access to a place or resource and is crucial when it comes to supply chain security as it can identify any individuals entering the site. Access control can also decide who has the clearance to access both buildings and files and as a result gives organisations greater control over the whole supply chain as individual movements can be traced and monitored. For manufacturing sites, for example, access control can prohibit unauthorised access to shipping, loading docks and cargo areas.

Access control technology becoming more sophisticated

In recent years, access control technology has become more and more sophisticated and modern systems are now using biometrics to optimise security, privacy and convenience across the supply chain.

So why are biometrics so effective? With an ability to prevent issues such as undocumented access, loss of ID cards and ID swapping, biometrics are a formidable alternative to previous access control systems that relied on passwords and physical keys. Nowadays access control and biometric technology has the capabilities to control access points and identify, record and track all employees, contractors, visitors and vendors that may have access to the building. It can also be used to deny access and trigger an alarm when anyone attempts to enter an area without jurisdiction. New technology can even control the times individuals have access to facilities.

The level of sophistication available with biometric access control technology means that authentication can be taken one step further. Biometrics actually have the ability to monitor behaviour and can take into account the way in which the person interacts with the device, for example, the force that they hit a key. This has massive implications for the supply chain as everyone involved in the process, from the manufacturers to the distributors, can be carefully monitored and screened.

Using access control to protect people and property

An example of the latest access management technology available to businesses is timeware’s access control package which focuses on protecting the two most valuable assets; people and property.

The timeware software is designed to ensure than when a distributor completes a job or when an individual leaves employment, they will no longer have access to the building. The access control technology can be fitted to any door and biometric readers will ensure only authorised personnel have access through it. Once the system is installed, it is possible to produce reports on staff movement and to track individuals around a site. It’s also possible to give visitors and contractors temporary access to ‘public’ areas with badges that will cease to function after a pre-determined time.

Sophisticated access control technology has the ability to strengthen security at the crucial point in supply chains, such as the manufacturing sites. Reinforcing the security at this critical point can help to increase visibility across the whole supply chain. More and more businesses are installing a variety of access control technologies to increase control at the point where it is needed the most.

Access control technology is but one example of innovation in the supply chain. We’ll be exploring more at our inaugural Big Ideas Summit on 30 April when 40 of the most influential thought-leaders gather to discuss the future of the procurement profession. Learn more about the event here.

Is ethical fast fashion an oxymoron?

Is ethical fast fashion an oxymoron?

While looking through the agenda of the Procurious Big Ideas Summit, I noticed that fast fashion is one of the key topics that will be discussed on the day. Procurious has asked its members to contribute to the Summit by submitting question, opinions and ideas through the Procurious platform. Click here to find out how to get involved.

So with that in mind, here is mine.

Is there such a thing as ethical fast fashion?

On a recent long haul flight I thumbed through clothing retailer, H&M’s lengthy 2014 Sustainability Report. While the report tracks some great initiatives the company is undertaking to improve its performance from an ethical point of view, I couldn’t help but think that regardless of the steps H&M take to produce their clothes ‘more sustainably’ the very nature of its business (its modus operandi) would suggest that this business could perhaps be considered ‘more ethical’ but could never be considered ethical.

Let me explain my thoughts: H&M is a hugely successful organisation. Its success can be largely attributed to the way the firm has adapted to the recent retail revolution of fast fashion.

Fast fashion involves drastically reducing the time taken for fashion trends to move from the catwalk into stores. But perhaps more importantly, it involves leveraging vast supply chains and purchasing practices that means goods can be produced and transported quickly and cheaply, thus enabling mainstream consumers to access these products more readily.

Fast fashion has long received criticism for driving low wages, poor working conditions and questionable environmental practices in the developing world. However recently, firms (like H&M) have made undeniable improvements in these areas. A discussion around these supply chain practices is best left for another day (or another article) but today I want to take a step back and discuss the sustainability of their business model.

Efficient supply chains practices have enabled those companies involved in fast fashion to produce clothing at incredibly low prices. This, combined with intensive marketing cycles designed to encourage consumers to buy ‘the latest’ fashions at high frequency, have caused many to dub the fast fashion business model and the throwaway culture that has accompanied it as ‘disposable fashion’.

Does doing a bad thing better make it good?

So the question stands: can a company whose business model (and ultimate success) is based on consumers frequently buying high volumes of clothing that they wear for a short period of time before discarding and replacing, ever be considered sustainable or ethical?

To put some context to the numbers, it’s estimated that H&M produce over 600 million items of clothing a year. When you consider that more than 20,000 litres of water is required to produce 1kg of cotton, enough to make a t-shirt and a pair of jeans; that cotton accounts for 2.4 per cent of the world’s crop land, but 24 per cent of the world’s insecticides and 11 per cent of the world’s pesticides; and that unsustainable cotton farming has as been deemed responsible for the destruction of numerous river basins across the world. These include the Murray Darling in Australia, the Indus in Pakistan and the Rio Grande in USA/Mexico, you begin to see the enormous environmental burden borne in order to manufacture and move these products. (Figures quoted above are from the World Wildlife Fund)

As I mentioned earlier, H&M is making impressive steps towards improving its environmental and ethical impact. The firm is committing to using 100 per cent organic cotton by 2020 (currently about 13 per cent of its products are made with organic cotton), they are making commitments to using less natural resources in their manufacturing process and have even spoken with leaders in Bangladesh and Cambodia about improving minimum living wages for garment workers in those countries.

But do these measures actually have a positive environmental impact or are they just minor improvements to an ultimately unsustainable business model? It’s certainly a compelling angle for the firms marketers to play on, but is it actually doing any good?

H&M proudly promotes itself as the world’s largest user of certified organic cotton, but is this something to be proud of? Americans alone throw 10.5 million tonnes of clothing into landfill every year, would it really make a difference if those landfills were full of organic cotton?

I applaud the steps that H&M is taking to improve its performance from a sustainability standpoint, I understand that the company is merely satisfying the consumers needs (read wants) and that ultimately the buck stops with us. But I must admit, the terms fast fashion and sustainability simply don’t sit alongside each other for me.

Fast fashion is just one of a number of topics that will be discussed at the Big Ideas Summit on 30 April. Have your say and submit your questions for the 40 influential thought-leaders that will be gathering for our unique think-tank event.

4 Big Ideas That Transformed Procurement Technology

The Big Ideas that will shape the future of procurement technology will be one of the hot topics at the Procurious Big Ideas Summit in London on April 30.

4 Big Ideas in Technology that will transform supply chains

That’s why we’ve invited leading technology influencers like Tim Hughes, Lance Younger, Peter Smith, and Mark Perera to be “in the room”, and provide their views on which technologies procurement professionals should keep in their cross hairs.

I think it was Machiavelli said, “whoever wishes to foresee the future must consult the past.” My belief is also that it sometimes helps to look in the rear view mirror, to understand what is coming up on the road ahead.

In this article I look back in time and share four of the Big Ideas in technology that I believe have helped shape the procurement profession as we know it today – common protocols, online catalogues, reverse auctions and barcodes.

From the outset, let me stress that I am no technology expert and that my list of Big Ideas in Procurement Technology was conceived under the palm trees of an island in the Indian Ocean. Some may say this provided me with perspective, others may say I’m deluded. Let’s see what you think!

Common protocols – EDI & cXML

Establishing common protocols for the exchange of business transaction data (such as purchase orders, invoices, shipping notices, and many others) provided the basis for the globalization of procurement and the demise of the paper and fax era.

Electronic data interchange (EDI) emerged in the late 60’s and focused on machine-to-machine transactions, but it proved cumbersome for the internet. In light of this, in 1999, Ariba created Commerce XML (cXML), which subsequently became the primary universal protocol for B2B interactions over the Internet.

Electronic catalogues

eProcurement came about as a way to conduct all sorts of purchasing transactions over the Internet, and marked a significant turning point in the use of technology for procurement.

Sometimes I wonder whether all the major eProcurement developments happened at the same time in the late ‘90s and we’ve just spent the last twenty years working out how best to use them, with the software companies refining the offerings in line with our demands.

Electronic catalogues were one of the first of the applications to be developed in the eProcurement suite.

It is easy today to think of this as a pretty basic development, but if you put it in context, consumer online shopping sites such as Amazon and eBay were only launched in 1995. Less than five years later, the corporate world was introducing its own, business-appropriate, form of online shopping.

The subsequent difficulties with managing in-house catalogues gave rise to the outsourcing of catalogue management, the creation of eMarketplaces and a whole new category of eProcurement applications and software providers that have flourished ever since.

Online reverse auctions

I LOVE a great reverse auction. Always have.

What I love most about reverse auctions is the need to follow a disciplined sourcing process in preparation for the event. I think this is one of the great, unsung benefits of this tool for the profession. Don’t worry, I have also heard all the downsides to online auctions. I know they have their place and that’s another reason why I love them – they are a weapon to be used selectively with great effect.

I love the story behind the creation of the online reverse auction – the Glen Meakem story. I was lucky enough to be both living in Pittsburgh when FreeMarkets was it its height, and also to be one of their customers. They were an impressive organisation.

Legend has it that Meakem conceived the idea when he was at a supplier negotiation day with GE. At that time, suppliers were marched into individual rooms Wal-mart style, interrogated, sent outside, then brought back in after their competitors had finished the same meeting. Flip charts were used to track pricing as it trended downwards.

Meakem had the idea to take this practice online and allow the negotiations to take place real time. Surprisingly, GE didn’t want to invest in the idea, so Meakem went out on his own, hiring McKinsey colleague Sam Kinney, and founding FreeMarkets with the purpose of facilitating the online tender process and running global auctions.

Reverse auctions proved to be a turning point for procurement, as they reinforced to company-wide suppliers the importance, and power, of a centralised purchasing team.

However, what I think makes reverse auctions most significant for the development of our profession is that not only did they really capture the attention of the C-suite, but also the rest of the organisation.

I remember hosting boardroom parties where colleagues from all parts of the business could come and cheer as they watched the prices being bid plummet. It’s not every day your colleagues get excited and stand up and cheer for procurement. It was a nice moment, and provided a great opportunity for procurement to demonstrate its value.

The Codes – The Bar… becomes the QR

I am certainly no barcode expert, but it is quite conceivable, as one story put it, that “no event in the history of modern logistics was more important” than the invention of the barcode.

Apparently, the first retail product sold with a barcode was a single pack of chewing gum at a supermarket in Troy, Ohio on June 26, 1974.

Forty years later, the latest incarnation of the bar code is the QR code (Quick Response Code) which is the trademark for a type of matrix, or two-dimensional, barcode.

The QR code has quickly become popular due to its fast readability and greater storage capacity compared to standard barcodes.

Where this development becomes very interesting is in today’s world of supply chain disruptions, where the QR can assist with product and time tracking, item identification and more efficient document management.

Given the procurement profession’s increasing need to guarantee supply chain transparency, the QR code could help provide some of the answers we need to protect our brands in the future.

The Big Ideas that will shape the future of procurement technology will be in the spotlight on 30 April at the Big Ideas Summit.

Procurement professionals around the world can get involved, and join Procurious’ 5000 members, as digital delegates by going to the Big Ideas Summit website and tweeting your Big Idea using #BigIdeas2015

You can also share your views on the ideas you believe disrupted procurement technology in the Procurious group.

5 of the deadliest risks facing your supply chain in 2015

Are you prepared to manage (and ultimately overcome) these challenges head-on?

5 biggest supply chain risks

Today we’re talking risk…

As a profession we’re getting better at managing common supply chain disruptions – supplier performance management and demand forecasting used to be the cause of week-long headaches… But the advent of new technology and implementation of streamlined processes are taking some of that strain. However we are not (yet) very effective at managing the less frequent, higher impact events that effect our operations.

On Thursday 30 April, Procurious will host a world-first cost leadership think-tank at The Soho Hotel in London that will be amplified online to our 4500 members across 100 countries through a mixture of videos, interviews, social media and feature-writing. Follow along on Procurious by RSVP’ing here, then get ready to Tweet your questions and join-in with the discussion!

Below we’ve listed 5 key risks that procurement and supply chain staff face in 2015 and beyond.

  1. Cyber threats

2014 was the year that cyber attacks got real. The recent attacks on Sony Pictures exemplified that hacking has moved from a nuisance to a full-scale criminal operation. Cyber attacks not only cause significant business interruptions they also have an extremely detrimental effect on brand reputation. According to the Edelman Privacy Risk Index 71 per cent of customers say they would leave an organisation after a data breach.

We’re not only seeing a increase in the frequency and severity of cyber attacks, but companies appear to be grossly underestimating the risks attached to these attacks. The Allianz Risk Barometer suggests that 29 per cent of organisations are ill prepared to deal with cyber threats – a figure that is significantly higher than any other risk category.

  1. Health concerns 

2014 saw the largest outbreak of Ebola in written history. Over 10,000 deaths were recorded over the course of a few short months. In addition to the horrific human cost of this epidemic, it provided us with a sobering glimpse into what a global health pandemic might actually mean for our supply chains. While Ebola was contained largely to a small number of West African nations, cases began to show up in Spain, United Kingdom and the USA. Fortunately Ebola, while an incredibly deadly disease, is not highly contagious and the outbreaks were all suitably contained.

Had the outbreaks taken hold and spread further around the world, it would have likely had crippling effects on economic activity and trade flows. Nations may have been forced (as Sierra Leone was) to enforce lock-down periods where highly populated areas like shops, markets, and places of worship were shut down and people ordered to stay at home for significant periods of time.

As well as the human and economic impact of diseases, procurement and supply chain managers should also consider the impact these events have on the security of commodity supplies. The troubles in West Africa last year impacted the supply of raw materials such as cacao, rubber and aluminium ore.

  1. Weather

Extreme weather slows procurement progress. The economic impact of last years extreme weather events are summarised brilliantly in this chart produced by the Bank of America for the World Economic Forum in Davos. For some sense of perspective, the combined financial impact of 2014’s 10 most extreme weather events totalled more than $27 billion USD (that’s just slightly more than the GDP of Ecuador).

With extreme weather events apparently occurring more frequently and causing more harm to our operations, what exactly are procurement teams doing to plan for these sort of events?

  1. Brand reputation and value

Consumers are taking a far greater interest in where their products are coming from. As a result, organisations and indeed procurement and supply chain professionals are increasingly vulnerable to public scrutiny of their corporate practices.

A recent Chartered Global Management Accountant survey highlighted that 76 per cent of global finance chiefs now say that their company is prepared to lose short-term profit in order to protect its long-term reputation. The same number suggested there should be more emphasis placed on reputational risk this year. This is in stark contrast to responses collected in previous years.

Despite these suggested commitments there appears to be gap between the promise and the practice of brand protection. 60 per cent of those surveyed admitted they had no formal processes or models in place to calculate the financial impact of not managing reputational risk.

  1. Political instability

Political instability and war continue to pose threats for organisations with international operations. Events in the Ukraine, Russia, the Middle East (and a normally peaceful Hong Kong) have gone some way to destabilise the confidence of business operations in those regions.

Being the naturally curious sort we’re on the lookout for the hot topics, and big questions that influence the decisions supply chain managers will be making over the coming year. We want to know how the corruption allegations in Brazil will play out, what the drop in oil prices mean for the conflict in the Ukraine, and whether election results in Israel will bring stability to the region?

In its recently-published Reliance Index, FM Global listed Venezuela as bottom, while Norway came out on top. Read more on this story here.

Whether it’s war, hacking, weather, terrorism or brand destruction, risk will continue to play a pivotal role in the success of supply chains and indeed organisations as a whole. The question is are you prepared to manage (and ultimately overcome) these challenges head-on?

Are we facing a productivity crisis?

Are we suffering from a productivity crisis?

The International Monetary Fund (IMF) has released its latest report and with it come grave warnings for China, Brazil and others. However, the UK comes bottom of the pile when it comes to measuring productivity.

According to the new World Economic Outlook:

[The] analysis suggests that potential output growth in advanced economies is likely to increase slightly from current rates… In contrast, in emerging market economies, potential output growth is expected to decline further, owing to ageing populations, weaker investment, and lower total factor productivity growth as these economies catch up to the technological frontier.

Yes, although demographics are catching up with some of the larger developing economies, China’s working-age population is set to shrink rapidly – to cite but one example.

Static productivity

As much as technology gives – it too takes away. In fact the report claims that it’s one of overriding factors contributing to falling productivity levels around the world.

When advanced economies once saw a  boost in productivity through the use of technology,  the effects of such a boost have been in decline for a long time since (even before the economic crisis). Now however, emerging markets are becoming more turned on to technology – which, the IMF noted may curb the potential for new growth.

The Economist notes: Productivity growth will also weaken in future, both because the developing world has less room to catch up with rich economies and because productivity slowdowns in America tend to spill over to other countries. Economic disappointment is an increasingly global affair.

You can read the report in full here.

The latest [March] findings from BDO’s Business Trends Report compounds matters further, revealing that productivity in the UK is 21 per cent lower than the average amongst the G7 countries, including Germany, the US and France. Stating that Britain’s workers were less productive in the final quarter of 2014, with output per worker falling 0.2 per cent.

On the UK’s continuing poor labour productivity performance, BDO partner Peter Hemington said:

“While it is encouraging to see strong business confidence, the UK’s continuing poor labour productivity performance is a very significant concern.”

“Although employment growth in recent years has been strong, much of this has been in part-time jobs,” he said. “Productivity ultimately determines our prosperity so it is a crucial area that must be addressed. Policymakers of all persuasions must take on this productivity puzzle.”

The Daily Telegraph’s assistant editor Jeremy Warner makes the controversial point that: “the fall in productivity might have something to do with an apparently inexhaustible supply of cheap workers, both from mass immigration and greater employment participation, particularly among the elderly. Employers have chosen cheap and easy-to-get-rid-of man hours over the capital cost of investment. In this sense there is a downside to Britain’s flexible labour market.”

He further compares the predicament to that of the United Kingdom’s closest European neighbours – France. “One of the reasons for relatively high rates of French productivity is that the labour market is so hedged around by protections that there is a positive incentive for French companies to employ as few people as possible. The costs of making workers redundant act as a powerful deterrent to taking them on in the first place. This is not an affliction that British businesses are likely to suffer from.”

Do we have a productivity problem? Over to you!

550 enslaved fishermen freed from remote Indonesian island

Hundreds of fishermen slaves freed

The Indonesian government announced this week that it is making moves to return foreign fishermen (mostly from Myanmar) to their home country after an Associated Press (AP) report revealed they were being held under conditions of slavery.

The report detailed the plight of hundreds of men and women, who were trapped in the Indonesian village of Benjina. It is alleged that the men and woman were moved (in some cases sold by slave traders) to Indonesia to work on fishing boats. The working conditions on the Indonesian fishing vessels were dire. The AP reported that workers were not paid, were forced to drink unclean water, work 20-22 hour shifts without days off and are beaten if they try to rest or complain.

Once the boats return to port, their catch is emptied and then shipped to Thailand where it enters global seafood supply chains. The AP report highlighted several high profile American brands that were carrying products sourced from the same Thai factories that were buying seafood from the slave vessels. The organisations named included Kroger, Albertsons, Safeway, Wal-Mart, and the nation’s largest food distributor, Sysco. As well as distributing to the US the report also highlights that seafood from these factories is making its way to Europe and Asia.

US government leaps to action

This case, (one among others), has prompted action from the US government, with Barack Obama signing an executive order that recently came into effect, requiring all government contractors to ensure their supply chains did not utilise slave labour.

It also looks likely that U.S Rep. Carolyn Maloney will reintroduce her proposed legislation that will force large firms (those with over $100 million in global receipts) to spell out their policies for ensuring slave labour stays out of their supply chains.

Speaking on the complexity of managing global supply chains Jeff Tanenbaum, a partner at Nixon Peabody’s labor and employment practice said: “It is a difficult aspect of supply chain management and compliance operations. When talking about potential illegal and or horrific behaviours it can be very difficult to uncover them, and it is hard to effectively address them until they are uncovered.”

While the news that workers from Benjina are being sent home is good, it seems likely that for as long as companies and consumers in the US, Asia and Europe demand the lowest possible prices for their seafood that products sourced through slave labour will find their way into the supply chain.

Until supply managers alter their approach to purchasing seafood and create more collaborative approaches to these problems with their suppliers, it seems certain we will continue to hear reports of such incidences. The quote below sums up this sentiment effectively…

If Americans and Europeans are eating this fish, they should remember us. There must be a mountain of bones under the sea – Hlaing Min, runaway fisherman Benjina