Category Archives: Procurement News

3 Ideas To Support You In Developing A ‘Circular’ Supplier Relationship

No business can escape the fact that global economic conditions, the status and future availability of affordable resources, energy supplies and a growing global population are creating an ever more complex business environment. It is time to act.

CircularEconomy

There is no such thing as ‘business as usual’, and collaboration with suppliers is key in the transition to a better and more circular world. Suppliers should be involved in the ‘circular innovation lifecycle’ – from initial idea all the way to manufacturing and continuous improvement.

Supplier relationship management is a key tool. The question is, what can you do in order to view suppliers as actual or potential partners, who can help you “stay ahead of the curve” in terms of going more circular?

The question is also how you can expand the scope of interaction with them beyond purchasing and fulfilment transactions and tap into their expertise and capabilities to drive innovation, enter new markets, improve quality and exchange insights about marketplace trends?

Idea #1: Understand Even More About The Relationship

It is key for the supplier to understand your business in detail, as well as for the buyer to understand the supplier’s business too. You need to understand the cost and value of their entire supply chain. Without a thorough understanding of all costs, from raw materials through to the end product or service, and the value provided by each supplier in the process, a supplier relationship cannot be, first, evaluated and, second, further developed.

Remember that supplier strategies go two ways. Most companies focus on what suppliers can do for them rather than on what they can do with the supplier to lower costs. A true partnership leverages the total production cost – and knowledge to both parties’ advantage.

Also I suggest that if you work with LCA (Life Cycle Assessments) that you share them with your suppliers, so they can understand where your critical areas are and where they can help you improve or at least generate ideas for improvement. Perhaps it does not environmentally or economically make sense to create a closed loop, just as an example. Perhaps a dialogue with the supplier and a look at the LCA will show that.

Idea #2: Share Meaningful And Critical Information

Share critical information as early as possible. Information is the grease that makes an integrated supply chain work. Sharing information constantly, with appropriate security and confidentiality, is critical for successfully managing a supplier relationship. Make relationship meetings meaningful. Relationship meetings should focus on critical issues, areas for supplier improvement and discussions on how the buying organisation can improve the relationship.

Idea #3: Define Clear Objectives For Your (Circular) Relationship

If you decide to use SRM as part of your toolbox then it is key to define objectives clearly and specifically. At the same time acknowledging that many of the benefits of SRM may be hard to track and measure with precision.

As a matter of fact evidence also suggests, that suppliers that are engaged through SRM programmes are more willing to put in effort and resources above and beyond what is contracted. More than half of respondents in a recent survey conducted by State of Flux say that their key suppliers’ senior management team is more committed to their partnership as a result of their SRM activities, while the same proportion see improved account management as a result.

Other examples of additional commitment from suppliers include: proactive ideas for continuous improvement (46 per cent); collaborative problem-solving (45 per cent); and priority access to the best people and resources (21 per cent). All of these can help the business stay ahead of the curve and implement more circular business models.

You can download the latest research from State of Flux here

Why You Should Consider Carefully Before Hiring Temporary Labour

Examining your demand costs for temporary labour may make you think twice about bringing in extra help during busy periods. Jon Milton, Business Development Director at Comensura, explains.

Temp-Staffing

The use of temporary labour to bolster a permanent workforce when needed is a no brainer, but have you ever stopped to examine the bigger picture? Have you ever considered whether you really need that extra pair of hands, or if there could be an alternative option? Or, have you thought about the objectives the temporary assignment will deliver or how to make sure this spend comes in on budget?

Demand for temporary labour can be caused by a multitude of factors: the need for extra support during particularly busy periods; short-term planning creating the need for a ‘quick fix’ or ‘firefighting’ solutions; or even temporary workers remaining on assignment even after the original reason for their hire has now gone.

Know Your Demand Costs

Before committing to hiring temporary staff it’s important to consider your demand costs. These costs are the direct result of hiring managers from within your business ordering temporary workers without first justifying the need for the worker, or not fully assessing alternative approaches. In many cases, an understanding of demand costs may mean the full cost can be eliminated, which has the potential to deliver significant savings on temporary labour.

For most businesses, the realisation that demand for temporary labour exists is when the hiring manager asks their line manager to approve a temporary hire or when an internal request for a purchase order is made.

But the starting point for any business case evaluation should be to assess the need for non-permanent extra staff and if justified, how much the business is prepared to spend. It’s important to be clear from the outset and agree an approach to evaluating the internal demand for temporary workers rather than just reacting when requests are made.

Evaluation and Consideration

The process for evaluating the business case for temporary workers should take the following into consideration:

  • usage of temporary workers in different business units
  • the seasonal demands placed on the business unit and its capability to meet demand via its permanent employee headcount
  • the business unit’s workforce plans and how critical a flexible workforce is to deliver an efficient, lean operational performance
  • the complexities of your organisational structure and your approach to decision making, is it centralised or devolved?
  • your priorities as a business – for example, those that need to keep tight control of costs should centralise the approval and assessment of the business case

For those hiring managers and business units with a relatively low or infrequent demand for temporary labour, presenting an informal and individual business case will help ensure temporary labour assignments are appropriately planned, scheduled and authorised.

However, for those that regularly use a large number of temporary workers, it makes sense to create an annual business case for each temporary worker category. The plan should assess the historical usage patterns and expected future demands on the job categories so that the workforce can be appropriately planned, scheduled and authorised. For example, in a warehousing scenario there could be one business case for warehouse operatives and another for fork lift truck drivers.

Essentially, the business case for hiring any temporary workers should consider customer demand and the cost of temporary resources. Also, ask yourself what the measureable outcomes from the additional resources are and whether your business objectives will be met. And finally, consider other employment options, and if other projects or tasks can be put on hold to reprioritise resources.

What are the Key Procurement Trends for 2016?

Did you successfully predict the key procurement trends in 2015? Chances are good that you were able to pick out at least a couple of the major themes appearing in the news and industry reports. But what does the coming 12 months have in store for the profession? Trends

Ethics, sustainable procurement, relationship management, technology and social media – these were just a few of the topics highlighted by the Procurious community when asked this question in 2015. Sure enough, a number of these themes were prominent in news stories and organisational strategy last year.

Roll on 12 months and there is a fresh set of trends to keep up with in order to remain relevant. We’ve picked out a few that we think will be making headlines, prompting discussions and keeping organisations on their toes in 2016. 

Technology

  • Rise of the Cloud

Last year we spent a lot of time discussing the Internet of Things (IoT) and its growing impact on procurement. However, it’s clear that many procurement teams have yet to get to grips with the Cloud. However, procurement has a great opportunity to leverage Cloud software in a number of ways, including as part of supplier collaboration.

The Cloud will allow ordering to be streamlined, increase visibility across the supply chain and allows for changes to be made more easily, even when goods are in transit.

Del Monte has already taken this step by moving its supply chain data to the cloud. The company can now access a wealth of global data, create orders, place contracts with suppliers and collaborate with partners, all in real time. Thus far, it has led to a 56 per cent saving in customs broker costs, better visibility and a 26 per cent reduction in inventory due to better information on goods in transit.

  • Improvements in eProcurement

As technology advances, systems that have been around for a number of years will have to play catch-up. Spend management and eProcurement systems are just a couple of those platforms that are in need of a reboot (while taking into account that organisations still need to be more selective when choosing theirs).

Better technology will allow for faster purchasing activities, and eventually enable an experience more comparable to what we are used to as individuals when we shop online. This will, in turn, mean that rules are less likely to be bent to “get the job done”, maverick spending and policy breaches should decrease, and procurement can stop being seen as a roadblock.

People

  • Meeting the Needs of Millennials

In truth, this could have fallen into the Technology section, but it’s important from a people perspective too. Millennials have high expectations, sometimes unrealistic, as to how procurement could and should be done, particularly when it comes to technology. Businesses need to be up to date as far as technology and connectivity go in order to meet these expectations and retain their millennials, as well as deal with other millennials working in the supply chain.

Why is this a people issue? Because if you’re not doing this, someone else will be and the best millennial talent will get a job with them instead.

  • Meeting the Students

Organisations need to know where they are going to get the best people to fill their job roles, plus meet the rising expectations of the business. Universities and colleges are prime places to be doing this.

Work experience, apprenticeships, placements and sponsorship are all great options for organisations to attract current students and new graduates and school leavers. 2016 could be the right time for you to speak to the educational institutions near you and see what you and they can do together.

Risk 

  • Cyber Security in Contracts

Research suggests 78 per cent of organisations have experienced a data breach within the past two years. This goes beyond the high-profile examples of 2015, but puts a spotlight on the need to account for this risk as part of procurement contracts.

A lack clarity on who is responsible for the data within supply relationships, and how it can be stored securely, as well as plans for contingencies should a data breach happen, could leave both procurement and large parts of their supply chains exposed.

  • Supply Chain Transparency

Ok, so this isn’t necessarily a new procurement trend, but it’s one that’s going to get even more focus than in previous years. You just need to look at the new towards the end of 2015 (think Nestlé) to see stories of slave labour in supply chains.

From paddock to plate in restaurants and the food supply chain, to tracking clothes from the plant they were created from, there are a variety of areas that can and will be tracked.

Technological advancements (such as the Cloud), increasing mobile empowerment and increasing public scrutiny in this topic will certainly cause this to be close to the top of the vast majority of procurement departments’ risk agendas.

What do you think will be the key trends? If you have your own ideas, why not start a Discussion and share them with the rest of the community.

Mergers & Acquisitions in the Transportation Industry – A 2015 Retrospective

If you are already working in this sector, you do not need me to tell you there have been significant mergers and acquisitions in 2015. More are expected and you may be affected. The blog today reviews some of these events.

Merger 2

If you have not been following this sector, you will find recent financial details that are astounding and outstanding. Do not be deceived by recent lower annual growth figures in this industry when they are reported only in terms of percentages. This distorts the real growth, as the annual revenues in this sector are so large.

Company revenues, in many cases, are growing rapidly year on year. The sector reported revenues, globally, totalling $750 billion in 2014. Thanks also, without doubt, to the fact that eighty percent of Fortune 500 companies use some form of logistics and transportation provider.

But, why have there been so many recent mergers and acquisitions in the Transportation industry? Answer – consolidation is a must to stay competitive. The key word is scale. This is heard again and again when executives in this sector are interviewed.

Participants and Key Players

The participants are the firms who provide logistics services to customers for part or all of their supply chain management functions. These third party logistics (3PL) providers typically specialise in warehousing and transportation services, scaled to customer’s needs. Sometimes a service provider also offers value-added services, such as production or procurement of goods, and is a third-party supply chain management provider (3PSCM).

Many of their customers are reviewing their Supply Chain Roadmap to allow it to fit better to their business strategies. By contrast, the end game strategy that has led to some of the recent mergers has left some observers puzzled. But of no doubt is the importance of these changes, especially when one notes the size of these mergers, both in terms of geography and their financial size.

These have included for example, CMA CGM taking a 67% stake in the APL container group for S$3.4bn. The CMA vice-Chairman stated that the focus is on “scale”, adding that this is now “more critical than ever to capitalise on synergies and capture growth opportunities whenever they arise”.

Although more freight is being carried, global rates for freight have seen a decline, but sharp declines (40%) in costs of bunker fuel. So for CMA CGM they saw group net profit over 9 months approach $613m as opposed to $392m in the same period last year.

Sector Inertia

DSV Group (subject to UTi shareholders approval that is expected Q1 2016) will acquire US based UTi Worldwide Inc., who operate in 58 countries with 21,000 staff and have revenues of US$3.9 billion. Once again, ‘scale’ is the word used by the UTi Chairman.

However, there are now reports a rival bid may appear. DSV had stalled on the acquisition plan some time earlier when reports in the financial press caused a share price rise in UTi stock. The share price then fell following revised UTi profit forecasts.

Then there is Kintetsu World Express and their purchase of APL Logistics. Singapore NOL selling its APL Logistics division, making the transaction one of the largest in recent years. The state owned shipping line of Singapore will collect $1.2 billion from the sale.

This will give Kintetsu a much larger footprint. NOL were keen to point out that when calculating a purchase price based on a company’s financial results, the sale price obtained was well above the current market average for acquisitions in the sector. NOL sold both its logistics arm and shipping line business this year.

Further inertia in the sector was proved with announcements from FedEx confirming plans to acquire TNT Express for $5 billion. Confirmation is expected in the spring of 2016. This will make the combined company the second largest delivery service in Europe.

TNT shares rose 10 per cent when reports surfaced, saying a green light is expected from the EU antitrust regulators. A formal declaration is due by mid-January, although UPS continues to lobby against this acquisition. The firm tried to buy TNT three years ago but were stopped by the EU Commission, due to the estimated 30 per cent control they would be seen to have of the total market.

Why now?

It will not come as any surprise that mergers and acquisitions are seen as the vehicles of choice to build company size. But these logistics companies are themselves seen as targets, with potential, by private equity investment firms.

Changes in the global financial markets may have led to brakes on acquisition plans prior to 2014, until such time that target company share prices had become weaker, or rather, not seen as being over-priced. This, together with other factors, has meant that 2015 has been a bumper year for M&A.

As if to confirm the pace of announcements, Japan Post recently announced they would buy Toll Holdings of Australia for $5.07 billion. Toll has come a long way from its roots in 1888 in New South Wales, delivering coal!

 

3PL companies are being asked by many of their largest customers to supply more services, and indeed many want to and know they have to. Companies want to offer a wider range of services to make them the one and only provider of transportation services to these major customers. This objective makes a wider geographical footprint a must have, and this, along with recent private equity involvement and strategies, also explains the 2015 dynamism in the sector.

Acquisition provides an easier route to achieve many of these aims, albeit with potential staff repercussions that are seen in any industry. Most commentators agree that these changes will continue. Whether the financial benefits that result from an acquisition match the forecast is another topic, but by that time the seller is out of the equation.

Stories from The Source – Part one: Tony Megally

The Source General Manager Tony Megally speaks with Hugo Britt about how to get yourself noticed by a top recruitment firm.

Albert Street

As with most 21st-century offices, we have an open-plan layout here at The Faculty. The team is spread across the first floor of a sun-filled, goldrush-era building in the heart of Melbourne. We have minimal partitions and senior management sits right in amongst their teams. One notable exception to this layout, however, is The Faculty’s sister organisation – The Source.

The Source is a boutique recruitment firm specialising in procurement and, due to the intriguingly confidential nature of their work, sits in a corner of the building separated from the rest of us by a glass partition. The small team beyond the wall always look incredibly busy, and when they do emerge, it’s usually with a phone glued to the ear, carrying out intense-sounding conversations in hushed tones as they pass my desk.

What goes on behind that mysterious portal? What are the particular challenges involved with recruiting for procurement? I interviewed three members of The Source team to find out, beginning with its new General Manager, Tony Megally.

So, Tony, tell me about yourself. How long have you been in recruitment?

My career in recruitment kicked off in 1999, and let me tell you, things were very different back then. We didn’t have smartphones, barely had email, no voicemail to reach people, and you were very lucky if you had any kind of database to work with. I remember the majority of my time being spent faxing resumes through to clients.

What’s “faxing”?

I’m going to assume you’re joking. Recruitment back then was nowhere near as proactive or strategic as it is nowadays – it was highly reactive and transactional. I initially worked in a volume market with the focus on recruiting for short-term, temporary assignments. I’d get a call from a client on a Friday night, for example, asking for 10 temps by the following Monday. Not easy.

What exactly has changed in recruitment over the past 15 years?

Recruitment has become a more sophisticated industry. It’s no longer so transactional and is now highly relationship-focused. We support clients to build their businesses through great talent and increasingly act as guides to candidates throughout their entire careers. That’s the beauty of recruitment – you get to follow people’s careers and watch them grow. I placed graduates back in 1999 that have now become senior and executive leaders, and in the best cases they’ve become clients themselves.

What about changes in the procurement space?

Just like recruitment itself, the procurement profession has moved away from its traditionally transactional function and is increasingly commercial-focused and strategically positioned. Things are evolving fast – the challenge for us at The Source is to keep ahead of the ever-changing expectations that organisations have in regard to the role of their procurement functions.

What levels of seniority do you recruit for at The Source?

We recruit from CPO down to the specialist level, but personally I look after the senior to executive space. This involves a broad salary range: about $150k to $350k (AUD). Clients work with us typically when it’s a hard-to-fill role, or when there’s a confidential restructuring going on and they can’t advertise. We’re in the mix – we’re searching for and networking with procurement talent all the time. Basically, clients want to partner with us to gain access to our talent pool.

How can candidates get the best out of their relationship with a recruiter?

It’s important for both sides to be as transparent and upfront about their expectations. We’ll share all the details about the client’s brief to help you secure the perfect role, but we need candidates to share as much as possible to help us promote them. It’s good to be aware that recruitment takes time. While an analyst-level could be placed within one to two months, executive placements can take six to twelve months.

Do you work mainly with advertised roles, or “headhunting” top talent?

Most of our time is dedicated to nurturing what we call “passive talent”. That means we get in touch with professionals who may not necessarily be active in the job search but are open to considering opportunities in the near future. It’s all about developing and maintaining relationships – we take a very long term view.

What makes a stand-out candidate in your view?

I look for evidence of commercial acumen, strategic agility, a relationship focus and of course a strong people focus. These soft skills make people stand out. Candidates need to be good networkers (through organisations such as The Faculty) and be able to demonstrate strong business partnering both internally and externally.

Stability is important, for example in Category Management you’ll need to prove you’ve been through an end-to-end strategic procurement lifecycle or in the case of Senior Leaders, you’ll talk to your strengths in change management and business transformation. Both of which usually take about two to three years.

So two to three years is the minimum period you should stay in an organisation?

In my view, yes. But the flipside of that is when we see someone who has sat in a role for ten years and hasn’t progressed their career, that doesn’t usually suggest drive and ambition.

Got any tips for preparing a CV and attending an interview?

The best CVs are kept simple and list stand-out quantifiable achievements. Keep track of the things you’ve accomplished.

You can never do enough research before an interview. Read everything on the company website, search for key individuals on LinkedIn, review company financial statements (easy to access for publicly listed organisations), reach out to networks. There’s no excuse for not being prepared for the “what do you know about us” question. Interview preparedness is an indication of how organised you will be on the job.

Thanks Tony. It sounds like you’re a key person to know in the Australian procurement profession.

I’d encourage anyone who’s interested in a confidential career discussion to get in touch with The Source, whether you’re actively seeking a new role or would just like to start the conversation about your career future.

The Source is a boutique mid to senior and executive recruitment and search consultancy with national reach specialising in the procurement market. For more details, visit The Source.

The Great Procurement Social Value Bake-Off

How promoting social value in public contracts should be the icing on the procurement cake.

Bake off picture

Well, what a task! I’ve just finished commenting on the draft statutory guidance to implement the Procurement Reform (Scotland) Act, perhaps one of the most ambitious pieces of public procurement legislation that the world has ever seen!

Worryingly, in amongst the feedback from colleagues, is the concern that including social value considerations in contracts would push up the contract price (Here in Scotland we call them Community Benefit Clauses).

This view was echoed at the 2015 CIPS conference where lawyer David Hansen cautioned against going overboard when applying social value provisions.

But does including an element relating to social value really have to cost much more? Isn’t it something where the public sector can rightly use to take action to put the icing on the cake of great procurement?

Absolutely I say! And while I may not come close to Mary Berry’s cake making, here’s my recipe for success when it comes to Social Value Clauses.

Helen’s Recipe for the Perfect Social Value Clause

  1. Sift the social value clause into a bowl.

Social Value clauses (aka community benefit clauses) are really in vogue in Scotland just now. They’ve been included in all sorts of construction projects to generate thousands of opportunities for apprentices in the building industry, working on things like the facilities for the Glasgow Commonwealth Games or the new Forth Road Crossing.

I actually don’t know of many local authorities this side of Hadrian’s Wall who haven’t managed to get an apprenticeship or student placement into one of their major works contracts.

But it’s not just works contracts where social value can be included.

We’ve managed to secure community benefit clauses in our services contracts for things like sponsored places for the third sector at conferences and additional contact time for people receiving care at home from the supplier who delivers pre-prepared meals.

The key is, as David Hansen rightly advised CIPS colleagues, to keep things proportionate to the contract and sift out the irrelevant that will add cost.

I mean, you only need a bit of innovative thought. Just what social value can a Peterborough based IT system supplier to your Benefits Service provide when you’re based in the Outer Hebrides? IT prizes for schools? Maybe a couple of tablet PCs for people most in need?

  1. Mix in the Third Sector when it starts to boil

Keeping third sector organisations hot, engaged and ready to tender for public contracts can give a real extra dimension to the value you can achieve.

Not only will you have secured savings and benefits arising from a fabulously crafted specification and procurement strategy, but you’ll also be able to award the contract to a third sector organisation whose sole purpose is to give something back.

Awarding a contract to a third sector provider will mean your social value can really start to rise.

Awarding a community transport contract to the third sector means the outreach work they do with vulnerable people is safeguarded as they can now spread their overheads, admin and fleet costs, across more than one income stream.

What about a car maintenance contract, which, if awarded to a garage run by the third sector, can provide work placement opportunities to men who’ve been unemployed for a considerable length of time and who perhaps need a bit more support due to addiction problems or mental health issues?

You see, you can never add too much of the third sector to your recipe; the key is to make sure they’re hot and ready to bid.

  1. Finally, add the secret ingredient

Just when you think you’ve created the best social value cake you can, you need to add the pivotal secret ingredient that’s going to win you the procurement bake off prize:

User engagement and participation in the process.

Delivering real social value must be about putting service users and the community at the heart of what procurement does. Where our contracts affect people’s lives we should be out there asking them what outcomes they want to see delivered and getting them to make the choices about which supplier is used.

We’ve being pushing the boundaries up here in the Outer Hebrides through our participatory budgeting bus services project in Uist and Barra (check out @YourBus for details). But we’re not alone, Orkney have done a great job by engaging with users and carers to commission services and there’s been innovative engagement with deaf service users as part of procurement processes in Nottingham.

Putting the people who matter at the heart of the process not only means better contracts and potential reductions in cost but also, and perhaps most importantly, the legacy of a group of people whose confidence has grown.

Social Value must be at the Heart of every Procurement Recipe

Social Value does not need to be expensive, nor does it need to be ‘an optional extra’. When you view it as part of the recipe for public contracts, it’s that extra ingredient that takes the cake from average to amazing.

And suddenly, you’ll be delivering more than just contracts, you’ll be making a difference to the people your organisation is there to serve.

So why not try my recipe for social value and maybe you can win first price in the Great Procurement Bake Off!

Be Social to Perform

Marc Zuckerberg, the father of the most well-known social network recently stated: “I think a simple rule of business is, if you do the things that are easier first, then you can actually make a lot of progress”.

Be-Social

We probably all believe in the use of social media and social networking pages, however up until now there was no academic evidence that job related use of social media for procurement managers actually positively affects their job performance.

A recent study of Maastricht University, School of Business and Economics (NL) revealed interesting insights and proofs that social media, if used and applied correctly for the job, can actually increase individual job performance of procurement professionals. Prof. Dr. Frank Rozemeijer and Jonas Heller developed two research models – the one that explains the relationship of the job-related social media usage and procurement job performance will be covered in this article.

Positive Relationship

Companies usually tend to block social network sites for their employees to prevent distraction at the workplace or reduce the perceived security threat of public networks. According to the study of Maastricht University, procurement companies should reevaluate their social media policies for their procurement professionals.

The study tested the relationship of active and passive job related social media usage on procurement job performance. “Active” job related social media usage is defined as creating & sharing content with the community or engaging in on-line discussions communication, whereas “passive” usage implies searching and consuming content created by others. A positive direct relationship was found for both, active and passive job related social media usage.

Networking and Learning

In addition, to understand how the use of social platforms affects the procurement manager’s performance, the study investigated on two important tasks which are part of a procurement manager’s job: Networking capabilities and individual learning.

Networking capabilities are described as a managers capabilities to establish, maintain and develop (business) networks. Individual learning describes an individual’s capability to build knowledge through reflection about external stimuli and sources, and through using this knowledge in the workplace.

Procurement managers nowadays need a dense network of suppliers and industry contacts to ensure sustainable business performance. Connecting with peers in the procurement world helps procurement managers to maintain an overview over the market and fosters buyer-supplier relationships.

In addition, staying up to date about market developments, technological innovations and changes in rules and regulations are a crucial part of the learning process of every procurement manager’s job. Based on literature and semi-structured interviews with procurement managers, a research model was developed which was tested through an on-line survey amongst 103 procurement professionals from various industries that were active on social media.

First, the study found a direct, positive relationship of active and passive job related social media usage on procurement job performance. The direct effect of passive job related social media usage on procurement job performance is stronger than the direct effect of active social media usage.

Active Social Media

Further, the results showed that networking capabilities and individual learning fully mediate the direct positive effect of active social media, indicating that the positive effect is only present if social media is used for networking or learning activities (e.g. acquiring knowledge online by reading tweets or group discussions in procurement networks such as Procurious). Furthermore, the relationship of passive social media usage is partially mediated by networking capabilities and individual learning, suggesting that there are additional variables that still need to be investigated to explain this relationship.

The direct positive effect of networking capabilities and individual learning underlines the importance of these two activities for procurement professionals that aim to perform better than their colleagues.

The findings of this study are the first of its kind and finally proof a positive impact of job related social media usage on procurement job performance. Those insights can be crucial for procurement managers and recruiters. In a next article you will read about factors to influence job related social media usage within your company or procurement team.

Adding Value to Procurement Through Change Management

Rio Tinto’s procurement function is globally known for its high standards and principles. When it comes down to building a world class global procurement department, change management plays a key role.

change-management

Ahead of Women in Procurement 2016, Renae Rutherford, Director – Optimisation Delivery, Global Business Services from Rio Tinto, has shared some key insights with us, which will be presented as a case study at the conference. Renae has embraced change management as a strategy in all her roles to help Rio Tinto functions, including Procurement, achieve significant improvement on a global scale.

Challenges and Opportunities

We asked Renae to share the biggest challenges and opportunities Rio Tinto is facing in procurement at the moment. She says that Rio Tinto is in a moment of “more opportunity than challenge, with decreasing commodity prices, business units are depending on procurement to deliver significant cost reductions including managing working capital more effectively. The challenge is finding more value, as we have a mature global & regional category management model that has caught most of the quick win opportunities.”

Renae also identified a number of other challenges for Rio Tinto’s procurement team, including “achieving efficiencies through global process standardisation in Procure to Pay and master data management” and “identifying how best to evolve procurement as part of a cross-functional organisation that is moving towards an integrated business services model, where procurement will operate more closely with other global functions including IS&T, people services, finance services and property”.

Value in Change Management

When asked how change management is helping Rio Tinto manage these conditions, Renae responded: “Change management is a very broad category.”

“The very first module in my change management post-graduate course was self-management skills – and this was a revelation!  All leaders are change agents, and the most capable leaders have excellent self-management skills, which they apply to cope with job challenges and organisational change, as well as propel their own professional development (aka personal change!).”

“People change management skills are essential for identifying others’ reactions to change and helping them work through this fully, in the fastest way possible.  Resolving business challenges typically brings change impacts to our people and it’s important we help them manage this effectively.”

“Organisational change management skills are essential for taking a holistic approach to bringing about and sustaining the change, where changes will not achieve full benefits nor be sustained if they are not aligned with formal and informal people, process and organisational systems.”

Speaking at the Women in Procurement 2016 conference in March, hosted by Quest Events, Renae will be presenting a session focused on how to embrace change management to build a world class procurement function, including Rio Tinto’s approach, lessons learned, and being a change leader.

Leadership and Career Advancement

Women in Procurement 2016 is also addressing leadership and career advancement themes, so we asked Renae to share some useful tips of how she has approached her career progression.

Here are Renae’s 5 recommendations for those aspiring a leadership role in procurement:

  1. Take on every opportunity to learn and develop, especially when it’s different or daunting
  2. Put in the hard work early, to build that depth of diverse experience
  3. Recognise you passions as well as situations that bring our your strengths, and find more like these
  4. Big 4 consulting experience was a significant accelerator – taught me how to learn quickly, how to influence, and how to manage risks with engaging people and leading projects
  5. Be ok with not knowing everything or not feeling comfortable in your role (mistakes provide the deepest learning); when you do feel comfortable, it’s time to move on

To read Renae Rutherford’s bio and find out more about Women in Procurement 2016, please visit the website here or download the conference agenda.

Marketing Procurement – The Most Popular Concepts

Darren Woolley, CEO and founder of marketing consultancy TrinityP3, freely admits that 15 years ago he had no idea what marketing procurement was. Now, curator of a renowned blog on the subject, he is here with a great offer for Procurious members.

Top50_Stack

When I started TrinityP3 Marketing Management Consultants in January 2000 I had never heard of marketing procurement and only had the most peripheral understanding of the procurement function. What led me to starting my own marketing procurement consultancy 15 years ago was a Bachelor of Applied Science degree, five years in medical research and then 15 years as a copywriter and then a Creative Director in advertising agencies.

So I guess, as I have since discovered, probably the typical career path into procurement, meaning typically atypical.

Efficiency and Effectiveness

In April 2006 I started a blog as part of our website. Mostly the posts were opinion pieces based on observations about the industry. If you look back to those days, the articles were short, not particularly in-depth or, for that matter, insightful. It was also irregular and inconsistent. But it was nine years ago. If you are interested, check out the early posts on the TrinityP3 blog here.

Around this time was also when we discovered the marketing procurement function within some of our larger multinational clients. It was interesting to meet people whose job it was to identify ways to ‘assist in managing the marketing process for greater efficiency and effectiveness’.

I use that phrase as it is how we describe what we do at TrinityP3 and what we have found the best marketing procurement people do within their own organisations. It is also why we call ourselves Marketing Management Consultants and not Marketing Procurement.

Strength to Strength

In 2011 we noticed a growing interest in the content on the blog and so made a strategic business commitment to make the blog the centrepiece of our content marketing efforts. This included making sure we regularly published, in fact three times every week, all year round. Okay, we take a week or two off for the holidays.

Within a year the number of people visiting the blog increased 300 per cent and today there is more than 12,000 people reading the blog every week and they come from every continent, except Antarctica of course.

In the early days I was writing most of the posts, but quickly the TrinityP3 consultants began to offer posts on their core competencies such as media, agency remuneration, roster management, digital and data and production. And such is the reputation of the blog, we also have an increasing number of industry thought leaders offered guest posts.

In 2012, we noticed that some articles were getting a much higher readership, sharing on social media and comments. When we looked at the topics that were the most popular, they reflected the issues that were either high profile news or trend in the industry or offered a significant insights or a fresh perspective to common issues. In amongst these were gems on pitches, pitch practice, agency remuneration, including value based, incentive and performance based, scope of work, billable hours and so much more.

Into Print

We decided to capture these popular posts by publishing it as a book. In paperback and e-book, it provided particularly popular. So the following year we did the same. And this year we have done it again. The Top 50 Marketing Management Posts of the Year captures the best and most popular.

But don’t take my word for it. Here is what some of the industry leaders think of the Top 50 Marketing Management Books of the Year:

“Darren Woolley’s Top 50 Marketing Management Post of the Year is a remarkable mosaic of must-read articles and expert opinions that will open your mind, offer new perspectives and challenge you in the process.” – Bruno Gralpois, Author of “Agency Mania” and Co-Founder and Principal, Agency Mania Solutions

“Trinity P3’s Top 50 Marketing Management Posts is a wonderful collection of well-written, insightful blog posts by Darren, his team, and guest writers. They deal head-on with some of the most timely and on point challenges in the industry. Whether you’re a client leader, an agency leader, or industry consultant, this book is a “must read”. – Debra Giampoli, Director, Global Strategic Agency Relations, Mondelez International

“The posts by Darren Woolley and the TrinityP3 team are critical insight. First of all, they provide a glimpse from a unique place in the world — Asia – and yet are truly universal. The collection of top posts gives professionals in our industry fantastic “food for thought” as we go about our hectic lives. He and the team are truly well respected experts and their intelligence is world class.” Sopan Shah, VP Procurement, InterContinental Hotels Group

Exclusive Offer

If you want to lay your hands on this highly-regarded book, follow this link and a free copy is yours when you use the code: Procurious15 (only open to Procurious members).

Happy reading!

Darren Woolley is a scientist by training and a former creative director of JWT. Woolley is the CEO and founder of marketing consultancy TrinityP3.

TrinityP3 is a marketing management consultancy. We challenge our clients, and ourselves, to continuously evolve in thought and approach.

What are the 7 Challenges Keeping PSCM Managers Up at Night?

As the modern procurement division advances to become a part of the whole organisation innovation process, so does the expectations around supply chain and procurement professionals’ performance.

overcoming-challenges

Having a deep understanding of the challenges facing executives who are ascending the procurement ladder is the first step to find strategies and inspiration to overcome them.

Research completed ahead of the Women in Procurement 2016 conference, with Purchasing and Supply Chain Managers from across a variety of sectors, has identified 7 main challenges the modern supply chain and procurement professional must break through in order to achieve the department expected results. Here is a list:

  1. Aligning procurement’s vision with the organisation’s strategy and communicating its value to the entire company
  2. Understanding how technology and processes support supplier relationships and how to lift enterprise innovation
  3. Identifying how to deliver more value to your organisation through strategic procurement
  4. Developing a winning strategy by creating a value oriented procurement department
  5. Inspiring leadership and building meaningful capabilities and skills for your team
  6. Developing the competencies to do business with international partners in challenging cultures
  7. Retaining your best talents

If some, or all of these challenges are keeping you up at night, then you are not alone.Purchasing and Supply Chain Managers managers across the country are looking for solutions to these issues right now.

The Women in Procurement 2016 conference is bringing together a panel of experts to give all in attendance some insights into how leading organisations are addressing these issues. To find out more, download a brochure here.