Category Archives: Procurement News

Paydirt! Resources Sector Supply Chain GM Wins Prestigious Award

Hot off the press: the Asia-Pacific region’s 2018 CPO of the Year and Future Leader in Procurement (FLiP) of the Year have been announced at The Faculty’s Gala Dinner.

Dramatically shifting the impact of procurement in a truly international role, MMG General Manager of Supply Chain Ron Brown has been recognised for delivering major procurement and supply chain transformation, driving value creation across the organisation and consistently delivering tens of millions in savings per annum over the past four years.

Brown’s achievements were celebrated at last night’s CPO Forum Gala awards, hosted by leading procurement advisors The Faculty.

International role

Global resources company MMG Limited operates and develops copper, zinc and other base metals projects across Australia, the Democratic Republic of Congo, Laos and Peru. As such, Brown and his centre-led procurement team have become adept at not only working across time-zones but also in negotiating the significant language and cultural differences in the four regions. Brown himself has a full travel schedule, as he regularly visits sites across four continents in person.

Shifting the focus

Brown’s commercial leadership has led the organisation to recognise that simply focusing on cost-down does not work. Instead, Brown has shifted the focus to:

  • Improving the skill-sets on contract management, creating commercial value over the life of the contracts and putting in place systems to ensure opportunities are not left on the table.
  • A greater emphasis on supplier relationships, including better engagement, more regular communication around performance to enable greater value creation.

Greg Travers, Executive General Manager Business Support, comments that Business Unit stakeholders within MMG have recognised the value that Brown and his team are delivering. “They have worked hard on improving relationships and have turned the perception of procurement around favourably. Ron and his team are getting out of the office to see the business, and spending more time on site.”

Influence beyond procurement

Travers also comments that Brown is a well-rounded, commercially focussed executive who contributes more broadly across the organisation, and has presence at all levels including the executive team and the Board. “Ron is one of the General Managers the Executive Group regularly nominates to attend group meetings and get involved in projects from the very start. He is energetic and is ideal for contributing to broader organisational projects and for change and efficiency reviews.”

Significant wins

Key achievements that contributed to Brown’s nomination for the CPO of the Year award include the delivery of a major procurement project to support the construction of the recently completed Dugald River Mine site in Queensland (Australia). Brown and his team embedded the contract management approach to build savings, sourced long-lead items and engaged local suppliers in a logistically challenging, complex industrial environment. Brown and his team contributed to the delivery of the project significantly under budget and ahead of schedule. They also achieved multi-million-dollar savings through an electricity contract revision for Las Bambas (Peru), and enhanced global sourcing primarily through China, resulting in significant savings across a wide range of supplier inputs.

Brown and his team have also re-engineered and simplified procurement policy, process and reporting frameworks at MMG, creating a high-level dashboard to drive visibility. Site inventory has been improved through more efficient contract management, buying at better prices and strengthening supplier relationships.

People Leadership

“Ron has significantly lifted capability across his team, hired and developed the right people in procurement and supply,” says Travers. “He mobilises his team and creates career pathways for them.” Brown has also actively promoted gender diversity across his team.

But the CPO of the Year wasn’t the only award presented at the #CPOForum18 Gala Dinner. One of procurement’s rising stars, Maryam Rahimi of Sydney Trains, was also celebrated with the presentation of the Future Leader of the Year (FLiP) Award.

Len Blackmore, Maryam Rahimi and Tania Seary

Keith Bird, Managing Director of The Faculty, says “The CPO of the Year and Future Leader of the Year Awards not only recognise the significant achievements of these talented professionals, but they serve as an important source of inspiration for other aspiring leaders in the profession. Both Ron Brown and Maryam Rahimi are known both for delivering excellent value to their organisations, but also for their dedication to mentoring, coaching and inspiring others.”

Public Sector Procurement Star Wins Future Leadership Award

It’s a big week for Sydney Trains’ Maryam Rahimi. Not only is the Australian public sector procurement professional stepping up to a new role where she’ll be leading a team of 27 people, Rahimi was also awarded the prestigious Future Leader in Procurement (FLiP) of the Year Award for 2018 at last night’s gala event in Melbourne.

Originally from Iran with an engineering and manufacturing background, Rahimi immigrated to Australia in 2010 where she entered the rail sector, first with Downer Rail and then with Sydney Trains. This week, Rahimi is moving from her role as Acting Senior Business Category Manager to Manager, Plant Hire. This leadership position with responsibilities and a team across both Sydney Trains and NSW TrainLink has greatly expanded responsibilities from her previous role – and she’s 100% up for the challenge.

Len Blackmore, Deputy Executive Director of Procurement for Sydney Trains and NSW TrainLink, says that Rahimi’s personal story is as impressive as her professional achievements. “Maryam is balancing the demands of a busy career whilst raising her young family, and was the sole income earner upon her arrival in Australia. She is a highly capable professional with enormous resilience.”

“Resilience” is a term that comes up frequently when discussing Rahimi with Blackmore, who says one of the key markers of resilience is that fact that she proactively champions change in the organisation. “Maryam has been enthusiastically involved in the complete revamp of our Source to Contract process”, he says. “This has been on top of her day-to-day role, where she’s also embraced the procurement improvement program we’re currently running.”

But it’s in stakeholder engagement where Rahimi has her most impressive wins. Upon settling in at Sydney Trains, she quickly identified an issue where stakeholders were not highly engaged with procurement. Through outstanding business partnering with a focus on the customer, Rahimi lifted stakeholder engagement and improved the perception of procurement through the establishment of trust, credibility, early engagement and taking the time to understand customers’ needs.

Rahimi’s commercial leadership was another key factor in her being nominated for the Award. Along with strong negotiating skills, she has a strategic focus, thinks holistically over the total life of the contract, and involves the end user in designing solutions to get results. Rahimi reportedly has a great touch in leading people and is known for her focus on working collaboratively and fostering a positive culture. She has lifted the capability of her direct reports through mentoring, coaching and inspiring others.    

“I’m absolutely delighted about her winning the award because Maryam has worked extremely hard to get where she is”, says Blackmore. “It gives someone who is a high performer with high potential the due recognition that will benefit her career.”


About The CPO of the Year Award

The CPO of the Year Award is a flagship initiative of The Faculty, created in 2012 to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

For the past 6 years the Award has celebrated someone who has been assessed as an outstanding leader, a prominent contributor to their business and the broader profession, leading delivery of high ROI, and exceeding performance expectations. The Award is a measure of executive presence, commercial insight, people leadership abilities, innovation, professional advocacy, technical ability and integrity.

About The Future Leader in Procurement (FLiP) Award

The Future Leader in Procurement (FLiP) Award recognises an outstanding commercially focused member of the next generation of procurement professionals who is making a demonstrable difference to business results, across different industry sectors, budgets, team size and experience. The FLiP Award will be presented to a multi-talented professional who has demonstrated leadership capabilities and is an influencer and trailblazer in their organisation. The Award is a measure of leadership potential and presence, commercial insight, stakeholder engagement, innovation, professional advocacy, technical ability and integrity.

The 2018 Judging Panel was comprised of Michael Andrew, Chair of the Board of Taxation and former Global CEO of KPMG, Helen Sawczak, National CEO of the Australia China Business Council, and Andrew Porter, CFO of Australian Foundation Investment Company and President of the Group of 100. The meeting was chaired by Tony Megally, General Manager, The Source.

The CPO of the Year and Future Leader of the Year awards were sponsored by Coupa Software.

About The Faculty

The Faculty is recognised as one of Asia-Pacific’s leading procurement advisors. The team works with organisations to transform and elevate the role of procurement, build high performance commercial teams and facilitate professional knowledge networks.

Sorry Kids: Easter Chocolate To Be Cancelled After 2050

The world is running out of chocolate… And if procurement pros can’t find a way to save the day, no one can! 

Most of us like to indulge in a little (or a lot of!) chocolate over Easter.

In Britain alone, the projected Easter spend for 2018 is $892.6 million.

And in the US, 2018 Easter spending is expected to total a whopping $18.2 billion.

But, depending on how attached you are to your Creme Eggs, Lindt Gold Bunnies or your Waitrose chocolate avocados , you might need to stockpiling now; in preparation for a very uncertain future!

Why climate change is claiming our chocolate?

More than 50 per cent of the world’s cocoa comes from West African countries, primarily Côte d’Ivoire and Ghana, whose climates have traditionally best-accommodated the cacao tree.

But,  in recent years, drying conditions, long draughts and rising temperatures, are making it harder to grow cocoa beans.

Warmer, dryer climates “will suck moisture from the soil and make it impossible to produce a good crop in many regions around the world.”

In short, climate change could destroy the chocolate industry within 30- 50 years.

What can procurement professionals do?

All is not lost! Procurement teams around the world are already investing in alternative, and more sustainable options, for their cocoa sourcing.

  • Developing a sturdier cacao plant

Last year, Mars unveiled their Sustainable in Generation Plan stating:

“We’ll invest $1 billion over the next few years to tackle urgent threats facing our business and the society we operate in – threats like climate change, poverty in our value chain and a scarcity of resources.”

Part of that investment will go towards “recruiting University of California researchers to develop a sturdier cacao plant that won’t wilt in drier climates.”

  • Changing farming approach

The majority of farms in Côte d’Ivoire and Ghana are run by poorer families who cannot afford fertilisers and pesticides. If modern farming techniques were made available to the farmers in Western Africa; cocoa production might be easier.

The Rainforest Alliance is working with smallholder cocoa farmers to manage climate change and protect their livelihoods and way of life.

  • Relocating suppliers

Farmers in Western Africa have the option to move their crops to higher ground; but there is limited space and many upland areas are protected for wildlife.

Organisations could look to source their cocoa beans from a different region entirely.

Dr Barry  Kitchen, executive chairman of Daintree Estates, told the New Daily that “Cairns generally had ‘ideal’ conditions for cocoa trees, which need consistent rain, warm temperatures, and shade with dappled light.”

“You’ve got to be continually innovative and continually looking at ways that you’re preparing yourself for the future.” he said.

But, given the much higher labour costs in Australia, it’s unlikely that the industry could ever migrate to Australia.

  • Changing the nature of chocolate

Research by The Conversation suggests wild mango butter, made from the fruit’s stone, has a very similar chemical, physical and thermal profile to cocoa butter.

If procurement teams decide to invest in the science behind it,  it mightn’t be too long before we’re eating mango butter Easter eggs.

Personally, Procurious thinks it’s an egg-cellent idea!

In other procurement news this week…

Starbucks Testing Blockchain

  • Starbucks is piloting the use of data technology, including blockchain, to make its coffee supply chains more transparent
  • The firm hopes the technology will provide real time information about the beans within the supply chain and help financially empower rural farmers
  • Kevin Johnson, chief executive officer at Starbucks, said: “Over the next two years, we will look to demonstrate how technology and innovative data platforms can give coffee farmers even more financial empowerment

Read more on Supply Management 

Amazon’s Latest Drone Patent

  • Amazon’s latest patent is a delivery drone that understands when you shout at it
  • The drone is designed to recognise human gestures, and then respond accordingly. Gestures the drone would recognise include, for example, waving arms, pointing, the flashing of lights, and speech
  • An illustration demonstrating the drone’s functionality shows a man wildly waving his arms and with a speech bubble next to his mouth

Read more on The Verge 

Do You Have Any Idea What Your Consultants Are Doing?

Hand-on-heart: Can you swear that you’ve properly briefed consultants and paid only for what you’ve received?

Buying professional services is often accompanied by a host of reputational risk and budgetary pressures.  However, for the public sector, a new approach to professional services procurement is proving that it doesn’t have to be that way.

Public sector procurement continues to be a highly debated topic in the UK, against a backdrop of reduced budgets and high-profile failures, it seems clear there’s still a need for new and innovative approaches.

What needs to change? Well, traditional purchasing frameworks have long been pegged as a solution to the sector’s buying challenges. They promise fully compliant access to a range of suppliers with all the hard work that comes with the tender process done for you. However, as they often offer a limited pool of suppliers and a notable cooling-off period which can delay a project’s start date, frameworks can be a frustrating route to market for some.

It’s in the procurement of professional services where the frustrations of traditional routes to market are often most keenly felt. There’s often a lot at stake. As budgets shrink and requirements evolve, the need to access expert external advice, often at short notice, is crucial to the success of some projects.

Consultants are often appointed as trouble shooters; to advise and lead on new projects or even spearhead big organisational changes. Using such services can represent a significant investment for public bodies and the failure of high profile projects such as IT infrastructure demonstrates the reputational and budgetary risk that can occur if you don’t get it right. Control is a key success factor.

There’s a need for change and some public sector bodies have already embraced a different approach. It’s an innovation that, unusually, could see the public sector leading the private sector.

The NEPRO neutral vendor solution recognises and responds to these and other short falls of traditional frameworks. It helps procurement professionals gain that control, mitigate reputational risk, deliver on budgets and manage demand. It’s a fast solution for the procurement of professional services that offers a welcome alternative to traditional purchasing routes.

The NEPRO solution is based on outcomes – buyers pay only for results delivered, measured by pre-agreed project milestones. We’ve all heard stories of consultants hired by public sector organisations to work on a specific project for a significant fee, only for the provider to still be there long after the project has finished having been hijacked by another department. This approach puts an end to that, with both the buyer and supplier clear on what is needed, by when and at an agreed fee.

If there’s no robust focus outcomes or deliverables it’s easy to see how contractors can end up staying in departments long after project completion and be paid significantly beyond the original value of the project they were hired to support.

When speed is important, procurement professionals have the opportunity to cut red tape and realise the benefits of consultant-based projects in a third of the time it traditionally takes to procure professional services. While traditional procurement routes can take 100 days from initial request for information through to a consultant starting work on a new project, this approach can see consultants start work in an average of 30 days through direct contract awards and fully compliant mini competitions.

The starting point for any new project is to fully understand what the buyer needs and find the right supplier to fulfil the brief. All the complexities of supplier management are taken care of on behalf of the buyer, providing compliance, control and transparency of expenditure. NEPRO delivery partner Bloom then manages the project and assures delivery.

We’re proud to now be transforming the procurement of professional services across the UK, giving buyers more choice and more business opportunities to suppliers of all sizes. To put that in context, last year, the number of contracting authorities wanting to procure through Bloom almost doubled to 170, suggesting that the public sector is waking up to this faster and more effective way to procure the services of consultants.

By Rob Levene, executive director and co-founder, Bloom.

With its unique neutral vendor solution, Bloom offers buyers access to a vast community of over 4,000 suppliers across 19 categories and 240 sub-categories. This dynamic supplier marketplace drives choice and competition and with over 70% of projects delivered by SMEs, helps drive growth back in the local economy and supports social value agendas.

4 Things Supply Managers Need To Know About China’s Belt and Road Initiative

Get to grips with the jaw-dropping scale of China’s investment in ultra-modern supply chains stretching from South-East Asia to Scandinavia.

Image: Yiucheng/Shutterstock

China’s Belt and Road initiative is big. VERY big. We’ll get to some of the awe-inspiring numbers in a minute, but first let’s look at why this project is particularly relevant to supply management professionals around the globe.

Helen Sawczak, National CEO of the Australia China Business Council thinks that there’s a common perception that the Belt and Road will be a way for other countries to see to China.

“It certainly will enable smoother movement of goods into China, but what people need to understand is that the strategic focus is on the movement of goods out of China.”

That’s why the Belt and Road needs to be firmly on the radar of every procurement professional who sources goods from China – and let’s face it, that’s just about all of us.

In this interview with Sawczak, who is a guest speaker at The Faculty’s upcoming CPO Forum in May, we explore the sheer scale of the project, the timelines involved, its embedded supply chain technology, and what it means for standardisation of trade practices.

1: What is the Belt and Road, and how big is it?

The Belt and Road is a $900 billion-dollar signature initiative announced by China’s President Xi Jinping in 2013 and hailed by China as “the project of the century”. The name refers to the land and sea trade routes.

The “Belt” is centred around the re-establishment of the ancient Silk Road, which stretched from Japan to Europe in the time of the Roman Empire.

The modern-day Belt is actually divided into six routes where China is building roads, high-speed railways, gas pipelines and more to bridge an infrastructure gap that exists throughout Asia and Central Asia, before joining with existing transport infrastructure in Europe:

  • The New Eurasian Land Bridge, running from Western China to Western Russia through Kazakhstan.
  • China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia
  • China–Central Asia–West Asia Corridor, running from Western China to Turkey
  • China–Indochina Peninsula Corridor, running from Southern China to Singapore
  • China–Myanmar–Bangladesh–India Corridor, running from Southern China to Myanmar
  • China–Pakistan Corridor, running from South-Western China to Pakistan

The “Road” (confusingly) refers to a maritime route beginning in South-East Asia, moving through the Suez Canal and ending in the Mediterranean. Similarly, China is investing heavily in ports along the route.

“Together, the Belt and Road encompass three continents, 68 countries and more than 60% of the world’s population”, says Sawczak. “An estimated 25% of all the goods that are shifted around the world will go via the new Silk Road route.”

Beijing says it will ultimately lend as much as $8 trillion for infrastructure in 68 countries.

Image: CCTV news

2: Long-term vision

During his historic visit to China in 1972, Richard Nixon reportedly asked Zhou EnLai what he thought had been the impact of the French Revolution on western civilisation. The Chinese Prime Minister considered the question for a few moments before replying, “It’s too early to tell”.

China has always taken the long-term view.

Without being locked into the short-term political cycles faced by many Western governments, China is in the rare position of being able to launch far-sighted projects to improve critical infrastructure.

As such, the length of the Belt and Road Initiative will be measured in decades, rather than years. Today, says Sawczak, “every company in China is trying to get a Belt and Road label in order to secure funding.”

“Belt and Road isn’t just about infrastructure and the supply of goods. To build this stuff they’ll need people, food, education and more. There are going to be enormous opportunities for business and suppliers to support this initiative – it’s going to have a huge impact.”

3: It’s buzzing with 21st century technology

One of the benefits of building new road, rail and port infrastructure from scratch is that China is taking the opportunity to build a truly 21st-century supply chain.

Infrastructure along the land and sea routes will feature digital technology including inventory sensors (IoT) that will enable a level of data analytics that leapfrogs past current supply chain practices.

Trading will involve blockchain verification and e-commerce settlement transactions that will vastly improve the cost and speed of trade.

To learn more about what IOT is and basics of Blockchain, check out here and here.

4: The Belt and Road will drive standardisation

“Because there are 68 countries involved, there’ll be a push for the standardisation of trade processes all along the Belt and Road”, says Sawczak. “One would hope the highest standards will be used – such as blockchain verification. Overall, standardisation is a good thing that eases free trade and boosts globalisation.”

Sawczak warns that with so many parties involved, it will be imperative for other countries to integrate their e-commerce with Chinese systems and to consider availing themselves of the new flexibility of the Renminbi as an international currency.

Read more on how to source from China here.

“Communication is another area where you’ll need to align. For example, WhatsApp has been blocked in the past in China, so cybercommunities need to be prepared to adapt to Chinese platforms to communicate during multilateral deals.”


Helen Sawczak is the National CEO of the Australia China Business Council, a membership based organisation dedicated to promoting trade and investment between Australia and China. ACBC has a Branch in every Australian State and Territory, holding hundreds of information and networking events each year to assist Australian and Chinese companies to connect.

Now in its 11th consecutive year, The Asia-Pacific CPO Forum is the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level. Held at Melbourne’s Crown Conference Centre over two days, it is a once-a-year opportunity for leading Chief Procurement Officers to engage with peers and like-minded business leaders in an intimate and interactive setting. Click here to learn more.

Step 1: Brush Your Teeth Step 2: Change the World

“Molly, the reason you got less than Thomas, is because you are a girl.” We take a look at some of the highlights of this year’s International Women’s Day…

The #MeToo and Time’s Up movements have triggered an intensely powerful outpouring of testimony and solidarity among people around the world.

But this is only the beginning of the story.

The broader issues of systemic workplace sexism and the fight for meaningful inclusion undeniably stretch far beyond the entertainment world.

We need look no further than our own procurement backyard where women account for just 20-35 per cent of procurement association memberships, represent just 30 per cent of attendees and 20 per cent of speakers, and earn up to 31 per cent less than their male counterparts.

Time is most definitely up for our own profession to tackle this issue and celebrate more fully the dynamite contributions made by talented women to their businesses and to the profession.

And judging from the overwhelming response to our A Wise Woman Once Told Me campaign, you think so too!

A Wise Woman Once Told Me…

For International Women’s Day (IWD), we decided to pay homage to the wisest women we know with a new campaign entitled “A Wise Woman Once Told Me…”

Last year, we launched Bravo, a Procurious group, to both celebrate and promote women in procurement and campaign against the profession’s current gender disparity.

For IWD we asked procurement professionals across the globe to join Bravo and share the best advice a woman has ever given them.

Here are some of our favourite responses and action shots from the day…

Our youngest supporter and proud feminist shares the best advice he has ever received from a woman in his life… And what great advice it is too!
Procurious’ Melbourne contingent ready for an International Women’s Day celebration
Procurious founder Tania Seary shares the best advice she’s received from a woman…
A Procurious member shares their advice
Delegates at SAP Ariba live in Las Vegas created an amazing “A Wise Woman Once Told Me…” wall

Literary heroines from across the globe were very well represented…

Poignant advice from diarist Anne Frank
Advice from Hogwarts’ wisest witch
Matilda also had some wise words to share with the procurement community…

International Women’s Day 2018  – By the Numbers

Events, campaigns, protests and celebrations across the globe marked 2018’s International Women’s Day.

This year’s theme was #PressForProgress, a call-to-action to press forward and progress gender parity.

With the World Economic Forum’s 2017 Global Gender Gap Report findings telling us that gender parity is over 200 years away – there has never been a more important time to keep motivated and #PressforProgress.  – International Women’s Day

Some key events from this year’s International Women’s Day…

Pay Disparity is Child’s Play

“Molly, the reason you got less than Thomas, is because you are a girl.”

Stark pay gaps between men and women prevail across the world, which is why one Norwegian financial trade union, Finansforbundet, launched one of our favourite campaigns for this year’s International Women’s Day.

In the video, a group of children are asked to fill two vases with blue and pink balls.

Once they’ve completed the task they are rewarded with jars of sweets.

But the boys get more.

As you might predict, the confused children are quick to condemn the explanation they are given that boys get more simply because they are boys.

Unequal pay is unacceptable in the eyes of children.

Why should we accept it as adults?

Bravo – Join the campaign

There’s still time to join Bravo on Procurious and take part in our Wise Woman campaign.

Sign up here to join. 

We promise to donate £1 to Action Aid – a charity committed to ending the inequality that keeps women and girls locked in poverty – for every person that joins Bravo before 12th March 2018 – that’s the end of the day today! 

In other procurement news this week…

KFC: Back to Bidvest

  • It hasn’t been a (finger-licking) good month for KFC WHO experienced widespread distribution problems after it decided to switch its logistics contract from Bidvest to DHL, resulting in the closure hundreds of outlets and disappointment of thousands of fried-chicken fans
  • Last week, it was reported that KFC would be returning, in part, to its ex-distributor Bidvest, who will supply up to 350 of its 900 restaurants
  • Bidvest has pledged “a seamless return” and a KFC spokesperson said “our focus remains on ensuring our customers can enjoy our chicken without further disruption.” Let’s hope they don’t cluck it up this time!

Read more on BBC News 

Lego goes green

  • Lego has started using polymer from plants in some of its toys as part of a move away from oil-based plastics.
  • The Danish firm’s first bioplastic offering is made from sugarcane and will be used in “botanical” elements including leaves, bushes and trees
  • The bioplastics are set to appear in stores later this year as Lego moves towards sustainable raw materials in all its products by 2030
  • Tim Brooks, vice president of environmental responsibility at Lego said: “We are proud that the first Lego elements made from sustainably sourced plastic are in production and will be in Lego boxes later this year. This is a great first step in our ambitious commitment of making all Lego bricks using sustainable materials.”

Read more on Supply Management 

UK Accuses Russia Of Massive Cyberattack on Global Supply Chains

Maersk, TNT and other global companies that suffered nearly a billion dollars in collective damages were not the intended targets of a Russia-launched cyberattack. How, then, were they infected?   

wk1003mike/Shutterstock.com

“The UK government judges that the Russian government, specifically the Russian military, was responsible for the destructive NotPetya cyberattack. Its reckless release disrupted organisations across Europe costing hundreds of millions of pounds. “We call upon Russia to be the responsible member of the international community it claims to be, rather then secretly trying to undermine it.”

This statement was part of the UK Government’s unusual step last week of publicly accusing the Russian military of being behind a cyberattack. The White House also called out Russia, issuing the following statement: “In June 2017, the Russian military launched the most destructive and costly cyberattack in history. This was also a reckless and indiscriminate cyberattack that will be met with international consequences.”

Experts believe that Russian hackers launched 2,000 “NotPetya” attacks in the early hours of June 27 last year. NotPetya was designed to masquerade as ransomware, but was soon revealed to be wiper malware with the purpose of destroying computer systems, erasing data and disrupting business operations.

Global firms were collateral damage

One of the consequences of living in a connected world is increased vulnerability to indiscriminate cyberattacks, even for organisations that are not the hackers’ intended victims.

NotPetya’s primary target was a shipping company in Ukraine, which has been locked in conflict with Russian-backed separatists since 2014. However, the virus-like nature of the cyberattack meant that businesses with strong trade links with Ukraine, including parts of FedEx, Danish shipping giant Maersk, UK manufacturer Reckit Benckister, and Dutch delivery firm TNT were also affected. Pharmaceutical firm Merck & Co and FedEx reported permanent damage to the systems, while a West Virginia health system had to replace its entire network after being attacked.

Russian officials have responded that the claims are “groundless” and that Russian businesses were among those whose systems were affected.

Read more: Wall Street Journal

 

In other news this week:

Unilever Publishes Palm Oil Supplier Data

  • In a move to boost transparency, consumer goods giant Unilever has published the location of over 1,400 mills and over 300 direct suppliers of palm oil.
  • The palm oil industry is under increasing pressure from consumers after revelations of deforestation and human rights abuses in Indonesia and other countries.
  • A spokesperson from Unilever said the company hoped that sharing the information would be the start of a new industry-wide movement towards supply chain transparency.

Read more: The Straits Times

 

Tennessee Truck Dealership Selling Dirty Engines

  • A loophole in emissions control laws has enabled a truck dealership to sell Peterbilt and Freightliner trucks with rebuilt diesel engines that spew 40 to 55 times the air pollution of other trucks.
  • The New York Times reports that the loophole is being “championed” by Environmental Protection Agency administrator Scott Pruitt after the Obama administration failed to close it.
  • The trucks are known as “gliders” because they are manufactured without engines and are later retrofitted with the rebuilt, 1990s-era engines recovered from salvage yards.

Read more: New York Times

 

CIPS Announces New Group CEO

  • The Chartered Institute of Procurement & Supply (CIPS) last week announced the appointment of Malcolm Harrison (FCIPS) as Group CEO.
  • Currently Chief Executive Officer of the Crown Commercial Service at The Cabinet Office, Harrison will take over the post from the current interim CEO, Gerry Walsh, in July 2018.
  • The announcement comes nearly one full year after the sudden passing of former CEO David Noble in February 2017.

Read more: https://www.cips.org/en-cn/news/news/cips-announces-group-ceo-appointment/

Warfare Just Got A Whole Lot Cheaper

The US Navy’s recent purchase of two drone-incinerating laser cannons signals a turning-point in the ever-rising costs of sourcing – and firing – high-tech weaponry.

Andrii Vodolazhskyi/Shutterstock.com

Remember the USS Zumwalt? Launched with much fanfare in 2013, the guided missile destroyer was equipped with 155-millimeter advanced gun systems, designed to fire the Long Range Land Attack Projective, a GPS-guided shell with a range of 60 miles. At an eye-watering $800,000 a round, however, the guns were simply too expensive to fire, and were soon replaced with a more affordable system.

Zumwalt provides an extreme example of the prohibitive cost of firing a weapon at sea. At its cheapest, a typical shipboard gun and missile arsenal costs $5,000 per shot.

That’s why the US Navy’s procurement of two high-powered lasers – developed by Lockheed Martin at $75 million each – will change the game for the expense of firing weaponry. One of the lasers is designed for testing on land, while the second will be installed aboard an Arleigh Burke-class destroyer by 2020.

The lasers are so cheap to run because firstly, solid state lasers run on electricity rather than chemicals, and secondly, they do not fire a projectile at all. A pulse of directed energy costs under one US dollar each – that’s $799,999 cheaper than the Zumwalt rounds. At present, the lasers are primarily defensive, with the magazine limited only by the amount of energy pumped into it. Using 150 kw of power per shot, they are able to destroy small boats and shoot down unmanned aerial vehicles (drones). Upgrading their power to 300 kw could allow them to destroy fast-moving anti-ship missiles, while 1000 kw (one megawatt) worth of power could burn through 20 feet of steel in one second, easily enough to neutralise a fighter jet.

The Navy is clearly anticipating ordering more lasers. The contract with Lockheed Martin includes options worth an additional $800 million (nearly $950 million in total) to buy another 10 weapons and equip over 10% of the fleet’s destroyers with high powered lasers.

The lasers were purchased against the background of China’s reported testing of a ship-mounted rail gun, a weapon that uses powerful electromagnets to accelerate projectiles to over 3km/s. Again, these weapons are expected to be cheaper to fire than conventional guns as they will not require explosives or propellant to launch ammunition.

Several US contractors have attempted to build a rail gun including BAW Systems, which created a prototype, but the project was scrapped due to budget issues.

Chinese rail guns aside, observers have speculated that the 300 kw laser’s ability to destroy small boats is a direct response to Iran’s use of “swarm boat tactics” in the Strait of Hormuz. Iranian fast boats, typically armed with anti-ship cruise missiles and torpedoes, set off in an asymmetrical, dispersed fashion from hidden harbours in the Persian Gulf and then converge to surprise-attack an enemy ship. Laser weaponry has been mooted as the most promising solution to ward off this form of attack.

Meanwhile, Lockheed Martin has developed a ground vehicle-mounted laser system that can burn through tanks, and is working on an anti-missile laser that can be mounted on fighter jets. Defence contractor Raytheon built a laser that could be fired from a moving helicopter, along with a drone-destroying, laser-mounted dune buggy. Similarly, Boeing has developed an anti-drone laser cannon.


In other news this week:

Japan launches its own Belt and Road Initiative

  • Tokyo is deepening economic ties and security cooperation with multiple countries in an apparent bid to counter China’s Belt and Road Initiative.
  • Japan’s Foreign Minister Taro Kono has recently completed a tour where Japan made investment announcements in areas including Southeast Asia, Sri Lanka, Pakistan and the Baltics.
  • Tokyo has launched a US$200 billion infrastructure plan as they actively propose an alternative to the Chinese Belt and Road. Previously, the single biggest competitor to the Belt and Road Initiative was the Trans-Pacific Partnership trade pact, which collapsed after Washington withdrew.

Read more: http://www.scmp.com/news/asia/article/2132811/japan-takes-lead-countering-chinas-belt-and-road-initiative

Hummus crisis!

  • Drought in India, the world’s largest producer of chickpeas, has resulted in several years of poor harvests and rising costs of products such as hummus globally.
  • India has had to buy chickpeas from growers in other countries, putting pressure on supply and driving up prices. British supermarkets have reported a 12% rise in a single year.
  • The unexpectedly severe drought has affected hundreds of million of people who rely on the harvest in India itself.

Read more: https://www.nytimes.com/2018/02/08/business/hummus-chickpeas-prices.html

FAA Drone Licensing Unpopular

  • According to a report from Gozmodo, the US Federal Aviation Administration has only acted once to enforce its licensing requirements for the operation of commercial drones.
  • The FAA began requiring licenses in 2016 for people operation drones for commercial use, including photographers, crop-sprayers, and pilots delivering goods via drones. Hobbyists are exempt from the license requirement, although all drones need to be registered. The licensing system is unpopular, with drone pilots having to pay $150 and pass a 60-question test with a 70%+ score.
  • Goods delivery via drones is an area of key interest for supply managers worldwide, along with associated regulatory and cost burdens.

Read more: https://www.gizmodo.com.au/2018/02/basically-no-one-is-getting-fined-for-flying-drones-without-a-license/

From Cannonballs to Mobile Apps: The Fight Against Modern Slavery

Disney, Walmart and other big players have partnered with Humanity United to launch Working Capital, a $23 million early-stage venture fund aimed at creating scalable, ethical supply chain innovations.

Image: Royal Navy Brig “Acorn” chasing a slaver vessel in 1841, by Montague Dawson.

In 1808, the Royal Navy established the Preventative Squadron, tasked with suppressing the Atlantic slave trade by patrolling the coast of West Africa. By 1860 the Squadron had captured 1,600 slave ships and freed 150,000 Africans. In the meantime, America fought a long and bloody civil war before the Emancipation Proclamation could finally be enforced through all regions.

Abolition in the 19th century – in the very simplest terms – was driven firstly by a change in the law, then enforced with the barrel of a British frigate’s cannon or a Union Army soldier’s rifled musket.

In today’s fight against modern slavery, we’re seeing a new wave of legislation, including the UN Global Compact, the UK’s Modern Slavery Act, France’s Duty of Vigilance law, Holland’s Child Labour Due Diligence law, and similar legislation being considered in Switzerland and Australia. Yet, as we know, the insidious nature of modern slavery means the perpetrators are considerably more difficult to identify than they were 200 years ago. That’s why modern slavers must be fought not with guns, but with tech solutions that remove their sources of income.      

Big names behind venture launch

Working Capital was launched by Humanity United last week with the goal of “accelerating supply chain innovations to enable corporations to operate more transparently and ethically around the world”. The launch made headlines due to the leading brands that are on-board with Working Capital, including: Walmart Foundation, C&A Foundation, Stardust Equity, Open Society Foundations (Soros Economic Development Fund), The Ray and Dagmar Dolby Family Fund, and The Walt Disney Company. The fund also received £2.5 million in sidecar grant funding from the UK’s Department for International Development.

Ed Marcum, Managing Director at Working Capital, said in a statement that “There is a growing market demand for more transparent and responsible corporate supply chains. We see an opportunity to invest in emerging solutions that will meet the demands of large multinational corporations while also benefiting millions of vulnerable workers.”

A press release from Humanity United says the fund focuses on product traceability, worker engagement, sourcing platforms, risk assessment, and ethical recruiting tools by investing in emerging technologies such as blockchain, machine learning, artificial intelligence, digital identity and Internet of Things (IoT) solutions. 

Two tech platforms that are about to be scaled up

 At present, Working Capital’s portfolio of slavery-fighting tech solutions lists two organisations:

Provenance: Described as “Fairtrade on the Blockchain”, Provenance is a technology platform that uses blockchain to enable brands, suppliers, and stakeholders to trace products along their journey from producer to consumer.

Ulula: A software and data analytics platform that allows organizations to engage with workers in real time to measure and monitor labour-related risks, creating more responsible global supply chains.

Watch this space

As companies such as Provenance and Ulula use this cash injection to maximise their impact, be prepared for the appearance of anti-slavery plug-ins to existing systems or even mobile Apps that rate and lock-out the use of risky suppliers.

While 19th century slavery was fought on the battlefields and on the high seas, the 21st-century frontline exists on the smartphones of procurement professionals around the globe. 


In other Procurement news this week:

 Germany’s biggest trade union strikes

  • About 260 companies were affected by thousands of striking metal and engineering workers in Germany last week.
  • The IG Metall union wants an 8% pay rise and reduced hours on full-time pay to enable workers to care for children or elderly or sick relatives. The IG Metall union has 3.9 million members.
  • The companies involved are currently willing to negotiate on pay not on reduced hours.

Read more: https://www.reuters.com/article/us-germany-wages/german-industrial-workers-start-24-hour-strikes-in-row-over-pay-hours-idUSKBN1FK0GA

 

Bananas threatened with extinction as history repeats itself

  • The Cavendish, the world’s most popular type of banana, is facing extinction as a fungus known as the Panama Disease takes hold.
  • The first strain of Panama disease, known as Race One, wiped out the Gros Michel banana in the 1950s, previously the world’s most popular banana.
  • The current strain (Race Four) now attacks Cavendish and other cultivars. 47% of bananas grown worldwide are Cavendish, with 55 million tonnes grown per year.

Read more: http://www.bbc.com/news/uk-england-35131751

 

Facebook reports more active users, less time spent on site

  • Users spent approximately 5% less time on Facebook, which translates to around 50 million hours a day, from October to December 2017.
  • Facebook’s Mark Zuckerberg commented that the priority was encouraging more personal interaction among users. Active users rose 14% to 2.13 billion people in the same three months.
  • Facebook’s annual advertising revenues jumped 47% to over $40 billion, while profits jumped 56% to $16 billion. Despite these figures, the company is adjusting its News Feed to prioritise posts from friends and family and make sponsored content less prominent.

Read more: http://www.bbc.com/news/business-42893051

Dude, Where’s My 3D-Printed Car?

3D printers have been around for 30 years, yet the prediction of “one in every household” has not yet come to pass. When will this technology really hit the mainstream, and how will it impact our careers in procurement?  

For those of us keeping an eye on the coming megatrends that will impact the procurement profession, the list of technological disruptions is a familiar one. Big data, cognitive technology, cybersecurity and blockchain are frequently included in “what’s next” articles, but here’s the thing – rather than being futuristic ideas that are 5 to 10 years away, all of these technologies are already here. What’s lacking is our ability to unlock the full (and vast) potential of these disruptive forces.

This concept holds true for another frequent inclusion in this list – 3D printing.

3D printing is still regarded as a futuristic technology despite the first additive manufacturing equipment being developed in the 1980s. The 30-year technology is seen as revolutionary even today because it is constantly evolving, and has not yet realised anywhere near its full potential. Every year we hear of innovative companies utilising 3D printing to produce cars, trucks, aircraft, clothing, firearms, and even body parts, yet these advances still tend to be reported as the “experimentation” rather than a new way of doing things.

When will we know that 3D printing has truly arrived? Perhaps it will be the day that you can walk into the showroom of an average car dealer and be told that 90% of the cars for sale are 3D printed. Or maybe when it becomes normal practice to go online to build a custom pair of sneakers that are 3D printed and delivered to your door. Or when organised crime catches on to the potential of 3D tech to print unheard-of amounts of firearms, counterfeit products, and drugs.

Meanwhile, keep an eye on the innovators who are helping push 3D printing ever-closer to the mainstream while regulators scramble to keep up. In just the past two weeks, we’ve seen:

What does the rise of 3D printing mean for our procurement careers?

3D printing means that every organisation will become a manufacturer. Instead of scouring the global supply chain to find the widget that’s required, the role of supply management risks devolving into two basic steps:

  1. acquiring the 3D model
  2. ensuring your organisation’s printer has the raw material it needs.

Doesn’t sounds like a very fulfilling career, does it? To take things one step further, consider the fact that it doesn’t take a human procurement professional to perform either of those tasks. End-users could source 3D models themselves, while 3D printers are intelligent enough to manage their own stocks of materials, just as an IoT-enabled laser printer re-orders its own ink when supplies are running low.

Here’s the good news, though – the result of being freed up from the tactical work of sourcing means that the profession can concentrate on the strategic projects that we really want to be doing, rather than just responding to a buy signal.

Image from Pinshape.com.

Is The Economy Heating Up, Or Cooling Off?

What do the stats from ISM’s Report On Business reveal about the economy and how can they help you on the job?

The October Purchasing Managers’ Index (PMI®)  registered 58.7 per cent in the U.S. It showed a decrease of 2.1 percentage points from the September ISM® Manufacturing ROB reading, yet the report stated that the economy has been growing for the past 14 consecutive months.

What do all these numbers mean and how can they help you in your job?

These reports have been correctly forecasting major turns in the business cycle for more than 70 years. Savvy purchasing executives have been using the keen insights provided to help with their strategic and tactical plans for just as long.

First things first, any PMI® above 50 indicates expansion in the ISM® report. So even if ‘the rate of up is down’, as our former chair used to joke, if the index is above 50 it signals a growing economy. If you are new to reading this report, start with the ‘Table At A Glance’ so you can familiarise yourself with the comparison of this month to last month for all 11 indicators.

Next, start listening in to the radio broadcasts each month following the report, on Manufacturing Talk Radio – not only will you get analysis of the latest numbers, there is also an archive of shows from which to put everything in context, and help you make the most of these reports.

ISM Report On Business

The foundation of the ISM® ROB and the primary reason for its credibility as an accurate indicator of the U.S. economy is the Business Survey Committee. The committee is composed of supply management professionals who are responsible for the purchases at their company.

Membership of the committee is based on the Census Bureaus’ North American Industry Classification System (NAICS) and diversified on each industry’s contribution to Gross Domestic Product (GDP).

Data is collected through a monthly survey, which asks how certain economic events have changed, if at all, in the current reporting month compared to the previous month. Committee members are only required to indicate for each of the activities has moved in one of three ways: has there been no change (same), or has there been a positive change in the economic directions (better, higher, and for Supplier Deliveries, slower) or a negative change in the economic direction (worse, lower, and for Supplier Deliveries, faster).

Members are encouraged to make additional comments about any of the activities that are affecting their purchasing operation or the outlook of their company. These comments provide valuable insight and depth to the reasons for the changes which might not otherwise be apparent form the statistics alone.

Are you interested in joining the panel of supply management professionals whose input informs the ISM® Manufacturing Report On Business®? It’s also a great way to learn what each index means!

To find out if you qualify and fill out an interest form, please click here.