Category Archives: In The Press

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

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

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

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

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

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

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

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

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

Three winning characteristics of 30 Under 30 Stars:

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

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

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

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

World Trade and Procurement in the Trump Era

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

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

The threat to global supply chains

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

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

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

Trump’s abolition of free trade agreements

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

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

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

The prospect of new bilateral deals

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

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

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

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

China could be the driving force behind liberalising trade

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

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

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

Driving integration in procurement markets

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

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

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

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

Access to global markets is core for procurement

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

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

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

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

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

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

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

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

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

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

Protectionism could backfire by further accelerating automation

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

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

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

Accelerating automation is inevitable

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

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

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

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

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

What’s the answer?

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

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

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

In other news this week:

France passes “duty of vigilance” supply chain law

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

Read more at Supply Chain Dive

Trump seeks historic increase in military spending

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

Read more at ABC News

A Noble Cause: CIPS CEO David Noble’s Enduring Legacy

From his fight against modern slavery to his campaign to licence the procurement profession, Procurious highlights the enduring legacy of the late CIPS CEO, David Noble.

David Noble’s professional accomplishments were many and varied, both within his role as CIPS Group CEO and during his stellar career beforehand. After his sudden and untimely passing late last week, however, there have been tributes from procurement leaders around the world. The tributes emphasised two of Mr Noble’s stand-out achievements.  Firstly, his fight against modern-day slavery and secondly, his work in promoting and licensing the procurement profession.

The crusade against modern slavery

In an interview with Procurious before his appearance at the Big Ideas Summit, David Noble stressed that the profession is in a unique position to drive the eradication of modern slavery. “Whether it’s child labour, inhumane working conditions, forced labour or slavery, there is no doubt that the procurement and supply profession has a unique opportunity to step up to this challenge as a professional community and effect real change”.

Mr Noble believed that in terms of corporate social responsibility, procurement has come to a significant crossroad and needs to adapt to survive in the face of rapidly-changing parameters, starting with accountability.

“Accountability for inadequate or exposed supply chains now goes right to the top, with the company’s reputation on the line. Good corporate supply chain governance demands accountability, and to have accountability means the appropriate authority and capability to act.”

The  2015 Modern Slavery Act

2015 was a watershed year for Mr Noble and his crusade against modern slavery, with two significant milestones taking place. Firstly, the UK Government signed into law the 2015 Modern Slavery Act, after seeking considerable guidance from CIPS while the Act was being created. CIPS was sought out as a subject-matter expert due in no small part to its 2013 partnership with Traidcraft and Walk Free, which led to the creation of the Ethical and Sustainable Procurement Guide. The Guide helped procurement professionals identify suppliers who subjected workers to poor wages, inhumane conditions or forced labour, and advised them on how to put preventative measures in place. Following the release of the Guide, CIPS also created an ethical e-learning course and test, which covered corruption, fraud, bribery, exploitation, human rights and forced labour.

After the Modern Slavery Act was signed, Mr Noble’s message to the profession was again focused on accountability: “For too long supply chain transparency has been overlooked, and we hope that this legislation sends out a clear message to business leaders that they are accountable for all discrepancies, no matter how far down the chain.”

Vatican City declaration  to eradicate modern slavery

The second milestone that took place in 2015 was Mr Noble’s invitation to Vatican City to witness a historic signing by faith leaders of a joint declaration to eradicate modern slavery. Leaders from the Buddhist, Christian, Hindu, Jewish and Muslim faiths signed the declaration, which had been developed by Andrew Forrest’s Global Freedom Network. Mr Noble was invited as a guest of Andrew Forrest and also by the Archbishop of Canterbury Justin Welby, in recognition of CIPS’ work in addressing modern slavery and the integral role supply chain management will play in the ongoing campaign.

Many of the tributes to Mr Noble published on Procurious called out this aspect of his career, beginning with CEO ISM Tom Derry, who wrote that “[David’s] moral vision and leadership was instrumental in CIPS’ crucial role in the passing of the U.K.’s Modern Slavery Act in 2015.”

CIPS General Manager for the Asia-Pacific region, Mark Lamb, wrote: “He was particularly vocal about ethical procurement, eradicating bribery and corruption, and ensuring that supply chains are free from modern slavery.” Similarly, The Art of Procurement host and producer Philip Ideson wrote about Mr Noble’s “leadership of efforts to eradicate slavery across the supply chain, impacting millions of workers without their own voice”.

Broadspectrum’s Executive General Manager of Procurement, Kevin McCafferty, worked closely with Mr Noble on the development of the Ethical Procurement Guide: “David was instrumental in getting the UK Government to introduce the Modern Slavery Act 2015.” Mike Blanchard, Deputy Chief Executive Operations at the New Zealand Tertiary Education Commission, wrote that Mr Noble’s focus has led to CIPS becoming “a professional body with ethics as a pillar”.

Licensing the profession

When Mr Noble was asked to bring his “Big Idea” to London as part of Procurious’ 2015 Big Ideas Summit, the subject for him was a no-brainer. “My big idea is something we have as a policy statement – licensing the profession,” he told the camera. Watching his comments today, it becomes immediately clear that his drive to license the profession was inseparable from his campaign to improve ethics in procurement and, ultimately, eradicate modern slavery.

The need for CIPS to licence the profession became increasingly apparent to Mr Noble as he received calls from the media after supply chain disasters linked to malpractice or ethical breaches. Reporters asked him the simple question: “Why is the procurement and supply profession allowing this to happen?”

Bringing accountability and consequence to procurement

It was difficult to bring accountability and consequences to those on the front line who were making decisions that led to malpractice and reputational risk. Licensing, said Mr Noble, was therefore the answer. “There’s a huge public good agenda linked to supply chains around the world … [and] companies are increasingly realising that having licensed supply professionals makes a real differentiator to success.”

Licensing brings with it the threat of consequences: “If they behave unethically, they stand to lose that license and they’ll find it difficult to work in the profession again,” said Mr Noble. “But the good side is that it gives them the protection of saying ‘You’re putting my professional license at risk’ if they’re ever asked to do something unethical or wrong.”

CIPS President and former Rio Tinto CEO Sam Walsh noted Mr Noble’s extraordinary achievements in moving forward with the professionalisation of procurement: “His initiatives such as training, licensing of procurement professionals, establishment of standards for anti-corruption, anti-bribery and anti-modern slavery have led to CIPS being highly regard by governments, employers and members.”

Visna Lampasi, General Manager Group Procurement for Woolworths (Australia) also commented on Mr Noble’s “energy behind licensing the profession … and major contribution to procurement’s development”.

 A legacy of thought-leadership

A valued contributor to the Procurious Blog, Mr Noble appeared at the Big Ideas Summit in 2015. His thought-leadership published on Procurious includes:

This article concludes our three-part series honouring the achievements and memory of CIPS CEO David Noble. Readers can leave a tribute to Mr Noble on the Procurious discussion board.

Tributes Continue To Pour In As Global Procurement Community Mourns David Noble

As procurement leaders from around the world send in their personal tributes to mark the sudden and untimely passing of CIPS CEO David Noble, the common theme is one of sadness and shock.

Through these moving tributes, a picture is beginning to emerge of the significant legacy that Mr. Noble has left behind for the profession.

Leave a tribute to David Noble on the Procurious discussion board.

In many ways, the world is divided into two hemispheres when it comes to the professional bodies representing procurement and supply management.

Whether you belong to CIPS or ISM, you can be confident that you’re a part of an organisation with an incredibly long history (85 years in CIPS’s case, over 100 years for ISM), with a network of hundreds of thousands of professional colleagues globally.

It seems fitting, then, that after the Group CEO of CIPS passed away suddenly late last week, the CEO of ISM was one of the first to reach out with a moving tribute for his peer:

I know my personal shock and grief is shared by the global procurement community upon learning of the passing of CIPS Group CEO David Noble. David was more than a trusted ally and colleague. David had a vision of the evolution of procurement that included putting procurement, through licensure, on a footing equal to other formally recognised professions. His moral vision and leadership was also instrumental in CIPS’ crucial role in the passing of the U.K.’s Modern Slavery Act in 2015. ISM extends its deep condolences to David’s wife, his family, and our esteemed colleagues at CIPS.  Tom Derry, CEO, ISM.

Since yesterday’s sad announcement from Tim Richardson, the CIPS Chair of Global Board of Trustees, Mr Noble’s passing has been reported across industry publications including Supply Management, Spend Matters and Procurious. Yesterday’s article on Procurious included early tributes from Sam Walsh, former Rio Tinto CEO and CIPS president; Procurious Founder Tania Seary; Santos CPO David Henchliffe; and Visna Lampasi, General Manager Group Procurement for Woolworths Ltd.

Tributes continue to pour in, led by Mark Lamb, CIPS General Manager for the Asia-Pacific region.

At CIPS, we are deeply saddened to lose our leader and colleague, David Noble. Indeed, it is not simply a loss to CIPS, but also to procurement globally. David was always passionate about the role that procurement plays and how it can change people’s lives for the better. His legacy will long be remembered: CIPS is now recognised as the global professional body for procurement with an impressive global footprint and is improving procurement around the world. He was particularly vocal about ethical procurement, eradicating bribery and corruption, and ensuring that supply chains are free from modern slavery. As I reported to David, I will particularly miss his leadership which has seen CIPS go from strength to strength around the world. Mark Lamb, General Manager CIPS Asia-Pacific.

It is very shocking and sad news for all of the CIPS family and procurement professionals around the globe. David Noble was the voice of the profession in many arenas, and his visionary leadership has led to the success of the institute, its members, and the profession globally. He will be greatly missed, and I do sincerely hope that he rests in peace departing so early in life, and that his family and loved ones find solace and patience at this difficult time of their lives. Sara Abdellatif Omer FCIPS, Member, CIPS Global Board of Trustees

Like many across the global procurement community, I was shocked to hear of David Noble’s passing. Today is a very sad day for our profession, but more importantly, for David’s family, friends and colleagues. David’s legacy will touch every corner of the world. He inspired and advocated for a generation of procurement professionals while his leadership of efforts to eradicate slavery across the supply chain impacts millions of workers without their own voice. Philip Ideson, Host and Producer, The Art of Procurement

I was shocked and saddened today to hear of the passing of David Noble. I have known David as a friend since he joined CIPS in 2009 and worked closely with him on the development of the Ethical Procurement Guide with Andrew Forrest and the Walk Free Foundation. David was instrumental in getting the UK Government to introduce the Modern Slavery Act 2015, and has been a true leader to the procurement profession over the past 8 years. My condolences go out to his family and friends, and his colleagues at CIPS. He will be sadly missed by the Institute. Kevin McCafferty FCIPS, Executive General Manager – Procurement, Broadspectrum 

During my tenure as the only CIPS Trustee representing countries outside of the UK, David was always supportive in bringing a global perspective to CIPS as he worked diligently towards a global goal. Whist David and I had our differences with regards the establishment of the global governance structure, we were always able to share a pint at the bar and have great discussions around the profession. He always had a keen interest in what was happening in the Australian market and how the profession was developing. When I last met David, he was his usual vibrant self, full of energy and looking at ways to continually grow the institute and profession. David’s loss will create a void that any successor would have significant challenges to fill. My condolences to David’s family. Stephen Rowe FCIPS, CPO, Spotless. 

“David was the reason I joined the CIPS Board. He was such a strong advocate for the profession and his visionary approach for CIPS was an inspiration. He believed that the procurement profession was significantly undervalued and with steerage it could drive significant changes in the world, whether that be in eradicating modern slavery or sustainable sourcing. He was a warm-hearted Northerner who was well respected and someone who I’d known for many years. He will be sadly missed. Alison Parker FCIPS, Member, CIPS Global Board of Trustees, MD, HSBC

I was shocked to hear that our leader David sadly passed away on Friday. I first met him in the UK many years ago, before he was CEO of CIPS, and very much admired him in his Procurement roles. He has worked relentlessly for CIPS over his seven years’ tenure to bring value to our profession. David will leave a large gap and I am saddened I will not get to see him in London at our Annual Congress Meeting, just weeks away. Hannah Bodilly FCIPS, Global Congress Member for Australasia, Head of Strategic Sourcing, Bank of Queensland

I first knew David when I was on the CIPS Council (as it then was) back in the noughties. David always had a clear view on where he felt the profession needed to go. He gave strong leadership and direction in globalising CIPS to be the recognised worldwide body that it is today. Whilst being a leader at CIPS he was also a champion for the profession as a whole – his promotion of key causes, such as the Anti-slavery remit being a notable one,  which has such global resonance right now. He raised the profile and importance of procurement across public and private sectors alike, as well as with the media. He also forged links with other Institutes and bodies worldwide. His passion for the profession was without doubt and under his direction CIPS was re-branded. Like the broader profession, CIPS has flourished and grown in importance and stature.
He will be greatly missed by all who knew him and he will be a tough act to follow. Barry Ward, Procurement Brand Manager, Global Business Services, IBM

David and I worked together at Novar (formerly Caradon) for over seven years, arguably during a “golden era” of professional procurement in that organisation. Like many others who worked with him and for him during that period, I have many fond memories of David. From his absolute and authentic passion for our profession (years prior to him achieving his ambition to be part of CIPS), his relentless desire to support the technical development of his team (achieving one of the first CIPS Excellence awards when they launched the program) and his love of football (which many bruised ankles can attest to). He was an authentic, committed leader and a true gentlemen. My heartfelt condolences to his family and the CIPS organisation who have lost a fantastic champion and a great bloke. Very glad to have known him if only for a far too short period of time.  Andrew Brightmore FCIPS, Executive Director at Compass Group Australia 

David was a true advocate for our profession. Through CIPS, he led the charge with the licensing and professionalisation of procurement. His focus was on all areas of ethical practice, culminating in the 2015 Anti-Slavery Act, which was supported by the Vatican. His pragmatic and honest approach delivered the real transparency required when you lead a professional body with ethics as a pillar. Creating growth in any industry is a challenge, so his achievements in growing a membership organisation should also be highlighted as another major accomplishment. I am, and always will be, a proud Fellow of CIPS and a colleague of David. He will be missed by all. Mike Blanchard FCIPS, Deputy Chief Executive – Operations, Tertiary Education Commission, New Zealand 

A legacy of thought-leadership

A valued contributor to the Procurious Blog, Mr Noble appeared at the Big Ideas Summit in 2015. His thought-leadership published on Procurious includes:

Leave a tribute to David Noble on the Procurious discussion board.

Global Procurement Profession Mourns Passing of CIPS CEO: David Noble

Tributes are pouring in from procurement professionals around the globe in response to today’s news that David Noble FCIPS, Group Chief Executive of The Chartered Institute of Purchasing & Supply (CIPS) and one of the profession’s strongest advocates, passed away late last week.

CIPS have announced that  David Noble has unexpectedly passed away on Friday after a short illness.

Mr Noble’s legacy to the procurement profession includes his adroit leadership of the world’s largest procurement and supply chain professional body and his championing of the Modern Slavery Act.

Sam Walsh, former Rio Tinto CEO and CIPS president, commented that:

David will be sorely missed. He managed and grew CIPS into a truly global and financially successful organisation focused on improving and obtaining recognition for the Profession.

His initiatives such as training, licensing of Procurement Professionals, establishment of standards for anti-corruption, anti-bribery and anti-modern slavery have led to CIPS being highly regarded by Governments, Employers and Members.

CIPS loses an accomplished leader

Mr Noble took on the role of CIPS Group CEO in June 2009 after the previous CEO, Simon Sperryn, departed after only one year at the helm. Despite being parachuted into a difficult role as an “emergency appointment”, Mr Noble rapidly stabilised and increased CIPS’ finances and oversaw the steady growth of the member base to over 100,000 professionals internationally.

Prior to his captaincy of CIPS, Mr Noble was Group Supply Director at IMI plc, a FTSE 250 UK multinational company specialising in advanced engineering technology, where he was responsible for a £1billion spend. Mr Noble was also known for his pioneering of Category Management and Strategic Sourcing at Motorola in the mid-1980s. Although the majority of his career was in manufacturing, Mr Noble’s experience of the public sector, the distribution industry and large scale turnkey power station projects served him well when he engaged with the leadership of these sectors in his role as CIPS Group CEO.

Mr Noble held an honours degree and was elected a fellow of CIPS in 1994, also serving on the fellowship selection panel, the CIPS management board, the Cabinet Office Government Procurement Reform Board and the London Olympics Supplier Arbitration Board.

A global advocate for procurement

According to Keith Bird, Managing Director at The Faculty Management Consultants, Mr Noble’s global vision for CIPS means that his passing will be felt around the world. “Personally, I will remember David for his vision and tenacity. Expanding the CIPS network globally is a remarkable legacy to leave behind.”

At the time of Mr Noble’s death, CIPS has over 115,000 members across 150 countries, with offices in Africa, the Asia-Pacific, UK, North Africa and the Middle East, with partnerships in China, Poland, Romania and Sweden.

Procurious Founder Tania Seary commented that Mr Noble’s advocacy for licensing the profession will be his greatest legacy:

I last met with David at the Institute of Company Directors in Pall Mall. He was so proud of CIPS’ membership growth and its increasing levels of online engagement. CIPS, like ISM, is an important backbone to our profession – through his advocacy, David has strengthened procurement’s posture.

Similarly, Santos CPO David Henchliffe remembers Mr Noble for the work he has done moving the profession forward in one of its key areas of growth, Australia:

I worked with David as the Chair of the CIPSA Professional Advisory Group for more than 5 years. He was a tireless advocate for advancing the profession and the Institute in Australasia and will be sadly missed. I would like to extend my condolences to his family and friends.

A modern-day abolitionist

Mr Noble was a giant figure in the crusade against modern slavery, inspired by a meeting with Andrew Forrest of the Walk Free Foundation in 2012. Since then, he aligned CIPs with the cause, partnering with Walk Free to educate the organisation’s 100,000+ members through the establishment of the Ethical and Sustainable Procurement Guide.

CIPS also provided guidance to the Home Office in the creation of the 2015 Modern Slavery Act, which led to Mr Noble journeying to Vatican City in 2015 to witness the historic signing by faith leaders of a joint declaration committed to the eradication of modern slavery by 2020. He also attended a meeting at the White House to discuss how CIPS can support the G20’s Anti-Corruption Implementation Plan.

An incredibly hard act to follow

It is believed that Mr Noble’s passing will create a significant leadership gap for CIPS, as he was personally driving many of the organisation’s key initiatives. Many of the partnerships and relationships formed at the highest level were linked to Mr Noble’s personality, and the confidence and trust he inspired in others. At present there is no clear successor for CEO within the executive team. There has been some movement recently among CIPS’ leadership, with a new Chief Operating Officer joining late last year, and the Head of Finance retiring soon.

Mr Noble’s role as advocate, spokesperson and thought-leader for the profession meant he was regularly called about to comment on the biggest issues affecting the profession, from slavery, to Brexit, to finance and the manufacturing landscape.

Visna Lampasi, General Manager Group Procurement for Woolworths Limited praised Mr Noble for his pioneering spirit:

David was a driving force.  He put his personal brand and energy behind licensing the profession, making the Modern Slavery Bill a reality and a creating a number of other firsts for CIPS.  He was a major contributor to procurement’s development and will be sadly missed.   It is a great loss, not just for the profession, but for his family and friends.

A legacy of thought-leadership

A valued contributor to the Procurious Blog, Mr Noble appeared at the Big Ideas Summit in 2015. His thought-leadership published on Procurious includes:

You Appointed WHO As The New CPO?

Increasingly, companies are appointing CPOs from outside of the supply management profession. What does this tell us about C-level expectations of procurement, and why are supply management professionals missing out?

Want to follow all of the action today? Register as an online delegate for the London Big Ideas Summit 2017 here.

This is the moment you’ve been waiting for. Years of hard work and a brilliant career in supply management has brought you to within a hair’s breadth of fulfilling your dream – to become the Chief Procurement Officer of your company. Starting at the most junior level, you’ve worked your way up the ladder to your present position as second-in-charge of the procurement function. Your boss announced his retirement last week, and you’re quietly confident your turn has come – after all, there’s absolutely nothing about the organisation’s supply chain that you don’t know.

You step into the meeting room where the out-going CPO and two other executives are seated around a table. Disconcertingly, they stop talking when you walk in and look at you guiltily. Getting straight to the point, they tell you they’re excited to announce the new Chief Procurement Officer is … Jennifer from Marketing.

Is Procurement Being Usurped?

Has this happened in your organisation? There’s every chance that when it comes time to choose a new CPO, the C-Suite will appoint someone from a non-supply background. This means that a colleague of yours in a completely different department may one day swoop in to steal the job that you’ve been working towards for years.

While CEO-level expectations of the CPO continue to blur and broaden, the skill-set required to meet those expectations can now potentially be found in any department. The fact that supply managers are still reporting difficulty in educating their businesses on the value procurement can bring to an organisation doesn’t help the situation. If a CEO (wrongly) believes that a supply manager has spent his or her career focused solely on cost, then they are likely to look elsewhere for candidates for the top job.

Deb Stanton, Executive Director of Research and Benchmarking organisation CAPS Research and former Global CPO of MasterCard, has observed the trend of CPO appointments from outside of the profession. CEOs are no longer as interested in appointing CPOs who possess the traditional skill set that is earnt over years working in supply chain. A savvy marketing professional, or a cost-conscious operations manager who understands how supply management works, makes a very attractive candidate for CPO.

So, what does this mean?

  1. CEOs are looking for a different set of skills for the next CPO

The CPO of the future may have little idea how a tender is run, but they must:

  • Be business-savvy and understand the organisation as a whole
  • Know how procurement works from a customer’s perspective
  • Be completely aligned to overall business strategy (not just the supply management strategy)
  • Have a strong knowledge of the business’ finance function
  • Be focused on the core customer and external audiences
  • Embrace changing technology and external disruptive forces
  • Be an influencer and relationship management expert.

Deb referred to CAPS Research’s “Futures Study 2020”, which projects the skills required to manage a procurement function into the future.

  1. The CPO doesn’t necessarily need supply management expertise

The complex and varied skill-set picked up through a career in supply management may no longer be enough to satisfy the requirements for the job of CPO. CEOs may even regard procurement’s traditional audience of stakeholders, end-users and suppliers to be too focused.

That being said, technical procurement skills do matter, and are still vital for any procurement team’s success. In the example above, the disappointed candidate who missed out on the top job can still play a vital role in educating and supporting the outsider CPO with their supply management knowledge.

What’s the solution? If you believe the CPO role rightfully belongs to you, rather than someone from a completely different department, then make sure you broaden (rather than narrow) your focus as you move upwards in your organisation. This means familiarising yourself on a macro level with the whole business, bringing the core customer into every decision you make, and being known as an influencer who can clearly articulate the value you, and your function, brings to the business.

As Deb pointed out today, procurement professionals are in a unique position to overlook an entire business. They’ve got every chance of seeing where the opportunities are so let’s use it an not lose it!

Don’t forget to register as a digital delegate so you can keep up with the rest of today’s events.

The Samsung Smartphone Debacle: Suppliers Pushed Too Far, Too Fast?

Samsung has apportioned some of the blame for its exploding Note 7 phones to two of its battery suppliers. But who is ultimately responsible? Is the pressure to innovate at all costs leading to unsafe development and testing time-frames?

What Went Wrong?

Samsung  has begun the long task of rebuilding consumer trust in its smartphones. But questions remain.   Why didn’t Samsung pick up design and manufacturing faults before they sold 1 million unsafe devices to customers? The cause appears to lie in Samsung’s rush to beat its arch-rival Apple to market. This led to a failure to properly test lithium-ion batteries in the Note 7 phone.

The pressure to innovate that tech giants such as Samsung place on their suppliers is immense. Particularly when competitors such as Apple are constantly upping the ante. Every new release on a phone must be demonstrably better than the last.  This means delivering ever-smaller and lighter batteries that customers can charge rapidly and use for a full day and evening.

Battery manufacturers responded to the challenge by using a thin “club sandwich” design. In this battery positive and negative electrodes are stacked and kept apart using layers of separators. Unfortunately, the pressure for an ever-thinner battery meant that the separators were too thin, leading to shorts and subsequent over-heating. A second, unrelated design fault lay in an abnormal welding process. This led to contact between a positive terminal and a negative electrode.

Spreading the blame

The fallout for the exploding smartphones follows a familiar pattern where, although the technical fault lies with a supplier of products and services, the big-name parent company takes the lion’s share of the blame. Even when the parent organisation attempts to publicly offset some of the blame onto its suppliers, consumers typically assign responsibility to the most recognisable brand.

An example of this famously occurred in April 2010 with the Deepwater Horizon oil spill in the Gulf of Mexico.  The owner of the well, BP, took most of the responsibility (and $54 billion in associated costs), whilst the contracting operators came under considerably less scrutiny. Tellingly, a U.S. District Judge apportioned 67% of the blame for the spill to BP, 30% to Transocean and 3% to Halliburton.

Samsung, to its credit, did accept overall responsibility for the $6.9 billion mistake even while it pointed the finger at battery manufacturers. Samsung Electronics America senior vice president Justin Denison told a press conference: “Ultimately we take responsibility for this. It’s our product, we set the specifications, and it’s up to us to catch the problem before it leaves in one of our devices.”

The long road to brand recovery

Youtube users may have noticed Samsung’s brand-repair efforts have gotten underway, with ads such as the following appearing online:

The South Korean company has invested $170 million into safety.  It is assertively broadcasting its new 8-point safety check which includes a durability test, visual inspection, x-ray test and others. Samsung’s investigation into the Note 7 failures included over 700 R&D engineers. These engineers tried to replicate the issue by testing 200,000 phones and 30,000 standalone batteries.

But, in a further unfortunate setback for the brand, one of the affiliates responsible for manufacturing the faculty batteries – Samsung SDI – experienced a factory fire last week in Tianjin, China, with 110 firefighters and 19 trucks responding to the blaze.

Senior executives from Samsung have commented that they’ve learnt an enormous amount about crisis management in the past few months. Observers, too, can draw some valuable lessons around the dangers of rushing new innovations to market and the ineffectiveness of attempting to apportion blame to suppliers.

Read more about Samsung’s smartphone battery issues.

In other procurement news this week…

Boeing’s Space Taxi to include 3D printed components

  • Boeing has commissioned 600 3D printed components from Oxford Performance Materials for use in its Starliner space taxi.
  • Boeing expects the spacecraft to fly unmanned in June 2018. and will have a first crewed test flight in August 2018. It will ferry two astronauts to the International Space Station for the first fully operational flight in December 2018.
  • The inclusion of 3D components marks a first for 3D technology usage in spacefaring technology, with increasing recognition that printed plastics perform well under the pressure of launch and in a temperature of absolute zero.

Read more at Supply Chain Dive.

New research reveals CEOs still don’t “get” procurement

  • Consultancy firm 4c Associates released the findings of a poll of 521 CPOs, managers and procurement personnel to understand how procurement is perceived by the C-Level.
  • 48% of participants claimed their boss “doesn’t get what the procurement team does, or can do”. 55% said the C-Level regards procurement as a support function. It exists to cut costs, rather than add strategic value to the organisation.
  • Mark Ellis, senior partner at 4c Associates, commented that procurement needs to proactively highlight the services they can provide beyond cost cutting. “If all the function does is speak in terms of savings, then that’s how it will be perceived: as a cost cutter”, Ellis said.

Colin Powell To Complete Stellar Keynote Line-Up At ISM2017

The fact that the Institute for Supply Management can attract keynote speakers of this calibre offers proof that the profession truly has come of age.  

ISM has announced that the former U.S. Secretary of State, General Colin Powell, will join former UK Prime Minister David Cameron to deliver a keynote at the year’s biggest conference in Supply Management, ISM2017.

General Powell will inspire and motivate ISM2017 attendees with stories of leadership under fire – and how to deliver complex supply systems when facing immovable deadlines.

As former Chairman of the Joint Chiefs of Staff, Powell assembled a multibillion dollar supply chain involving 42 nations during Operation Desert Storm in the Persian Gulf. Powell and his team pulled together millions of coordinated supplies: military goods, machinery, food, weaponry, and critical spare parts.

“As Secretary of State, General Powell used the power of diplomacy to build trust and create alliances, while also having the grit and experience forged by his military career in delivering results when it matters most,” said Tom Derry, ISM CEO. “Powell’s insight will be critical to ISM members and other purchasing and supply chain professionals as they focus on the challenges of working in a tough, ever-changing global economy.”

David Cameron, former Prime Minister of the United Kingdom, who stepped down from the position in 2016 in the wake of the Brexit decision, will also keynote ISM2017 conference attendees about his experience navigating geopolitical and public policy issues and their impact on the global supply chain. He will address a range of events in Europe and worldwide, and what they could mean to supply managers everywhere.

Powell and Cameron’s keynotes share a theme that will resonate with supply managers everywhere – how to deliver effective short-term solutions – and leadership during a time of crisis. The inclusion of two political veterans is particularly apt in 2017 as Europe continues to adjust to the effects of Brexit and the U.S. recovers from one the most divisive presidential races in recent memory.

Registrations are now open for ISM2017, which will be held May 21–24, 2017, at the Disney Coronado Springs Resort in Orlando, Florida.

Focused on “Critical Insights, Powerful Results,” the event expects to draw more than 3,000 attendees from around the world. ISM 2017 features keynotes, learning tracks, and sessions about leading in times of stress. More than 75 interactive sessions will be part of six learning tracks at ISM2017, and executives from firms such as Google, Toyota, Pfizer, Direct Energy, Zimmer Biomet and others will present.

Find out more about ISM2017

What Would You Do If The President-Elect Criticised Your Supply Chain?

Major US organisations are starting to rethink their manufacturing strategies for fear of being labelled “un-American” by the President-Elect. 

Every US-based supply manager with outsourced supply chains should follow Donald Trump on Twitter. Why? Because for major companies with overseas manufacturing operations, there’s every chance that the President-Elect will label your organisation “un-American”.

Since November 2016, Trump has criticised companies including Ford, Toyota, GM, United Tech and, more recently, pharmaceutical organisations including Johnson & Johnson, Pfizer and Bristol-Myers for moving U.S. jobs abroad. His focus appears to be on companies outsourcing to Mexico and China, where historically low-cost labour enables organisations to manufacture their products at a competitive level.

Companies changing plans

According to a report from Reuters, boards of a number of U.S. companies that manufacture overseas have directed their public relations teams to plan a response in case the President-Elect singles them out on Twitter.

Similarly, some companies are reportedly re-thinking mergers and other moves that would involve outsourcing to China for fear of being cast as “anti-American” by the President-Elect. Ford has backed away from plans to build a $1.6 billion plant in Mexico, while United Tech has announced plans to keep half of the 2,100 jobs it was shifting over the border. Reports have also emerged of dozens of major organisations contacting government relations and PR advisors to assess if they have any “red flags” that would draw Trump’s attention and lead to a damaging Tweet being sent.

New risk metric: weighing national interest

According to the Reuters report, “corporate leaders can no longer focus only on maximising shareholder value; they must now also weigh national interest.” Essentially, being labelled as un-American has become a new risk metric that needs to be weighed against the cost benefits of overseas manufacturing.

Trump’s aggressive rhetoric against China may also lead to a reduction of outsourcing to the manufacturing powerhouse as the relationship between the two countries is expected to decline. Trump has also flagged high tariffs as another way in which he plans to move manufacturing jobs from China back to the U.S.

The effects of a Trump Tweet cannot be downplayed. Lockheed Martin lost $4 billion in value as share prices feel immediately after Trump criticised the organisation on Twitter, while Toyota saw $1.2 billion in value wiped in five minutes following a similar Tweet. Developers have even created an App to alert investors to Trump’s market-moving Tweets. This week, the nine biggest pharmaceutical companies that use manufacturing plants in Europe, Asia and Africa lost roughly $24.6 billion in 20 minutes during a news conference in which Trump singled out the industry.

Alongside potential losses in share value, coming under fire from the soon-to-be President puts organisations at risk of brand damage and consumer boycotts.

It is unclear whether Trump will continue to use Twitter to drive his “Made in America” agenda, or use more traditional tools to affect change such as policies and import tariffs.

What do you think about “Made in America”? Are organisations right to be wary of a tweet from Trump?  Let us know in the comments below. 

We’ve kept one eye on the news headlines from around the world this week…

Proliferation of “non-human workers” accelerates

  • Amazon reportedly placed 15,000 robots across 20 fulfillment centres in 2016, increasing its machine workforce by 50%.
  • Similarly, iPhone manufacturer Foxconn has replaced 60,000 Chinese employees with robots, while Wal-Mart is automating up to 7000 jobs, including roles in the accounting and invoicing departments.
  • In the U.S. alone, up to five million jobs are expected to be replaced by robots by 2020.

Read more at Supply Chain Dive 

Blood supply chain faces an uncertain future

  • Due to changes in medical practices, hospital demand for blood has been dropping steadily for the past decade.
  • The strong supply and weak demand for blood has led to a 10 percent drop in the cost of a unit of red blood cells in the US, with overall revenue for the blood banking industry dropping to US$1.5 billion per year in 2014, down from $5 billion in 2008.
  • S. blood banks are expected to lose 12,000 jobs in the next few years, or roughly a quarter of its workforce.

Read more at  The Conversation