Category Archives: Life & Style

Social media use in the logistics and supply chain industry

The use of social media is prevalent within Fortune 500, Inc. 500 companies, and small businesses.  Why are companies using social media? 

Social media use in the logistics and supply chain industries. Pixabay

Companies are using social media to grow their business and to bring value to both their company and their customers.  The McKinsey Global Institute conducted an in-depth analysis four industry sectors that represent almost 20 per cent of global industry sales.  The analysis suggests that social platforms can unlock $900 billion to $1.3 trillion in value in those sectors alone.

Fronetics Strategic Advisors conducted a survey of individuals within the logistics and supply chain industries.  The objective of the survey was to gain insight into the use of social media within these industries.  Specifically, to learn more about why companies within the logistics and supply chain industries are using social media, the benefits they have realized, and challenges they have encountered.

The supply chain and logistics industries are recent adopters

Social media use is relatively new for companies within the logistics and supply chain industries.  64 per cent of survey respondents reported that their company has used social media for between one and five years.  Thirty-six per cent of respondents reported that their company has used social media for less than one year.

Motivations for use

Why have companies begun to use social media?  The survey asked respondents to rate statements on why their company uses social media.  The following statements received the highest rankings (somewhat to very important:

  • Increasing the visibility of their company (95 per cent);
  • Improving brand image (90 per cent);
  • Establishing the company as a thought leader (86 per cent);
  • Attracting new leads and customers (82 per cent).

Benefits and challenges

The majority (68 per cent) of respondents reported that their companies are realizing benefits from social media.  The primary benefits reported were: increased engagement with customers (80 per cent); increased market intelligence (80 per cent); and increased business intelligence (73 per cent).

With respect to challenges, time constraints (48 per cent), budgetary constraints (43 per cent), and lack of strategy (33 per cent), were the primary challenges reported.

Most companies manage social media in-house

The majority (92%) of respondents reported that social media is managed in-house by either a marketing department, a staff member devoted full-time to social media, or a staff-member devoted part-time to social media.

Summary

Although companies within the logistics and supply chain industries have only recently begun to use social media, they are already realizing benefits and are identifying social media as a strategic tool.

In addition to customer engagement, the benefits identified by social media include increased market intelligence, and increased business intelligence.  In short – information.  When asked why their company uses social media, responses generally focused on brand and image.

With respect to social media strategy, the majority of companies manage it in-house. Interestingly, the top three challenges identified by companies include: time, money, and defining a strategy.

What is your company’s experience with social media?

For the full report see: Social media and the logistics and supply chain industries: Report on social media use, motivations, preference, benefits, and challenges.

Fronetics Strategic Advisors is a management consulting firm focused on strategy and inbound marketing for the logistics and supply chain industries.

The secret to long-term career planning

In this second part of a two-part article, Hamish Petrie – former VP of People and Communications for resources giant Alcoa – reveals the secrets behind nurturing a long-term career.

Hamish currently writes for the Business Times in Melbourne. Read more about his story here.

Planning your career path

Time is a critical factor in any career planning process. Most futurists agree that a large proportion of jobs even ten years out have not been invented yet.

To try to conceive the sort of job that you might have in the latter half of a 30+ year career is impossible. Your personal situation and your career anchor will usually change often through your career. For example, major life changes can greatly alter your priorities. Some consultants recommend breaking your career into five year terms, however, my experience would suggest that this is too long.  Too many things can change your situation in even two years, so a three-year plan seems more appropriate in our rapidly changing world.

In making this sort of plan, most people identify that they want to do their boss’s job, as they know that they can do it better than the current boss. Whilst this may be true, it can be restrictive as people can lock onto this and lock off on other possibilities. This “lock on: lock off” thinking can prevent a person from thinking about lateral jobs that may ultimately prepare them for bigger future roles.

I always suggest that a medium term career plan should exclude their immediate boss’s role, as this stimulates broader thinking. Getting some breath of experience during the first half of your career is always wise and it doesn’t matter in the long term if a particular job is not your ideal one at the time, as long as you keep learning about yourself.

Companies and jobs are always evolving and changing so it is important to learn how to adapt to change and to help drive change in a positive direction for you and your company. There is an old adage that “ tomorrow’s power comes to those that solve today’s problems”. Demonstrating that you can creatively solve problems and stimulate others to help can be a great adjunct to your career.

The bottom line is that it is impossible to develop a realistic long-term career plan, but you can prepare yourself for possible future jobs. You can develop a short to medium plan and this can be very helpful as long as your include all of the opportunities for broadening your experience. When considering how to develop your career, it is much more important to focus on the company rather than the job. If you can join a company that is right for you, then they will help you grow, become active in a dialogue about your future and help you be happy, and rewarded in whatever job comes along.

Action Planning Questions: 

  1. Have you investigated your own career anchor or taken one of the self-assessment tests available on the Internet?
  2. Have you developed a three-year plan, excluding your current boss’s job?
  3. When considering candidates for a job, do you give try to identify their career anchors to determine the best long-term fit for your needs?
  4. When considering a job, do you focus much more on the company rather than the specific job?

Read part one: Hamish Petrie asks: ‘Can you plan your career?’

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Are we the golden children of procurement?

When the CEO of one of the world’s largest resources businesses, Sam Walsh, says he believes procurement has entered a “golden age”, it certainly makes you think – could this really be one of the most prosperous periods of our profession’s history? And, if so, what are we doing to capitalize on this opportunity?

Remind yourself what Sam Walsh said on Procurious

Are we the golden children of procurement?

From the perspective of my 15+ years in the profession, I am confident in saying procurement professionals are in the midst of some very exciting times… and here’s why: 

  1. Our roles have never been so complex and therefore as interesting.  Today’s procurement professionals must manage all the expectations of their 360-degree stakeholders, up-skill and engage their teams, deliver an advantaged supply base, and all the while, keep their own careers prospering.
  2. Our old tools still work. Even though our roles have become more complex, most of the tools we have developed and used during the last decade are relevant today – strategic sourcing, category management, SRM etc. are all valued by the business and deliver outcomes. Everything old is new again, and most importantly, it still works.
  3. Digital is already disruptive. As customers, we are already online and procurement is about to explode into this space – drones, social media, 3D printing etc. are all transforming the way we think about everything from supply and demand; professional development; collaboration and sourcing.  The challenge is to ‘digitalise’ our ancient tools for this brave new world.
  4. We are a rare breed. Couple demand for our expertise with the rate the profession is growing, and you’ll see there are procurement opportunities exploding all over the world. Go and grab them!
  5. Our image is golden. As more talented people enter the profession and we are called on to tackle issues of core business importance, our image as a profession has grown stronger than ever. Gone are those outdated aspersions that find procurement stuck in the “dark ages”. That’s where Procurious comes in – Procurious is reimagining the image of the modern procurement professional – with the core of its members proving themselves to be a smart, upwardly mobile, and commercially savvy breed. 

“Study the past if you would define the future.”
― Confucius

History of Procurement

Procurement is one of the fastest growing professions in the world. For those of you new to procurement, here’s a “short history of the world” which may give some perspective on whether we are indeed in the “golden age”.

The Dark Ages

OK, so we all know our forefathers started in the backroom.  Clad in their brown cardigans, they executed contracts, processed purchase orders, accepting the odd bottle of scotch from suppliers at Christmas time.

Enlightenment

The forefather of modern procurement is widely accepted to be Gene Richter, who worked at IBM in the 1990’s.

The major US companies soon followed IBM by leveraging their global volumes and introducing standardized procurement processes. Not so long ago, the seven step sourcing process was being implemented, centralized procurement teams were formed, followed by supplier relationship management, and more recently category management.

The dot-com boom

The dawn of the new millennium was a time of rapid organization and maturation for the profession.

Many large companies made significant investments (such as $1M+ board approvals) to invest in cross-company procurement exchanges.

Now referred to as Procurement’s dot-com boom, these group-buy investments got procurement quickly on and then just as quickly off the Board agenda. Investments in group buying (and the associated technology) all “became a bit too hard”.

Despite these high profile, public failures, procurement continued to flourish and today, the “dot.com boom” represents the time we moved from the back room – in our brown cardigans – to the boardroom, where our Chief Procurement Officer’s increasingly find themselves either sitting, or at least contributing, today.

Globalisation and the extension of the supply chain

Once all the large companies had leveraged their spend globally, the hunt was on for the most cost-effective country to manufacture goods.

All of a sudden we were managing suppliers and their suppliers in foreign and often remote, locations. This is where the profession became, and continues to be very exciting…

Globalisation has brought with it significant advances, and made our profession  much richer as a result.

Today, its universally accepted that procurement has moved beyond just cost – we now play an integral role in areas of risk management – including supply, quality, innovation and mergers & acquisitions (M&A); new product development; and corporate social responsibility.

The Digital Age

As if our jobs weren’t “interesting” (aka challenging) enough, now we have to account for social media too… Not only are we expected to manage a worldwide network of suppliers and contractors – we are exposed to dangers like customers or shareholders posting a “Tweet” or “status” about how we are managing the supplier.

Yet, this is why working in procurement today is so incredibly interesting and why the profession continues to flourish. We’re working at the interface between the business and all its stakeholders – be that the community, customer, shareholder, supplier, and employee. We need to manage all these stakeholders with the highest integrity in order to protect our brand.

How to make the most of the golden age

If Sam Walsh is right, and we are in the ‘golden age’, how do we take advantage / don’t let this golden opportunity pass us by:

  1. Market yourself and your ideas!  You are your own brand, and nobody knows YOU better. Leverage your good name and use your influence to promote the profession.
  2. Stay connected. With the world and with your peers. Identify risks and opportunities, learn from others.
  3. Keep learning. Every minute of every day we are learning. Whether that be learning from our peers, our customers, and suppliers. And by doing this we are able to identify issues for procurement as they emerge.
  4. Enjoy!  Make the most of being in this profession at this prosperous point in history.  There are so many career opportunities right now – you should be grasping every opportunity to learn and grow.

Conclusion

Although an unlikely comparison for our profession, I use Madonna as an inspirational metaphor/analogy for managing your career.  Even though she’s been in the same role for more than 30 years, she keeps “reinventing” herself for her target audience.  She’s still a pop singer, but she is constantly changing her branding to ensure she stays relevant. As professionals we need to be doing the same!

And that’s what I believe Procurious can bring to the profession – a place to stay current, and stay connected. A place where all procurement professionals can get ahead and thrive in this golden age and beyond!

The term Golden Age (Greek: Χρυσόν Γένος Chryson Genos) comes from Greek mythology and legend and refers to the first in a sequence of four or five (or more) Ages of Man, in which the Golden Age is first, followed in sequence, by the Silver, Bronze, Heroic, and then the present (Iron), which is a period of decline. By extension “Golden Age” denotes a period of primordial peace, harmony, stability, and prosperity

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5 green initiatives to improve your supply chain

Pretty much each & every one of us (as individuals and organisations) now make a conscious effort to do our bit for the environment and “Go Green” wherever possible. Not only do our “Go Green” actions benefit the world we live in and potentially reduce costs for us but also makes us feel good inside – giving us that feeling that we, as the superintendents of our ecosystem, are making a difference.

Go Green in your supply chain

I’m sure that most of you will have already put practices into place within your home environs with regard to recycling and saving energy by switching to energy saving bulbs and turning off power that is unnecessarily left on stand-by, but have you considered instilling comparable measures within your logistics Supply Chain.

As our attitudes towards the environment changes, what methods could you implement to offer a “Greener” Supply Chain solution?

Here we take a look at 5 ways which could improve your Supply Chain’s eco-efficiency:

1. Take a view from a different prospective of your company and deliberate your current actions. Do you consider your company to already be embracing a good standard of eco-efficiency? How can we expect others that we collaborate with to hold and preserve a high standard of “Go Green” ethos when we, ourselves, do not follow.

2. Evaluate your current use of machinery and packaging and assess where you can make reductions by introducing more energy proficient equipment and the use of recycled packaging products as well as decreasing the volume of packaging your items require. Recent studies indicate that over 50% of goods on store shelves are packaged in recycled paperboard.

3. Use a comparison site to review your business energy prices and see where you could potentially make savings.

4. Inspire your staff to promote green resources and infuse systems which encourage a “Go Green” attitude throughout your workforce. Why not implement an “idea” box for your employees to make suggestions of how & where they feel changes could be made to reflect “Greener” processes.

5. Restructure & modernise your logistics to minimise emissions. Can you make better consumption of your vehicles by combining the shipments of more than one client on a particular route in each load?Could you deliver a higher quantity of resources per load to reduce your truck movements? Contemplate the use of low carbon transport such as rail, barge or sea together with hybrid vehicles for means of transport by road. Full information is available for advice on methods to “Go Green” within your business transportation methodologies via http://www.epa.gov/smartway/

Being environmentally friendly should be high on your list of priorities in the 21st century, but without the knowledge of how to shape a “Greener” supply chain, you can’t realistically or practically reach your end objective. Investigate how you can co-operate with other companies, within your circle of business, how working together could result in the reduction of waste. Details on how a business can contribute to a more sustainable economy can be sourced via the UK Government website.

This guest post was penned by Sarah Robey. Sarah represents a UK-based logistics finding service.

Language barriers: the dangers of Google Translate

Procurement Professionals on LinkedInThis guest blog was written by Marcia Thompson and originally posted in the Procurement Professionals LinkedIn group. It has been redistributed with their permission.  Read more on Procurement Professionals LinkedIn group at: http://linkd.in/1uupe8p or Twitter: @ProcurementProf

Many years, in a restaurant in Ankara, Turkey, I made a faux pas when I was offered tea, or çay in Turkish. I replied in the little Turkish I had learnt. What I said was “no tea”, which I meant as no tea for me thanks. But apparently this was interpreted as “there is no tea”. This caused major confusion as saying there is no tea in Turkey is the same as saying there is no pizza in Italy or no vodka in Russia. The more the waiter tried to convince me that yes, there was tea in his restaurant, the more I said “no tea”. It took a few minutes to sort it out and my friends, the staff and I laughed about it.

google-tranlate

Whilst this example of a language misunderstanding was minor with no harm done, how many mistakes are made on a regular basis without people being aware.   Compounding this lack of awareness is “Google Translate” where people blissfully assume that the translation of words is correct and that the other party to the communication meant to say those words.

According to Wikipedia, effective communication occurs “when a desired effect is the result of intentional or unintentional information sharing, which is interpreted between multiple entities and acted on in a desired way.” (source – http://en.wikipedia.org/wiki/Communication). Now I have to stop and wonder if readers with English as a second or third language – for the purpose of this article, I will say “ESL (English as Second Language) readers” – can understand that sentence. In “plain English” (English that is easily understood), effective communication is when the message received is the same message as the one that was sent.

Lost in translation

“Google Translate” is a translation tool that should be used with some caution. It ignores tone, regional differences, gender bias, perception, history, jargon, abbreviations and noise, et cetera.  Basically, all of these factors filter the information received and are potential obstacles to effective communication. I deliberately chose noise as the last factor.

Many ESL readers, and even some native English readers, would read “noise” as something we hear but actually “noise” can also be used to describe irrelevant information. The Oxford English Dictionary defines one meaning of noise: “in non-technical contexts: irrelevant or superfluous information or activity, esp. that which distracts from what is important” (source: http://www.oed.com).  Interesting that this definition uses “esp.”, which could create some confusion, or indeed “noise”. Esp. could be interpreted as an abbreviation for Espana for Spanish readers and if you google “esp.” extrasensory perception is ranked the highest definition. In a google search for “what does esp. stand for: http://www.abbreviations.com/serp.php?st=ESP.&p=7, there is a list of 158 meanings for esp., but the one that the Oxford English Dictionary meant, “especially”, is listed on the 7th page.  It could be a real challenge for ESL speakers to work out something as simple as this one abbreviation is (for native English speakers) and it is a great example of how Google Translate, or even Google Search, can’t be relied upon to assist with complete understanding.

English is the most commonly used language for business purposes between people from different countries.   As more interactions and transactions are carried out, esp. (J) online, it can be easy to assume that everyone that is communicating in English has a common understanding. Even native speakers can have trouble communicating with each other.

So what is the solution? Well, basically all of the parties to the communication need to check that they have understood the communication. It is better to do this sooner rather than later.   How depends on the type and purpose of communication. In Procurement, it could be that the supplier needs to demonstrate they have understood the specification of a good or service.   This could be a sample, photo, drawing or anything that clearly shows they are delivering as required by the specification.

A second opinion could be helpful, for example someone else reading a contract to ensure understanding of the terms and conditions.   Calling the other party to discuss the contents of a written document can also be useful. Whatever the situation is, don’t assume that Google Translate will be able to translate your words 100% effectively. There are many words in English that have two or more meanings. Native English speakers are used to it and don’t realize how many there are.

As an example, I am going to leave you with my interpretation of the word blue:

  • colour like as the sky, feeling sad, fight or argument, genuine (as in true blue), mistake, the name of someone with red hair (also known as Red), and royal (English royals are said to have blue blood).

Is collaboration really necessary?

If you’re a procurement professional, then you probably hear the word collaboration more than you’d like to. Collaboration has rightfully earned its place in the hall of fame of executive buzzwords. But as most practitioners know, the reality of collaboration is often unglamorous.

Is collaboration really necessary?

So why this gap between the ideal world and reality? One root cause is that very few people actually follow collaboration best practices. The side effects of ineffective collaboration are further magnified when different departments within an enterprise have to work together, which is often the case when procurement is involved.

The truth is that collaboration works if and only if the answer to all of the following questions is a resounding YES:

1. Is collaboration necessary?

Too often, committees get formed and the overhead of having to communicate to several (overextended) people often outweighs the benefit of their participation. Ask yourself whether you really need others’ help or input.

2. Does everyone know what they’re doing?

How many times have you been in a meeting where half the participants look disengaged or confused? Collaboration is an active process and everyone needs to be all in and know what they are responsible for delivering. And this needs to be true at every point throughout the project lifecycle.

3. Is the end goal clear to everyone?

Often, collaborative projects kick off with a grand vision, but weeks later, the harsh realities of having to deliver by a certain deadline often muddle that vision. This causes confusion (at best) and severe productivity loss and frustration (at worst). Ask yourself whether you know where you’re going. If you don’t, then the odds are that you’re not the only one.

4. Does everyone know what the action plan is?

This is especially critical to complex projects with multiple stakeholders from various departments (which covers most Procurement projects). This type of project requires constant reallocation of resources and more than a few last-minute changes to the grand plan. Has the entire team been made aware of these changes? And more importantly, does the entire team know what the plan of action even is?

5. Are we actually using the right tools?

Despite the recent rise of collaboration and social media tools, most procurement professionals rely on email and Microsoft Excel to manage an increasing number of highly complex projects. Whatever the tool, it must be easy enough to understand at first or second glance, and it must add value immediately. The benefits of leveraging social technologies to collaborate effectively are huge.

A recent McKinsey study titled The social economy: Unlocking value and productivity through social technologies makes the case that social technologies can aid collaboration and improve the productivity of interaction workers by 20 to 25 per cent.

Bottom line – collaboration can be incredibly valuable and almost always results in a superior work product and better outcomes for all if practiced correctly. Next time you start a project, don’t forget to review the five questions above!

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The best way to negotiate

Welcome to the third article in a monthly series from John Viner-Smith.

How to negotiate effectively

If you’re a student of negotiation (and, as a procurement professional, how could you not be a student of negotiation?) then you should have a well-thumbed copy of Richard Fisher and Bill Ury’s “Getting to Yes” within easy reach on your bookshelf. Fisher and Ury literally wrote the book on what is termed “principled” or “interest-based” negotiation (often simplified to “win-win” negotiation). When asked “what’s the best way to negotiate?” most academics will point you to this approach.

How to negotiate - getting to yes

There are five central guiding principles to this approach.

  1. Separate the people from the problem. In other words, seek to decide issues on their merits rather than the emotions, fears and egos of the negotiators
  2. Focus on interests, not positions. Fisher and Ury assume that almost all disputes can be resolved with principled negotiation because, when you cut through the positions adopted by negotiators to their actual interests, they are often more easily reconciled
  3. Invent options for mutual gain. By working creatively and collaboratively around the interests, negotiators can achieve outcomes that deliver gains to both sides.
  4. Insist on objective criteria for decisions. The classic examples quoted here are the purchase or sale of something like a house or a car, where there will be plentiful benchmark data available pointing to the “fair” price for the item being traded or an independent appraisal can be carried out.
  5. Know your BATNA (best alternative to a negotiated agreement). Your BATNA is the best outcome you can achieve if you don’t do this deal. If the proposal on the table is as good as or better than your BATNA, the deal is worth doing. If it isn’t, it’s not.

There are definite advantages inherent to this approach. If you genuinely have scope to negotiate this way you can engineer “all gain” deals which add value to both sides. In some cases, correct and thorough preparation on both sides and conscientious commitment to maintaining an atmosphere of curiosity, creativity and collaboration can result in deals which represent increased value to both sides and are the foundation of strategic partnership in business.

In a previous Procurious article I wrote that “win-win” is a myth, so you may be wondering how I reconcile that view with the idea of engineered, all-gain deals. “Win-win” is a term that is bandied about so much it has lost all meaning. All too frequently it’s used by one side or the other when they’re winning something, but haven’t given any real thought to what the outcome does for the other side. Engineered, All-Gain deals are only possible when both sides are genuinely curious enough to understand the other side’s underlying interests and candidly share their own. Sharing that information makes both sides vulnerable to the other, so an environment of trust and authentic commitment to the long term is vital. Business relationships like that are like marriages, and it is no more appropriate to talk about who won what in such a relationship than it is to call a winner in a marriage.

So is interest-based negotiation the best way to negotiate? My answer would be “sometimes”.

Let’s start by looking at this idea of calling interest based negotiation “principled”. Does that imply that all other kinds of negotiation are unprincipled? That’s a dangerous value judgement to make! Let’s use an example to explore this question. “Joe” is buying a house.

  • Joe’s budget is £500,000
  • The asking price for the house is £510,000
  • The vendor (unbeknownst to Joe, of course) needs £455,000 from the sale
  • The identical house next door sold last week for £489,000

Getting to yes-style, “principled” negotiation theory dictates that Joe should work with the vendor to find the deal that best suits both their interests and is fair to both, possibly taking market benchmarks into account. Under these conditions, you might consider that a settlement around £490k is fair and principled.

Instead of doing that deal, Joe uses an array of questioning skills, market knowledge and tactics to establish that the vendor could do the deal at £455k and wants money fast.  Joe then uses that information to apply pressure on the vendor to close the deal for £460k, thirty thousand pounds less than the “objective”, “fair”, benchmark price. Recognising that he’s never going to see the vendor again and therefore there is no value in a warm or trusting relationship, Joe uses every available lever to push the vendor down to a price that is closer to their walk-away point than the middle of the range.

Joe’s negotiating methodology is the antithesis of Fisher and Ury’s approach. He deliberately makes the person the focus by using the pressures on the vendor to create leverage. He focuses that leverage entirely on meeting his own interests to the greatest degree at the expense of the vendors’  and makes no attempt to come up with options for mutual gain. He ignores the objective criteria, focusing instead on the subjective pressures in the vendor’s head. Finally he closes a deal, keeping the lion’s share of the value in the deal for himself. So does that make Joe unprincipled?

If you’re tempted to say “yes”, ask yourself why. Certainly Joe is unlikely to enjoy a warm relationship with the vendor after the deal but why should that matter? He’s never going to see the vendor again. So if you did answer “yes”, is it possible that you just don’t like Joe? Maybe he seems greedy. Maybe you have some sympathy for the vendor. Viewed in isolation, Joe’s approach might seem aggressive and selfish. But let’s say Joe has a family, ask yourself this; who has more right to Joe’s £30,000; the vendor or Joe’s kids? They can’t both have it. Viewed that way, you might conclude that by pushing the vendor to accept the lowest possible price and saving himself enough money to put one of his kids through University without debt, Joe’s actions are entirely principled.

Life (personal and business life) is complex. We all balance complicated and often conflicting principles and duties and it is tempting, in the stress of negotiation, to lose sight of who’s interests you are there to serve. As a matter of principle you owe yourself the best deal possible. You owe your stakeholders the best deal possible. You owe your counterparty only what the circumstances of the deal at hand dictate that they are due, at the lowest possible cost to yourself.

Saying “It’s always best to adopt an interest-based approach to negotiations…” is correct in academic terms, but in the real world you have to qualify that by adding “…when you can”. As a negotiator you have other options available to you and they will be valid some of the time. In selecting which approach you adopt, I offer you a single guiding principle that works for me;

“Adopt the approach that will deliver the greatest benefit to yourself and the interests you represent”.

If circumstances allow an interest-based approach, this one principle will guide you to that approach. If not, this principle will help to focus you on doing what is necessary.

In space, no one can hear (the procurement professional) scream…

This is the fourth article in a fortnightly series from Gordon Donovan.

Captains’ blog (well there is a space theme to this one….)

Procurement in space

You may have read recently about NASA issuing an RFP to resupply the international space station.  

It reminded me of a couple of quotes from John Glenn:

“I guess the question I’m asked the most often is: “When you were sitting in that capsule listening to the count-down, how did you feel?” Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts — all built by the lowest bidder on a government contract.” 

“As I hurtled through space, one thought kept crossing my mind – every part of this rocket was supplied by the lowest bidder.”

In a previous article I talked about the supplier selection process and the use of cultural fit rather than the traditional supplier selection methods, for some projects. I wonder how they would cover the cultural issue with this one. Would Romulans and Klingons be prohibited for instance? Would the Jedi be able to use the force to deliver the goods?

This leads us nicely to an article about the draft report into tenders for the Australian government. 

In summary the article and report states that “Tender documents have traditionally been written prescriptively and with an overarching focus on value for money. While risk management and value for money are both important considerations, too narrow a focus on these factors can constrain choice, innovation and responsiveness in the government-commissioned provision of goods and services.”

Will this lead to a change in evaluation criteria in general for use of tenders, will this lead to more thought about the way of interacting with the supply market in general? I wonder what innovations NASA could tap into?

On the subject of evaluation criteria a recent blog article by Kelly Barner highlighted that sometimes trying to do the right think in evaluation (in this case diversity actually backfired. She stated that:

“In 2013 the Massachusetts State Lottery Commission awarded a contract for $5 million in advertising services. Like many public sector agencies, the lottery commission has diversity targets and required that a portion of the work be sub-contracted out to a minority- or woman-owned supplier.

The lottery commission evaluated all bids on cost and presentation as well as the diversity requirement. The contract was awarded to a firm that did not earn the highest score for cost or presentation but did commit to sub-contract 0.24 percent of the contract’s value, to a woman-owned supplier. The firm that earned the highest scores for both cost and presentation was, itself, a certified woman-owned business and therefore did not commit to sub-contracting work to another business.

Had that company been awarded the contract, 100 percent of the $5 million would have been awarded to a diversity supplier that also scored highest in the price and presentation criteria, and the state would have gotten a better result for less money.”

There has been a rash of benchmarking reports released recently:

Procurecon Europe

  • 20.7% of you believe  you have a poor level of supplier contract compliance
  • 74.1% of you approach recruitment for your organisation’s procurement teams in a combination of functional and non functional way
  • Relationship management is the biggest skills gap in your procurement teams today
  • 58.6% of you are investing in consultants as a third party solution/service for your business

Hackett Group

  • Management priorities in 2014 center on innovation-led growth
  • In 2014, procurement’s top priority is to expand its spend influence
  • Rebalancing supply risk
  • Recalibrating procurement’s technology and tools
  • Reinventing procurement’s value proposition

KPMG

  • Supply chain was the number one area where respondents said they will increase investment the most over the next 12 months.
  • Supply chain also topped the list when companies were asked which issues would be most challenging over the next 12 months
  • Human resources development will be ‘very’ or ‘critically important’ to their company’s strategy over the next 12 months.

Mckinsey

  • More and more companies are addressing sustainability to align with their business goals
  • Company leaders and all others increasingly see sustainability as a top CEO priority.
  • Companies’ current approaches to reputation management vary by industry
  • The reputation-management activities viewed as most important are not necessarily the most pursued
  • Sustainability ‘leaders’ set themselves apart through target setting and a clear strategy
  • Organizations excel at creating a culture and direction for their sustainability programs, but they struggle with elements of execution.

The last point on the Mckinsey report talks about creating a culture which brings us full circle back to where we started, and to round-off this piece I came across this article from Procurement Leaders. 

In it Steve talks about creating a cost conscious culture, which reminded me of something my organisation discussed earlier this year at our CPO forum. How to create that culture, Chris Lynch the CFO at Rio Tinto gives his 14 points here.

Strangely couldn’t find any mention of interplanetary co-operation on either of them…

For readers in Australia, I will be attending the CIPS Australasia conference in Sydney on 15-16 October and if you wanted to catch up please get in touch via the usual channels and I’ll be delighted to grab a coffee. Alternatively you can follow me on Twitter as I’ll be live-tweeting the highlights during the conference.

As ever you can subscribe directly to the sources I have identified here (nothing is my copyright), and if you wanted to discuss please feel free to contact me via Procurious, or follow me on Twitter.

Staying active and healthy with Jawbone UP24

Fitness trackers are proving big business; if you need proof, just know that the likes of Nike, Sony, Fitbit, and Samsung have already jumped onboard the somewhat profitable activity train.

The Jawbone UP24 is another from this particular stable, in so much as it’s an activity tracker designed to be worn on the wrist.

Jawbone UP24 fitness tracker review

Design and appearance 

The Jawbone UP24’s unobtrusive nature makes it perfect for those just dipping their toe into the activity tracker waters. If you’re scared of making a statement,  and instead are looking to make small, gradual changes to your lifestyle, then this could be the fitness band for you.

For the fashion-conscious among you, the Jawbone UP24 is available in a variety of colours – namely: red, navy blue, lemon lime, onyx, persimmon, and pink coral.

Jawbone UP24 fitness band - reviewed

A selection of sizes (small, medium, and large) ensures you’ll get the best fit – there’s not much of a difference in weight between the models either. The UP24 weighs in at 19g, 22g, and 23g respectively.

The band itself is made out of toughened, textured rubber. And we had no concerns when it came to wearing it for long periods of time, as the rubber happily possesses hypoallergenic qualities (skin irritation be gone – hurrah!)

Charging is achieved via a 2.5mm connector (think headphone jack in all but function) – this isn’t your standard USB charging cable. But you’re only looking at around 80 minutes for a full charge when connected.

How does it work?

What's inside the Jawbone UP24
The innards of the band.

The UP24 couples a Tri-axis accelerometer with some natty algorithms to passively track and quantify your steps, distance, active and idle time.

By taking into account your age, gender, height and weight, the band can also calculate the number of calories burned during a period of activity.

The band itself tracks your movement and sleep, but elsewhere the UP app will keep tabs on your meals and mood.

UP24 app

This is Jawbone’s second activity tracker – the original Jawbone UP lacks the newies’ Bluetooth Smart syncing (useful for viewing your data in real-time).

A lack of built-in screen means you’ll still be reliant on your mobile – but you’ll likely bump into a lamppost if you’re constantly distracted/keep-checking your wrist. Suffice to say, this omission isn’t exactly a deal-breaker. Plus, the band doesn’t rely on an ever-present connection – you can happily go about your business without using your mobile as a crutch. When you get the itch to analyse your movements, simply make sure you’re within reach of your Bluetooth-enabled device and press the button on the band to sync all recent data.

Currently none of the fitness bands in the marketplace offer any form of location-tracking. If you’re after a solution that plots your run/route, a GPS running watch may better serve your needs.

In terms of record-keeping, the app puts in a sterling effort. Your steps (or progress towards the daily goal if you want to think of it that way) are displayed in the form of a helpful chart. Plus you can deep-dive to get a better look at specified time-periods, should you so wish.

Sleep is also displayed in this way – the chart will break your slumber down into heavy/light periods, duration, if you woke at all, and how many sheep you counted before nodding-off…

Gentle encouragement

Jawbone UP24 app

A little encouragement goes a long way… The UP app offers-up daily recommendations to help encourage healthy living. Whether these be around water intake, reminders to go to bed earlier, or you’ve just been inactive for too long. The band can be programmed to deliver vibrating reminders, which is useful for encouraging you to get up from your desk, and give your legs a shake. Coupled with the band, it’s like having your very own motivational speaker on your wrist…

The iOS version of the UP app also allows you to track caffeine.

If you already use apps like RunKeeper, MyFitnessPal, etc. you can import data into the UP app and delve into the minutiae of your activity.

Using the Jawbone UP24
The UP24 app allows you to keep a record of your food and drink intake… like this Cava here.

I took the UP24 band along with me to Seville. In such muggy climes it would’ve been foolish to do ‘too much’, but in the gaps between siesta and a hundred mouthfuls of tapas I managed to put in more than my recommended daily average.

During my tenure with the Jawbone UP24, news of a significant update was announced. The update brings with it increased battery life (a full 14 days – up from the 7 days fresh out of the box). Updating the band will erase all current activity mind, so make sure you’ve recently synced your Jawbone before carrying it out.

Like what you’ve heard? Price-wise you can get your hands on the Jawbone UP24 for around the £105 mark in Europe.

What can the Spice Girls teach us about being reasonable?

This is the third article in a fortnightly series from Gordon Donovan in which he ponders ‘is now the time to be reasonable?’

One of the banes of contract is the term “reasonable”. For many of us the first time we have been introduced to this concept is via Carlill v Carbolic smoke ball when one of the judges (Lord Justice Lindley) suggested that:

Another meaning, and the one which I rather prefer, is that the reward is offered to any person who contracts the epidemic or other disease within a reasonable time after having used the smoke ball”

What can Spice Girls teach us about reasonable endeavours?

Springing into the 21st century we have now got contractual terms that says reasonable or best endeavours, but what does this mean. Recently I came across a couple of decisions and pieces which seek to put some further rigour around it.

First is an article in Supply Management that seeks to understand what a “reasonable “notice period for termination is.

This case states that a reasonable period would be subject to 5 key principles namely:

  • each decision must be made on its own facts;
  • what amounts to “reasonable notice” should be ascertained at the time at which the notice is given;
  • consideration should be given to the general circumstances and practices within the relevant trade;
  • any specific circumstances existing at 
the time of the contract should be taken account of;
  • the degree of formality in the relationship is a relevant factor.

Next was a case in Australia that made it to the high court. The case centred on a gas supply agreement. The agreement obliged the sellers to use “reasonable endeavours” to make available a supplemental maximum daily quantity of gas.

The court outlined three observations about reasonable endeavours clauses in general:

  • they are not an absolute and unconditional obligation.
  • the extent of the obligation is conditioned by what is reasonable in the circumstances.
  • some contracts with a reasonable endeavours clause contain their own standard of what is reasonable

Read more about reasonable endeavours here.

In a couple of recent articles a lawyer friend of mine has written about the differences between nest and reasonable endeavours (in Australia there does not appear to be any practical difference between the meanings of these terms).  

And in this article she goes onto discuss a specific case which gives us the following learnings

  • The words “reasonable commercial endeavours” mean that a party is obliged to take steps reasonably available to it to put it in a position to fulfil the obligation
  • If the party does take steps, but is unable to fulfil the intended outcome of the clause, the clause does not require that the party go any further

So what does all this mean?

You need to be specific rather than relying about the criteria of the obligation and how the clause should be followed (describe an example of the steps required maybe?)

Think about how changes in market conditions or the commercial landscape will be dealt with

If you are going to use best or reasonable then don’t use a ‘reasonable endeavours’ clause AND a ‘best endeavours’ clause within the same contract. Pick one set of terminology and stick with it.

Above all, early engagement with the legal team is important to help in managing the risks that come with this.

In other words you have to know what you want, what you really, really want! And while you’re at it, refer to this article in Supply Management…

As ever you can subscribe directly to the sources I have identified here (nothing is my copyright), and if you wanted to discuss please feel free to contact me via Procurious, or follow me on Twitter.