Category Archives: In The Press

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.

US Intelligence to Aid Supply Chains Against Cyber Attacks

A new US Intelligence campaign is set to help supply chains defend themselves against cyber attacks.

Cyber attacks

As businesses and supply chains grow increasingly more global, inevitably risk increases at the same rate. One of the most high profile risks for supply chains currently is are cyber attacks and hacking.

With each passing year, the cyber attacks get bigger. In June, the Democratic National Committee was breached by Russian hackers, and 20,000 e-mails, linked to Hillary Clinton’s Presidential campaign, were posted online.

In March, the Bangladesh Federal Reserve lost $100 million to hackers, with only $20 million recovered so far. Over 4,700 cyber attacks have been reported in the US alone since 2005, impacting hundreds of millions of people.

However, organisations with cross-border supply chains are about to get a helping hand in the fight against cyber attacks.

Cyber Attacks & Vulnerable Supply Chains

The National Counterintelligence and Security Centre will provide sensitive information, including classified threat reports, to companies about the risks of hacking in their supply chains.

The move is part of an effort to increase responsibility and education for organisations for supply chain security. It has previously been highlighted that there is a lack of understanding in US companies that having international suppliers makes supply chains vulnerable to cyber attacks.

“The supply chain threat is one that’s the least talked about but is the easiest to manipulate for all aspects of our daily lives,” said NCSC Director, William Evanina.

Domestic & Foreign Threats

The NCSC campaign will initially focus on supply chains linked to both China and Russia, the alleged sources of previous hacks. However, it will also be aimed at domestic hackers, criminal enterprises, and even disaffected former employees.

The campaign will prioritise telecommunications, energy and financial services corporations first. This is in part due to the nature of the business, but also their strategic importance to US national security.

And as well as cyber attacks, the NSCS will also be providing information and advice on so-called “hands on” crimes, such as stealing of classified information, or destruction of sensitive equipment.

Procurement Must “Play Full Part”

As part of the efforts to reduce cyber attacks, the key role of procurement has been highlighted. Evanina emphasised that procurement need to be fully integrated with other areas of the organisation to help mitigate risk.

He highlighted the role of ongoing due diligence to support initial investment in cyber security software and programmes. This would be carried out by procurement, but in partnership with the other areas of the business.

Evanina expands on the role of procurement in this video. He states that research into suppliers, and their own supply chains is critical in mitigating the risk.

Wider World

Although the work to be carried out as part of the campaign is primarily aimed at US companies, the applicability is there for all global supply chains.

Many US-based companies will purchase goods from overseas suppliers, and at the same time there will be companies purchasing from US suppliers. The inter-connected nature of the supply chain, as well as increased connectivity across technological platforms, increases the risk to organisations.

Carrying out due diligence on suppliers, knowing the full supply chain, and, perhaps most importantly, ensuring procurement plays a full part in organisational security, is a way to help mitigate this risk.

Will your organisation be taking advantage of the advice from the NCSC? Will you be impacted by any changes that take place? Let us know in the comments below.

Want to know what’s happening in the world of procurement and supply chain? Well, we’ve picked out the key headlines from the past week to keep you up to date…

Verisk Maplecroft Releases Modern Slavery Index
  • Global Risk Analysts, Verisk Maplecroft, have released their latest supply chain modern slavery index.
  • According to the Index, modern slavery constitutes a ‘high’ or ‘extreme risk’ in 115 countries worldwide.
  • Major exporters China and India fall again into the extreme risk category. The UK is one of only four countries seen as ‘low risk’
  • The report notes that most countries have some form of anti-slavery legislation or framework in place, but lack the resources to enforce these laws.

Read more at Forbes

African Countries Ban Secondhand Clothing Imports
  • A ban on imports of secondhand clothing is to be implemented by the Governments of the East African Community.
  • The group, including Kenya, Tanzania, and Uganda, proposed the ban in order to stimulate the apparel industry in their countries.
  • It is hoped that the measure will also create jobs and bolster the countries’ economies.
  • The rise of ‘fast fashion’ has led to a dramatic increase in the region’s secondhand clothing imports over the past decade.

Read more at Sustainable Brands

Scotland Launches Brexit Stimulus Fund
  • The Scottish Government has announced plans to create a stimulus fund following the UK’s decision to leave the EU.
  • The fund will add an additional £100 million to capital spending to support Scottish businesses.
  • Funds will be allocated to projects based on jobs creation and impact on the overall supply chain.
  • The Government also announced the creation of Business Information Service to support businesses affected by vote.

Read more at Supply Management

Shipping Industry Struggles Continue
  • As the results for the first half of 2016 are released, the struggles in the shipping industry look set to continue.
  • Hapag-Lloyd and Orient Overseas have both reported first half losses for 2016, with Maersk expected to do likewise this week.
  • Decreasing freight rates and over capacity have been blamed for the current plight in the industry.
  • Hapag-Lloyd plans on acquiring United Arab Shopping Co., a deal that could deliver $400 million in savings annually.

Read more at the Wall Street Journal

Procurement Professionals Going Mobile with Procurious App

Procurement isn’t 9-5 any more. Stay connected with all the major issues on the go with the new Procurious App.

Procurious App

In today’s modern, and highly connected, world, big issues like Brexit and supply chain disasters don’t neatly end at 5pm with the working day.

Whether at their desks or on the road, procurement and supply chain professionals need to stay on top of the latest challenges and opportunities, and take action 24/7.

But, now these dedicated individuals can relax (at least a little!) thanks to the new Procurious app. With a few taps, Procurious members can easily gain insights from their colleagues, invite their peers to get involved, stay in touch with suppliers and customers, make decisions and add value to their organisations, at home or away.

A Mobile Profession

“Today’s procurement professionals are always on the hot seat, managing business-critical issues,” said Tania Seary, Founding Chairman of Procurious.

“At the same time, these professionals, and especially millennials, are increasingly mobile, preferring to network, work and engage from their phones. The new Procurious app responds to growing demand from our members to support them wherever they are. It helps to provide them with the insights and collective experience of a worldwide procurement community.”

From e-learning videos to discussion groups, the app is easy to navigate and puts all of Procurious’ resources for networking, skill development and career advancement in the palm of members’ hands.

Download – Get Involved

The Procurious app brings all the functionality and great content of the Procurious site to your finger

Download the mobile app to:

  • Network with 16,000 curious, ambitious procurement professionals from around the world.
  • Discuss everything from achieving social responsibility goals to choosing contract document assembly software through lively forums.
  • Read our Blog to access more than 800 insightful posts. From the latest market intelligence and opinions, to tips from some of the top influencers around the world, we have it all!
  • Learn a new skill! Find dozens of e-learning videos on crisis management, winning the war for talent, negotiating, and more.
  • Messaging—Connect privately to build relationships, arrange discussions or share information with your peers.
  • Join a Group, from the Institute for Supply Management® (ISM®) to IT Buyers & Category Managers.
  • Shape the future of procurement by sharing your ideas at digital events like the Big Ideas Summit. Or mark your calendar to participate in our upcoming Boot Camp, an exclusive podcast series with daily insights to help procurement professionals get in the best career shape of their life.

If you’re a curious, ambitious procurement professional, don’t let travel slow you down! Download the Procurious app through the Apple App Store. Stay involved and in touch no matter where in the world you are.

If you want to see more of the Procurious app, stay tuned next week…

Share the news on Twitter: Join the global #procurement movement to #mobile with @procurious_ http://apple.co/1TWiAGx

Corruption & Slavery Threaten to Overshadow Olympics

As the 2016 Olympics kick off in Rio, ongoing corruption and slavery scandals threaten to overshadow the event.

Brazil Corruption Slavery

The 2016 Rio Olympics opened on Friday evening with a lavish opening ceremony, watched by a global audience of billions. Over the next two and a half weeks, 10,500 athletes from 207 countries will compete for medals in 28 sports.

However, the Olympics could be overshadowed by corruption and slavery scandals currently engulfing Brazil.

Corruption Scandal Widens

There has been widespread criticism of the money being spent to hold the Olympics in Rio. Much has focused on where money could have been spent to tackle poverty and social issues present in the city.

However, one scandal that has rolled on for over a year relates to massive corruption in the awarding of contracts. Petrobras, Brazil’s national oil company, and it’s ruling Workers’ Party (PT), are at the centre of allegations of one of the largest corporate frauds in history.

Petrobras was nationalised between 2002 and 2010, with the PT appointing its own candidates to high-level executive positions. These executives secretly diverted funds, valued at up to 3 per cent of all new oil contracts, to the PT and its coalition partners.

Senior Politicians Implicated

The corruption probe, nicknamed “Operation Carwash“, continues to widen. Plea deals have now implicated more than 480 politicians and executives.

It is alleged that these individuals received over $6 billion in bribes from a cartel of Brazil’s biggest builders. The money was traded in exchange for at least $50 billion in Petrobras contracts.

Suspended President Dilma Rousseff has been found guilty of budget fraud by a senate committee. Her predecessor, former President Lula da Silva, has been ordered to stand trial by a federal judge for money laundering and hiding assets.

Rousseff’s campaign strategist, Joao Santana, was also arrested for allegedly receiving $7.5 million in bribes from Petrobras. However, due to delays in Brazil’s legislature system, it could be a while before these cases are heard.

Slavery Rife in Brazilian Cities

Alongside the corruption and fraud in Brazil, new figures released this week suggests that slavery is still a major issue in the country.

The Walk Free Foundation has reported that there are an estimated 161,000 people working in slavery conditions in Brazil. This figure is up nearly 4 per cent from 2014.

Brazil has seen an influx of immigrants over the past decade from other Latin American, and African, countries. The issue is most prevalent in rural areas, but instances are occurring in major cities too. There have been more slavery cases reported in urban areas than countryside since 2014.

Official statistics show the mining sector accounts for 31 per cent of slavery cases discovered in Brazil, followed by construction (18 per cent) and agriculture (15 per cent).

“Blackballing” Companies

However, the Brazilian Government has earned some positive press in the way it is tackling slavery. They have created a “dirty list” of 300 companies who could lose access to public contracts as forced labour has been found in their supply chains.

The list was briefly suspended in March this year, although it was reinstated in May. The dirty list, and strategies that go along with it, have helped to free over 50,000 people from slavery conditions between 1996 and 2013.

At a time when the eyes of the world are on Brazil, and Rio, the ongoing work to free workers caught in forced labour conditions represents a glimmer of hope in an otherwise bleak political climate.

Are you in Rio for the Olympics? Or have you been involved in procurement or supply chain for the Games? We’d love to hear your experiences and showcase them on the Blog.

We’ve been collating all the major headlines from the past week to keep you up to date…

UK Interest Rate Cut Bad For Savers & Pensions

  • The Bank of England announced a decrease in UK interest rates to 0.25 per cent, the lowest rate ever.
  • It comes at a time of lower than expected growth in the UK economy.
  • The cut heaps further pressure on pension schemes already facing huge deficits from the shrinking economy.
  • It also means that a greater number of accounts, including business accounts, are expected to not see any form of interest on savings.

Read more on The BBC

Mercedes-Benz Vans to Open New South Carolina Plant

  • Construction on a new plant began last week in North Charleston, South Carolina, to produce Mercedes-Benz’s iconic Sprinter Vans locally.
  • The move will significantly cut lead-times for the German automotive giant. Previously US-based plants only assembled vehicles from ‘kits’ sent over from Germany.
  • Parts suppliers including the Auto Truck Group and the Knapheide Manufacturing Company, are expected to establish production sites in the region.
  • Mercedes-Benz reported delivery of approximately 28,600 vans to US customers last year.

Read more at Automotive Logistics

Brexit Leads UK Retailers to Source More Home-Grown Products

  • Fashion industry publication Just-Style reported that one-third of British retailers predict they will source more from domestic suppliers following the Brexit vote.
  • Research published by Barclays has found that 52 per cent of retailers also expect to increase supply chain activity in India.
  • 43 per cent of British retailers have indicated they anticipate a reduction in goods sourced from the EU.  
  • Despite the Brexit vote, European manufacturing actually improved over July. According to data firm IHS Markit’s Purchasing Managers Index, figures rose to 53.2 in July from 53.1 in June.

Read more at Just Style

Phone Battery Life Could Be Used to Track Users

  • The battery status API, introduced in August 2015, has been found to be capable of tracking individual users online.
  • API allows site owners to see the percentage of battery life left in a device, as well as the time it will take to discharge or recharge.
  • Although currently being used to enable low-power versions of websites, researchers have proved that it could be used to spy on users.
  • Privacy campaigners have argued that companies could use this data to also monetise battery levels, with users making different decisions when faced with a low battery.

Read more at The Guardian

Investor Confidence & Debt – A Study in Trans-Atlantic Contrasts

It’s a time of contrasting fortunes for trans-Atlantic businesses, as high investor confidence is matched by high debt.

Investor Confidence

Trans-atlantic businesses are always going to see some contrasting fortunes, given the diverse nature of the market environments. However, two new reports published this week suggest that these contrasting fortunes may have more impact than usual.

Despite a period of ongoing uncertainty in the UK, a new study has shown that investor confidence in UK SMEs remains high. Over 50 per cent of UK investors have stated they will support SMEs through private investment, even as confidence drops in shares, bonds and property.

However, in the US, another report suggests that companies are failing to maximise favourable conditions to lower their debt levels. A lack of improvement in supplier payments, and inventory management, has left overall working capital performance at its lowest level since 2008.

UK SME Investor Confidence

Despite the uncertainty surrounding financial markets and a variety of investment products, the majority of British investors are resoundingly confident in the country’s SMEs as an investment vehicle.

The research was commissioned by private equity house, IW Capital, and crowdfunding specialist Crowdfinders, and surveyed 1,000 UK investors. The survey revealed that over half (52 per cent) of investors said they would support the UK’s small and medium-sized enterprises through private investment channels in the wake of the referendum vote.

This equates to over 12.9 million potential investors for UK SMEs, and comes at a time where investor confidence in traditional assets, such as shares, Government bonds, and property, has dropped significantly.

The Lloyds Bank Investor Sentiment Index has helped to demonstrate the impact of the post-Brexit economic climate on investor confidence levels across the UK.

In mid-July 2016, the Index fell to its lowest level since it was launched in March 2013. Property (down by 35.3 per cent), government bonds (down 15.5 per cent) and UK shares (down 21.7 per cent) all experienced notable declines in investor sentiment.

Young Investors on the Rise

Encouragingly, 70 per cent of the younger age bracket of investors – 18-34 year olds – said they will consider investing in SMEs post Brexit.

Furthermore, the highest proportion of investors in a regional comparison who would back SMEs post Brexit was based in London. A significant 68 per cent of investors in the capital said they would support small businesses through private investment.

Luke Davis, CEO of IW Capital and Co-founder of Crowdfinders, commented on the report’s findings. “Following Brexit, Britain has been in a state of limbo, with consumers and investors unsure how the economic landscape will change over the coming months and years.

“What we can take from this research is that there is a silver lining from a business perspective as our nation’s investors are willing to support SMEs in the wake of Brexit, something that cannot be said for other investment classes.

“In times of economic uncertainty, ensuring support for the nation’s private sector – particularly the SMEs who make up 99.9% of all private businesses – is of paramount importance.”

US Companies Taking on Debt

Across the Atlantic, the situation was less positive. According to a survey from REL, a division of The Hackett Group, large US companies have increased debt levels, rather than improve working capital performance.

The survey looks at the performance of 1,000 of the largest public companies in the U.S. during 2015. It saw corporate debt rising significantly for the seventh consecutive year, as a result of low interest rates. Debt was up 9.3 per cent in 2015, the equivalent of $413 billion.

Since 2009, the total debt position of the companies in the survey has increased by over 58 per cent.

Working capital performance worsened, with a deterioration of 2.4 days or 7 percent in Cash Conversion Cycle (CCC). It is now at 35.6 days, the worst since before the 2008 financial crisis. These figures suggest major inefficiencies in managing their collections, payables, and inventory processes.

The working capital improvement opportunity of companies in the survey now stands at over $1 trillion, or 6 percent of the U.S. GDP. However, this can only be achieved by the companies equalling the performance of industry leaders.

Oil and Gas Performance 

A significant factor in this year’s overall results were the continuing low oil prices. This caused oil and gas companies to increase reserves, dramatically worsening both inventory and overall working capital performance, and dragging down the performance of the entire survey group.

Commenting on the results, Hackett Group Senior Director Craig Bailey stated, “Once again, low interest rates gave companies a perfect excuse to ignore the hard work of optimising receivables, payables, and inventory. This leaves over a trillion dollars unnecessarily tied up in operations. Instead of doing the hard work of transformation, most simply leveraged their future with more loans.”

Hackett Group Director, Ben Michael, added, “Eventually, interest rates will rise again, and there are signs this may happen soon. Then many companies may find themselves in dire straits, after seven years of growing debt and worsening working capital performance. Smart companies are getting out ahead of the curve now, and starting making the changes they need to squeeze unnecessary cash out of these key areas.”

You can access the full report, and results analysis, plus findings for European companies, on The Hackett Group website.

Want to have your say on these reports? Let us know your thoughts on these two surveys by commenting below. 

Away from the world of investor confidence and company debt, we’ve tracked down the key headlines in the procurement world.

NATO IT Division to “Splurge” on Defence Procurement
  • NATO’s Communication and Information Agency (NCI) has announced it will award €3 billion (US$3.3 billion) worth of cyber, air and missile defence contracts.
  • This is the first time since 2009 that NATO has increased expenditure. 
  • Proposals include a €2.5 billion satellite communications contract, advanced software procurement, and further strengthening of NATO’s air defences.
  • The spending increase comes at a time of scrutiny into NATO finances.

Read more at The Register

Nuclear Supply Chain Collaboration
  • Nuclear supply chain organisations from the US and Canada have signed a memorandum of understanding on cooperation this week.
  • The MoU will help to facilitate collaboration and innovation among nuclear suppliers and research organisations in both countries.
  • Focus areas include the development and deployment of advanced reactors and small modular reactors, job-creation and combating climate change.
  • The agreement comes ahead  of the major annual summit for utilities procurement professionals, who are due to gather in September for ISM’s UPMG2016 conference.

Read more at World Nuclear News

Aerospace Supply Chains Under Pressure
  • Boeing and Airbus supply chains were in the spotlight at the Farnborough air show, as pressure grows on both companies to deliver record numbers of aircraft.
  • This is putting increased pressure on already stretched suppliers, and is leading to concerns about supplier treatment.
  • Suppliers are expected to sign long-term supply agreements, promising both regular price reductions, and accepting unlimited liability should something go wrong, or face losing business.
  • It also comes at a time when Boeing have started delaying payments to some suppliers by up to a month.

Read more at the Financial Times

New UK Nuclear Power Plant in Doubt
  • A project to build a new nuclear reactor at Hinkley Point has been put on hold by the UK Government.
  • Despite EDF directors voting to proceed, the Government has delayed a decision until a further review in the Autumn.
  • The project cost is estimated at £18 billion, but could rise to £30 billion when further subsidies are paid.
  • Much of the debate centres on the guaranteed price for electricity produced by the plant being over double of current electricity prices.

Read more at The Guardian

Celebrating Supply Chain – The Organisation’s Unsung Hero

It exists in the background. When it works seamlessly, you wouldn’t know it was there at all. But the supply chain really is the unsung hero of the organisation.

Unsung Hero

Alice Catherine Evans. Dr. Megan Coffee. Gunner the Dog. Rick Rescorla. Heard of any of these individuals? They are just some of the unsung heroes from the past 150 years. They have all made a huge difference to the world, and arguably deserve much more recognition.

While maybe not at the same level, the same could be said for the organisational supply chain. It exists in the background. If it works seamlessly, then people don’t really take any notice of it. But, without it, organisations would grind to a halt. It really is the unsung hero of an organisation (as are all the people working in it!).

This week, supply chains have been in the news for the right reasons. The US Aerospace and Defence Industry and Domino’s Pizza were just a couple of organisations to highlight the good work their supply chains were doing.

However, it wasn’t all good news, as supply chains came under fire again for not doing enough to combat modern slavery.

SMEs the Unsung Hero for A&D

The Farnborough International Airshow, held in the past week, presents a fantastic opportunity of organisations further down the supply chain to present their new technologies and ideas. This year it also allowed the US A&D Industry the chance to celebrate its SMEs.

According to data from the Aerospace Industries Association (AIA), the US A&D Industry has exports totalling $142 billion last year. Of that, the supply chain generated 58 per cent of the exports, a whopping $78 billion.

The numbers go to show the strength of the supply chain companies, as well as the global partnerships they have built across the world. The importance of the supply chain SMEs is clear to the US A&D industry too. They have led the way in building a solid reputation of US technology and innovation across tens of thousands of projects worldwide.

AIA CEO David Melcher also sees a bright future of the SMEs. With trade agreements in place, Melcher argued that “small- and medium-sized companies can generate exports for decades more to keep this equipment operating effectively and efficiently.”

Supply Chain Success

Another unsung hero, at least until this week, was the supply chain for Domino’s pizza. The fast-food giant announced a 12 per cent increase in sales in the second quarter of 2016, beating profit and revenue forecasts.

The company attributed increased supply chain sales, including increased volumes and store growth, as a key reason for this. The supply chain sales themselves also saw a 12 per cent increase in the quarter.

Heroes Required

However, the week wouldn’t be complete without stories of what organisations need to do to combat slavery in their supply chains. A report released this week showed that the ICT industry has plenty to do in this area.

KnowTheChain compared 20 ICT companies, including Apple, HP and Samsung, on their supply chain practices. The results were not pretty, with the majority of the organisations scoring under 50 (out of 100) for efforts to eradicate forced labour, and how transparent their efforts were in doing this.

However, according to a business leader in the cosmetics industry, eradicating forced labour and slavery completely is an on-going battle. Simon Constantine, of British retailer Lush, stated that even though Lush is willing to pay more for ethically sourced goods, the company has still struggled to keep up.

Constantine said, “With the amount of work you need to do to stay on top of things, and everything changing so rapidly…I would never be comfortable saying our supply chain is 100 per cent clean.”

But with new regulations increasingly putting the onus on companies to ensure their supply chains are clean, it’s a battle that is set to be fought just as hard as ever.

Is your supply chain an unsung hero? Why not let us know and we can help you tell your story?

We’ve been pouring over the news and digital media to make sure you don’t miss the key headlines this week…

Brexit Causes “Dramatic Deterioration” in UK Economy
  • The decision by UK voters to leave the EU has led to a “dramatic deterioration” in economic activity in Britain.
  • Markit’s Purchasing Managers Index shows a fall in economic output to 47.7 in July, the lowest since the end of the Global Financial Crisis.
  • Both manufacturing and service sectors saw a decline, though exports were up due to the weakening pound.
  • Chris Williamson, Chief Economist at IHS Markit, said the downturn has been “most commonly attributed in one way or another to ‘Brexit’.”

Read more at The BBC

Turkish Procurement Programme Delays
  • The failed coup attempt to overthrow the national Government in Turkey will delay multi-billion dollar procurement programmes.
  • Members of the coup took senior army officials hostage last weekend, with their actions leading to over 200 deaths.
  • Although incomparable to loss of life, senior officials have admitted that procurement is “nowhere in the military command’s priority list.”
  • It has raised concerns that this will leave the army short of operational resources in the fight against ISIS.

Read more at Defense News

Rio Olympics Highlights Cross-Border Procurement Risks
  • The Rio Olympics, due to start in a few weeks, represents a massive opportunity for cross-border commerce.
  • The organising committee has already procured more than 30 million goods, including sports equipment and accommodation items.
  • However, organisations still need to be aware of the potential risks, such as logistical issues, and currency exchange rate fluctuation.
  • Reggie Peterson, Director of Indirect Supply Programmes at AmeriQuest, highlighted the importance of carrying out due diligence for organisations before getting involved.

Read more at PYMNTS.com

Facebook Drones Close to Taking Flight
  • Drones, built with the purpose of bringing connectivity to remote regions of the world, are closer to taking flight.
  • Facebook-owned British company, Ascenta, has run a successful test of its drones in the skies above Arizona.
  • The the solar-powered drones will be airborne for months at a time, beaming signals down to users on the ground.
  • The project is in competition with Google’s ‘Project Loon’, which aims to use high altitude balloons for the same purpose.

Read more on The BBC

Gotta Catch Them All! But Is Pokémon Go a Cyber Crime Target?

Pokémon Go is the new craze sweeping the world. It’s just a game, but how does it relate to real-life laws? And could it really be a target for cyber criminals?

Pokémon Go

Last week, Nintendo launched its new ‘augmented reality’ game, Pokémon Go, across the world. Nintendo spread the launch dates out, with the USA, Australia and New Zealand first, and Europe and other parts of Asia launches in the following days.

For the uninitiated (and you’ll be hard pushed to be one of those with the blanket media coverage), the game blends digital characters from the successful Pokémon franchise, with GPS and location based technologies on smart phones.

Global Craze…and Growing

Within 24 hours of its US release last Tuesday, Pokémon Go had already overtaken its competition to be the biggest game of 2016. It moved to number 1 on App Store, and after 3 days had become the biggest mobile game in US history.

The game surpassed Twitter in terms of daily active users, and Facebook in terms of user engagement on its app. It’s also estimated that it may overtake Google Maps as the largest user of Alphabet’s mapping data.

The incredible growth has also helped Nintendo’s market value jump. It marks the end of a difficult period for Nintendo, who’s market value has been in decline since October 2015.

Nintendo’s market value increase by 10 per cent when the game went viral in the first week of July, with a further 25 per cent added by last Tuesday. This equates to nearly $9 billion added to the market value in less than a week.

Safety First!

The new craze has not been without its hiccups, however. In addition to people walking into walls and falling down holes while glued to their phones, there have also been reports of muggings and armed robbery facilitated by the game’s geolocation software.

Police in Australia have also issued a couple of public announcements in light of these incidents. They have asked the public to be aware of their surroundings while hunting Pokémon, that they shouldn’t use the app while driving, and that “I was collecting Pokémon” is not a defence for trespassing.

The final point brings into focus the issue of how augmented reality games will cope with country laws. As users are collecting characters in the real-world, the potential for trespass grows.

How this will be handled by businesses (some of whom are taking advantage of the craze) and locations (like Arlington National Cemetery) in the future will be interesting to see.

Pokémon Go a Cyber Target?

A number of experts have also argued that Nintendo’s launch could leave some users potentially vulnerable to cyber criminals. With a staggered launch, some users may have been tempted to download a version of the app from unverified third-party app stores. This could subsequently leave them vulnerable to malicious apps and malware.

These apps could then allow criminals to access smartphone data, spy on users, or even control phones remotely. Another report by security software company, Trend Micro, highlighted the risk posed by the game to individuals’ data.

Gamers who downloaded Pokémon Go and registered using a gmail account, could inadvertently give third parties access to private data. However, this issue could be mitigated by ensuring the correct privacy settings in the app.

Connected Devices

While the cyber crime risk for Pokémon Go seems fairly low, it may signify the start of a larger issue. The growth of augmented reality games, smartphone technology, and connected devices via the Internet of Things, does pose a cyber security risk.

But what is certain is that as the technology leaps forward, security provisions and investment needs to move forward too.

Have you jumped on the Pokémon Go bandwagon? Do you think talk about cyber crime for these games is realistic? Let us know. 

We’ve dragged ourselves away from virtual creature capture long enough this week to bring you the weekly headlines…

General Motors Deal with Bankrupt Supplier
  • GM’s contract dispute with Clark-Cutler-McDermott Co. (CCM) has forced the parts supplier into bankruptcy protection, with plans to sell its remaining assets.
  • CCM has argued that unprofitable contracts have led them to lose $12 million since 2013.
  • GM will purchase a quantity of critical factory equipment and parts necessary to continue production across their North American factories.
  • The well-publicised dispute in the bankruptcy court has shed light on the uneven power dynamic between car makers and parts suppliers.

Read more at the Wall Street Journal

Retailers Struggling with Reverse Supply Chain
  • Customer returns and product recalls are becoming increasingly common, with the most notable recent event being IKEA’s massive recall of 36 million dressers worldwide.
  • Returns and recalls pose a significant challenge for the retail sector to build a ‘reverse supply chain’.
  • This term can be misleading, as it is not simply the usual supply chain run backwards, but a complex network of transportation and resellers.
  • Retail Industry Leaders Association VP Adam Siegel warns: “You’re not going to succeed if you’re losing money on your reverse supply chain because, inevitably, the reverse supply chain is going to grow.”

Read more at PYMNTS.com

Palm Oil Industry Rife with Human Rights Abuses
  • The palm oil industry has come under further scrutiny for human rights abuses.
  • The Rainforest Action Network (RAN) has released an animated video that highlights the organisation’s largest criticisms of the palm oil industry.
  • The video focuses on the non-compliance of a PepsiCo joint venture and endemic labour abuses in Indonesia. 
  • RAN claims workers at palm oil plantations have been subjected to excessively long work hours for low wages, dangerous exposure to agricultural chemicals, confiscation of passports, and child labour.

Read more at Triple Pundit

IBM Pushes Blockchain in Supply Chain
  • IBM has launched a platform for companies to test “blockchain” record-keeping technology in their supply chains.
  • The service is an attempt to expand the use of blockchain beyond the financial services industry.
  • IBM’s new service lets supply chain customers build and test blockchains using a version of the company’s LinuxOne system.
  • The service is aimed at companies that need to track high-value items through complex supply chains.

Read more at the Wall Street Journal

Facts not Fear: The Impact of Brexit on US Business

Institute for Supply Management (ISM) CEO Tom Derry tells Procurious that people need facts, not speculation and fear, when it comes to understanding the impact of Brexit on US business.  

Brexit US Business

ISM took the unusual step this month of releasing a supplementary Report on Business, focusing specifically on the impact of the UK’s Referendum on EU membership on US business.

The decision was prompted by a flood of enquires from US business and media representatives about whether the data for this month’s highly anticipated and influential report would reflect the fallout from Brexit.

“We decided to go back to our panel of over 600 procurement professionals with a tailored series of questions about the net financial impact of Brexit on their organisations”, said Derry.

“More importantly, there has been an enormous amount of speculation about the impact of Brexit, fed by a sense of unease and uncertainty. ISM was in a position to gather real data and put the information out there so businesses can make informed decisions based on facts, rather than fear, concern or emotion.”

Negligible Impact

The report will serve to dispel much of the speculation around the impacts of Brexit on US business. The vast majority of those surveyed reporting that Brexit will have a “negligible” impact on their business. Only one in three thought their firm would be negatively, or slightly negatively, impacted.

The main concerns for those who do anticipate an impact include the exchange value of the dollar, changes in demand globally, financial market uncertainty, and currency movements.

“The report demonstrates that despite the speculation, the majority of US businesses feel that Brexit will have a negligible impact”, says Derry. “This is because the US has a comparatively low export economy at only 13 per cent of GDP, so we are relatively insulated from the impacts of currency movements and global demand. We’re not a huge commodity exporter, although the strength of the dollar is of course a concern for those who are in the exporting business.”

Derry says that in the short-term, trade relationships are stable. “For US firms doing business in the UK or EU, very little has changed. For now, we’re good – business is predictable, and we love predictability and certainty.”

Future Investment Shift

In the long-term, however, US businesses may not choose to invest additional dollars in the UK. Historically, a lot of companies (such as car manufacturers) have used the UK as their port of entry into the EU, due to its shared language and talented workforce.

Derry added, “That option may no longer be so attractive, and discretionary investment will probably shift to Eastern Europe – Poland or the Czech Republic – to have a presence within the EU, and take advantage of low-cost labour.”

Derry says that the Brexit referendum is a historical event. However, in 10 years it is likely to be seen as a political decision, rather than an economic one. “The ‘sky is falling’ scenario is certainly overdone”, he says. “I don’t think we’re going to see the fracturing of the EU over Brexit.”

“It’s important to keep our vision focused forward. As supply management professionals, we work in the global economy and a major shift, such as Brexit, forces each of us to recalibrate our global supply strategies and trade relationships. The EU is the largest single market in the world – we can’t ignore it.”

Click here to read the supplemental ISM Report on Business: Brexit Report.