Category Archives: Procurement News

Leniency for Corrupt Petrobras Suppliers?

Petrobras, a Brazilian state owned oil company

Earlier this year Petrobras, a Brazilian state owned oil company, became involved in court action over questionable activities within its supply chain. Executives at the company were accused of accepting bribes, rigging bidding processes and facilitating overcharging in return from kickbacks from suppliers.

The resultant actions have had a marked effect on Brazil’s economic fortunes. After the scandal broke Petrobras elected to freeze all activity with the suppliers involved in the controversy. This decision has sent ripples through Petrobras’ supply chain resulting in bankruptcies and staff layoffs at a number of Brazilian firms. To put some scale to the project, it is estimated that Petrobras accounts for 10 per cent of all capital spending in Brazil. The slowing of work at Petrobras is thought to be one of the key factors contributing to Brazil’s economy shrinking by 1 per cent this year.

In response to the slowdown, the Brazilian government is considering a path of courtroom leniency for the embattled suppliers. In a bid to re-spark the country’s flailing oil and gas industry and kick-start its economy, the comptroller general is in discussions with five of the 30 suppliers caught up in the scandal. It is thought that should these firms accept responsibility for their wrongdoing, pay fines and commit to compliance measures, their exclusion from participating government contracts will be lifted.

It’s important to note that the proposed moves will not have any impact on the criminal trials faced by the executives of Petrobras and its suppliers. One of whom, Nestor Cervero, was sentenced to five years in prison yesterday for allegedly using money received from bribes to purchase an apartment. Cervero is the second Petrobras executive to receive a jail sentence for his role in scandal. Last month, Paulo Roberto Costa, former Petrobras director of refining and supply, was sentenced to seven and a half years in prison. However, after signing a plea bargain he will serve only one year under house arrest.

Why your CPO is key to the future of the profession

As Procurement continues to take steps towards showing its value to organisations, the role of the Chief Procurement Officer (CPO) is becoming more and more critical to its success…

Why your CPO is key to the future of the profession

The future of procurement was a key focus of the Big Ideas Summit on the 30th of April, and continues to be so as more of the content and Big Ideas are shared across the wider procurement community.

In the past week alone, not one but two procurement experts, Jonathan Betts from Science Warehouse, and Peter Smith of Spend Matters UK, have both hypothesised that procurement will be ‘dead’ or will have ‘disappeared’ by 2030. This doesn’t mean the function will cease to exist entirely, but more that what we currently view as procurement will change to something completely new.

The Chief Procurement Officer

It’s against this backdrop that the CPO comes to the fore. At the head of a function that is constantly reinventing itself (for good or bad, we’ll let you decide), finding the right strategy to lead effectively is a tricky prospect.

To make it trickier still, a CPO can then be faced with numerous individuals, both inside and outside their organisations, second-guessing their moves and strategies. If you’re looking for what a CPO needs, a thick skin is a good place to start!

But it’s not all about the negatives for the CPO. They stand at the head of a developing function and have the power and influence to craft something that will bring value to their organisation. Whether it is in driving down cost or supporting their teams by spending time on professional development, these are other key aspects of the CPO’s role. 

The Challenges

Plenty articles are written about CPOs and the challenges that face them. Additionally, it has become more common for CPOs to be surveyed on what they consider to be the major issues facing them and the function. Since the end of 2014, the following have been highlighted as areas of concern and consideration for CPOs:

As expectations of procurement rise and the overall procurement agenda become wider, a CPO needs to ensure that they have the correct strategies in place, but also plans on how they are going to achieve them. This includes key steps, such as training for teams, but also how they are going to communicate their plans.

Community and Awards

What has become clearer in the past year is that willing communities exist to help CPOs in driving the procurement brand on. Campaigns such as the ‘I am a Procurement Leader’ from Procurement Leaders, which aim to highlight the great work that leaders in the profession are doing also offer a level of support to the senior professionals.

And awards also help to showcase the success stories from the profession that have often gone unnoticed in the past. The CIPS Supply Management Awards highlight best practice, while recognition for individual CPOs helps to set the bar that bit higher.

Last week, Richard Allen, CPO and Executive Director of Enterprise Services at Telstra (Australia), was named CPO of the Year by The Faculty Management Consultants. The annual award helps to highlight the importance of the CPO role in organisations and recognises CPOs who, amongst other things, demonstrate leadership influence within their organisations.

Initiatives such as this one show that the role of procurement is much broader than sourcing or cost saving, but is critical to the wider success of the organisation.

What do you think – can CPOs help to secure the future of the procurement function? Does your CPO deserve some good press for their work? Get in touch with Procurious and make sure you don’t go unheard! 

Meanwhile, here are some of the stories making headlines this week in procurement and supply chain.

Gartner announces rankings of its 2015 Supply Chain Top 25

  • Gartner, Inc. has released the findings from its 11th annual Supply Chain Top 25, identifying global supply chain leaders and highlighting their best practices. Analysts announced the findings from this year’s research at the Gartner Supply Chain Executive Conference.
  • “2015 marks the 11th year of our annual Supply Chain Top 25 ranking,” said Stan Aronow, research vice president at Gartner. “In this edition of the Supply Chain Top 25, we have several longtime leaders with new lessons to share and a number of more recent entrants from the high-tech, consumer products, retail and industrial sectors.”
  • The top five include three from last year — Amazon, McDonald’s and Unilever — one returning leader, Intel, and a newcomer to this elite group, Inditex (see Table 1). Three companies rejoined the list this year after a lengthy hiatus, with L’Oréal at No. 22, Toyota at No. 24 and Home Depot at No. 25. Those familiar with Gartner’s Supply Chain Top 25 may wonder why perennial leaders Apple and P&G are not included on this year’s list.

Read more at Virtual Strategy.com

Cisco Tests ‘Internet of Things’ in its Supply Chain

  • In one of the latest initiatives to get its own supply chain fully wired, Cisco has been installing thousands of sensors in a plant in Malaysia to monitor and reduce energy consumption. Mr. Kern said in an interview with The Wall Street Journal that the team leading the project believes that implementing the system throughout Cisco’s worldwide production sites will help reduce energy consumption by 20 to 30 per cent, translating into tens of millions of dollars in cost savings. “In 60 to 90 days we’re hoping to prove it,” he said.
  • Cisco has been looking at broader supply chains as a part of its efforts to spread the idea of Internet of Things, the term for the web-enabled connections that can allow devices to transmit information about such things as energy consumption or productivity. Cisco’s Consulting Services group, for instance, is working with logistics provider DHL on a project to send real-time data on warehouse operations, for instance.
  • The Malaysia project is a pilot program that is part of a $4 million fund the company established in which employees brainstorm and test projects to make the company more productive. The projects cover a wide range of supply chain issues and are relatively small-scale for a $47 billion company—the energy management project in Malaysia cost less than $700,000—with the understanding that most will fail. But those that succeed can provide innovative solutions and major savings, Mr. Kern said.

Read more at The Wall Street Journal

Europe’s Fast Fashion King clips Carlos Slim to become world’s third-richest person

  • Amancio Ortega, Europe’s richest man, has become the third-richest person in the world, passing Mexico’s Carlos Slim for the second time this year. The founder of Inditex SA, the world’s largest fashion retailer, has increased his fortune to $68 billion. It’s up 79 per cent since March 2012, when the Bloomberg Billionaires Index debuted. Inditex operates more than 6,600 stores under brands that include Zara, Massimo Dutti and Pull&Bear.
  • Sales at the Spanish company have increased 31 per cent since 2012 to $24 billion in the year ended January 2015. Since Inditex’s 2001 initial public offering, Ortega has received more than $3 billion in dividends and has invested the proceeds in commercial properties in major cities across Europe and the U.S.
  • The billionaire’s performance has eclipsed that of the three other richest people on the planet: Slim, and U.S. billionaires Bill Gates and Warren Buffett. Slim’s fortune has declined 1 per cent, to $67.3 billion, since the index debuted while Gates has increased 38 per cent and Buffett 62 per cent. Ortega has added $7 billion to his fortune since Jan. 1, while Buffett, Gates and Slim have lost a combined $8 billion.

Read more at Bloomberg Business

L’Oreal USA tracks lofty sustainability goals in annual report

  • L’Oreal USA, the largest subsidiary of the L’Oreal Group, reduced carbon emissions by 57 per cent last year.
  • The company’s 2014 Progress report, titled Sharing Beauty With All, attributes the reduction to projects put in place last year to cut carbon impact. One of those projects is a new biomass power plant in its Burgos, Spain, factory.
  • The L’Oreal Group sets lofty 2020 targets in the report that work toward its main goal: ensuring 100 per cent of its products have a positive environmental or social benefit. The company is well on its way to meeting that goal, as the report reveals.
  • Here is an overview of the L’Oreal Group’s progress:
    • 67 per cent of new products that have been screened have either an improved environmental or social profile
    • 46 per cent of new or renovated products have a new formula using renewable raw materials that are sustainably sourced or raw material from green chemistry
    • 54 per cent of new or renovated products have an improved environmental profile
    • 17 per cent of new or renovated products have an improved social profile

Read more at Triple Pundit

SMEs plan to spend average of $30,000 on supply chain software in 2015

  • Software Advice, an advisory that matches SCM software buyers and vendors, found small businesses – with revenues of less than $50 million (£31 million) – are preparing to invest an average of $30,000 (£19,000) on commercial supply chain management software this year. Medium size and large firms will spend an average of $171,000 (£109,000) for new software.
  • The research found that 21 per cent of large firms use supply chain management software, 6 per cent of SMEs do so but this is up from 2 per cent in 2013. Software Advice said software manufacturers were increasingly providing smaller businesses with lower cost solutions and subscription-based services.
  • Software Advice said the software was being used to strengthen supply chains, increase transparency and visibility, harmonise data flowing in and out through multiple channels and eliminate manual tasks, data entry or more complex warehousing operations.
  • The report said supply chain management software could streamline the purchasing workflow. “Procurement systems generally offer multi-currency support as well as tools that can automate purchases and purchasing approvals. These systems can also connect users with vast networks of qualified suppliers – a critical capability for supply chain professionals who are trying to identify the most reliable raw materials suppliers at the best price, wherever they might be sourced from.”

Read more at Supply Management

An action-packed week ahead at The Faculty

It’s grand-final week at The Faculty. The team has been working towards this week for months – there are whiteboards all over the office covered in scribbled plans and brainstorming, the printer has been running almost continuously and the atmosphere here is at fever-pitch. It’s the week of the 8th Annual Asia-Pacific CPO Forum, a 2-day event where we’ll be hosting no fewer than 56 of the region’s top CPOs, with a collective influence over $180 billion spend.

How to be a great boss

But that’s not all. This week will see no fewer than six major events, namely the Future Leaders in Procurement Forum (FLiP) followed by the Future Leaders’ Dinner, the National CPO Roundtable Meeting, the CPO Forum itself, an executive breakfast with The Hon. Jeff Kennett, and the CPO Forum Gala Dinner – the networking event of the year if you want to mix with the who’s who of procurement in the Asia Pacific.

The events run over the next three days, and attendees have been arriving at Melbourne Airport to be greeted by typical May gloom – overcast with a threat of rain, and temperatures dropping as low as six degrees tonight. No matter, though – we’re prepared for the usual witty comments about our weather from Sydneysiders and other delegates from the sunny north, and we have such an action-packed program lined up that there’ll be no thought of stepping outside the event venues until the end of each day.

I’m going to cover the events through a series of blogs, bringing you the big ideas, themes, news and surprises from the next three days. There’s so much happening that it’ll be impossible to cover it all, so I’ll be sending you the highlights, along with the key take-outs from my colleagues and the attendees. Lisa Malone is here representing the team at Procurious, and she tells me to keep an eye on the hashtags #CPOforum15 and #FLiP15 @TheFacultyHQ.

So, what’s happening today?

There are two major events happening concurrently today, catering to two sets of attendees in very different stages of their careers. At Melbourne’s Park Hyatt Hotel, 32 delegates are gathering for the Future Leaders in Procurement (FLiP) forum. Who are they? They’re category managers, procurement analysts, sourcing specialists and other role-holders from organisations all over the region, and as the name of the event suggests, they’re the region’s future leaders of the procurement profession. Nurturing these top-performers and giving them every opportunity to develop their leadership capabilities, define their career paths and expand their professional networks is an absolutely key part of the much-discussed “war for talent”. The very fact that these 32 rising stars are in attendance today is a fantastic reflection on the organisations they represent – these companies have recognised and rewarded their most talented individuals by making the time and resources available for them to attend. That’s a big deal, when you consider the frenetic pace of modern procurement careers and the rare chances we get to come up for air, focus on ourselves and consider what’s ahead.

The FLiP delegates have a huge day ahead. They’ll be learning from some of the nation’s leading CPOs including Keith Bird (QLD Rail), Andrew Ordish (AMP) and Cindy Dunham (Fortescue), along with experts on the human side of being a leader (team-building, trust-building and understanding customer mindsets) – Dave Lourdes (Evolving Human Potential) and Dan Gregory (CEO of The Impossible Institute and a regular on ABC’s Gruen Transfer). Other big names include Holly Ransom (Chief of Staff to the NAB Wealth Chief Executive and one of Financial Review’s 100 Most Influential Women), who will challenge delegates to smash through their comfort zones and practice big-picture thinking. Laurel Papworth (Forbes Top 50 Social Media Influencers and Educator, UNSW) will guide the attendees through the critical role of social media and its power to drive deeper market insights and foster supplier innovation.

Meanwhile, here at The Faculty headquarters, the biggest players in the business are arriving for the National CPO Roundtable Meeting. The Roundtables for Melbourne, Sydney, Brisbane and Perth meet on a quarterly basis, but this gathering is the only opportunity in the year for all 26 attendees to meet as a group. They’re here today because they recognise the immense opportunities offered by networking with their cross-sector peers, the benefits gained from procurement market intelligence and the unparalleled power of collaborative learning. I’m privileged to be sitting in on their meeting today and I’m aware that up-and-coming procurement professionals such as those gathering at the FLiP forum would give anything to be a fly on the wall in this room. In fact, we’re confident that when the time comes, a number of the FLiP attendees will one day take their own places at this meeting, and that’s very exciting.

The CPOs will be sharing their challenges for the financial year ahead and exploring the critical issues facing them individually and collectively. They’ll be hearing from The Faculty’s Founding Chairman Tania Seary on The Big Ideas Summit that was recently such a success in London, and from Braam Uys (Rio Tinto) on his “Iron Fist in a Velvet Glove” approach to supplier relationship management. We’re expecting some provocative ideas to come out of the group discussions, and looking forward to those “a-ha!” moments where one CPO is able to provide a solution to another’s challenge.

Coming together

So, the two meetings today have different agendas but there are certainly some common themes that will be tackled by the two groups – leadership, embedding change, raising the profile of procurement and, most of all, networking. The most exciting part of the day, for me, will come at 4.00pm when the CPOs wrap up their meeting and walk the two blocks to the Park Hyatt to offer the FLiP delegates a CPO Mentoring Masterclass. By this point of the day, the “FLiPpers” will be bursting with new ideas, inspiration and excitement about taking their learnings back to their organisations. They’ll get the opportunity to bounce these ideas off the CPOs, or perhaps seek advice on their greatest challenges, or simply discuss their vision for a stellar career path in procurement.

As exciting as the day ahead will be, I have to keep reminding myself that it’s only a preliminary to the main event ahead – the CPO Forum. But I’ll save that for another blog. The CPOs are coming through the door, so I’m going to get a coffee and settle in to find out what the future holds in store for procurement in the Asia-Pacific.

 

 

 

 

Amazon’s Big Idea: drone deliveries direct to you. What next?!

Delivery to your door? That’s all a bit old-fashioned for Amazon it seems, as their plans for delivering customer orders using drones takes shape.

Amazon plans on sending drones directly to you

The common thought was that Amazon had intended to use their drones to deliver packages straight to the customer’s door, but details of a patent lodged in the USA has opened up a whole new range of possibilities.

From warehouse to hand

The patent, lodged in September 2014 and recently accepted, allowing details to be published, proposes to deliver packages straight to the customer, tracking their location using data from their smartphones.

The delivery option falls under the previously announced ‘Prime Air’, something that Amazon has been developing for a while now. However, it goes much further than most people expected. Using the Amazon app, the customer would select the ‘Bring it to me’ option, and then wait for their package to arrive from the closest dispatch location.

The patent also reveals plans for the drones to be able to communicate with each other, exchanging information on the weather and traffic conditions in the area. The drones will be designed in a variety of shapes and sizes in order to manage packages of different weights and shapes.

And if you’re worried about the drones crash-landing in your cappuccino while waiting outside your favourite café for that must-read book, fear not. The drones will be outfitted flight sensors, radar, sonar, cameras and infrared sensors to ensure safe landing zones are found and to constantly monitor the drone’s path to ensure it avoided collisions with human or animals.

Regulatory Disputes

However, the patent’s acceptance does not mean that US authorities will approve the plans. For a while now, Amazon has been trying to convince the Federal Aviation Authority (FAA) to approve widespread use of drones, as well as allowing them to do further testing and development in the field.

Drones are currently limited to a height of 122m (400ft) and must stay in the pilot’s line of sight. Such have been Amazon’s issues with FAA regulations, that it has conducted much of its testing in Canada. The FAA has also been blamed for the US losing out in drone development, most notably to the UK, where a research centre is being built.

It’s not only the FAA that Amazon needs to convince either. A British Airline Pilots Association survey highlighted that just over half of adults think that drones pilots should have formal training, and that prison sentences should be imposed for endangering aircraft.

New Technology

While Amazon’s patent raises a number of questions about safety and privacy, it’s clearly a major development opportunity for the supply chain and logistics industries. Direct deliveries to an exact location could prove to be a considerable time and money saver, particularly for people in remote locations.

We’d be interested to hear your thoughts on this development. Is it going a step too far? Do you really want to have drones delivering packages to people wherever they are? Is the convenience worth the potential disruption?

Technological advancements were a hot topic at the Big Ideas Summit, powered by Procurious, a couple of weeks ago. From driverless trucks on mine sites, to technological disruptors in the supply chain, we’ve heard some great ideas. But we want to hear your Big Ideas too – find out how to share them here.

To access all the great content and discussions from the event, join Procurious for free today and join the Big Ideas Summit Group.

Meanwhile, here are some of the big headlines making the news in the procurement and supply chain space this week.

Apple wants to be entirely carbon neutral… one day

  • Apple wants to create enough renewable energy to power its entire global business, including its supply chain. Chief executive Tim Cook claimed it would take Apple “years” to realise the goal but said it had to happen.

  • “Apple’s goal is to achieve a net-zero impact on the world’s supply of sustainable virgin fibre and power all its operations worldwide on 100 percent renewable energy,” it said in a statement.

  • The firm already generates enough renewable energy to power 87 percent of energy use in its stores, offices and data centres, but that figure doesn’t include the supply chain. Apple said its supply chain uses 60 times as much power as its own operations.

  • Apple has previously been criticised for the environmental impact of its supply chain, most of which is based in China; regulators in China were said to be investigating two Apple suppliers for toxic dumping in 2013, amid other accusations of dumping by industrial partners.

Read more at Wired UK

Wal-Mart builds Supply Chain to meet e-commerce demands

  • Wal-Mart Stores Inc. is one of a growing number of big-box retailers building out their supply chains with distribution centers designed to meet the demands of online shopping. The company expects to open four such giant facilities this quarter, as it aims to triple online sales by 2018, to $35 billion from $12 billion last year.
  • Building fulfillment centers designed to cater to e-commerce, which demands the ability to handle a large number of small orders, can help retailers conduct more profitable online sales, said Brian Kilcourse, managing partner at RSR Research LLC, a retail technology consulting firm.
  • Each of Wal-Mart’s new facilities will be more than 1 million square feet and hold at least 500,000 items—much larger than its traditional distribution centers for stores, which hold 30,000 to 50,000 items. Wal-Mart opened an e-commerce center in Texas last year, and like that one, the new buildings will use both human labor and automation, such as computer-controlled chutes, to move items.
  • The goal of Wal-Mart’s new centers is to provide a single place stocked with a wide variety of products to get shipments collected and sent faster, a Wal-Mart spokesman said. Ultimately, analytics behind the shopping software will determine, on the fly, the most efficient way to fulfill the order, the spokesman said.

Read more at The Wall Street Journal

Jaguar Land Rover honours supply chain firms

  • Vehicle manufacturer Jaguar Land Rover has recognised its top ten direct suppliers at its inaugural Supplier Excellence Awards.
  • Companies from Corby to Cairo were presented with trophies by actress Joanna Lumley, at a ceremony held in the West Midlands, close to the heart of the company’s UK operations.
  • Ian Harnett, Jaguar Land Rover Director of Human Resources and Purchasing, said the awards had been instigated to recognise the role supply chain firms played in helping the company achieve its goals.
  • A total of 10 trophies were presented for performance in 2014:  two gold, four silver and four bronze.  The awards went to individual plants or facilities, rewarding on-time delivery, continuous quality, accreditation to international and Jaguar Land Rover standards and flexibility to meet the company’s developing needs.

Read more at TheBusinessDesk

New partnership to transform healthcare procurement in Asia-Pacific

  • UK and Australia-based company Healthcare Procurement Partners (HPP) has expanded its Asia-Pacific operations with a contract to deliver cost-savings and process improvements for the largest corporate healthcare provider in Asia-Pacific, Fullerton Healthcare Group.
  • Following an initial program of reducing non-payroll spend for Fullerton Healthcare’s Australian subsidiaries, Brisbane-based HPP will now pursue similar procurement projects in Singapore and Indonesia.
  • While the terms of the Project Fusion contract between HPP and Fullerton Healthcare Group remain commercial-in-confidence,  HPP’s local on-site presence in these key Fullerton Healthcare markets is expected to deliver significant repeatable annual savings by mid-2015.
  • HPP’s Managing Director, Daniel Williams said: “This promotes the transparent exchange of knowledge about how and where to unlock savings and improve cost-efficiencies, locally and more widely,”

Read more at NewsMaker

$349 Apple Watch components cost only $83.70

  • A “teardown” of the product by IHS Technology found the components cost $83.70, compared with the retail price of $349, giving it the lowest hardware costs relative to consumer price of any Apple phone researched by IHS.
  • IHS said estimated component cost to retail price ratios for other Apple products it had reviewed ranged from 29 per cent to 38 per cent.
  • The company said its analysis included manufacturing costs of $2.50 but did not include costs such as logistics, capital expenses, research and development, software and licensing.
  • Kevin Keller, senior principal analyst for materials and cost benchmarking services at IHS, said: “It’s fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost.

Read more at Supply Management

Thinking the Unthinkable – Big Ideas on Supply Chain Risk

How does the bird flu crisis affect supply chains?

2030 may seem like a long way away right now, but if you are planning your procurement strategies, you need to be thinking that far ahead. But what are the unpredictable risks in the supply chain that represent your ‘blind spots’?

As the news broke over the weekend about another avian flu crisis in the United States, North American organisations and supply chains could be forgiven for thinking that they have already had their fill in 2015.

In what is seen as the most significant outbreak of avian flu in over 30 years in the US, 16 states have declared states of emergency and are now quarantining affected farms. At Sunrise Farm in Iowa, one of the biggest farms in America, over 4 million birds will be lost, accounting for over 1 per cent of all the egg-laying hens in America.

Poultry exports are worth over $5 billion to the US economy, but the overall cost, as well as the knock-on effect to businesses further down the supply chain, is difficult to estimate. In Iowa alone, farmers are already predicting losses of $850,000 each, assuming that the outbreak can be contained.

2015 – A Bad Year

And this is just the latest in a long line of supply chain issues that have had a major impact in North America in 2015.

  • Winter Storm Juno – hit the Eastern United States in January, causing record snow falls and transportation disruption
  • Port Strikes – West Coast ports shutdown due to strikes, costing the US economy $2 billion per day
  • Tornados – the Midwest was hit by tornados, causing widespread destruction and killing 2 people

However, it’s not just North America that is seeing supply chain disruption on a greater scale than normal. A ‘once in a decade storm’ hit New South Wales last week, closing roads, cancelling ferries and causing massive disruption.

Unpredictable Risk

While 2015 has been hard on a number of supply chains, these are by no means isolated incidents. Friday the 24th of April was the second anniversary of the disaster at Rana Plaza in Bangladesh. A building collapse killed 1,134 people, the vast majority of whom were involved with making clothing for western markets.

While conditions are improving and better measures are in place to stop something similar happening again, progress is slow, while the demands for so-called ‘fast fashion’ hampers ethical considerations and makes wholesale change difficult.

However, all of these issues, all the risks are outlined above are unpredictable, making it extremely difficult for organisations to protect themselves completely from the fall out.

Protecting the Supply Chain

One of the themes of the Big Ideas Summit will be what procurement’s ‘blind spots’ are. While risks occur in an unpredictable fashion, organisations cannot let them be ‘unthinkable’ and need to understand what could be done in order to mitigate emergent risks.

  • Map your supply chain – know where your suppliers are and where your products are coming from. Where are the potential issues of getting your product from its creation to your end customer?
  • Identify transportation weaknesses – consider the port strikes in America as an example. Where are your products routed through? Can you find good alternatives in the event of a crisis? Is it worth splitting that load now?
  • Calculate costs – if you can understand the potential cost to your business of a failure in the supply chain, then you can use these figures to build support in the business for your plans.
  • Prioritise your risks – is there a particular item that is critical in the supply chain? Know everything there is to know about these items so that you can prioritise correctly.
  • Plan and prepare – Fail to prepare, prepare to fail. This is exactly what will happen if you haven’t spent some time carrying out analysis and understanding where your risks might come from.

There is no such thing as ‘no time’ to do this. The time you spend now may save you time and money further down the line.

Have you got any other suggestions? Can you think of any other ‘blind spots’ that exist for procurement and supply chain? Visit the Procurious Group for Big Ideas and tell us what you think – we’d love to use some of these to quiz our experts later this week.

Meanwhile, here are the other stories making headlines this week.

US Defense sustainability embrace a goldmine for Aussie innovators

  • The US Department of Defense’s multi-billion-dollar Net Zero Fund offers a huge potential market for Australian energy efficiency and sustainability companies.

  • Net Zero is a significant undertaking by US Defense to, in effect, green the military and supply chains. It aims to bring civilian sustainability measures into the defence arena and as the Defense literature states this can be done “while also maximising operational capability, resource and availability and wellbeing”. The funds being made available for Net Zero are therefore to be allocated to improving not just the energy usage of the US military, but also to retrofitting a potential 200,000 installations globally in an environmentally sustainable manner. The value of the installations alone is put at a conservative US$141 billion.
  • This presents a massive potential market for Australian applied research and Australian companies to offer environmentally sustainable solutions and energy efficiency to the US defence industry and the workshops aim to facilitate such contracts…

Read more at The Fifth Estate

Apple Watch: supply chain strain is the new norm

  • This week sees the launch of the Apple Watch. However, with rumours of 1 million pre-orders in one day in the US alone and the firm now pushing estimated delivery times for its product into June, speculation is rife that its supply chain may not be able to keep up with demand.
  • This type of speculation ahead of a big launch is nothing new. Recently Samsung was forced to admit that it may be unable to fulfil the 20 million pre-orders received for the new Galaxy S6 and S6 Edge.
  • Reports indicate that shipping of the product started in the US a week ahead of the April 24 launch date. It is also likely that the company’s procurement leaders have taken the required steps to achieve supply chain agility and where possible, spread risk across multiple suppliers.
  • This ‘supply chain strain’ has become the new norm in the consumer- driven world of high-tech gadgetry, where all eyes are on the newest and most innovative devices. For some companies, the struggle to meet demand is regarded as an endorsement of a product’s popularity. In fact, from a reputational perspective, a stock surplus would probably be more damaging to the company’s brand, than a supply shortage.

Read more at The Telegraph

Could the Groceries Code Adjudicator increased powers change procurement?

  • Founded in 2013, the Groceries Code Adjudicator (GCA) is a supermarket watchdog set up to regulate the relationship between food retailers and their suppliers. Its intention is to ensure the fair treatment of suppliers to reduce their exploitation.
  • We were met with news earlier this year that Tesco is facing a formal investigation by the GCA, after suspicion arose that it breached regulations on supplier contracts. After Tesco overstated its profits, the GCA looked into the supermarket chain and found ‘reasonable suspicion’ that it had breached the code of practice for grocers. It’s not just retailers that have shown unethical treatment of suppliers: world-famous food brand Heinz has come under fire for reportedly doubling the length of time it takes to pay suppliers.
  • The GCA has been granted increased power through new legislation and now has the power to fine retailers up to 1 per cent of its annual UK turnover. That means that the GCA could sting Tesco with fines of up to £400 million. Suppliers may soon enjoy a more equal relationship with retailers and the tough terms that they have previously had to cope with could ease. Food retailers may need to modify how they operate to ensure compliance and the procurement process could well be among these changes.

Read more on Supply Chain Digital

Top-performing supply chains: Pharmaceutical companies

  • Supply Chain Insights studied balance sheet patterns for over 2,000 public companies and shared those results with over 150 executive teams.
  • Progress in driving supply chain excellence in this sector is stalled. The reason? With a growth agenda and intense investment in research and development (R&D), growing regulation, and the building of global capabilities, the last decade has been a time of change for the global pharmaceutical companies. Their progress has not been equal to that in the consumer goods or food and beverage industries. The many mergers and acquisitions among companies in this category have also slowed progress in achieving supply chain excellence.
  • With a focus on both performance and improvement, which company did best? In the pharmaceutical industry, it is tough to judge which company is the leader—that is, who has the best metrics. The company posting the best performance in the portfolio of metrics is AstraZeneca; however, the company is not improving (as measured by the Supply Chain Index for the two periods studied). The companies making the greatest improvement are Biogen Idec and Novo Nordisk. Moreover, most companies in this sector are making progress on individual metrics, but not on the entire portfolio.

Supply Chain Insights: Best pharma companies

Read more on Supply Chain Insights

What are our procurement ‘blind spots’? Register for the Big Ideas Summit and contribute to the discussion with 40 influential thought-leaders and our 5000+ strong Procurious community.

How much are you worth? Average UK procurement salary on the rise

According to The CIPS/Hays Salary Guide and Procurement Insights Report 2015 published last week, the average salary for all UK procurement and supply chain professionals has increased again, and by more than the national average. But what impact will this have in the ‘War for Talent’?

How much are you really worth?

The annual survey, involving more than 3000 procurement and supply chain professionals, looks at salaries and rewards across the profession. In 2015, it found that the average pay award in procurement was 2.5 per cent, considerably higher than the national average of 1.7 per cent.

Top Salaries, No Equality

In real terms, what this means is an average salary for procurement and supply chain professionals of £41,661. When looking at the individual job roles, the average salaries are now:

  • Procurement Director – just over £89,000
  • Head of Procurement – £64,000
  • Category Manager – £42,000
  • Senior Buyer – £35,000
  • Buyer – £27,000

Although salaries are on the increase, there is still a lack of equality between men and women in the profession. At all levels apart from tactical roles, salaries for men were higher than those for women, with the greatest inequality at the advanced professional level, where the difference was as much as £10,300.

The salary also found that professionals who held MCIPS accreditation earned on average 23 per cent more than their peers without the qualification.

Junior Roles on the Rise

What might be surprising to many people is that the biggest annual increase was seen in junior procurement roles. Assistant Buyers gained on average a 4.2 per cent increase in their salaries, while Procurement Directors reported only a 3.3 per cent increase.

The rise in the wages of junior roles highlights an important issue for procurement, even in light of it being one of the fastest increasing professions in the world. A lack of professionals starting in the junior roles means that organisations now have to work harder to attract and retain their employees.

The War for Talent

The ‘War for Talent’, as coined by McKinsey in the 1990s, is still firmly in place in the procurement profession. The number of procurement jobs available has increased significantly, with Hays Recruitment seeing a 40 per cent increase this year alone.

This increase has left many employers struggling to find the right, skilled employees to fill these roles. Of the number of avenues open to organisations when looking to attract new talent to their organisations, social media is one of the most powerful.

Platforms like Twitter, LinkedIn and Procurious can help employers check out potential employees, get to know them in more detail and also be noticed as an ‘employer of choice’ in the industry. But social media is by no means the silver bullet for procurement recruitment. Without new ideas, the work that procurement has done to get to the executive table may be undermined.

‘People’ is one of the key topics at the Procurious Big Ideas Summit on April 30th. Procurious has gathered 40+ of the biggest influencers in procurement and will be getting their ideas on the future for ‘people’ in procurement (among a host of other topics). Join in, ask questions, watch exclusive video content and contribute to all the discussions by here

In the meantime, here are some of the top stories making the headlines in procurement this week.

Exploitative fashion retailers named and shamed

  • Australian fashion companies lack transparency around their supply chain or do not have full knowledge of where their raw materials are being sourced from, leaving workers including children at risk of exploitation, an audit has found.
  • The Australian Fashion Report 2015, launched by  international development organisations Baptist World Aid and Not For Sale, which aims to empower consumers with the knowledge needed to purchase fashion ethically – this year assessed the ethical practices of 219 clothing brands — and found that popular retailers including Rockmans and Lowes are some of the worst offenders.
  • Many brands now produce in Bangladesh, which in recent years has become wildly popular for ready-made garment suppliers and where the wage is approximately $39 a month, 75 per cent cheaper than China.
  • Corporate governance researcher with the University of Technology in Sydney and a researcher with the thinktank Catalyst Australia, Martijn Boersma, said: “For Australia, the bulk of our imports come from the Asia-Pacific region where it is estimated 78 million children are involved in child labour. The deeper supply chains are, the more difficult it is for them to be monitored.”

Read more at Mamamia and The Guardian

Hilton hotels to improve animal welfare in supply chain

  • Hilton Worldwide is to implement new measures to improve the welfare of animals in its global food supply chain. The hospitality company said it would begin to eliminate the use of cages for egg-laying chickens and gestation crates for breeding pigs.
  • All hotels in the Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton and DoubleTree by Hilton brands, will ensure that chickens are not confined in cages by 31 December 2017. By the end of the year after that, all pork products will have to be come from suppliers that house breeding pigs in groups, rather than gestation crates.
  • The changes, announced in conjunction with the Humane Society of the United States, will initially apply in 19 countries and will be adopted in other markets as supply becomes available. Jennifer Silberman, vice president, corporate responsibility for Hilton Worldwide,  said the company was committed to addressing key issues throughout its business and supply chain.

Read more at Supply Management

Internet of Things will deliver US$1.9 trillion boost

  • DHL and Cisco have jointly released a new Trend Report focused on the Internet of Things (IoT) at the DHL Global Technology Conference in Dubai. DHL and Cisco Consulting Services are also collaborating on a joint IoT innovation project that will improve decision-making in warehouse operations with near real-time data analytics based on Wi-Fi connected devices.
  • Ken Allen, CEO DHL Express and board sponsor technology, said: “At Deutsche Post DHL Group we have a deeply held belief in the positive powers of global trade. There is huge potential for countries to further increase their connectedness and prosper through trade, integration and technology. We believe the Internet of Things will be a primary enabler of this transformation.”
  • The Trend Report, which estimates that there will be 50 billion devices connected to the Internet by 2020 compared to 15 billion, looks at the potential impact this technological revolution will have on business.
  • The value at stake, combination of increased revenues and lower costs that is created or will migrate among companies and industries when new connections are made, reveals the huge potential when the Internet and networks expand their connections to warehousing, freight transportation and other elements of the supply chain.

Read more at m2mnow

‘SWL Australia’ opens for business

  • Science Warehouse is a leading provider of on-demand procurement and managed catalogue solutions that deliver purchasing efficiencies and control, spend visibility and drive savings. The Software-as-a-Service (SaaS) solution boasts dozens of clients across the UK public sector including higher education and the NHS, as well as corporate clients in the construction sector.
  • During the past 2 years it’s been developing a presence in Australia, working in partnership with the leading Australian spend analytics provider, Purchasing Index ANZ.  The Charles Perkins Centre (CPC) at the University of Sydney has been live with the Science Warehouse solution since 2014 and has already seen CPC users buying from over 2 million live products.
  • In response to very positive feedback from other potential Australian customers, a new subsidiary (SWL Australia) has been formed with offices in Melbourne.
  • Richard Shine, Science Warehouse Sales Director said – “This is a fantastic opportunity for Science Warehouse to really showcase a market-leading solution.”

Cabinet Office procurement plans almost “perverse” and “draconian”

  • Reaction has been swift to a reported move by the Cabinet Office to include two subtle but radical provisions in the government’s Small Business, Enterprise and Employment Act which could shake-up local government procurement.
  • The Act, which became law last month, is said to contain two clauses which appear to give the Cabinet Office authority to investigate and challenge local authority procurements. The majority of the Act does not affect procurement, but two clauses appear to have relevance.
  • Responding to the bill’s provisions, the ICT leader at one London local authority said, “At a time when we’re looking to devolve spending decisions and empower local communities the Cabinet Office have introduced provisions which could, somewhat perversely, do exactly the opposite. Not sure why these powers were introduced.”
  • The National Outsourcing Association (NOA) has described the proposals as “almost draconian.” Kerry Hallard, chief executive of the NOA said, “Now that the government has the ability to implement measures relating to public procurement as it sees fit, it is imperative that this new power is not used callously.

Read more at Government Computing

Slavery in Supply Chains – A Modern Day Risk

The case of the 550 fishermen freed from slavery conditions in Indonesia (as reported on Procurious), highlights a wider issue of slavery in supply chains across the globe.

Modern slave trade in fast fashion and electronics

We might think that slavery is a thing of the past, or limited to the developing world, but increasingly that’s not the case. A few weeks back, Procurious highlighted the issue of apparent ‘sweatshop’ conditions here in the UK in the fashion industry, where workers with poor English skills are being paid less than half of the minimum wage to produce garments for high street stores.

Not many people realise that the clothes they wear, the mobile phone they use and the food they eat can often come from supply chains where there are conditions of slavery or forced labour. And as demand for products grows, along with the expectation of paying lower prices on the high street, these incidence of these conditions is increasing.

Slavery Bill

The issue of modern day slavery is being given focus at the highest level of government in the UK. The Modern Day Slavery Bill is currently being debated in the UK parliament and is aimed at forcing large companies to disclose the actions they have taken to ensure that their supply chains are free from slavery, trafficking and child and forced labour.

However, there are criticisms that the bill doesn’t cover everything it needs to. According to an article in The Guardian newspaper at the end of March, the current wording of the bill only requires the large companies to report on supply chains which have parts in the UK, or where products are brought back to the UK for sale.

This omission potentially renders the bill powerless to stop UK-based companies profiting from slavery in overseas supply chains, particularly where there are wholly owned subsidiaries in other countries. There are also criticisms over a lack of consistency in reporting, as firms will not be told what to include, as well as how this law would be enforced.

Individual Responsibility

While it will be interesting to watch the debate on the new bill in the UK, particularly as the General Election approaches, there is also an argument for individual and organisational responsibility.

According to CIPS, businesses can take three basic actions to combat slavery in their supply chains:

  1. Understanding and commitment – know what modern day slavery is and commit to taking a proactive role to end it.
  2. Leadership on auditing – engage in rigorous audits of supply chains.
  3. Accountability – be accountable for business relationships and work to eliminate vulnerabilities in supply chains.

As Procurement professionals, we have the ability to influence what is happening in this particular area through our interactions with supply chains and second and third tier suppliers.

  • Putting into place POLICIES to prevent, detect and eradicate modern slavery within their own operations
  • Establishing PROCESSES to identify vulnerabilities
  • PLANNING for situations where corrective action is needed

Supply Chain Risk

So why are we focusing on this? At the Big Ideas Summit on April 30, some of the leading procurement influencers will be discussing Risk and what the ‘blind spots’ are for the profession. In looking ahead towards 2030 and beyond, it’s worth considering that that modern day slavery could still be something that is present in supply chains and something that organisations will have to deal with.

Is this a risk that can be mitigated? Can it be passed on to someone else? From our point of view as procurement professionals, the answer to both of these questions has to be ‘no’. The only way to look at and tackle a risk like slavery is to meet it head on. And this can come down to taking responsibility at a personal and organisational level.

Next time you’re in the shops, think about where that t-shirt was made or where that coffee came from. When you’re dealing with suppliers, do you know what their suppliers are doing? What are the policies you have in place and are you collaborating with suppliers closely enough?

This won’t be solved overnight, but if each individual takes responsibility, then it can be beaten in time.

Have you got any thoughts on supply chain risk and modern day slavery? Why not pose a question to our experts at the Big Ideas Summit on this and see what they think? Get involved at www.bigideassummit.com, join the Procurious Group, or add to the conversation on social media using the hashtag #BigIdeas2015.

In the meantime, here are some of the top stories making the headlines in procurement this week.

Fashion brands make positive strides towards detoxing supply chains 

  • In an update of its Detox Catwalk campaign, which charts the progress by 18 companies, Greenpeace East Asia has listed their achievements and commitments over the past four years.
  • The companies represent 10 per cent of the $1.7 trillion dollar apparel and footwear industry, the environmental campaign group said. Brands including Adidas, Benetton and Limited Brands, the parent company of Victoria’s Secret, were praised for ensuring data on hazardous chemicals in their supply chains is published on the global online platform IPE.
  • C&A and H&M are among brands that have eliminated PFCs, while Levi Strauss, Mango, and Marks and Spencer are among fashion companies working towards the elimination of APEOs and phthalates in their supply chain.
  • However, Nike and Li-Ning were criticised for not doing enough to ‘detox’.

Read more at Supply Management

Is this the biggest threat to Alibaba?

  • JD.com, China’s largest online direct sales company, is set to be the new challenger to ecommerce giant Alibaba. It has announced UNIQLO as the newest international brand to partner with the company by opening a flagship store on its marketplace platform, enhancing its reputation further within the industry.
  • The new UNIQLO flagship store is part of JD.com’s industry-leading marketplace, which is increasingly becoming the platform of choice for both domestic and internationally renowned brands and manufacturers seeking to reach the company’s massive base of active Chinese shoppers. The addition of UNIQLO adds to JD.com’s growing reputation as the go-to destination for shoppers looking for authentic, high-quality goods in a broad and growing range of categories.
  • UNIQLO will also become the first international clothing brand on JD.com’s marketplace platform to warehouse its merchandise in the company’s facilities. By using JD.com’s complete logistics solution, UNIQLO is enabling customers in eligible areas to take advantage of JD.com’s unparalleled same- and next-day delivery service.
  • JD.com is the largest online direct sales company in China. The company operates 7 fulfilment centres and a total of 123 warehouses in 40 cities, and in total 3,210 delivery stations and pickup stations in 1,862 counties and districts across China, staffed by its own employees. The Company provided same-day delivery in 134 counties and districts under its 211 program and next-day delivery in another 866 counties and districts across China as of December 31, 2014.

Read more at Supply Chain Digital

Bulgaria among Top 10 in EU by Transparency in Public Procurement

  • Bulgaria is among the top 10 in the EU by transparency in public procurement and among the top 5 by electronization of the process, according to Economy Minister Bozhidar Lukarski.
  • Citing statistics of the Sofia-based office of the European Commission, Lukarski noted that Bulgaria was among the top 10 in the EU by transparency in public procurement and among the top 5 by electronization of the process.
  • Lukarski vowed that e-public procurement would be universally available in the EU by 2020.
  • He expressed satisfaction that the European Commission had backed the attempts of Bulgaria to boost the development of the country’s northwestern region, the poorest region in the EU.

Read more at Novinite.com

Basware buys UK’s e-procurement network Procserve

  • Basware, a provider of P2P, e-invoicing and network connectivity solutions (and now trade financing as well), said the deal with public sector e-procurement vendor Procserve “significantly strengthens Basware’s position in the public sector, combining Procserve’s UK government experience with Basware’s established global expertise in purchase-to-pay and e-invoicing.”
  • Spend Matters offered their thoughts on the acquisition, saying: ‘It is smart for Basware to use its appreciating currency and balance sheet to acquire volume, but also to purchase technology that could potentially be used elsewhere in its solution portfolio (outside of just targeted efforts in the UK public sector).
  • ‘On a comparative basis, Basware has continued to struggle to date on the e-procurement side of P2P, and while Procserve has focused on the UK public sector, there might be elements of the solution that architecturally and on the product-level could improve Basware’s overall capabilities to more effectively compete against providers like Coupa, Ariba, SAP and Oracle on a global footing for integrated P2P deals.’

Read more on Spend Matters UK

4 technology trends we’ll tackle at Big Ideas 2015

4 technology trends for 2015

New innovations in technology have the potential to transform supply chain management, whether that be through streamlining inventory, improving accountability, or providing your existing operations with a shot in the arm… But it’s a tough job to constantly stay ahead of the curve – how are you supposed to know if the trend you’re picking is going to be a winner, and not just some flash-in-pan?

At the Procurious Big Ideas Summit on April 30, Oracle’s Tim Hughes (along with other industry experts) will explain the current state of play and give Procurious’ digital delegates an insight on what’s to come next.

Today we’re climbing into our driverless cars and talking all-things Tech. Here are four big tech trends that have the potential to drastically change the face of procurement forever.

  1. Big Data

We are a society of data producers and like it or not, our entire digital activity is being carefully monitored and recorded. In 2013 Facebook was recording in excess of 4.5 billion ‘likes’ everyday. That number has likely skyrocketed since. Interactions like this and billions of others across the globe are being captured, stored and utilised to build a more accurate picture of how we behave and interact with our environment. So far, so Orwellian. Big Brother is always watching.

But we shouldn’t fear this omnipresence… Big data has already been utilised successfully to track the spread of disease, predict election results and assist in emergency management situations. For procurement professionals big data can be harnessed to forecast market trends, understand supplier risk, identify new savings, create collaboration with suppliers and understand how environmental factors could impact supply.

  1. Apps

Despite early adopters integrating mobile technologies into their business processes over the last five years – the mobile business sector is only just starting to find it feet. Apps have surged to prominence in recent years with mobile web users spending a staggering 86 per cent of their browsing time in apps, opposed to only 14 per cent in traditional mobile web browsers. With the gap between these statistics widening year upon year, the age of the app is well and truly upon us.

We’ve become so accustomed to checking our phone in our personal lives; it should come as no surprise that more importance is being placed on the mobile in our working lives too.

As workplace apps reach new levels of capability and maturity we can expect to see procurement teams leveraging mobile devices to better streamline tried and tested (but sometimes archaic) processes. How about approving purchase orders for offsite staff on the fly? Utilising cameras for receipt and barcode scanning in warehouses? Generating real-time reports on the go, or utilising GPS positioning to understand precisely where is inventory is flowing? These suggestions are only the tip of the iceberg…

  1. The Sharing Economy

Thanks to companies like Airbnb, Uber, Hassle and Netflix we are seeing a fundamental shift in the way consumers pay for products. No longer do we ‘buy and own’ products – instead we’re borrowing and renting with a much higher frequency.

These changes in the way we consume films, taxis and hotel rooms are being reflected in the corporate world as more firms look to leverage ‘pay-as-you-go’ ownership models. This is a structural change in purchasing habits that procurement managers will likely have to manage more frequently in the future. We’ve already seen an emergence in the IT procurement space with the prominence of cloud computing and software as services, the big question is – which spend categories can we turn our eye to next?

  1. Social Media

Clearly, this point is close to our heart at Procurious. Social media has well and truly embedded itself in our personal lives and its importance is starting to be realised in our professional lives as well.

In 2014 the number of Internet users worldwide stood at a colossal 2.4 billion. 2 billion of those were also frequent social media users.

On Twitter more than 500 million tweets are sent in a single 24-hour period, meanwhile two people sign-up to LinkedIn every second, and 50,000 job applications are submitted over the course of a day. Every one of these statistics is astonishing in isolation, but it’s not just the big boys that are dominating our social habits – specialist vertical networks such as Spiceworks (for IT pros), OilPro (for oil and gas professionals), and Procurious are starting to find their own followings.

In-fact many of the large ERP’s (SAP, Oracle, IBM Emptoris etc.) have already integrated social media technology into their standard offerings. The strategic importance of this technology is illustrated by SAP’s acquisition of Ariba and recently Fieldglass.

While you often think of social media as a place for just sharing compelling content, short and snappy anecdotes, and authentic stories, it’s actually much more than that… Procurement and supply chain professionals are already well accustomed to working globally, often in a virtual team environment with cross-cultural suppliers and stakeholders.  Social media actually makes this process easier by facilitating networking, strengthening the sense of personal brand, and providing the collaborative tools to facilitate more effective work. Along with ongoing advancements in Cloud technology, social media certainly has a very important role to play in the future days of procurement.

What’s your Big Idea? On 30 April, Procurious will host a world-first cost leadership think-tank at The Soho Hotel in London that will be amplified to our 4500 members across 100 countries through a mixture of videos, interviews, social media and feature-writing. Discover more at www.bigideassummit.com, join our Procurious group, and Tweet your Big Idea using #BigIdeas2015

The Easter Supply Chain – Optimisation and Collaboration

Did you over-indulge at the weekend? Did all the kids’ Easter eggs make it to the Sunday morning Easter Egg Hunt? Whether your Easter delicacy of choice is the humble egg, sweets like jelly beans and marshmallows, or something more like a Spanish torrija, you may not realise the complicated supply chain that is required to help the Easter Bunny complete his deliveries.

easter-eggs-637110_1280

 

In the UK, Easter sales of chocolate make up 10% of the figures for the entire year. According to the National Confectioners’ Association in the USA, around 70% of the Easter sweets purchased are chocolate, which works out to a whopping $2.1 billion spend.

And it’s not just the confectionary market that will see an increase in sales over the Easter period. According to a survey by Evans Distribution Systems, $2.9 billion will be spent on clothing and fashion, while a combined $2.7 billion will be spent on flowers, greetings cards and decorations.

Delivering all this chocolate, sweets and other items to stores requires a mammoth effort from logistics organisations around the world. Shipping efficiency, customer location, order quantities and supply chain management all have to be reviewed in order to keep up with the demand.

In the USA, Hersheys opted to optimise their supply chain around the elements of customer geographical location and grouping stock-keeping units with product groups. It is estimated that by doing this, and using off-the-shelf software, the organisation has saved itself in excess of $15 million per year.

Just Born, a confectionary manufacturer who are responsible for America’s favourite non-chocolate treat, the Peep, changed their supply chain strategy in order to cope with the huge demand for their products at Easter.

The organisation now uses distribution centres and 3PL to break bulk orders for more efficient delivery to retailers. Just Born also shares these centres with other organisations, with this collaboration further reducing the costs associated with deliveries.

An increasing use of technology for inventory management and planning is making life easier for organisations too. Barcodes can be used to manage inventories more efficiently, while also allowing for real-time tracking of stock at both distribution centres and retail outlets.

Further advancements in technologies such as ERP and MRP systems will allow organisations to further increase efficiencies, while increased collaboration will benefit not only the whole industry, but also the consumer.

So just remember, the next time you crack open that chocolate egg, there’s more than a simple process required to get it from manufacturer to shelf (and that’s before the Easter Bunny gets involved!).

If you have any ideas about the technologies being used in procurement and supply chain, or any advancements that could make a difference in the profession, let us know and we’ll add it to the discussion at the Big Ideas Summit. Or why not tell us by joining our Procurious group, or Tweeting your Big Idea using #BigIdeas2015.

Read on for the big procurement and supply chain headlines making the news this week.

Jamaican Government to spend $51m on eProcurement

  • The money will be spent on its electronic procurement system to strengthen its public procurement for purchasing and tendering agencies and suppliers.
  • The purchase will enable all of these activities to be automated and integrated in a single portal.
  • Just over $31 million will go towards the hosting server and electronic procurement system, scheduled to be in place by July.
  • Other amounts include $1.47 million to be set aside for training, $575,000 for a final project evaluation and a project audit costing of just over $1 million.

Read more at Supply Management

Advanced announces place on NHS SBS procurement framework

  • Healthcare software provider, Advanced Health & Care, has been named as an approved supplier on the NHS Shared Business Services (NHS SBS) Healthcare Clinical Information Systems framework.
  • Advanced is one of 26 suppliers to have been chosen for the framework
  • The new framework, which has been divided into six lots, is valued at up to £1.25 billion.
  • It will operate for four years with a potential two-year extension and is free for any NHS organisation to access.
  • The aim is to offer providers a more cost effective means of procurement when tendering for healthcare systems.

Read more at Shared Services Link

Businessfriend – a new way for execs to do business

  • Businessfriend was one of the new technologies that had been launched at the International Consumer Electronics Show in Las Vegas
  • The app allows multiple networks and platforms to be pulled together into one place, decreasing the time taken to manage all of them
  • It has already been described as “Facebook meets LinkedIn, with a little of Office365 sprinkled in there…”
  • The programme boasts up to 2 gigabytes of free cloud storage, video chat, instant messaging, as well as adaptability to contract management systems that can be linked up into the functionality

Read on at Supply Chain Digital

Companies focusing on supply chain innovations in food and beverage industry

  • Organisations are looking to their supply chains in order to find success in food and beverage
  • Mondelez, Diageo and Nestle are just some of the big names looking at their practices to find new innovations
  • These include reduction of packaging, commitment to sustainability and reducing waste
  • It is hoped that more will follow suit when the savings from these activities become clear

Find out more at fooddive.com

Why we’re talking managing talent at Big Ideas 2015

4 ways of attracting new talent

On 30 April Procurious is gathering the Procurement world’s most influential minds for a discussion on the future of the function. The Big Ideas Summit will take place physically in London, but will be made available to attend digitally across the world through Procurious.com.

We’ve identified risk, technology and talent as three areas that will play a critical importance in the future development of function. In order to address these important areas and provide some background into the discussions and debates that will take place on the day of the summit, we have dedicated a series of blog posts on these topics. Keep your eyes peeled for our overview of technology and risk, but…

Today we are talking talent

In this piece we’ll be highlighting some of the high level trends that are impacting the way procurement teams manage talent. Be sure to stay tuned to Procurious as we’ll be deep diving into each of these topics over the coming weeks.

Hiring is up!

According to LinkedIn (which is quickly becoming the world’s largest recruitment organisation) firms will be looking to hiring more people in 2015, and will have a higher budget to do so. A survey run by the social network suggested that 63 per cent of recruiters will have a higher hiring volume in 2015 than in 2014, and that 46 per cent of recruiters will have a higher budget over the coming year (up from 28 per cent in 2013).

The rise of Intrapreneurship

Intrapreneurship is a term popularised by Howard Edward Haller in in the late 70’s. So, while the concept is not new, it’s certainly seen a revival in recent years.

The practice of intrapreneurship involves bringing an entrepreneur-like mind set and business practices to a larger, more established organisation. The rise in intrapreneurship has been attributed to increased competition in traditional markets from smaller more agile organisations. Larger organisations are realising that in order to remain competitive they need to innovate… Enter the Intrapreneurs.

The war for talent

Would it surprise you to learn that procurement is one of the fastest-growing professions in the world? Our increasing demand for talented professionals is outstripping supply. Procurement also competes for talent. We compete with other functions and other business. If you don’t have a sound talent acquisition and retention strategy you’ll be left behind.

As a consequence we have seen salary inflation and a lot of bad hires. It is a candidate-centric market.

One area that procurement teams may be missing a beat on is the art of attracting passive talent. LinkedIn suggests that while 75 per cent of potential candidates are passive in their job search (meaning that you have to go and find them) only 61 per cent of organisations have a strategy for attracting passive candidates.

Social Media

Discussion at the Big Ideas Summit will also focus around the critical and growing role that social media is playing in attracting and retaining top talent.

Social media can be utilised by firms to not only list job postings, but also to represent a business’s mission and value (which can be vital to attracting talent) and to evaluate the cultural fit of potential candidates.

The labour market is tightening, which means the need to engage, retain, and up skill your existing resources is growing.  The participatory and collaborative nature of social media is inherently suited to peer-to-peer learning which is both highly effective (learn real life lessons from subject matter experts), accessible (it can be accessed across multiple devices at a time convenient to the learner) and extremely cost effective (Procurious, for example, is currently offering the entire suite of online learning modules free to members for a limited time).

Social media also offers candidates a unique opportunity to elevate their personal brand as well as the profession. As a platform it is the perfect tool to share knowledge, ask questions, engage in discussion and spread influence.

As we get closer to Big Ideas Summit 2015 we’ll explain how you can use social media to both attract new talent, and up your own networking game.

What’s your Big Idea? Discover more at www.bigideassummit.com, join our Procurious group, and Tweet your Big Idea using #BigIdeas2015