Category Archives: In The Press

Supply chain issues on the small (and silver) screen

According to an excellent commentary from The Guardian, viral YouTube hits and blockbusting movie releases are helping to shine light on pertinent issues affecting supply chains the world over.

The Guardian cites such cinematic successes as Blood Diamond, alongside indie-documentaries like Blood in the Mobile (an expose on mobile phone production methods that are financing war in the DR Congo), and The Price of Sugar (at what human cost is sugar produced?) But there’s also a growing glut of online-only, YouTube short films – each aiming to achieve the same goals.

The Story of Stuff is a great example, as well as being something of a YouTube success story… Originally released in 2007, it’s been watched by over 44 million worldwide.

The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world. It’ll teach you something, it’ll make you laugh, and it just may change the way you look at all the stuff in your life forever.

Can you recommend any other videos that are making similar waves in these areas?

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Procurement: The new and improved model?!


Procurement Professionals on LinkedIn

The following article originally appeared on the Procurement Professionals LinkedIn Group.  Join and view other articles here.

In 2011 the Coalition Government launched their ‘new’ Government Construction Strategy with its aim to improve the industry whilst reducing whole life cost and carbon by 20 per cent by 2015.

Procurement: the new and improved model

A major part of the strategy focused on reforming public sector procurement, and in particular trialling a series of new procurement methods to drive these improvements and efficiencies by effecting behavioural and cultural change. The models intended to draw on established best practice and drive an ‘evolutionary, not revolutionary change’ across the public sector. They utilise a range of common principles which emphasise the need for collaborative working and early contractor involvement, where the supply chain responds to an outline client requirement and declared budget rather than a pre-determined design.

The three models are:

  • Cost Led Procurement – During the Cost Led Procurement process, a client sets out their output specification against a challenging cost ceiling based on their own knowledge and experience of costs . They then invite the supply chain to bring their own collaborative understanding to develop an innovative response to the brief. CLP is of particular use in a competitive framework environment where there is opportunity to continually improve on the unit costs of the programme working collaboratively with the supply chain.
  • Integrated Project Insurance – This is the most innovative and new approach. The Integrated Project Insurance (IPI) model offers clients the opportunity to create a holistic and integrated project team (an ‘Alliance Board’) to eliminate the “blame/claim” culture. The innovative “integrated project insurance” package limits the risk for the individual members of the team, fosters joint ownership of the project, and thereby reduces the likelihood of overrunning in terms of cost and time.
  • Two Stage Open Book – This model improves on an established approach often used in a framework environment. At the first stage a client invites prospective integrated teams to bid for a project based on their ability to deliver an outline brief and cost benchmark. The appointed team works alongside the client to build up a proposal after which the construction contract is awarded – this is the second stage.

In 2012 a trial programme for the new models was established which included projects from the Ministry of Justice and the Environment Agency, and more recently the procurement of the Education Funding Authority regional framework. However the trials have so far only focussed on CLP and Two Stage Open Book, as due to the innovative nature of IPI it has taken more effort to initiate a trial project.

Also in line with the development of the new models and in order to bring about further reform, the GCS reinforced the need to improve the public sector procurers skills. It has backed the creation of a Major Projects Leadership Academy run in partnership with the Saïd Oxford Business School and Deloitte, and ‘encouraged’ the dissemination of best practice across central and local government. Finally the GCS also provided an updated version of the Common Minimum Standards for procurement. Although the impact of these initiatives is more difficult to measure.

Despite all of this I still hear from contractors on a regular basis that clients are more concerned with lowest price tendering. Or are too reliant on their advisors producing a design before they procure a contractor and then expecting innovation and value engineering to further reduce their spend. So for me the big question now is – three years on, and (perhaps more importantly) less than twelve months to the next general election, have all of these reforms made any difference in the industry?

Based on the evidence provided in the trial projects the potential benefits of the new procurement models are demonstrable for all parties. However the trials have been restricted to a small number of high value central government projects. And whilst anecdotal evidence suggests that things are improving generally in construction, this is more than likely related to an upturn in the economy as a whole.

 

Tesco scandal shines a light on the retailer-supplier relationship

All is not well at Tesco HQ… Amid tales of the supermarket’s accounting scandal, a colossal 4 billion pounds has been wiped from its stock market value. The trouble stemmed from an overstatement of its first-half profit – a full 250 million. Not a small drop in the ocean by anyone’s standards.

“The Financial Conduct Authority has notified Tesco that it has commenced a full investigation following the overstatement of expected profit for the half year which was described in our announcement of 22 September 2014 and which is currently the subject of an independent review by Deloitte. Tesco will continue to cooperate fully with the FCA and other relevant authorities considering this matter.”

It’s not simply a tale of accountants getting their sums wrong… the wounds of deceit bleed deep, and it’s the suppliers on the other end that will hurt the most.

According to this story on The Grocer, a supplier with close ties to Tesco has revealed that buyers are “desperate” and are artificially bringing forward huge payments in order to fill the “huge gaps” left.

Tesco scandal has suppliers divided

Luckily the suppliers have the ears of the government-appointed watchdog – namely Christine Tacon, an Adjudicator of the Groceries Code. The Adjudicator’s motivations focus on whether the supermarket has breached code that adversely affects suppliers. Such breaches can include payment delays or changes to supply agreements.

David Sables, CEO at Sentinel Management Consultants told The Grocer that he believed this was merely “an extension of what was always going on.”

Graham Ruddick, Retail Correspondent for The Telegraph, writes: “There is currently no code, regulator or set of rules controlling the relationship between suppliers and retailers in the UK. In addition, there is nowhere to turn for a supplier if it feels it is being bullied by a retailer. Many suppliers are too scared to speak out against a larger retailer for fear of being delisted or replaced by a rival, so they suffer in silence and agree to the unreasonable demands being placed on them.”

He further states that the Tesco scandal could spark a long overdue shake-up of the retailer-suppler relationship – noting that: “Last year this lack of regulation resulted in the horse meat crisis.”

If one good thing is to come out of this sorry debacle, maybe it should be this?

How Better Together is putting the excitement back into UK public procurement

The Scottish Independence Referendum was a thrilling time, one I’m glad to have been part of, but now it’s over, what is the real impact of Better Together for UK Public Procurement?

Better Together for UK Public Procurement

I believe that we are facing exciting times ahead and that we now have an amazing opportunity to create something special, something lasting and something that will have a real impact on the communities we serve.

Let’s push things to the next level

It’s time for our collaborative buying organisations to push things up a gear.  At a UK level the public sector spends over £45bn on goods, services and works.  Crown Commercial Services chairman Bill Crowthers is quite right when he says that “we need to make the most of this extraordinary buying power.”

How CCS, Scotland Excel and other collaborative buying organisations engage with their customers, the public bodies the length and breadth of the UK, will be crucial as we move into the next generation of public contracts.

We need agreements which serve not only London but Lerwick, not just Belfast but Bangor.  Our collaborative partners must deliver agreements and contracts that will reduce the overall cost to the whole public purse.

Savings not just for the strong and influential public bodies with huge amounts of spend but for the smaller less centrally located bodies too.  All for one and one for all!

It’s time for innovation, imagination and change

Let’s use this next period to encourage innovation amongst our suppliers, particularly those who are UK based small and medium enterprises.

Let’s use imaginative contract strategies, structured contract management and true and deep supplier engagement.

Let’s make access to public contract opportunities easy.

If we really are better together then let’s have a single gateway where all public contracts for the UK are advertised.

Think how refreshingly simple it would be if you’re a British supplier, particularly a small one looking to grow, if you knew about every single contract opportunity for your commodity in the UK as soon as it was advertised.  So let’s build on the success of portals like Public Contracts Scotland to create something bigger and better that covers the whole of the UK.

Let’s take the impetus given to us by the new EU directives and drive this SME agenda forward!

Community benefit clauses that benefit all

We need to seize the opportunities to make public procurement a force for good in the wider community and economy.  We can use community benefit clauses to not only deliver apprenticeships and work placements, but also to promote improved engagement with and services for communities.

How about donating the power of a community benefit clause in your construction project to another area if you can’t sustain any more apprenticeships at the moment where you are?  Why not put it in your contract but target it for a related geographic area where there is a demonstrable need?

Now that would be Team UK working better together wouldn’t it?

There is powerful information in the data – we just need to use it!

We have access to big data on spending across our organisations, across our sectors, across our countries, across the UK.

It’s time to inspire our IT suppliers to give us integrated solutions which join up purchasing systems to general ledgers to contract registers to national procurement information hubs.  It’s no longer acceptable for us all to say we don’t have the data; that we just don’t know.

Just imagine what we could do with all that knowledge about our spend and contracts if we can actually get our hands on it?

The future for public procurement is exciting

So as we head towards a place where decision-making could become more local, the potential for public procurement to excel has never been greater.

We can deliver even more savings and value by joining up behind the scenes and working together whenever we can.  This won’t be by implementing a one size, or organisation, fits all approach.  It will only be by adopting a federalist approach that recognises procurement teams operating at local, sectoral and national levels all have their roles to play in this exciting next stage.

Only then we truly be better together.

Sourcing things differently: the world of alternative storefronts

Here in 2014 companies are increasingly looking for different ways to get products into the hands of the end user. We’re not just talking about practical logistics, but every decision and thought that informs a customer’s purchasing process. Take Internet sensation Alibaba for instance – sure you can draw parallels to other popular online storefronts, but there’s something in its old-fashioned street-vendor approach that no one else has successfully harnessed in this age.

Elsewhere HowGood is offering shoppers the chance to shop transparently, informing around sustainability and ethical factors.

What is Alibaba? Alibaba online marketplace

What is Alibaba? 

Described by The Economist as the world’s greatest bazaar, Alibaba is a Chinese e-commerce platform that is single-handedly responsible for carrying out more transactions than both eBay and Amazon (and that’s combined…) In terms of numbers Alibaba represents a massive 80 per cent of online purchases in China.

Alibaba is a haven for manufacturers, suppliers, importers and exporters.

Three websites actually sit under the Alibaba umbrella, and they are: Taobao, Tmall and Alibaba.com.

It’s an online marketplace (for want of a better explanation), one that’s free for users to browse and buy, but sellers can pay for ads in order to stand out. It’s come some way from its roots when it existed solely for the purpose of connecting manufacturers to potential customers. In 2012 Taobao and Tmall saw transactions totalling $170 billion being made – and revenue in 2013 stood at $6.73 billion.

There’s more than just the transactional side of the business too. Services such as AliSourcePro will allow businesses to source new supplies, and get quotations for stock in under 12 hours. A payment system – Alipay, meanwhile handles small and micro financial transactions.

The rise and rise of Alibaba: A healthy investment

The Chinese e-commerce giant has made it into the history books by achieving the largest initial public offering (IPO) since records began. Upon its debut Alibaba stood tall at $92.70 (a full 38 per cent more than the original estimate) – and racking up a colossal $25 billion in total shares.

And with that, Alibaba founder Jack Ma has somewhat unsurprisingly just topped China’s rich list too.

Your sustainable weekly shop

HowGood sustainable shopping

Want to be better informed about the things you’re putting into your shopping basket?

HowGood is offered through both a dedicated app and online experience – and has just amassed $2 million in funding.

Researches and rates products based on a number of criteria (60 In total); with everything from a company’s behaviour over time, to the provenance of ingredients and the manufacturing process.

Procurement under the spotlight

HowGood’s website states:

“We investigate the products’ ingredients – and the company’s procurement and processing methods. We’ll look at everything from corporate governance to specific issues like hazardous waste emissions.

We’ll also put company behaviour in the context of their industry. So if a company’s industry has naturally low carbon emissions, their emissions policy will carry a lower weighting — and vice versa.”

HowGood’s genesis dates back to 2007, in 2014 it now shares data to small US grocers spread across 21 different states. Its ‘Featured grocer’ spotlight regularly identifies highly-rated products and suppliers.

Find out more about the food you eat at howgood.com

Tania Seary talks Procurious in the media

Over the course of the last few weeks, Procurious founder Tania Seary has been quoted in Australia’s Marketing Magazine. We’ve provided some choice excerpts from the conversation below.

Tania Seary Procurious

In part one of a two-part article she says:

“10 or 12 years ago, procurement used to be in the back room in the brown cardigan, but now they’re very much in the boardroom.”

“Globalisation’s driven a lot of the development, and a lot of it is about brand reputation and risk management.”

The article continues:

Advertising agencies need to “get with the program” and start quantifying the value they produce for businesses, she says with a provocative grin.

Seary has made her career founding a string of successful businesses to develop the procurement industry, including professional development educator The Faculty, recruitment service The Source and, most recently, industry social network, Procurious.

“10 years ago procurement wouldn’t have been seen anywhere near advertising agencies because that was the holy grail; that was the secret herbs and spices. What business leaders have to grapple with is they want to reduce their marketing costs, but where do they do it?”

Read the article in full here.

The second part of the article talks about how procurement can add value to an organization.

It begins: Tania Seary has a bundle of catchphrases she pulls out to explain why marketers should value procurement professionals’ input into their decision-making.

One of these is “Process is liberating” – and she says it convincingly.

Despite marketers such as Chorus Executive’s Christine Khor and DDB’s John Zeigler describing procurement’s systematisation and financial pressures as stifling to creativity, Seary argues that proper processes actually allow creative freedom.

“It’s all very structured and the guidelines are set up very well if procurement’s involved and people know what they’re dealing with.”

Seary is adamant that procurement professionals, “If they’re doing their jobs right”, simply act as value-adding helpers to decision-making, rather than taking away control in the way marketers often perceive.

Tania on why procurement people look at the value of agency relationships in a variety of dimensions other than pure financials:

“There’s no use being a cost reduction guru when your CEO’s looking for growth. You need to be managing costs but you need to be thinking about how you work with suppliers to grow the business with new products, new geographies, whatever. But if your CEO’s like, ‘Right, we’re under pressure here, it’s about reducing costs,’ well everyone should be in sync with what the business strategy is and supporting each other, ideally.”

Don’t forget: You can read the article in full on the marketingmag.com.au website.

5 more common procurement myths busted

Procurious.com – busting procurement myths since 2014.

We arm you with another handful of myth-busting one-liners to help you educate your workplace.

Myth: Procurement is just a fancy word for what was once known as the purchasing function within a business.

Reality: Procurement operates in a constantly changing environment and continues to evolve to meet business needs. Whilst its basic practice has always been around, procurement’s role and responsibilities and the skills required have significantly developed over time. What was considered purchasing is not the procurement of today, and the same may be said of the procurement of the future..

Myth: Anyone can get a job in procurement.

Reality: Procurement benefits from professionals with diverse backgrounds, and like no other profession is more active in seeking a mix of knowledge and experience. Procurement professionals are a good reflection of the industry sectors and business functions they work in and across. And yet, procurement still has a skillset that is distinct and requires specific training and development focus.

Myth: Most people end up in procurement as a career by accident.

Reality: There’s a new generation of procurement professionals that have actively chosen procurement as their career of choice. This surge will continue.

The shift is a result of businesses realising the potential opportunities for investing in dedicated procurement and procurement becoming more widely known and recognised. Just take a look at the new programs developed specifically for procurement in the education and training sector.

Myth: Procurement people don’t communicate effectively with other levels of the business.

Reality: Procurement people have the tough job of communicating messages and making changes across vertical and horizontal levels of the business. Often it’s the message, reasons and impacts of communication that is difficult.

Myth: A good chief financial officer can do procurement tasks just as well.

Reality: Procurement considers a wide outlook in decision-making and is in a good position to do this objectively. Finance is a highly important factor but must be weighed up against other business needs (such as service, risk and innovation).

Want more? Read the original 5 procurement myths

Has RFID technology revolutionised logistics?

This video from IBM demonstrates how RFID technology could revolutionise logistics services… But this isn’t from 2014, instead it’s been sitting gathering dust on YouTube since 2006.

So what’s happened in the preceding years? Honestly, not as much as you’d have thought… RFID has faced a number of challenges despite its advantages and usefulness within industry. But not from lobbyists with privacy concerns, conspiracy theorists, or lunatics who believe RFID has something to do with the Mark of the Beast. Instead it is feared that RFID technology has the potential to place significant complications on organisations as it opens them up to external (often invisible) risks.

Sports manufacturer Adidas has just attracted considerable attention by sewing RFID tags into the jerseys of national football teams.

In a statement to Deutsche Welle, Adidas said: “As part of a logistics project we have tested for the first time an RFID label with a virtual number. It is a read-only label without any additional data. The label is not tied to the article number, size or color of the article and we also can’t link it with end customer data. It is of course up to customer of this product to cut out the RFID label along the dashed line and throw it in the trash”.

So just what is RFID anyway?

RFID is short for radio-frequency identification, it transmits data wirelessly through the use of electromagnetic fields. There are many benefits for adopting RFID technology into your products, not to mention its barely-there proportions, and teensy price-tag (in-fact EPCglobal is campaigning for the cost to fall to just 5 cents). When applied it functions as a tracking device (of sorts), allowing the producer to keep tabs if they so wish.

Today you can find RFID tags being commonly used across storage and logistics industries. Retail is also catching-on, so it’s not surprising to learn of Adidas’ dabbling.

The participants at this Canadian yoga event confirmed their attendance at a RFID-fitted kiosk. And the library at Sydney’s University of Technology is looked after by robots – how is this possible you ask? Through RFID of course…

Will augmented reality change the manufacturing industry?

According to recently published figures – only 17 per cent believe that augmented reality is going to change manufacturing in the future.

But first a primer: what is augmented reality?

Dmi T/Shutterstock.com

People often confuse augmented reality (AR for short) with virtual reality, the two are wholly different beasts but it’s easy to see the logic. Virtual reality transports the user into a carefully constructed 3D, virtual world. It’s a full-blown immersive experience – and it needs to be, in order to create and sustain the illusion. Whereas augmented reality relies on digital data being overlaid on a live view of the world outside. Text, graphics and sound fill your field of vision, adding a useful extra layer of data to your immediate surroundings. In technology terms we’re talking Google Glass and Sony’s Smart EyeGlass, rather than Oculus Rift and Project Morpheus.

Factories of the future

Today there is very little practical, real-world use of augmented reality in the field. Despite being AR is still very much in its infancy many industries and professions are wising-up to the benefits the technology can afford.

Not to mention, the use of AR could expedite training – negating the use of offsite sessions and bringing it in-house instead. Similarly it has applications within the medical world, providing the surgeon with overlays of essential patient information.

Boeing, BMW and Volkswagen are working on implementing AR into their assembly lines to smooth the manufacturing process.

There’s a strong case for the use of AR within the retail and commerce space. Want to see what’s inside a product’s packaging without opening it? You can do that, sure.

How about using it to help battle immoral practice in the workplace? Google Glass is now able to detect whether someone’s happy, sad, nervous, angry or excited with the help of an app. This could help boost productivity, ensuring workers remain in a healthy state of mind, and identifying emotional strain before it fully takes hold.

Incidentally SCM World currently carries a survey on the future of manufacturing – you can take part and submit your thoughts here. The results are due to be published in October, so we’ll be keeping a careful eye on this one.

Responsible sourcing: top 500 ranking

You can pack a great deal under the responsible sourcing umbrella – from businesses practicing sustainable procurement, specialists in environmental and ethical trading, thought-leaders in social impact, to those organisations sharing strategies and solutions.

The leaderboard is arranged by social media clout – those with massive influence undoubtedly sit nearer the top, indicating that meaningful interactions via social media channels count for a lot here.

The list is compiled by McClelland Media Ltd, and UK retail giant Marks and Spencer.

We’ve provided a small sample below, but we suggest you head on over to https://www.leaderboarded.com/responsible-sourcing to view the top 500 in its entirety.

You can pack a great deal under the responsible sourcing umbrella – from businesses practicing sustainable procurement, specialists in environmental and ethical trading, thought-leaders in social impact, to those organisations sharing strategies and solutions.  The leaderboard is arranged by social media clout – those with massive influence undoubtedly sit nearer the top, indicating that meaningful interactions via social media channels count for a lot here. The list is compiled by McClelland Media Ltd, and UK retail giant Marks and Spencer.   We’ve provided a small sample below, but we suggest you head on over to https://www.leaderboarded.com/responsible-sourcing to view the top 500 in its entirety.  See something missing? We’ve been told it’s possible to nominate organisations (or people) for consideration. Best visit the publisher’s website for more information.

We’d also recommend bookmarking the page, as it updates weekly every Friday.

See something missing? We’ve been told it’s possible to nominate organisations (or people) for consideration. Best visit the publisher’s website for more information.