Category Archives: In The Press

Global Trade Growth Slowdown a Wake-up Call for Nations

Global trade growth has slipped to its slowest rate since the 2009 financial crisis, sparking concerns for jobs and economic growth.

global trade

The World Trade Organisation has released figures showing that global growth has fallen to 1.7 per cent in 2016. This is well below the forecast 2.8 per cent growth in GDP outlined by the WTO at the beginning of the year.

It’s expected global GDP growth will remain around 2.2 per cent for 2016, which would represent the lowest figure since the financial crisis in 2009.

The slowdown in growth has been driven by a sharp decline in merchandise trade volumes. These fell in Quarter 1, and then didn’t rebound as expected to the middle of the year.

On top of this, the WTO has also revised its 2017 forecasts downwards, from 3.6 per cent, to between 1.8 and 3.1 per cent.

Decelerating Global Trade & Growth

Falling global trade and growth is also in part due to slow growth and performance in major world economies, such as China and Brazil.

North American growth, the strongest in the world in 2014-15, has also slowed. A reduction on imports into the USA has been partly to blame for this.

The volatility in the global economy, as well as a backdrop of increasing uncertainty, has been a major consideration for many countries in their trade.

Disagreements over global trade partnerships, such as the Trans-Pacific Partnership, have not helped the situation. Both US Presidential candidates oppose the agreement, and have stated they will end US involvement in it after November’s election.

The WTO have also warned that uncertainty around the UK’s ongoing relationship with the EU following June’s Brexit vote may lead to even slower growth in coming years.

Protectionism Hurting Growth

After an extensive period of global trade growth through globalisation, many countries are now looking to pull both manufacturing and supply chains back within their borders.

A separate report by the International Monetary Fund (IMF) highlighted the role of protectionism in the slowdown. While tariffs on trade are regulated by the WTO, other measures, such as reducing quotas and increasing subsidies for in-country manufacturing, can be used to reduce exports.

This then has a knock-on effect on global trade volumes, and can inhibit development of global supply chains.

Roberto Azevedo, the WTO’s director-general, said, “The dramatic slowing of trade growth is serious and should serve as a wake-up call. It is particularly concerning in the context of growing anti-globalisation sentiment. We need to make sure that this does not translate into misguided policies that could make the situation much worse.”

Job and Economic Growth Risk

The global slowdown in trade has also raised concerns about job creation, and general health of the world economy. Both economic growth and job creation have long been linked to open trade.

Efforts to re-shore manufacturing and supply chains have an impact on global employment. Though it must be said that many organisation are seeing economic benefits from bringing manufacturing back in-house. These benefits are passed on to the both the local and national economies in turn.

However, for many developing countries and smaller companies, the slowdown in trade will hit harder. Roberto Azevedo called on countries to “heed the lessons of history“, and re-commit to open trading to boost economic growth.

Though some positive signs have been seen in the past month or so, the uncertainty remains. The US Presidential Election could fundamentally change the way one of the world’s largest economies interacts with the rest of the world.

And with other major economies not showing signs of quick recovery, it remains to be seen when or if the global slowdown will be arrested.

What are you seeing in relation to global trade in procurement? Is your supply chain suffering from the slowdown? Let us know below.

We’ve taken time out from getting you fit with Career Boot Camp to check out the top headlines this week. 

Activists Block Palm Oil Operations

  • Greenpeace activists are blockading operations of IOI, one of the world’s biggest producers and traders of palm oil.
  • A group of ten people, including two Indonesian farmers affected by forest fires related to palm oil operations, are blocking access to IOI’s refinery in Rotterdam.
  • The Greenpeace ship Esperanza is also preventing palm oil from being unloaded from incoming tankers.
  • Greenpeace is demanding that IOI commits to a sustainable palm oil supply chain before they lift the blockade.

Read more at Maritime Executive

US Craft Beer Brewers Outpace Supply Chain

  • US hops farmers are struggling to fulfil orders for a rapidly growing number of craft breweries,
  • The industry has doubled in size over the past five years, as consumers look to smaller companies for their beer.
  • Farmland devoted to varieties of hops has increased by 65 per cent in the same period. However, the number of small customers makes it difficult for farmers to keep up with demand.
  • As a result, production has slowed for the first time after several years of rapid growth.  

Read more at the Wall Street Journal

Inquiry Launched Into UK Defence Procurement

  • An inquiry into the UK’s military acquisition and procurement policy has been launched by the House of Commons Defence Committee.
  • The review was prompted by a report published last year by think-tank Civitas that argued for an overhaul of the MOD’s acquisition process.
  • The committee’s inquiry will look into whether emerging acquisition systems are offering value for money.
  • It will also look at the implication of Brexit will have on the UK’s defence industry.

Read more at Supply Management

Silicon Valley Alive to Truck Potential

  • Silicon Valley tech organisations are looking more closely at why trucks have jumped ahead of cars in driverless technology.
  • Software companies are also looking at the technologies that could be used in passenger cars in future.
  • Uber demonstrated its interest in lorries when it announced the acquisition of Otto, a start-up focused on self-driving technology for trucks.
  • It has been argued that such technology is used on commercial vehicles first, as there is potential for faster ROI.

Read more on The Financial Times

Is the Age of the Tech Unicorn at an End?

Once, every tech start-up wanted to be a unicorn? But could the age of the unicorn be at an end? And what will replace them?

unicorn

For the past few years, much of the talk for new technology start-ups has been about achieving the moniker of a ‘unicorn’. Many have tried, plenty have failed, but there are as many that have succeeded.

However, as many people warned, the constant rise of the ‘unicorn’ was always going to come to an end. And even some of the big name unicorns from the past few years have lost this particular title.

So, is the age of the unicorn at an end? And what is coming next to take their place?

Rise of the Unicorn

For those of you still unfamiliar with the term, a unicorn is a technology start-up company, which reaches a valuation of over $1 billion. The companies are characterised by rapid growth, and are generally privately funded, either through VC, or other routes.

The issue with unicorns, one that investors were aware of from the start, is that they are not profitable. Well, at least to begin with. Most unicorns aim to prove concept, and grow market share, before making any money.

Valuations tend to be based on future projections of worth, which is why truly defining a unicorn is tricky. Currently, the Wall Street Journal lists 155 unicorn firms, Fortune 174, and VentureBeat 229.

There are plenty of recognisable names on these lists. Uber, Airbnb, SpaceX and Dropbox, to name but a few. Many of these companies also appear on lists of organisations still considered to be disrupting their respective industries.

It’s probably easier to argue that companies like Facebook and SpaceX, unicorns of the past, have surpassed that title by being profitable in their own right. And profitability, after all, is surely the key.

Pop! Is that a Bubble Bursting?

When we first visited the topic of unicorn organisations a little under a year ago, we did highlight vulnerabilities in this set up. Venture capitalists and their investments are as much susceptible to market changes as any other business.

And given the global uncertainty that has been prevalent in 2016, many investors are looking for safer options. And this decrease in available funding has already seen a major impact amongst unicorns.

The pre-IPO investment firm Sharespost published an analysis in August that concluded that 30 per cent of all unicorns would lose their billion-dollar net worth. Some already have, and some have been pushed down that road in the past 9 months.

Big name companies like Theranos (once a unicorn, now subject of media interest for all the wrong reasons) and Evernote have already had valuations written down. Even Twitter and Uber have lost some of their valuation (though not enough to take them under the magic $1 billion mark).

Rise of the…Cockroach? Really?

Yes, really. Well, if you’re looking for a survivor, it’s well known that cockroaches could probably survive the apocalypse!

It might not be as glamorous a title, or an image, but the cockroaches are here to stay. Cockroach organisations differ from unicorns by having slow and steady growth, a closer eye on spending, and steady profits.

Cockroaches exist where funding doesn’t come as easily, but they can be smaller, more agile, and better prepared for uncertainty. And with smaller budgets, they are regarded as being more creative than their unicorn counterparts.

For investors, this represents a safer option, and a potentially better return in the long-run for them and their clients. While some unicorns will make it, and make it big for their investors, cockroaches are seen as a safer investment, something that is welcome in volatile markets.

Where will we be in another year? Who knows. We can’t predict which companies will still have their unicorn title, and which will be falling back. However, the chances are that the cockroaches are here to stay.

Cockroach or unicorn – which would you rather be involved with? Is the age of the unicorn really at an end? Let us know your thoughts below.

While you ponder that, here are this week’s procurement and supply chain headlines to keep you going.

Bangkok Fire Trucks Belatedly Enter Service

  • A fleet of 176 fire trucks are to finally enter service in Bangkok, a full 10 years after they were purchased.
  • The trucks have locked up in a warehouse for over a decade due to a prolonged legal dispute.
  • The Austrian-made trucks were locked up soon after delivery as part of a wider corruption scandal involving senior government ministers.
  • Due to their age, the trucks require extensive maintenance before they can be put to use.

Read more at The Nation

Self-Driving Delivery Boats to Ply Amsterdam’s Canals

  • The Amsterdam Institute for Metropolitan Solutions plans to use the city’s extensive  canal network to trial a fleet of autonomous boats.
  • The floating robot vehicles will deliver goods and provide driverless transportation for people along the canal network.
  • The boats can also be linked together to provide on-demand bridges and stages.
  • Amsterdam’s research into robot canal boats parallels the proliferation of self-driving cars in the US and elsewhere.  

Read more at The Verge

Amazon Business Hires White House Procurement Head

  • Amazon has hired the former head of the Office of Federal Procurement Policy, Anne Rung, in a bid to increase its sales to government agencies.
  • The role, titled Global Leader of Public Sector Sales, will focus on helping Amazon win government purchasing contracts.
  • Rung will work closely with government buyers to purchase goods and services more efficiently.
  • In her Federal role, Rung reportedly saved taxpayers more than $2.1 billion in procurement spending by reducing duplication.

Read more at B2B eCommerce World 

30 Under 30 Programme Goes Global

  • ISM and THOMASNET.com’s 30 Under 30 Supply Stars programme has returned for its third year.
  • The programme celebrates the achievements of young professionals in Procurement and Supply chain, with the goal of attracting more Millennials into the profession.
  • This year, for the first time, the competition has expanded beyond the US to include nominations from around the world.
  • Judges are looking for multitalented professionals who are influencers and trailblazers in their organisations.

Read more and Nominate at THOMASNET.com

Supply Chain Review Pressure Following Chicken Scare

Public confidence in supermarkets and their supply chains has taken another hit, following a scare about contaminated chicken.

chicken

A recent report has found that one in four chicken samples bought from major supermarket chains contain antibiotic-resistant E.coli. The findings are again putting pressure on supermarkets to tighten their supply chain quality assurance processes.

While supermarkets have worked hard to improve supply chain traceability, this report shows there is much work to be done. It also serves to highlight a wider issue in the food supply chain – the use of antibiotics.

There is on-going criticism about the overuse of antibiotics by humans, but use of the drugs on livestock is contributing to increased resistance to antibiotics by so-called “super-bugs”.

Issues Raised in Chicken Testing

The study of chicken samples was carried out by the University of Cambridge. It revealed that from 92 chicken pieces, including whole chicken, thigh pieces, drumsticks and diced breast meat, 22 pieces contained potentially deadly bacteria.

The “superbug” strain of E.coli was found in chicken samples from all leading UK supermarkets, including Tesco, Waitrose, Aldi and Morrisons. Similar strains were found in supermarket pork samples tested in the same study.

The findings raise concerns about the quality of factory farming in the UK, as well as the end-to-end supply chains of the big retailers.

Dr. Mark Holmes, part of the research team that conducted the study, suggested that more resources needed to be put into assessment of antibiotic resistance in animals in the supply chain.

“These results highlight the need for improvements in antibiotic stewardship in veterinary medicine,” Holmes said. “The levels of resistant E.coli that we have found are worrying. Every time someone falls ill, instead of just getting a food poisoning bug they might also be getting a bug that is antibiotic resistant.”

Supply Chain Quality Assurance

Quality control software experts InfinityQS suggest that, while the supermarkets themselves might argue that their quality assurances are sound, the findings suggest this is not the case.

“It’s clear that a disconnect exists across these supermarkets’ supply chains. It’s likely they’ll have stringent procedures in place for their own food traceability, but it’s imperative these are adhered to amongst their suppliers.”

The company suggested that closer relationships with both suppliers and farmers was necessary. This could mean a more pro-active approach to site visits to where they source food from, and understand how they could help farmers to make improvements.

“An effective supply chain process will ensure that controls are in place to manage the necessary people, activities, resources and data throughout the supply chain.

“If done correctly, that product will be delivered with the correct documents, with an agreed quantity, adhering to a set quality standard and all sent at the right time to the right place.”

Antibiotic Overuse Creating Resistance 

The report also serves to highlight the wider issue of overuse of antibiotics in humans and animals. As well as depleting global supplies of antibiotics, systematic overuse is creating resistant strains of potentially deadly bacteria, including E.coli.

It’s predicted that, by 2050, one person will die every 3 seconds around the world from antibiotic resistant bacteria. Globally, 70 per cent of bacteria have now developed antibiotic resistance, including to traditionally ‘last line of defence’ treatment.

It’s estimated that around 40 per cent of antibiotic use in the UK is for animals in the food supply chain. The drugs are frequently given to large groups of completely healthy animals, with the intention of stopping the spread of infections. Mass medication accounts for an estimated 90 per cent of all animal antibiotic use in the UK.

Intensive farming practices, and keeping large groups of animals in close quarters, is to blame for such practices. In such crowded conditions, even one unhealthy animal can have devastating consequences.

However, as farming practices change, and retailers aim to ensure higher animal welfares standards, this issue may be lessened. Retailers have also been urged to pay a higher price for meat such as chicken and pork. This would relieve productivity pressures on farmers, and reduce intensive farming too.

Will this change your dietary habits? How can procurement get more involved in changing the underlying issues? Let us know in the comments below.

careerbootcamp-logo-final

Career Boot Camp Reminder!

The Procurious Career Boot Camp kicks off in earnest this morning with the release of our first podcast! Today, as well as every day for the next 15 work days, we’ll be releasing a podcast at 9:30am (BST).

You can access everything you need to enlist for Career Boot Camp here. If you have any questions, read this, or get in touch.

We’ve been on the look out for all the top stories in procurement and supply chain this week. And here they are…

Bailout Rejection Makes Hanjin Liquidation Likely

  • The chances of a bailout for stricken shipping company Hanjin look unlikely, increasing the possibility of liquidation.
  • The bailout was needed to help the company combat $5.4 billion debts, and allow it to unload cargo at ports.
  • However, with decisions still to be made, the South Korean Government criticised the company for “economic irresponsibility”.
  • The company is conducting sales fund the release of $14 million worth of stock currently stuck on its cargo ships.

Read more at Supply Chain Dive

Sewing Robots to Join Garment Workforce

  • A company called Sewbo has developed a robot that can sew, and intends to replace humans in the garment manufacturing process.
  • The machine uses stiffened, pre-cut garment pieces and feeds them into a sewing machine, before dropping the completed garment into hot water to remove the non-toxic stiffener.
  • Automated clothing production provides a potential solution to labour abuses and sweat-shop conditions in the developing world.
  • However, large-scale automation would also put millions of people in the garment industry out of work.

Read more and watch the video at Engadget

Study Says Petrol Must Be Phased Out by 2035

  • According to a Climate Action Tracker report, the last petrol powered car will have to be sold by 2035 to limit global warming to 1.5 degrees Celsius.
  • A ceiling of 1.5 degrees was the most stringent goal set by world leaders at the Paris summit last December.
  • Current projections suggest that electric vehicles will make up only 5 per cent of the world’s car fleets by 2030
  • This means aggressive measures will be required to shift rapidly away from fossil-fuel powered vehicles much earlier than expected.

Read more at Fortune

“Poor Procurement” To Blame For Detention Centre Cost Blowout

  • Australia’s scandal-ridden offshore detention centres for asylum seekers have come under intense scrutiny once again.
  • An audit of the centres revealed “serious and persistent deficiencies” in the relevant department’s management of the contracts.
  • It identified failures in the open tender process for security, cleaning, catering and welfare services, with costs blowing out from a $351 million contract in 2012, to a current $2.2 billion contract.
  • The report also criticised the original open tender process, and negotiations that took place with suppliers in 2012.

Read more at The Guardian

Are Employees the Weak Link in Company Cyber Security?

Are your employees leaving the door open for cyber attacks? Here’s how to help them reduce the cyber security threat.

employees weak link

Employees are a significant risk to their employer’s cyber security according to research by specialist global executive search and interim management company Norrie Johnston Recruitment (NJR).

The research forms part of NJR’s cyber security report, ‘How real is the threat and how can you reduce your risk‘. The report shows that:

  • 23 per cent of employees use the same password for different work applications.
  • 17 per cent write down their passwords.
  • 16 per cent work while connected to public Wi-Fi networks.
  • 15 per cent access social media sites on their work PCs.

Such bad habits and a lack of awareness about security mean that employees are inadvertently leaving companies’ cyber doors wide open to attack.

This research is supported by a report which incorporates the advice from fifteen experts in the field. In it, Benny Czarny, Founder of OPSWAT, discusses the top tips to avoid massive data breaches.

With Sony recently setting aside $15M to investigate the reasons for, and remediate the damage caused by, last year’s data breach, many of our customers—from large enterprises to small business—are wondering what they need to do to make sure they aren’t the next big data breach headline.

The good news is that most data breaches can be prevented by taking a common sense approach, coupled with some key IT security adjustments.

1. Employees’ security training is an absolute necessity. 

I cannot emphasise this point enough, as your network is only as safe as your most gullible employee. Even the most sophisticated security systems can be compromised by human error. The Sony breach started with phishing attacks.

And people still also use USB devices from unknown sources, which is allegedly how the Stuxnet worm was delivered.

2. Access to executable files should be limited to those who need them to complete their duties. 

Many threats are borne via self-extracting files. Therefore, limiting the number of employees who are allowed to receive this file type limits your exposure.

Your IT department absolutely needs the ability to work with executable files. Bob in accounting? Not so much!

3. MS Office documents and PDFs are common attack vectors. 

Vulnerabilities are identified in MS Office and Adobe Reader on a regular basis. While patches are typically released very quickly, if the patches are not applied in a timely fashion the vulnerability can still be exploited.

As an everyday precaution, document sanitisation is recommended to remove embedded threats in documents.

4. Data workflow audits are essential. 

Data can enter your organisation through many different points – email, FTP, external memory device, etc. Identifying your organisation’s entry points and taking steps to secure them is a critical step in avoiding data breaches.

At a minimum, scanning incoming and outgoing email attachments for viruses and threats, and implementing a secure file transfer solution, should be considered.

5. Store sensitive data in separate locations. 

Simple data segregation could have mitigated the impact of the Sony breach. The hack exposed both internal communications and unreleased video files.

Had the videos and emails been stored on two separate systems some of the damages may have been prevented.

6. Internal and external penetration tests are critical. 

Internal testing is a valuable tool, but hiring an outside party to attempt to breach your network will identify security holes your team may have missed.

7. Keep your security architecture confidential. 

You may be excited about your innovative networking solution or new cloud-based storage system, but think twice about making any of that information public!

8. Remember that traffic generated internally to your security system may still be suspect. 

For example, the Sony malware connected to an internal security system to impersonate legitimate traffic to disguise its malicious nature.

9. Multilayer defence is needed. 

I like to describe defence in depth by comparing it to the defence systems you might see at a castle. It could be defended by a large stone wall, followed by a deep moat, followed by a draw-bridge, followed by an iron gate, etc.

A single layer of defence is not sufficient for your data. It must be protected by multiple systems working in parallel. That way if one layer is breached your data is not exposed.

10. Finding your weakest security link is your top priority. 

Every office has one, and it will vary wildly from organisation to organisation. It might be the employee with their passwords taped to their monitor. It might be the deprecated Linux server everyone seems to have forgotten about.

You might not be looking for those weak links, but rest assured that cyber attackers are. The question is: Who will find them first?”

To read more useful and practical insights into topics including how to assess the scale of your risk level and managing the immediate aftermath of a security breach, download the full report.


Looking for an introduction to Cybercrime? Check out this article from Cloudwards. 

Time to Panic? Climate Change Driving Coffee and Chocolate ‘Extinction’

Like to start your day with a latte? Make the most of it while it lasts, as climate change threatens extinction of the coffee bean.

coffee climate change

No, it’s not scare-mongering. And yes, there are more important things in the world than a daily espresso. However, the possible extinction of the coffee bean could have a wider-ranging, and more devastating, impact than you think.

And that’s not all. Climate change is also threatening a number of other popular foods and drinks, including chocolate, wine and beer.

Climate Change Destroying Farmland

A new report by the Climate Institute has shed light on a number of worrying facts. They argue that, should global warming continue at the same rate, wild coffee could be “extinct” by 2080.

In addition, rising global temperatures, and increasing pests and funghi could halve the available farmland suitable for growing coffee by 2050.

And it’s not just gourmet beans, and your local Starbucks’ supply of arabica beans that are set to be impacted. With a global temperature increase of 3 degrees as a result of climate change, even instant coffee is going to suffer.

Climate change is also causing the spread of pests and funghi to coffee growing areas not previously affected.  Coffee Leaf Rust, a fungus, and the coffee berry borer, a pest, have destroyed crops in South America, and have started to appear at higher altitudes, impacting a greater number of crops.

Coffee – Supply Chains and Livelihoods

Around the world, people drink more than 2.25 billion cups of coffee each and every day. In the UK alone, 70 million cups of coffee are consumed each year. And by 2020, it’s predicted that there will be 21,000 coffee shops around the country.

Coffee is a major export for a number of developing countries. An estimated 120 million people would be impacted by the total extinction of coffee crops. In countries like Burundi, coffee makes up 59 per cent of its exports, while it accounts for 33 per cent of Ethiopia’s.

However, climate change is already taking its toll in a number of other coffee producing countries. In Tanzania, where 2.4 million people work in the coffee supply chain, output has dropped by 50 per cent since the 1960s.

In 2012-13, the spread of coffee leaf rust in South America destroyed 85 per cent of Guatemala’s coffee crop, caused damage worth $500 million across the region, and cost 350,000 people their jobs.

And while some growers can move crops to higher altitudes to mitigate this risk, it’s not an option for small farmers who make up 80-90 per cent of total coffee growers.

Making a Difference

However, there is still time to make a difference and help sustain the livelihoods of the millions of people who rely on coffee for an income.

Helping to reduce emissions is a good place to start. Limiting temperature rises to 1.5 degrees could make a major difference to coffee producers. On your daily coffee run, use a reusable cup – one paper cup has the equivalent carbon footprint to 811 passenger vehicles.

Consumers can also buy brands that give a good deal to small farmers. These funds can then be used to help the farmers adapt their practices and mitigate future risks.

Not Just Coffee…

Sadly for all the foodies out there, coffee isn’t the only crop that is under threat from climate change. Avocados, chick peas, honey, and bananas are all on the food equivalent of the ‘endangered’ list if current trends continue.

And what’s more, chocolate, wine and beer may also be at risk. Chocolate is suffering from over-demand (70,000 more tonnes were consumed than produced last year), and cocoa supplies could be exhausted in the next 16 years.

As for wine, with current temperature rises, an estimated 73 per cent of land in Australia, and all of the Bordeaux region, will be unsuitable for grape crops by 2050.

As consumers it’s time to change our habits, or face running out of some of our staples and luxuries. It’s high time we all make some changes.

Away from a world without coffee, chocolate and wine, we’ve been collecting the big stories in procurement and supply chain this week…

Hanjin Bankruptcy Continues to Disrupt Supply Chains

  • The fallout from the bankruptcy of South Korean shipping company, Hanjin, has continued throughout the week.
  • Despite a US Court granting Hanjin ships access to ports, there are still concerns that delays will create significant bottlenecks for retailers.
  • Companies including Samsung, Hugo Boss, and Nike have all reported having to source alternative logistics options due to shipping delays.
  • Hanjin Group has made an offer of 100 billion won ($92 billion) to help contain supply chain disruptions.

Read more at The Globe and Mail

Australia Asks Chinese Shipping Company to Pay Clean-Up Costs

  • The Australian government has asked Shenzhen Energy Transport to pay $120 million towards the clean-up of a 100-acre area of the Great Barrier Reef.
  • One of the company’s ships ran aground on the southern edge of the reef in 2010 after going off-course.
  • According to the Great Barrier Reef Marine Park Authority, the ship caused severe physical damage and considerable contamination by toxic chemicals, including the now-banned anti-fouling agent tributyltin.
  • Shenzhen is fighting the bill, arguing the costs are unrealistic, and that the Great Barrier Reef is “self healing”.

Read more at Mashable

UK Local Government “Off Message” on Cloud

  • A new report from Eduserv suggests that UK local council procurement teams are “off message” on the Government’s G-Cloud software.
  • Only one in three councils say they have both a cloud IT strategy and a procurement policy which allows them to use G-Cloud.
  • Over 27 per cent claim they have an in-house procurement policy that doesn’t let them use G-Cloud at all.
  • The report has suggested that councils need to bridge the gap between IT and procurement to drive G-Cloud usage.

Read more at UK Authority

Coupa Moves to Register for Public Offering

  • Cloud-based spend management platform Coupa Software has publicly filed a registration statement with the U.S. SEC for an initial public offering.
  • The number of shares to be offered and the price range for the offering have not yet been determined.
  • The company has announced plans to raise $75 million in IPO.
  • Coupa intends to list its common stock on the NASDAQ Global Market under the ticker symbol “COUP.”

Read more at VentureBeat

Give Your Career a Cardio Boost With Procurious’ Boot Camp

Do you want to add more value to your organisation? Do you dream of being a CPO? Then Procurious’ Career Boot Camp is for you!

Calling all procurement and supply chain professionals! Are you impatient to add more value to your organisation? Do you dream of becoming a Chief Procurement Officer (CPO) in the future?

With globalisation and technological change disrupting every aspect of our profession, making time to update your skills can catapult you up the ladder.

Get Your Career in Shape

According to Deloitte’s third annual Global Supply Chain Survey, individuals with leadership acumen are in especially high demand.

79 per cent of supply chain executives surveyed by Deloitte said it was very important or extremely important for new hires to have leadership and professional competencies (to help with change management, problem solving, etc.).

In response to this need, Procurious is launching a free, exclusive 15-day Career Boot Camp programme to help high-achieving professionals around the world get in the best career shape of their lives, and upgrade their skills while on the go.

Starting the 19th of September, Boot Camp will feature a short, daily podcast, from a selection of top procurement leaders and business influencers.

But, individuals who wait will lose out! Each podcast will be available for just one day before being replaced by the next one in the series.

Listen, Learn, Discuss – and Advance!

The podcasts will showcase a variety of topics, from being your team’s MVP and networking your way to the top, to incubating your big ideas, all designed to give participants a career cardio boost.

Coaches include:

  • Tom Derry, CEO of the Institute for Supply Management
  • Chris Sawchuk, Principal & Global Advisory Practice Leader, The Hackett Group
  • Dr. Tom Verghese, Principal and Consultant, Cultural Synergies
  • Stuart Brocklehurst, Chief Executive, Applegate Marketplace Ltd
  • Gabe Perez, Vice President, Strategy & Market Development, Coupa Software
  • Sigi Osagie, author, ‘Procurement Mojo’
  • Jon Hansen, co-author, ‘Procurement at a Crossroads’

And that’s not all! Each podcast will be accompanied by a blog article, and vibrant group discussions on the Procurious website.

We’ll also be hosting other articles and thought leadership pieces on every aspect of your career. Plus, we’ll be asking our senior procurement leaders to share the benefits of their career experience in our ’60 Seconds With…’ article series.

Build Your Workout Plan

The key thing to remember is that you can make Boot Camp fit to your schedule, and work for you. The beauty of Boot Camp is that it’s an entirely digital experience, which adds to Procurious’ current eLearning and skills development opportunities.

“The next generation in procurement needs to take the responsibility for their professional development into their own hands,” said Tania Seary, Founding Chairman of Procurious.

“Online learning is the fastest and easiest way to give yourself the skills you need. Just a few minutes a day can make the difference between standing still, or moving quickly into more impactful roles.”

So come on, don’t get left behind by your peers and colleagues. Build your personal workout plan, and get fit to meet these leaders’ needs! If you’re new to Procurious, try one podcast. If you’re a Procurious member, sign up for the whole programme!

Take a step toward your next promotion by registering for Career Boot Camp today.

Bankruptcy Spells Supply Chain Trouble on the High Seas

Global supply chains are sailing into troubled waters again this week following the bankruptcy of a major shipping firm.

Hanjin Shipping Bankruptcy

A storm is brewing on the high seas for global supply chains thanks to the latest issue for the global shipping industry. One of the world’s largest shipping firms has filed for bankruptcy, having lost support from its national banks.

Hanjin Shipping, South Korea’s largest shipping firm cited debts totalling $5.4 billion, following a long period of financial distress. It is the largest container line bankruptcy in history.

The bankruptcy comes at a time of major strife in the global shipping industry. A combination of oversupply of ships, and an undersupply of cargo, has led to a raft of mergers, acquisitions, and cost-cutting exercises.

Seized Ships and Stranded Cargo

Hanjin currently owns and operates nearly 100 cargo vessels, as well as a further 11 ports. The ships move an estimated 25,000 cargo containers across the Pacific every day.

As a result of the bankruptcy, Hanjin has stopped accepting new cargo from customers, while the situation spells trouble for those ships already in transit to and from Asia.

Dozens of ships have been denied entry to ports in North America and Asia, including South Korea’s largest port, Busan. This is due to concerns that the company wouldn’t be able to pay fees for loading and unloading of vessels.

In China, 10 ships operated by Hanjin have been, or are expected to be seized, on behalf of creditors. This is in addition to another vessel seized in Singapore earlier last week.

The South Korean Government has stated that it will start help to prop up the company, a move that will enable it to stop ships and other assets being seized. However, it is unlikely to save the operator, with experts stating that Hanjin will struggle to recover from losing both its business and reputation.

Unhappy Holidays

The company’s bankruptcy has opened the door for other operators to pick up the slack. However, the situation stands to make life more difficult for retailers, with holiday season shipping on the horizon.

Manufacturers are being forced to look for new routes for a number of products, while on some major trans-Pacific routes, shipping costs have jumped by up to 55 per cent. There are further concerns about the potential knock-on effect further down the supply chain.

Rising transportation costs, delays, and a reliance on Hanjin as a freight carrier, could push other trucking and logistics firms out of business too.

Retail Woes Continue

All of this is set to have a major impact on US retailers in the lead up to the traditional holiday season. Retailers are anticipating a two to three-month delay on the arrival of South Korean goods being transported by Hanjin.

Concerns about the impact on the US economy has prompted The National Retail Federation to ask the US Government to intervene.

“Retailers’ main concern is that there [are] millions of dollars’ worth of merchandise that needs to be on store shelves that could be impacted by this,” said Jonathan Gold, the group’s vice president for supply chain and customs policy.

The situation is the latest in a long line of shipping-related trouble for US retailers. In early 2015, a strike by West Coast port workers saw ships similarly stranded, causing months’ worth of delays.

Whether the impact this time around will be as great remains to be seen. Should cargo be released soon, retailers may not suffer as much as expected. However, irrespective of how long the delays are, it’s sure to test the resilience of major global supply chains.

Are you impacted by the Hanjin bankruptcy? Do you have contingencies in place to mitigate the delays? Let us know in the comments below.

Away from the high seas, we’ve been hunting down the top procurement and supply chain headlines this week… 

Fire Closes Gap Distribution Centre

  • Gap Inc.’s main distribution centre in Fishkill, New York State, has been shut down after a massive fire damaged the premises.
  • All employees were safely evacuated, and investigators are working to understand the extent of the damage and cause of the fire.
  • The clothing and accessories retailer has launched contingency plans to move product through its North American network of distribution centres.
  • However, there are concerns that the disruption will create a bottleneck ahead of the upcoming holiday season.

Read more at MarketWatch

DHL Trials Augmented Reality Glasses

  • Logistics giant DHL is to roll out a UK trial of “vision picking”, following a similar trial in the Netherlands.
  • In “vision picking”, warehouse operatives are equipped with advanced smart glasses which visually display where each picked item needs to be placed on the trolley.
  • The company expects that having a hands-free augmented reality display will increase productivity, decrease error rates and improve employee satisfaction.
  • The augmented reality trial is part of DHL’s move towards “Industry 4.0”, which includes testing technologies including robotics and the Internet of Things across the supply chain.

Read more at Logistics Manager

GE Acquires Supply Chain Software Company

  • GE’s Transportation division has announced the purchase of supply chain software company, ShipXpress.
  • GE said the acquisition of the cloud-based software developer would expand its portfolio into the logistics value chain.
  • The company also sees this as a way of increasing its ability to deliver information and transaction services for railway customers around the world.
  • GE Transportation President & CEO Jamie Miller said the acquisition would “deliver the industry’s most advanced, scalable cloud-based solution to accelerate the movement of goods and information”.

Read more at Railway Gazette

SpaceX Explosion Threatens Launch Programme

  • A SpaceX rocket has exploded during a test, destroying the rocket and the satellite it was due to launch.
  • The explosion happened while the rocket was being fuelled, but that the cause of the blast is still unknown.
  • The rocket was due to carry a Facebook satellite into orbit, aimed at providing internet connection to Africa, the Middle East, and Europe.
  • The explosion could delay the launch of its programme to carry American astronauts in the future.

Read more at CNN Money

Taxi! Have Google & Uber Been Pipped to Self-Driving Cabs?

A number of major companies are developing self-driving taxis. But have they been pipped to the post by a Singaporean start-up?

Self-driving Cars - nuTonomy

Over the past few years, a number of organisations have been in a race to develop, and launch, self-driving vehicles.

Google and Ford have both entered the market for self-driving cars, while Uber has been more active in the taxi market. It’s even rumoured that Apple are set to join the competition in 2021 with ‘Project Titan‘.

But it appears that they have all lost the race to put a car on the road to a small, US and Singapore-based start-up.

Self-Driving Taxis in Singapore

nuTonomy was founded in 2013 by two MIT researchers, Karl Iagnemma and Emilio Frazzoli. It has both a US and a Singapore base of operations.

On Thursday last week, nuTonomy started a trial of its self-driving taxis in the business district in Singapore. The company is starting its test with just six cars, but hopes to double this number by the end of the year.

However, the timing of the test makes Singapore officially the first country to allow autonomous, self-driving cars on its roads.

Passengers in the business district will be able to hail the cabs using a smartphone app. In the early stages at least, nuTonomy engineers will be sitting in the vehicles, partly to monitor performance, but also to take over driving if needs be.

Significant Market Developments

The nuTonomy testing marks a significant development in the self-driving car market. Ford has made large investments in new technology companies, and increased its development team in Silicon Valley.

This is all part of the company’s ‘Ford Smart Mobility‘ plan, which aims to make Ford a leader in autonomous vehicles, particularly those for ride-sharing.

Uber have also confirmed that they will start testing of autonomous taxis in the coming months in Pittsburgh. As with nuTonomy, cars will be hired via their smartphone app, and a driver and engineer will be in the vehicle too.

However, there are questions about how much autonomy the cars will be given on the Pittsburgh streets. Experts have pointed out that there are still limitations behind Uber’s, and other companies’, vehicles, and that completely self-driving cars are still a way off.

“The reality is these cars will be closely supervised systems because it doesn’t matter if they are 80 percent self-driving or 99 percent self-driving, you will still need a human involved for the bit that is not,” says Bryant Walker Smith, an assistant professor of law and engineering at the University of South Carolina.

Significant Issues to Overcome

It raises an interesting question as to when truly driverless vehicles will be on the road, and on the market. There still appears to be a number of issues that must be overcome before this can happen.

As one article from The Register points out, no matter how advanced the technology has become, there are still glitches. While the rules of the road are common nature for many of us, it takes a lot longer to programme this into a computer.

Google’s self-driving cars are prone to be confused by traffic lights (or things that look like them), poor road markings, and glare from sunsets. Junctions, cyclists, bad drivers, and adverse weather conditions also create issues that need to be solved.

And, of course, there’s no accounting for human interactions. Tesla have recently been forced to tweak the definition of their ‘Autopilot’ software to a “driver assist function”. This comes after confusion that it was actually a self-driving function you might find in an aircraft, or science-fiction movie.

There is an argument that people want a self-driving car that doesn’t require them to have any input. But, without the technology to support this, there will be a reliance on some level of human interaction for some time yet.

Would you be happy to get into a self-driving taxi? Or buy a self-driving car? What would be holding you back from taking this journey?

In a week full of scandal in the procurement press, we’ve been scouring the headlines for the hottest topics…

Major US Retailer to Investigate Fake Cotton Claims
  • Major US stores are investigating if bedsheets and pillowcases are made from non-Egyptian cotton despite being labelled as such.
  • The investigations follow Target’s severance of ties with large textile manufacturer Welspun India.
  • Walmart, Bed Bath and Beyond, Costco and Macy’s are all supplied by Welspun India.
  • Welspun has announced the appointment of an external auditor to audit supply systems and processes.

Read more at the Chicago Tribune

Australian Companies Embroiled in Foreign Bribery Scandals
  • Two major Australian companies have been implicated in bribery scandals relating to foreign contracts.
  • Staff from mining company, Sundance Resources, have allegedly bribed the leader of the Democratic Republic of Congo to secure approval for a major iron ore project.
  • Additionally, Snowy Mountains Engineering Company staff allegedly bribed officials to secure a $2.3 million sewerage project in Sri Lanka, and a $2.2 million power plant project in Bangladesh.
  • The list of Australian companies implicated in foreign bribery continues to grow, with recent allegations implicating Tabcorp, Leighton Holdings and BHP Billiton.

Read more at The Age

Safety fears as Mylan Hikes EpiPen Prices

  • Pharmaceutical company Mylan is under intense scrutiny after raising the price of its epinephrine delivery system, the Mylan EpiPen, from $57 to over $500 in the US.
  • Mylan acquired the EpiPen auto-injector in 2007, but has only recently raised the price after the demise of its competitor Auvi-Q.
  • The single-use EpiPen delivers approximately $1 worth of epinephrine per injection. 
  • Commentators fear patients will stop buying the EpiPen, opting instead to inject by syringe. This risks an incorrect dosage or accidental injection in a vein, which can be fatal.  

Read more at Forbes

Fire Services Told to “Collaborate” on Procurement
  • The UK Government has told fire authorities across the country that they need to collaborate more on procurement.
  • It comes after a report that many authorities are paying vastly different sums for similar items.
  • The government said in a statement it was “determined to help authorities adopt a collaborative approach”.
  • This is the first time nationwide statistics on fire authority procurement have been released.

Read more at Supply Management

Construction Supply Chain Skills Shortage at Breaking Point

An acute skills shortage in the construction supply chain is impacting both budgets and the quality of projects. 

Construction Skills Shortage

A new survey from the Scape Group has highlighted the impact of the skills shortage in the UK construction industry.

The ‘Sustainability in the Supply Chain’ report surveyed over 150 contractors, subcontractors and senior managers at public sector organisations. It also examined supply chain stability, the tendering process and reliance on the public sector.

The report suggests that the skills shortage has impacted quality and budgeting of projects across the UK.

Skills Shortage at “Breaking Point”

One of the key concerns raised in the report was in the quality of the workmanship being seen projects. 58 per cent of contractors and suppliers cited a negative impact on quality.

However, when assessed in the public sector, a staggering 85 per cent of managers said they had seen a drop in quality in their projects.

Beyond quality, many respondents also saw the skills shortage as having a negative impact on budgets. Both public sector (80 per cent) and contractors (40 per cent) highlighted the difficulty of keeping within budget. The shortage of skilled workers has led to many bricklayers earning up to £1,000 per week.

Mark Robinson, Chief Executive at Scape Group, commented that although the impacts of the skills shortage were clear, there were basic steps that could be put in place to mitigate it. This could include the introduction of apprenticeships schemes, something that many contractors in the construction industry still do not have.  

The Private/Public Juxtaposition

The report also highlighted the huge division between public and private sector definitions of a “healthy” supply chain. Private sector organisations stated that long-term operational stability was their core aim (72 per cent), as well as with minimising waste and recycling (63 per cent) and supporting local economies (58 per cent).

However, only 63 per cent cited stable employment patterns as key to having a healthy supply chain.

This is in stark contrast to public sector organisations, where 70 per cent felt that long-term benefits for the local economy needed to be the highest priority. Furthermore, 67 per cent believed that local skills and suppliers were core to a healthy supply chain too.

Another key finding in the report was the challenge of communication between the public and private sectors. Both sides (75 per cent of suppliers; 80 per cent of public sector managers) believed that the public sector needed to do more to engage with its supply chain.

This included giving greater visibility of upcoming projects, and enabling contractors to start bidding up to 18 months in advance of contracts starting. SMEs in particular felt they needed to be more informed about projects. It was felt that this could be addressed by using digital platforms, and setting up regular forums for communication.

Report Recommendations

The report concluded by making some recommendations on what needed to be done in the construction supply chain.

1. Addressing the Skills Shortage

The skills shortage was seen by the vast majority of respondents as the most serious barrier to growth and efficiency within the industry. While there has been a drive to increase apprenticeships, it was agreed that more needs to be done.

Diversity and the gender gap was also highlighted as a barrier. Many felt that more needed to be done to ensure that more opportunities were made available to young men and women, from a range of backgrounds. These could be communicated via education programmes, support by social media.

2. Forward Visibility of Projects

SMEs face a challenging environment in the construction industry. It was felt that this could be helped by making tenders public more than 18 months in advance. This would allow SMEs to plan ahead, form relationships, and would ultimately allow for more stable employment patterns.

3. Greater Collaboration

Greater public sector engagement with suppliers, especially SMEs, will create a stronger supply chain and support efficient delivery. However, there is a mismatch between what the public sector believes to be important, and what the industry believes is necessary.

Consistent and forward looking digital communications, driven by government, would make it easier for the public sector to engage with SMEs. It would also help to make information about opportunities more accessible.

4. Local Spend & Social Value 

The public sector, by its very nature, must deliver greater social value through its supply chain. This is balanced alongside the increasing pressure to deliver savings and achieve more with less.

The supply chain is the vehicle through which the public sector can deliver this extra value, and there are greater opportunities for those who understand this key aspiration.

Do you work in the UK construction industry? What needs to be done to alleviate the skills shortage? Let us know in the comments below.

Need a conversation starter for Monday’s tea break? Here are the top headlines from procurement and supply chain this week.

Californian Wildfire Cuts Off Key Freight Corridors
  • A fast-moving wildfire has engulfed 30,000 acres in a single day across the state of California.
  • The “Blue Cut” fire has closed the main highway connecting Los Angeles and Las Vegas, and shut key freight rail routes.
  • Road and rail shippers moving goods through the area have experienced disruptions and forced detours, with delays of 36 to 48 hours.
  • More than 80,000 people have been ordered to evacuate the region, and 34,000 homes are threatened by the fire.

Read more at JOC.com

Spotlight on the Seafood Industry
  • A study of seafood served across 700 stores and restaurants in the US has found that one out of three fish are mislabelled, with unethical suppliers substituting lower-cost fish for pricier ones.
  • Once filleted, it is extremely difficult to tell different species of fish apart, meaning customers can easily be misled.
  • Federal regulators in the US have launched the Seafood Compliance and Labelling Enforcement program in response, using a genetic database to test imported fish.
  • The seafood supply chain is acknowledged to be one of the most complex and opaque supply chains in the world, with very little visibility of illegal fishing, country of origin or even species of fish.

Read more at The Daily Meal 

Nike Alliance Purchases Apparel Suppliers
  • Nike Inc. has formed a supply-chain partnership with private-equity firm Apollo Global Management.
  • The partnership comes in response to ongoing logistics issues that have seen product delays for Nike.
  • The alliance has purchased existing Nike apparel suppliers operating in the USA and Central America to create more “vertical integration” in the supply chain.
  • Last year Nike opened a distribution centre in Memphis, and the new alliance has purchased the warehousing and logistics business ArtFX.  

Read more at Market Watch 

Patagonia Rebuilds Wool Supply Chain
  • Apparel company Patagonia is rebuilding its supply chain to ensure the highest animal welfare standards.
  • The company has spent a year with suppliers and experts writing its own supply chain standards, in order to ensure that suppliers follow them.
  • Meeting with farmers and suppliers helped to ensure that the standards were both robust, but relevant too.
  • The company is expecting to ensure both quality and welfare standards in light of increasing public scrutiny of supply chains.

Read more at The Wall Street Journal

Brexit Presents Export Opportunities for UK Business

Could an increase in export opportunities be a silver lining among the Brexit clouds for UK businesses?

UK Export Market

Much of the reporting in the business world on the Brexit has focused on the potential negative impacts. However, there could be benefits for British businesses, including SMEs, in an increase in exports opportunities.

The weakening of the pound is believed to be a contributing factor to this growth. This has made British products and services cheaper overseas. As a result it’s provided British manufacturing with an opportunity to compete in foreign markets.

UK “Needs to Improve” in Export Market

The Flash UK Purchase Managers Index (PMI) has revealed export business rose for the second straight month, and to the greatest extent in two years.

Additionally, a recent survey by the Federation of Small Businesses suggested that the number of small businesses exporting could double, due to the drop in sterling value. This could potentially help to cushion the economy from the uncertainty of leaving the EU.

However, it’s not all positive. Despite the potential boost for exports from the drop in the value of sterling, Britain is still significantly behind the government target of £1 trillion of exports by 2020.

The recently appointed Trade and Investment Minister, Lord Price CVO, stressed: “The UK punches well below its weight in the export market and badly needs to improve.”

Increasing Overseas Tenders

Procurious caught up with Stuart Brocklehurst, CEO of Applegate, to ask him what the key factors are in export decisions. Since the result of the EU referendum, Applegate PRO, has experienced a 20 percent increase in overseas tender requests.

Brocklehurst commented, “With concerns over domestic demand, exports offer a great diversification of revenue for UK businesses. The decline in sterling means our goods and services are around a tenth cheaper for overseas buyers. This presents a significant opportunity for UK businesses.”

It’s worth looking at the situation from 2 sides when it comes to procurement – UK and non-UK based. For non-UK based procurement, the UK has become a lower-cost manufacturing option. There is a significant opportunity to make savings, as the goods and services in the UK are now 10 per cent cheaper.

Inside the UK, however, it’s a different story for procurement. As the prices fall in the UK, many procurement organisations will be faced with a tricky decision. Should they re-shore their supply chain or not. For example, manufacturing businesses currently planning to make capital investment priced in US dollars have seen the real-cost price increase by 10 per cent.

There’s also a question of currency stability. The pound may drop further in the coming months, so what can procurement do? Brocklehurst stated, “Companies can either mitigate this risk by purchasing derivatives, or purchase locally in order to avoid the volatility altogether.”

SMEs Uncertain on Exports

One interesting point that Stuart Brocklehurst makes comes in contrast to the positive note sounded by the Federation of Small Businesses. Brocklehurst argues that, although there has been a strong increase in overseas orders and export opportunities, many SMEs still don’t want to get involved in exports.

“When it comes to SMEs and exports, nothing is guaranteed. Some SMEs don’t want to get involved in exports, particularly where there are concerns about red tape. They’re hesitant to proceed where there are administration overheads, as they’re worried about getting it wrong,” says Brocklehurst.

Brocklehurst also believes that if there is a UK slowdown, this will be a benefit for businesses exploring export opportunities. Nevertheless, it shouldn’t be taken as a certainty that exports will completely offset the effect of falling currencies on purchases, and a potential economic slowdown.

In 2008, at the height of the Global Financial Crisis, many believed that the export market would help the UK economy. However, due to recessions in many other countries, demand for UK exports actually weakened, and the recovery took longer than expected.

Realising the Opportunities

Whatever the UK economy looks like in the coming months, it’s clear that the Brexit isn’t all bad. It’s also undeniable that it has presented clear export opportunities for UK businesses.

However, many companies remain uninterested in exporting, even with the potential revenue and business growth opportunities. It’s down to business leaders to help drive this strategy through.

Equally, for procurement, it’s time to decide how sourcing will look in the coming months, and ultimately when the UK leaves the EU.

Applegate PRO is the UK’s foremost sourcing database, helping to link buyers and suppliers, and streamline the eProcurement process.

The platform is being utilised by a wide range of companies across the world, including Airbus, SpaceX, General Dynamics, NATO headquarters and The White House.