Category Archives: In The Press

Walmart cops criticism over sourcing practices

WALMART criticised for sourcing water from California

Retail giant Walmart has come under fire in the US over claims the firm is sourcing water used for its bottled water products from drought stricken regions in California.

A report, compiled by a CBS affiliate in Sacramento, suggests that Walmart is sourcing bottled water stocks from Sacramento’s municipal water supply. The world’s largest retailer has drawn stern criticism for this practice given the region is in midst of a crippling four year drought that is devastating crops and forcing residents to face water restrictions.

Similar complaints have been made of coffee chain Starbucks, who were called out in a report in the Mother Jones magazine for sourcing bottled water stocks in parts of California the government has deemed as being in areas of “exceptional drought”. Since the report’s release, Starbucks has announced it will cease sourcing water from the troubled Californian regions, a commitment that Walmart is yet to have made. This lack of commitment was highlighted in the following email statement from Walmart spokesman John Forrest Ales, who outlined the company’s concerns over the drought, but stopped short of altering sourcing practices.

“The drought in California is very concerning for many of our customers and our associates. We share those concerns and are tracking it closely. Our commitment to sustainability includes efforts to minimize water use in our facilities. We have and continue to work with our suppliers to act responsibly while meeting the needs of customers who count on us across California.”

While the public outcry over this issue has been significant (a petition demanding Walmart take its activities elsewhere has garnered over 11,000 signatures), the International Bottled Water Association has been quick to stifle the issue, pointing out that bottled water accounts for less than 0.01 per cent of all water used in the US each year.

Greenpeace report urges improved transparency from Amazon

Apple, Facebook, Google progress toward a Green Internet, but coal-heavy utilities stand in the way.

A recently published Greenpeace report urges improved transparency from Amazon, and more engagement from all major internet companies to overcome resistance to renewable energy from monopoly utilities.

Greenpeace’s research states that major internet companies including Apple, Facebook and Google continue to lead efforts to build an internet that is renewably powered, but an uncooperative utility sector and rapid energy demand growth for the internet places those ambitions under threat. Continued resistance to renewable investments from coal-heavy monopoly utilities in data centre hot spots such as Virginia, North Carolina, and Taiwan is causing the rapid growth in the digital world to increase the demand for dirty energy.

“Tech companies are increasingly turning to the smart choice of renewable energy to power the internet, but they’re hitting a wall of stubborn monopoly power companies that refuse to switch to 21st century sources of energy. Internet companies need to work together to push utilities and policymakers to provide them with 100 per cent renewable energy and avoid the creation of a dirty internet.” said Gary Cook, Senior IT Analyst for Greenpeace USA.

The report, “Clicking Clean: A Guide to Building the Green Internet,” also highlights the continued lack of transparency by cloud giant Amazon Web Services (AWS).  AWS has taken some significant steps over the last year, including committing to power its operations with 100 per cent renewable energy, but the lack of basic transparency about its energy use is a growing concern for its customers.  Although AWS did announce plans to purchase over 100 MW of wind energy this past year, Greenpeace discovered that AWS continues to rapidly expand in Virginia. Based on an analysis of permit applications by Amazon subsidiary Vadata, AWS made investments in new data center capacity in 2014 that would increase its energy demand by 200 MW in that state, where the utility Dominion powers the grid with only 2 per cent renewable energy.

The report found that Apple continues to be the most aggressive in powering its data center operations with renewable energy. Despite continued rapid growth, Apple appears to have kept pace with its supply of renewable energy, maintaining its claim of a 100 per cent renewably powered cloud for another year, followed by Yahoo, Facebook and Google with 73 per cent, 49 per cent and 46 per cent clean energy respectively. Greenpeace found that Amazon’s current investments would deliver an energy mix of 23 per cent renewable energy for its operations.

“Amazon needs to provide more information about its data center footprint and how it will move toward 100 per cent renewable energy, as Apple, Google, and Facebook have done – its rapid expansion in coal dependent Virginia should be a concern to its customers like Netflix and Pinterest who are fully dependent on Amazon for their online operations. Increased transparency will allow AWS customers to know where they and AWS stand on their journey to 100 per cent renewable energy,” said Cook.

The energy use of our digital infrastructure, which would have ranked sixth in the world among countries in 2011, continues to rapidly increase, and is largely being driven by the dramatic growth of streaming video services like Youtube, Netflix, and Hulu. Video streaming is estimated to account for more than 60 per cent of consumer internet traffic today, and is expected to grow to 76 per cent by 2018.

Apple continues to lead the way toward a green internet with several major renewable energy investments announced in the last year, including an $850 million deal to power its operations in California – the largest ever non-utility solar deal. Google’s march toward 100 per cent renewable energy is threatened by monopoly utilities like Duke Energy in North Carolina, a major hub for data centers.

Currently, customers are not allowed to buy power from anyone other than Duke, which gets only 2 per cent of its electricity from renewable sources, but North Carolina legislators are trying to increase the options for consumers to buy renewable energy from parties other than Duke Energy.

Colocation companies, the internet landlords that rent out data center space, continue to lag far behind consumer-facing data center operators in seeking renewable energy to power their operations, but Equinix’s adoption of a 100 per cent renewable energy commitment and offering of renewably hosted facilities is an important step forward and puts the company at the front of the colocation pack.

Greenpeace contacted every company assessed in the report to request data on their energy use. When companies did not respond, as was the case with Amazon, Greenpeace estimated their energy consumption using conservative assumptions and publicly available information.

Greenpeace is calling on all major internet companies to:  

  • Make a long-term commitment to become 100 per cent renewably powered.  
  • Commit to transparency on IT performance and consumption of resources, including the sources of electricity, to enable customers, investors, and stakeholders to measure progress toward that goal.
  • Develop a strategy for increasing their supply of renewable energy, through a mixture of procurement, investment, and corporate advocacy to both electricity suppliers and government decision-makers.

CIPS David Noble shifts a few paradigms

CIPS David Noble speaking at Procurious Big Ideas Summit

David Noble, Group Chief Executive of The Chartered Institute of Procurement & Supply (CIPS) took the stage at the Big Ideas Summit to shift a few paradigms.

Every organisation relies on buying things to run their business and as buyer you’re in an extremely powerful position. But because buyers often operate behind the scenes, many people aren’t aware of procurement and supply as a career choice.

CIPS is not just UK-based. The membership spans the globe. You can find Institute members in 150 different countries. It brings everyone together to share news and ideas through member events, networking opportunities and discussion forums.

The profession is not just all male. Half of the 114,000-strong community worldwide  is female. At a student level Singapore now has more of a female skew than male.

At CIPS nearly half the senior staff and board is female.

The membership was primarily seen as kindergarten – now this may have been true maybe 20 years prior, but things have changed.

We are in a sea change.

David says that we are in a sea change, therefore we must understand our business environment and what the Institute is doing about it.

Only 1/3 of CEO’s believe P&S professionals are ready for the strategic challenges ahead.

CIPS has set about doing work to define the future profession. And it is clear from the results of its survey that the profession has come-of age. Now it’s time to ‘raise your game and raise your voice,’ to ensure that procurement becomes pivotal to organisational success and value delivery, with a key role to play at the highest levels.

Let’s start selling this profession better by becoming the story tellers of our success.

Top buyers are in huge demand around the world and can achieve extremely high positions within companies.

Driving value is like driving change. To drive change is never easy so you need to persevere, and have dogged determination. You are able to add value not just from cost reductions, but also from the innovation and creativity you can bring to the role. And because of procurement’s involvement across the whole value chain, you could not find any function with such a unique position in any organisation.

Telstra director honoured with prestigious procurement award

Richard Allen receives The Faculty’s ‘CPO of the Year’ title.

Chief Procurement Officer (CPO) at Telstra, Richard Allen, was last night announced CPO of the Year by leading procurement consultancy The Faculty.

Awarded at the Asia-Pacific CPO Forum’s annual gala dinner held at the Eureka89, Melbourne, Mr Allen was chosen from a shortlist of top performing CPOs in the region.

Sponsored by WORKWEAR Group, part of Wesfarmers Industrial & Safety (WIS), the award highlights the importance of the CPO role in organisations by recognising CPOs who hold strong functional and technical expertise, realise commercial outcomes, demonstrate leadership influence and leverage the value of procurement across their businesses.

Responsible for all outsourcing decisions at Telstra, encompassing both local agencies and overseas partners with a procurement spend in excess of $12 billion, Mr Allen is credited with making a significant contribution to the telecommunications company’s customer-focused strategy over the past four years.

Richard was nominated by Robert Nason, Group Executive, Business Support and Improvement at Telstra, who said: “Richard has been instrumental in Telstra’s transformation over recent years, and his commercial leadership has helped Telstra strengthen its customer service offering,”

“He’s introduced innovative service evaluation, to measure and increase advocacy within Telstra’s suppliers, recognising that they are often our customers, too,”

“Richard’s also led a widespread rationalisation of our supplier base, reducing it by 30 per cent, which benefits both our business and our customers.”

Another innovation introduced by Richard was his ‘reverse sourcing’ initiative where he achieved a 90 per cent change in payment terms from suppliers, which has unlocked a significant incremental cash benefit to the business.

Mr Allen’s ability to lead the procurement function through an extensive domestic change program and make a significant contribution to Telstra’s transformation is what captured the judging panel’s attention.

Judging Panel Chair it is Dr Karen Morely said: “The change Mr Allen has made at Telstra is a perfect example of how procurement can support a company’s value proposition whilst also keeping a close eye on costs.”

“Richard’s ability to broaden the role of procurement across the business and reap such strong rewards is the result of his functional excellence, leadership, commercial capabilities and personal drive.”

The Faculty’s Founding Chairman Tania Seary said: “Making a tremendous impact on one of Australia’s largest corporations and driving real change across the business is far from simple – yet Richard has shown that his technical skills and leadership combined are a perfect formulae for success.

“The Faculty congratulates Richard and the procurement team at Telstra for all their achievements over the past four years, and hope that others in the industry learn from their excellent results.”

Established in 2012, the CPO awards program, a flagship initiative of The Faculty, was created to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

WORKWEAR Group General Manager, Chris Jones, said that while procurement is one of the fastest growing professions in Australia, awards like CPO of the Year recognise the crucial impact procurement can have on business outcomes.

“The CPO role is not just about sourcing and purchasing, but includes building or protecting brand reputation, mitigating risks and help companies deliver on their value promise.”

For more information on the Faculty’s CPO of the Year Award, please visit here.

How the UK General Election will affect digital trade

Katie Gallagher, managing director at the North’s leading independent digital trade association comments on the result of the UK General Election and how it is going to effect the digital sector in the North.

Polling_station_6_may_2010

“The coalition certainly brought in some good initiatives for tech and digital businesses, most of which until recently were focused on London. However this changed dramatically in the run-up to the election where there was borderline hysteria from all political parties about tech and the North.

“I hope that the Tories will continue to invest in the North and understand just how vital our technology sector is to job growth and the wider economy. It’ll be interesting to see how the Tech North initiative pans out, considering it was a Lib Dem initiative all along.

“While the last Government did introduce computer science into the curriculum, they also introduced several controversial reforms which were actually at odds with the desire to create work ready students with vocational, hands on experience.

“David Cameron has said his party will create more apprenticeships, and whilst we admire this ambition, digital technology apprenticeships have not been as successful as hoped, particularly in the SME community. The infrastructure still isn’t right to get enough quality talent from schools into digital apprenticeships, so I hope the new Government will look to change this. We really need to get digital education right this time and tackle this skills gap once and for all.

“I’d also like to see additional investment in promising start-ups. While we did see the introduction of some helpful finance products under the coalition, there’s still number of decent tech businesses that are struggling to access the finance they need to grow. Cameron has been known to champion UK start-ups, so I hope this remains a priority.  

“It was a challenge for us to make sure industry voices were heard in the right places with the last Government. I hope that the new Government listens this time and realises its approach to digital, skills and economic growth needs to be joined up, and the best way of doing that is from a business-led, bottom up approach.”

Learn more about Manchester Digital

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

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

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. 

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.