Category Archives: Procurement News

Easter Procurement – How Do They Make Yours?

They have been a staple in the Easter diet for many children (and adults too!) for decades. But just how do Cadbury make the Creme Eggs we enjoy so much?


As hard as it might be to believe but the humble Cadbury’s Creme Egg has been an Easter staple since its launch nearly half a century ago. Global sales of the eggs are over 500 million per year, with the UK alone accounting for approximately 200 million per year (that’s around 3 each per year in the UK), with the majority of these manufactured in Birmingham, UK.

The Creme Egg brand has a value in itself of £55 million, which certainly isn’t bad for a confectionary item that’s only available between January and Easter each year.

Like them or loathe them, Easter just wouldn’t be the same without the instantly recognisable purple, red and yellow packaging (or green, blue, red and yellow if you happen to live in the USA). It’s no small feat to produce the volume of eggs to satisfy global demand, at such a specific time of year to take full advantage of the condensed sales period.

Before we delve into the supply chain and production process, some facts about this famous egg…

All Gone a Bit Egg Shaped – Fun Facts!

In fact, all Cadbury-manufactured chocolate is banned in the USA, Creme Eggs amongst them. The Hershey Company has the rights to manufacture all Cadbury chocolate in the USA and the move was to limit competition with imported items.

This is down to the recipes being altered slightly to adjust to different tastes, as well as to account for some ingredients that are banned in certain countries.

More on this below, but let’s just say that it did not go well…

Not only are the Eggs themselves shrinking thanks to ‘shrinkflation’, but in 2015 the multipacks dropped from six to five eggs. But that probably helps with the next fact…

  • They are really unhealthy (but you knew that and it doesn’t really matter anyway).

Each egg contains around the same volume of sugar as two bowls of really sugary cereal. And at around 6 teaspoons of sugar, it’s what the American Heart Association considers to be a full day’s worth of sugar.

Raw Materials

The Creme Egg that we buy and eat today has been in production since its introduction in 1963. It’s recipe has been the same since this time, using the same key ingredients. There was a brief period in 2015 when Mondelez, who currently own Cadbury, and Kraft, their parent company, changed the recipe. This involved changing the use of Cadbury’s Dairy Milk chocolate for the egg’s shell to a cheaper, cocoa-based shell.

And much like the ill-fated New Coke recipe, the outcry was much the same. After much protest the recipe was changed back, but not before the organisation had seen a loss in sales estimated at £6 million in 2015. FYI, for those of you outside the UK, don’t get a Brit started on what their feelings are on Cadbury’s chocolate in general since the firm was taken over by Schweppes and then Mondelez!

The key ingredients we’re looking at here are, of course, cocoa and, in Cadbury’s own words, “a glass and a half of milk in each bar”. The majority of the milk in the UK, over 50%, is supplied by dairy farm co-operative, Selkley Vale farmers, from Wiltshire and Gloucestershire.

The cocoa is a bit more complicated and, in the past, a lot more controversial. As with most chocolate manufacturers, Cadbury sources its chocolate from countries with high volumes of cocoa production – Ghana, Cote d’Ivoire, Indonesia, the Dominican Republic, India and Brazil. Previously fully affiliated with Fairtrade, Cadbury drew criticism  of practices and its supply chain when it dropped this in 2016 in favour of a new scheme, Cocoa Life.

The scheme, which is, as of 2019 working in close partnership with Fairtrade, aims to use over $400 million to aid 200,000 cocoa farmers worldwide. Not only will this mean that more Cadbury chocolate is made from sustainably sourced cocoa, but farmers will still have benefits in line with Fairtrade goals, such as improved income, competitive pricing and tailored investment suited to their needs.

Cadbury has been able to leverage its supply chain well in recent years to provide a solid and stable foundation for its production in the UK, Canada and the USA. How do they go from that to the magic end product?

The Production

Ever wondered how Cadbury manages to get the very unhealthy, yet absolutely delicious, fondant filling into Creme Eggs? Had discussions over whether it’s an injection mould for the outer shells and then the fillings? Then wonder no more!

It’s actually quite simple really. The two halves of the shell are made separately and then filled with the fondant to create that ‘fresh egg’ look inside. The halves are then shut in a book mould to create the final product, that is then wrapped for sale. If you want to see everything in action, there’s a great video on YouTube (and below…) from Bloomberg on the full UK production process.

Probably the most bizzare thing in the whole production process, apart from the fact that there’s someone working for Cadbury whose job title is ‘Easter Shift Manager’, is that all of this happens in winter. Supply chains are year-round anyway, but production processes need to be done in such a way that the hundreds of millions of eggs are ready for shipping for the 1st of January.

There you have it – a brief history of, and the not-so-secrets behind manufacturing one of the pillars of Easter. Now, I don’t know about you, but we’re off to the shops for a few Creme Eggs before they disappear for another year…!

Leading Under Fire Is Leading With Heart

Leading with empathy in the face of adversity


When the Prime Minister of New Zealand declares the tooth fairy and Easter bunny as an essential service, it brings warmth to the otherwise repeated drudgery of Government press conferences. It brings a smile to those facing the grind of lockdown and isolation – even if only for a moment.

“You’ll be pleased to know that we do consider both the Tooth Fairy and the Easter Bunny to be essential workers, but as you can imagine at this time, of course, they are going to be potentially quite busy at home with their family as well with their own bunnies.” Jacinda Ardern 6.04.2020

You can watch a short clip from the press conference here

Credit: Radio New Zealand

The way was paved long ago

Leading with warmth and heart is not a style of leadership that is learned and it does not appear overnight, you cannot pretend or try to switch it on. What was called an “Ardern effect” during her election campaign is now proven to be a signature style.  

What she was once criticised for now defines her. Ardern has an undeniable charismatic ability to relate to people. This is what cements her as a leader, when things get tough and when really crappy things happen to us, she is there to be our strength when we can’t hold ourselves.

Her response to the mosque attacks showed the world who New Zealand is. I was at a mosque in Wellington when she arrived unannounced to express her condolences. While the spontaneous songs that erupted through the crowd were captured by the media, what was not captured is what I saw. I saw her slowly approach the building taking time to look at all of the chalk drawings on the footpath that local children had made. She then took the time to embrace a Muslim woman who audibly gasped in shock that she was there right in front of her and so close – this is the same woman who stood at the gate handing out tissues to us well-wishers and providing us support while we tried to process the incomprehensible act.

While the Imans’ and Muslim leaders were being strong for us, Ardern became their strength. The strength she provided was through human connection and a hug. Warmth and heart. The cameras weren’t there and that’s what really counts. Her values are inherent to her as a person, she does not switch them on and off.

COVID-19 Ardern style

When the COVID-19 viral filled cloud looked to be approaching our shores and spreading, Arden was met with a barrage of criticism from the opposing side. Their volleys were able to land while she held off pushing us further up the alert levels, knowing that level 3 and 4 would begin to impact the economy.

As soon as NZ showed a potential case of community transmission she acted. “Go hard and go early” was her slogan and it seemed to work. We closed the border and went into lockdown.

Next, the nay-sayers said we didn’t have enough test kits and that we weren’t doing enough testing. This was only a lag due to supply issues. As of yesterday, NZ has the highest testing rates per capita in the world.

Leading with empathy in the face of adversity is perhaps the toughest gig of all. But it didn’t take long for the measures to start to make an impact and NZ was soon revered worldwide as a leader in this situation.

We aren’t just flattening the curve, we’re smashing it.

How does she do it?

She stays cool, calm and collected but she never switches off her heart. She acts when required but won’t be bullied or pressured into pulling the trigger too soon. She has a few trusted advisers and what must be an epic home base to support her.

We can all take lessons from her style and not step into a persona at work. Be yourself 100% of the time and lead with compassion. Ardern provides the perfect template of an authentic leader in action.

This article is solely the work of the author. Any views expressed in it are those of the author and do not necessarily represent or reflect the official policy of the New Zealand government or of any government agency.

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

Can China Continue To Be Trusted As The World’s Factory?

After the coronavirus, can we still trust China to be the world’s leading manufacturer? Find out here.


With the coronavirus pandemic now spreading its deadly tentacles into most countries of the world, the temporary blip we all experienced when China (albeit briefly) went offline and disrupted 94% of the world’s supply chains seems a thing of the past. But is it? Many experts were asking then – just like they are now – whether the coronavirus could be the end of China as a world manufacturing hub. And the answer seems to be divided into two camps. 

Firstly, there are those that believe China’s dominance is so well-established that no other country could ever compete, or not anytime soon. They believe that although geopolitical issues and rising costs in China are a concern to some, that China is simply too good at what they do. They believe that it would be nice to have our eggs in more baskets, there is simply no other feasible basket. 

Then, there are those that believe the opposite, and specifically, those that believe it is now Mexico’s time to shine. Given its close proximity to the US and cheaper labour costs, these experts believe that Mexico is uniquely positioned to become a manufacturing hub, and more and more businesses will soon realise this. 

The Mexico vs. China question is exactly the type of debate we love having at Procurious, so we invited a number of the world’s foremost experts on the topic to have it in our latest webinar, ‘Alternate Sources of Supply: Is it Mexico’s Turn?.’ This article will explain why some experts believe China will definitely continue to be the world’s factory … and why you shouldn’t consider moving your supply elsewhere. 

History 

2020 marks the 40th year of mass manufacturing in China and in that time, China has become so proficient at what they do, that nearly 30% of the world’s goods are manufactured there. Beyond that, there isn’t much that China can’t produce, and they’ve certainly become experts in a number of niches, from electronics to textiles and steel. 

It’s for this reason that Kobus Van Der Wath, CEO of Axis Group, a global supply chain advisory group, believes that other countries simply cannot compete with China: 

‘Manufacturing in China began in the early 1980s so that has meant that the whole world has been dancing with China for three to four decades.’ 

‘It’s hard – or honestly, close to impossible – to compete when you’ve got a country that has had such a long lead time.’

Wages and conditions 

Beyond China’s long history as a global manufacturer, many experts also point to wages and working conditions as a reason that China has retained its stronghold on production. And at the time of writing, both of these reasons seem just as relevant as ever.

China is the most populous country on earth, with just over 1.28 billion people. This means that from a supply and demand perspective, China has a competitive advantage insomuch as there is a near-neverending stream of low-wage workers available for factory work. China’s history has also contributed to this – until the late 20th century, there were a lot of rural poor in China, and millions have now migrated to cities to work in China’s factory cities.

Although some people point out that wages in China have increased – and they have – they are still very cheap. As of January this year, the minimum hourly wage in China is…

To finish reading this article, join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news over an 8-week content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. 

The article is available in the documents section once you’ve logged in. 


Deciphering The Sales Speak – 5 Common Phrases Used In The Sales Process… And What They Really Mean

The top 5 software sales claims may seem familiar – but what do they really mean, and what questions should you fire back?


As procurement pros, we like to think of ourselves as experts who can cut through the fluff of the sales pitch and get down to what we think really matters.  

But let’s face it . . . some salespeople are so darn good that even the sharpest of us can’t quite sort the wheat from the chaff. And with procurement software sales teams often being some of the best in the business, well, we have our work cut out to decipher their code for ourselves.

I have had more than a few years of experience trying to work through this myself and though practice may not always make perfect it definitely gets us closer to where we need to be.  So, from my years of experience in being involved in more than 500 software evaluations, and being the one who has to make it all come together as the implementer, I want to help you navigate through the language and the catchphrases that we often hear from software sales teams.

Here are my top 5:

1. ‘The integration is easy’

One of the most common things we hear from sales teams that are trying to speed their way to a sale is that “Integrations are easy.”  Getting the system to do what it’s supposed to while talking to other systems is pretty straightforward. We all want to believe it, but as you find out when you are involved in an implementation, there is real work that must be done that is not easy, and someone has to do it.

I always laugh when I hear this stated in front of my clients IT teams.  You see, IT knows the work that is involved in a project like this and are certain that the word “easy” does not belong in the same sentence. They also know that anyone that does call it “easy,” is most likely someone who has never attempted to do this type of work.   

When you hear this it’s a good idea to have your questions ready, including:

  • What business objects are typically in scope in a project like this?
  • If you have multiple ERP’s, will each of them need to be interfaced with?  Who will be responsible for transforming each file?
  • Who will be doing the field level mapping?
  • Is there a middleware or any prebuilt connectors that can be leveraged?
  • Where has this middleware or connector been used before?
  • Do they have similar volumes/scale/complexity?
  • What  system dependencies are there?
  • What systems have you integrated with – even what version of systems? 

No question is too basic here – in my experience keeping it direct and to the point works best. 

2. ‘Your suppliers are already connected to our network’

A word can mean different things to different people and the secret to understanding the sales-speak here is to work out what ‘connected’ really means. It can mean your suppliers have participated in a sourcing event or once received a PO from another customer.

It can also mean that they have log-in information and have received all of the really great welcome emails that new suppliers are bombarded with that they have no idea what to do with. Or it can mean they are actually transacting through the system and are receiving POs and payments from other customers in the manner in which you intend they start doing for you.. In that case, they’ll know exactly how to work out what they need to do to make your life and theirs easy as you get your new system implemented.

Ask lots of questions here, especially when it comes to your big suppliers, the ones that would spell chaos for you if things didn’t go to plan . . . it’s not a bad idea to ask them where they’re at in the process of being enabled with other customers and identify any potential issues you may have before you get too far.  

3. ‘Training and change management aren’t needed for your end users and suppliers’

We all love digital technology – and sites such as Amazon and Google are designed to make it pretty easy for us to use them without the need to be trained. But we can probably all agree that many systems built for the enterprise seem to struggle to bridge the gap on major process and use case changes that take someone out of their comfort zone.  Even if it appears easier. Especially when their job does not involve them being in the platform all day, every day. 

Here’s where it is important to put yourself in the role of the user and see the system through their eyes. It’s even better to get them involved early and ask them how much change they anticipate for their department/region/etc and what type of support they will need to be successful.  

Don’t let the salesperson, or an enthusiastic user, convince you that you don’t need any change management resource. You can work out how much is needed – and, if your salesperson is right, it might not be that much. But it’s always a smart move to let your stakeholders and suppliers know what is happening, why and how it is going to impact them.  If you get any resistance, you will be thankful you have change experts at the ready to address it.

4. ‘You don’t have to have clean data prior to starting implementation’

You don’t have to follow a recipe when cooking something for the first time. But it will help – unless you like surprises and don’t need them to be good ones. Your sales team will say this because, honestly, who wants to spend time on boring stuff like data cleansing . . . especially when we all know it can take 4 to 12 months to clean up if you’re lucky? And they’re smart enough to know that too much time and effort upfront without real results can kill the deal. While we all want to get on with the really cool analytics, there’s a reason you need to do your groundwork.

If and when you hear this one, go ahead and ask the question we all know: What about the saying ‘Garbage In, Garbage Out’? You never know: your sales team may be able to share some new things they have tried where data cleansing hasn’t been needed. And they might have some examples of where this has worked before – and that’s definitely worth finding out about. If not, put a plan in place now for how your data will get cleansed and adjust what modules you purchase, sequence of rollouts and your implementation plan accordingly.  

5. ‘Don’t worry about transforming your processes as the technology has best practices already built in’

‘Leverage’, ‘optimise’, ‘game-changer’ . . . It’s only a matter of time before your salesperson drops the gold standard of corporate buzzwords in – ‘best practice’. While the phrase can be meaningful, most of the time it’s a sales pitch to get us over the line. We can implement a new system and get to best practice at the same time? Sign me up! But best practice means different things across organisations, industries and sectors.

When you hear this, two things need to happen. Firstly, take a look at your implementation plan and make sure it includes a review of all of your direct and related processes. And secondly, take a look at the ‘best practices’ that are included. They may be right for you, and now is is a great time to update and improve dated processes. If not, you’ll have done your review and know that what you have ended up with is the best thing for your business.

So when you hear these or similar claims as part of a sales pitch for software, remember what they typically really mean. Be prepared with questions for the sales team to ensure that the tech solution you sign up for really is a good fit for your organisation.

Did you know that Matt has just teamed up with Procurious to launch ‘Major Tech Fails’ – a series looking at everything from implementations to getting buy-in. Register here

4 Reasons To Be Excited About The Future Of Supply Chain Technology

What’s next in supply chain systems? There’s plenty to be excited about


First-generation supply chains were good at automating and optimizing processes. But they were restricted to functional silos – and that’s not enough for what we need in supply chains today.

Advances in supply chain technology are needed if procurement teams are to manage supply chains that are dynamic, responsive and interconnected with ecosystems and external processes. The new tech needs the capacity to manage much, much more data (by several orders of magnitude). This in turn will make it possible for an individual procurement manager to make sense of entire supply chain ecosystems in real-time.

These demands are driving progress – which is why I am excited about the future of supply chain technology.

1. We’re actually getting fairly good at applying AI repeatably in supply chains.

In order to continue to maintain the labor ratios and level of service to which we’ve become accustomed, we need AI within supply chains – this is non-negotiable.

The IBM Sterling Supply Chain Suite gives end-to-end visibility, real-time insights and recommended actions to turn disruptions into opportunities for customer engagement, growth and profit. 

It’s an open, integrated platform that easily connects to a company’s supplier ecosystem. And that connection and openness provides the data necessary to build self-correction into supply chains.

2. With blockchain, we finally have a chance to change the way we manage multiparty sharing of supply chain data.

It’s clear that use of AI in supply chains will be essential. But it is important to start from the understanding that organizations are at different stages of maturity in this area. Nevertheless, companies can make dramatic improvements simply by deploying existing tech to digitize and implement an organizational commitment to information hygiene and managing data effectively. Being able to digitize, catalogue and normalize supply chain data means having real-time information in the right place to make decisions quickly.

One survival from the old-tech world of supply chains is the use of enterprise resource planning (ERP) systems built to manage the data for each individual company. Each company’s ERP was its view of the world. The procurement team spent their lives comparing notes with other ERPs to reconcile differences. Everything from invoices to purchase orders had to be reconciled and supply chain processes were put in place to facilitate this.

For the old-world supply chain really to change, we need to recognise that we can’t each have our own copy of what we believe to be true. We need to have an accepted, shared view of the truth. This idea of multiparty shared data is a promising one. And technology such as distributed databases, shared ledgers and blockchain helps build these common views of the world.  


3. We are seeing the emergence and coordination of specialty ecosystems and networks that can be integrated in a ‘network of networks’.

Before hyper-interconnectivity and the opportunity to create ecosystems or a network of networks, we operated in a limited way – for example, connecting one value-added network (VAN) to another VAN in a logistics network with practical applications like document exchange for advance shipping notices and the like.

We’re now seeing that an interconnected ‘network of networks’ really adds value. People are using technology and data to work together to solve domain-specific issues like fresh food provenance with Food Trust and ocean-shipping visibility with TradeLens.

These specialized ecosystems can be seamlessly integrated into existing business networks to provide a wealth of information about previously opaque areas of the supply chain – where things went dark at critical moments.  

4. It’s possible to have personalized ‘control towers’ that can track the essential elements of global ecosystems but are tuned to what we each want to measure and act on.

Finally, we’re able to see the world the way we want to – from each of our perspectives – bringing together actionable recommendations from real-time intelligence to act on supply chain implications. 

From a simple example of inventory management that can have downstream supply implications for a logistics analyst, to the same information tracking financial implications and payment terms for a financial analyst, the varying views, insights and interrelated metrics stemming from core supply chain activity helps everyone across the organisation.  

Also knowing that no two supply chains are the same means the ability to quickly configure and personalize ‘control towers’ is twice as useful as simply having the static data.

So just when the need for a strong supply chain has never been greater, technology is increasingly proving itself up to the challenge of meeting this need. And what’s more, small changes can have big impacts.


Hear Vijay present in our recent webinar – 4 Supply Chain Capabilities You Need For The Decade That’s Going To Change The World here.

 

How To Lead Your Team In A Crisis: Covid-19 Procurement News

How should you lead your procurement team during a crisis? Here’s what you need to do

“The ultimate measure of a leader is not where they stand in moments of comfort, but where they stand at times of challenge and controversy.” Martin Luther King Jr.

Martin Luther King Jr. was certainly onto something when he said that leaders are tested not in not the good times, but in the challenging times – and everyone can agree, we’re certainly experiencing the latter right now. All of us – literally every single one of us across every continent of the world – are experiencing our own unique stresses and pressures, and our leadership ability may not be our focus. But likewise, now is also the time when our teams need us most. 

So how do we lead amidst so much uncertainty? We talked to Justine Figo, People and Culture author, and Naomi Lloyd, Director Procurement and External Manufacturing Partnerships Asia Pacific at Campbell Arnotts, to get an insight into how to lead your procurement team during a crisis. 

Managing expectations

With the coronavirus situation changing weekly, if not daily, helping your team understand what’s expected of them, as well as manage the expectations of executive leadership, can be a challenge. But according to Justine and Naomi, what your team really needs from you at this time is a realistic challenge, and more clarity. 

Justine believes that leaders need to have the courage to challenge their team to be productive – but at the same time, understand that there might be significant barriers at the moment: 

‘Right now, it’s about taking stock of what is going on for everyone at the moment, and saying: “What is the best possible challenging standard I can set for myself and for my team?” 

‘Of course, you need to understand that people will be disrupted, but still have the courage to give them purpose, with compassion.’ 

Naomi believes while realistic challenges are important, what’s more important is that you realign your priorities with your team – and communicate your expectations clearly, with much more granular direction: 

Want to hear more of Naomi and Justine’s great advice? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news over an 8-week content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

How COVID Could Kill Excessive Pay?

Mind the Gap? We most certainly do but will it finally start to narrow?


Funny memes, inspiring posts and far too much fake news – we are being inundated with information to entertain, amuse, inform and frighten us while we are in lockdown or self isolation. However, one post that really caught my eye was about the value of people’s work – it reflects a sea-change in attitudes towards excessive executive pay. 


To give them their due credit, a significant number of sports stars are taking pay cuts, several celebrities have announced vast donations to Covid-19 relief efforts and even Lady Gaga is giving a percentage of profits from her beauty brand to support food banks. 

Mass altruism is a global phenomenon. 

But what about businesses? Corporate Social Responsibility (CSR), it seems, is just a way to brand businesses as caring. So far, they are doing little sharing. 

With footballers deferring 50% of their pay and tennis ace Roger Federer donating 1 million Swiss francs to vulnerable families, why aren’t we seeing CEO after CEO lining up to do something similar? 

While “ordinary” employees are being laid off or furloughed, most of the C-suite seem to be keeping quiet on pay. 

WE WILL REMEMBER THOSE WHO GET THIS RIGHT – AND THOSE WHO DON’T 

There are few exceptions… and they will not be forgotten. Those executives who are sharing the pain are doing a fantastic PR job for themselves and their businesses. 

Take the CEO of hotel group Marriott Worldwide, Arne Sorenson, who will not be taking any salary for the balance of 2020 and whose executive team will take a 50% cut in pay. While Ford’s top 300 executives will defer 20% to 50% of their salary. 

However, considering the vast pay packets these top execs earn, a cut (or a lesser sacrifice of a pay deferral), seems pathetic compared to the generosity of sports personalities and stars of stage and screen.  

Yet as more and more leadership teams follow suit, other boards will be under pressure to make similar sacrifices on salaries – or they could fall foul of public opinion. 

When News Corp Australia announced that the executive team would take a “significant” pay cut in response to Covid-19 – showing that those at the top of the pay scale are sharing the pain of those at the bottom – it also added that executive perks such as entertainment and travel events were also being halted. It doesn’t look good to be seen to be enjoying the perks of a private jet at a time like this. 

It shows just how mindful organisations are of public opinion. 

There will come a point when bosses who haven’t budged on pay and bonuses will start to stick out…and it will be noticed. 

THE BALANCE OF OPINION IS SHIFTING – AND IT’S GREAT NEWS FOR SOME ORDINARY WORKERS 

At the other end of the scale, there is beginning to be more appreciation of those in essential but poorly paid roles. Take Food City supermarkets in Chattanooga, Tennessee making headlines for giving its 16,000 employees a total US$3 million bonus reflecting their hard work ensuring people can still buy food at this difficult time. 

In Singapore, frontline healthcare workers – who are at a higher risk of contracting Covid-19 – will be given a special bonus of up to one month’s pay.  

Across the world, there are similar stories of those at the bottom of the pay scale finally receiving some appreciation (in the form of hard cash).  

MIND THE GAP? WE MOST CERTAINLY DO BUT WILL IT FINALLY START TO NARROW? 

With trillions of dollars wiped off the value of the global economy – and the G20 pledging to inject $5 trillion to blunt the economic impact of the coronavirus pandemic – any exec whose remuneration package is based partly on performance is in for a big financial hit. 

This could finally do something to narrow the phenomenal gap between pay at the top and bottom of organisations.  

CEOs in the USA earn 265 times more than the average worker according to Statista, while in S&P 500 Index firms this increases to is staggering 361 more for the top boss than the average rank-and-file worker. 

Yet back in the 1950s the typical CEO made only 20 times the salary of the average employee.  

SHAREHOLDERS MIGHT WIN THE DAY – AFTER SUFFERING SUCH HIGH LOSSES 

Shareholders have suffered some catastrophic losses. So they are likely to put significant pressure on executive remuneration committees to bring salaries back in line. 

Or, as global advisory firm Willis Towers Watson puts it: “there are reasonable expectations to see directional alignment in the change of realized executive pay relative to shareholder value”. 

BUT AT THE END OF THE DAY – IT’S PUBLIC OPINION THAT REALLY MATTERS 

In the UK new regulations requiring certain UK companies to disclose their executive pay ratios are also designed to shine a light on inequality. And it’s quite timely that the first reporting is this year. So, the requirement could not have come at a worse time for overpaid executives. 

With the UK’s Corporate Governance Code asking boards to create a culture which aligns company strategy with purpose and values – and explicitly requiring remuneration committees or RemCos to explain how pay policies for executives are appropriate in their annual reports – 2020 was supposed to be the year when the value of CEOs was brought into question. 

According to the Chartered Institute of Personnel and Development (CIPD) in the UK for every CEO appointed, another 100 candidates could just as ably fill the position. 

In a world where you cannot find 100 nurses or doctors or first responders to fill every vacancy, it is going to be hard for these RemCos to justify pay excess. And it is not just an issue in the UK. As with the coronavirus, this is a global issue and very much one that will dominate the corporate world in 2020. 

Want to join in on the coronavirus discussions? We have procurement and supply chain professionals from all around the world crowdsourcing confidence in our Supply Chain Crisis: Covid-19 group.

Has COVID-19 Pushed Sustainable Procurement Off The Agenda?

Is sustainability shelved for now?


The COVID-19 pandemic has caused several of the biggest issues facing the profession before February 2020 – sustainability, social procurement, and supply chain diversity – to plummet in priority while organizations refocus on cost and risk reduction.

Given that 78% of companies anticipate a financial impact due to the crisis, this sudden shift in priorities is understandable, but that doesn’t make it any less disappointing. Every profession, industry, and sector in the global economy is currently shelving sustainability projects while the crisis plays out.

Frankly, many companies are now in survival mode, and their sustainability programs are seen to have no place in that mode. Fine words such as “sustainability was once seen as a ‘nice-to-have’ but is now a business imperative” have been forgotten while corporations tighten their belts and CPOs urgently re-prioritize the two foundation stones of the supply chain: cost and risk.

We were making progress

Until a few weeks ago (which feels like a lifetime), sustainability was high on the agenda of procurement teams in organizations of every size. The global standard for sustainable procurement (ISO 20400) launched with great fanfare and has been gaining momentum, while major procurement conferences such as the now-cancelled ISM2020 boasted several sessions on sustainable or social procurement. Modern CPOs followed the mantra “value beyond cost reduction” while those who were solely focused on cost were seen as old-fashioned and unimaginative.

In the training space, most supply management qualifications and certifications offered by industry bodies such as ISM and CIPS included a sustainability module, ensuring that young people coming into the industry understood and valued this aspect of the job.   

The big unknown is whether sustainability initiatives are simply on-hold and will resume once this crisis is over, or if they will be shelved for the long-term as organizations slowly claw their way back to their previous levels of profitability.

Long-term consequences

It’s difficult to predict timelines as no country (except perhaps China) has yet moved onto the economic recovery stage of the COVID-19 crisis, but the big question is whether the world will actually move backward in terms of sustainability. Take, for example, a mine site that is considering powering its operation with renewable energy rather than fossil fuels. With profits and jobs under threat, the decision will likely be driven less by environmental concerns and more by cost and risk: decision-makers will choose to stick with what they know, for the lowest-possible cost.

Environmental consequences aside, the thriving network of small to medium-sized suppliers that has sprung up in response to organizations’ wish to source from sustainable, ethical, social, and diverse suppliers will now be in dire trouble. With sustainability no longer a priority for their customers, their market is disappearing as we speak.

Rebuild the foundations, but don’t neglect sustainability

Realistically, we cannot expect organizations to reanimate their sustainable procurement programs until they feel like they are back on solid ground in terms of cost and risk. The feeling I have received in the past two weeks when talking with Una’s members is that sustainability is once again a “nice to have” that will have to wait patiently while the building blocks of the procurement pyramid – cost down and risk mitigation – are cemented back into place.

It is possible, however, to do both at once. Joining a Group Purchasing Organisation (GPO) can complement and amplify the strategies organizations have in place to tackle immediate cost and risk concerns such as:

  • dealing with inevitable price rises as the supply/demand equilibrium changes
  • securing access to high-demand goods and services as suppliers are overwhelmed
  • connecting with $100 billion in buying power to help ensure suppliers prioritize your organization when volume is running low.

Beyond these immediate concerns, a GPO can work on your behalf to maintain and improve critically-important relationships with suppliers. Already, supplier relationship management (SRM) is proving to be a defining factor in maintaining continuity of supply amid massive global disruption. It is also a channel through which sustainability discussions can continue.

An increase in buying power means more choice: sustainability and social procurement will not necessarily have to fall by the wayside, while ensuring diversity in the supply base is a key strategy in reducing risk and increasing resilience throughout the supply chain.

Una’s lights are on for our customers during the COVID-19 crisis. Click here to access our COVID-19 updates and information about supply chain disruptions. 


How Procurement Can Deliver Social Impact Through Sustainable Sourcing

How can procurement teams use purchasing power to improve an organisation’s sustainability and social impact?


Across industries Chief Procurement Officers are assuming the responsibility for their firm’s sustainability and social impact objectives. All while continuing to identify the best price, vendor and value for each transaction. 

Businesses are grappling with pressure from investors, employees and customers to generate greater shared value and to help address the world’s most pressing societal challenges – like climate change and social inequality. And procurement teams have to find answers. 

Amidst movements like ‘procurement with purpose’ or the Sustainable Procurement Pledge, more executives are turning to procurement teams to drive their company’s social impact agenda and help achieve their sustainability targets. 

In fact, commitments to sustainable procurement increased by 81% between 2016 to 2019. 

This has been fuelled by a rise in executive-level support. Just 13% of respondents in the 2019 Sustainable Procurement Barometer cited leadership buy-in as a challenge to sustainable procurement, compared to 50% In 2013.  

By nature, not all social impact initiatives can be implemented overnight. Here’s a look at how procurement teams can execute immediate, evergreen and long-term strategies to use the function’s immense purchasing power to improve their company’s societal and sustainability impact.

Immediate impact

First, procurement teams must ensure that their strategies align with the company’s larger social or sustainability goals. By working with social impact enterprises like Givewith, procurement teams can identify issue areas that are financially material to the firm. 

Then they can embed Givewith’s social impact programmes directly into their RFPs – requesting the supplier allocates a percentage of the transaction to a pre-vetted non-profit, social enterprise or NGO – to generate new funding for the cause and advance the company’s corporate commitments. 

By adopting social impact sourcing solutions, companies can appease both Chief Financial Officers and CSR leads by simultaneously catalysing social progress and generating cross-company value. 

Suppliers are very willing to support these initiatives on behalf of the buyer in these negotiations because social impact generates shared value and helps advance their company’s KPIs.

As companies continue to adopt strategies that mitigate risk – which can take years to fully implement – they can immediately advance business-relevant causes entirely outside of their supply chain operations by funding programmes of interest to their causes, such as those that allow 500 girls of colour to attend coding workshops in 13 cities across the United States. 

Evergreen opportunities

In addition to social impact sourcing, procurement teams should consistently seek ways to improve supply chain diversity, transparency and sustainability. 

Using software solutions like SAP Ariba can help companies vet unethical suppliers that spur slavery, poverty or inequality. Likewise, adopting buyer solutions like EcoVadis can help companies gain insights into the intricacies of their global supply chains and see the ethical and environmental performance of their vendors. 

In addition to pre-emptive vetting, procurement teams should consistently monitor and measure their suppliers’ performance to track sustainability results. Tracking and measuring this data over time can help the company manage risk and improve its operations. 

Long-term strategies

Following in the footsteps of international frameworks like the UN Sustainable Development Goals, the world’s largest, most forward-looking companies are beginning to adopt timelines for achieving their social impact and sustainability goals. 

This is a big opportunity for procurement. It can become a strategic arm of its organisation by working closely with the company’s executive team, financial decision-makers and social responsibility leaders to set sustainable procurement benchmarks and calculate how these efforts are advancing the company’s larger mission.  

In addition, procurement teams should also work closely with their suppliers to identify ambitious yet realistic goals that benefit both parties. 

They can encourage opportunities to co-create and co-innovate with suppliers on sustainable solutions.

As the pressure on businesses to help solve the world’s most pressing challenges continues to grow, so will the pressure for procurement to act ethically and more sustainably.

That’s why procurement leaders need to adopt social impact sourcing strategies that will benefit their business today and well into the future. 

Life At The Coronavirus Epicentre: Is This A Glimpse Into Our Future?

Are you ready for what’s to come? …


Every day, those of us in Australia, the US and Europe are increasingly feeling the full force of the coronavirus. In Italy, where the situation has escalated, the country has been fully quarantined. Countries all over the world are implementing strict restrictions on incoming travellers, and with no end in sight, the stock market continues to plummet.

One Procurious member who has already survived the worst of the crisis, and has come out the other side, is Paul Ryder, President of the International College of Finance at the Bank of China in Shanghai. Paul shared his fascinating story with us about what he’s experienced during the last few months, including special intel on China’s current supply chain situation. His insights are perhaps a glimpse into our future … will we be able to get the coronavirus under control, or will the sacrifice feel too great? 

When the news broke … 

The scenes of chaos we’ve seen worldwide and even worse, the harrowing decisions Italian doctors are now having to make, have become what we all now accept as consequences of the outbreak. But in stark contrast, Paul says that when the virus broke out in China, he felt the response was quite controlled: 


Want to hear more of Paul’s fascinating story? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news over an 8-week content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. 

We’re stronger together. Join us now.