Category Archives: Procurement News

Cracking-down on Africa’s illegal Ivory trade

Get your weekly fix of the biggest news stories affecting the supply chain world, procurement profession, and sustainable businesses.

Africa's illegal ivory trade

Focus on supply chain to tackle illicit ivory trade

  • The Born Free Foundation is calling on enforcement agencies to tackle the illicit trade in ivory by addressing the supply chain behind it. The charity has produced a report detailing the supply chain behind the trade, which involves a complex network including poachers in Africa, freight forwarding companies, corrupt port officials and organised crime syndicates.
  • The report, called Out of Africa, said: “Disproportionate attention is currently being paid to the beginning and end of the ivory supply chain, on tackling poaching through deterrence, and on reducing the end-demand by re-educating consumers.
  • “Both are extremely important, but also extremely difficult, especially in the short time frame available. Disrupting the intermediate sections of the supply chain, however, is likely to be a more tractable intervention.”
  • The report said between 2009 and June 2014 170 tonnes of ivory had been seized, that assuming a 10 percent interception rate was equivalent to the deaths of almost 230,000 elephants. Ivory is collected in the bush at $50 to $100/kg (£30 to £60/kg), sold wholesale at $2,100/kg (£1,300/kg) and then retailed in the millions.

Read more on Supply Management

Aerospace groups voice concerns over supply chain

  • Some of Britain’s smaller aerospace companies have expressed concern that capacity issues in the supply chain could derail the big aircraft makers’ ambitious plans to step up production of passenger jets.
  • The thousands of companies that make up the UK’s aerospace supply chain are at present benefiting from the launch of an unprecedented number of new aircraft and engine programmes under development in the industry simultaneously.
  • “There is definitely cost pressure and that’s coming now with the challenge of volume that is there,” says Craig Gallagher, chief executive officer at MB Aerospace, a key supplier to aero-engine manufacturers, such as Rolls-Royce.

Read more at FT.com 

Water scarcity a challenge to cotton supply chains

  • World Water Week kicked off in Stockholm on 31 Aug, and with it increased attention on putting increasingly limited water resources to better use.
  • Water scarcity poses a potential risk to the global cotton industry, and the apparel supply chain is being urged to do more to tackle the fibre’s huge water footprint.
  • Cotton is one of the largest and thirstiest crops produced – accounting for around 2.5 per cent of all available arable land and more than 3 per cent of the water consumed across all crop production.
  • The world is likely to face a 40 per cent global shortfall between forecast demand and available supply of water in the next 15 years.

Read more on Just Style

Arcadia entertains supply chain overhaul

  • Arcadia is continuing on its quest to overhaul its IT systems, this time announcing a contract that, it is hoped, will speed up and improve its supply chain overhaul.
  • The retail group, owned by Sir Philip Green, has started a multi-million pound migration to a new supply chain system and is working with suppliers including Oracle and Manhattan Associates.
  • The retailer has employed a testing partner to help make sure its new supply chain systems are glitch free by the time they go live. The challenge is made more complex by the fact that Arcadia operates several brands, including Topshop, Dorothy Perkins and BHS.

Read more on Retail Week

Hospital food

Hospitals must adopt food procurement sustainability plans

Read more on Supply Management

Apple iPhone 6 screen delay leaves supply chain scrambling

  • Suppliers to Apple are scrambling to get enough screens ready for the new iPhone 6 smartphone as the need to redesign a key component has disrupted panel production ahead of September’s expected launch, supply chain sources said.
  • It is unclear whether the hiccup could delay the launch or limit the number of phones initially available to consumers. But the issue highlights the risks and challenges that suppliers face to meet Apple’s tough specifications, and comes on the heels of a separate screen technology problem, since resolved, in making thinner screens for the larger iPhone 6 model.
  • Cupertino, California-based Apple, has scheduled a media event for Sept. 9, and many expect it to unveil the new iPhone 6 with both 4.7 inch (11.94 cm) and 5.5 inch (13.97 cm) screens – bigger than the 4 inch screen on the iPhone 5s and 5c.
  • In addition: the Cupertino company’s long-rumoured ‘iWatch’ may not ship until 2015 according to recent rumblings.

Read more at Supply Chain Digital

High risks and high rewards: dangers of low-cost sourcing

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

This blog concentrates on international sourcing activities and the trends and pitfalls of this high risk and high reward strategy.

Apple and Nissan

You may have heard lots of talk over the last couple of years about reshoring or nearshoring. Basically this means goods and services that were previously bought from international environs are now being purchased more locally. Several reasons for this, one you can only have a supply chain as long as your forecast is accurate (i.e. if you can forecast your requirements a week in advance, your supply chain must be about one week – otherwise we are into the world of safety stocks- amongst other things)

Several notable organisations have decided on this strategy for a number of reasons:

  • Politics, energy costs, supply chain inefficiency (GE & Apple)
  • Risk Reduction (Nissan)

All in all what this means is that CPOs are looking at all the elements of cost – the total cost of ownership (TCO) -rather than just a few costs in the quest to achieve corporate objectives. Some US States are hosting reshoring workshops in an effort to drive more of these initiatives. I’m not sure if it’s a trend as yet but it could be.

Of course sometimes these strategies go badly, badly wrong.

On the subject of low cost sourcing I read an interesting article from Jim Kiser about a client he had advised about a low cost sourcing initiative for resins. Essentially he states that the lack of work done upfront meant that the initiative created a blind spot for procurement. Namely:

  • No planning discussions around contract areas needed, payment terms, exchange rates, shipping, capacity of product, quality assurance, and so forth.
  • Not understanding the supplier’s financials, this was an Asian supplier and no records were accessible, it was a privately held supplier and only there was only one location from where the product was derived.
  • Analysing other countries for suppliers that could provide this material and a good landed cost.
  • No planning on a bonded warehouse arrangement overseas or at home for forward inventory control or capacity needs.

I think that these (amongst others) are good thoughts for any sourcing plan.

I was recently asked to give a presentation to a group of CPOs recently about culture within organisations and how does procurement influence and be influenced by it.

In preparing for this presentation I remembered a great quote from Peter Drucker, in that “culture eats strategy for breakfast” and therefore the need to ensure cultural alignment with suppliers is highly important (read my previous article on supplier selection). It’s a topic of huge interest to me. We live in a multicultural society and understanding cultural impacts in decision making is imperative.

Recently Harvard business review published a link to a simple cultural tool, it’s easy to take and makes for interesting reading when you analyse the results.

The profile test suggests that to get an accurate picture, you need to gauge cognitive, relational, and behavioural differences where cultural gaps are most common—and to assess yourself in those areas.

There are two other notable researches on country culture that are worth understanding if you are sourcing internationally as part of understanding risks.  See The Hofstede Centre and Journal of Cross-Cultural Psychology

You may also consider that as organisations are now more international, the heritage of the company may be as important as the country in which they are operating in.

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

Procurious’ eye on the news

Brazil nuts

Nestle looks to improve animal welfare

Nestle have pledged to improve animal welfare in their supply chain. The organisation has teamed up with World Animal Protection, the first major food organisation to do so, to improve standards and hold suppliers to account for practices such as battery farming, force growing, etc. and force them to improve welfare standards.

Nut prices go nuts

Nut prices in the supply chain for hazelnuts (52 per cent year on year increase) and coconut (74 per cent year on year increase) have shot up due to adverse weather conditions in Turkey and East Asia respectively. However, prices for both almonds and Brazil nuts have dropped from highs earlier in the year as production issues have been eased. (Just as an FYI – the largest producer of Brazil Nuts…Bolivia!)

Glasgow seeks next procurement superstars

City of Glasgow college has launched procurement and supply chain apprenticeships to encourage young people into a career in the industry. The apprenticeships will aim to replicate experiences in a real working environment and the curriculum has been developed, and is updated regularly, with help from procurement professionals.

Read more on all these stories over at Supply Management

Australia and Indonesia agree on cattle and beef sales

Australia and Indonesia have signed an agreement on cattle and beef sales to increase Indonesian food security. Australia are expecting a 77 per cent increase on levels of shipped live heads of cattle (currently 395,000 p/a) this year and will commit to providing proven breeds of cows, improvement in Indonesian abattoirs and redesigning of cattle transport ships.

Read more at Global News

And finally: let’s talk about online shopping…

Here’s a really interesting blog on why online retail isn’t the goldmine people think it is.

Read more on HBR

The great Cuban beer crisis of 2014

Oh where O my beero?

Cuba has run out of beer

If you’re popping open a can of ice-cold refreshment this weekend, spare a thought for the beer-deprived people of Cuba. The combination of a hotter-than-average summer and a shortage of malt barley has resulted in a perfect storm…

Cuba’s largest brewery – Bucanero, was said to have suffered from delayed imports of malted barley during the months of Jan-April. This shortage led to a sharp fall in production, and numbers haven’t been enough to sustain a healthy supply chain in what’s been Cuba’s third-hottest summer since 1951.

Bucanero produces four of the island’s main beer imprints, namely: Bucanero, Cristal, Cacique and Mayabe.

As a joint venture between the Cuban state and brewing giant Anheuser-Busch InBev – you could say Bucanero has something of a monopoly on beer in Cuba.

Cuban woman and dog
“Nope, no beer in here…”

Demand for beer has far outstripped supply, bringing vastly-inflated prices with it, as eager drinkers scour the island for the last remaining dregs. In-fact, figures revealed that Bucanero produced just 55 per cent of the expected output during the affected period. Other imported beers were said to be available to the thirsty hordes, but Cuba’s ‘paladares’ (private restaurants) have been quick to take advantage of the dry-spell.

Hip hops

Meanwhile in the United States: the hop industry is struggling to keep up with surging demand from the craft brewing community.

The average price for hops has grown from just $1.88 a pound back in 2004, to $3.59 in 2013. But craft brewers use more of the hoppy stuff than traditional breweries (1.25 vs 0.2 pounds), thereby putting a strain on hop supplies.

Supply chain risk drops to 18 month low

Enjoy this week’s news bulletin on your chemical-free Apple device, while enjoying a bowl of cornflakes, before washing it all down with some refreshing coconut water.

Popularity of coconut water

The rise and rise of coconut water

  • Once the drink of exotic holidays and childhood funfairs, coconut water is now the de rigueur beverage available in food emporia, bodegas and hotel minibars from New Delhi to New York. Indeed, in North America – the biggest global market for coconut water today – sales of the top three most popular brands went from almost zero in 2004 to nearly $400m by 2013.
  • Yet far from lifting coconut farmers out of poverty, we’re left in a situation whereby farmers receive about $0.12 – $0.25 per coconut and earn anything between $72 – $7,000 a year, according to Fair Trade USA. In contrast, the average serving of coconut water sells for $1.50 in the US, or £1.85 in a UK supermarket for a 330ml carton.

Apple bans hazardous chemicals from supply chain

  • Tech giant Apple has banned the use of two hazardous chemicals in its production line, after investors urged the firm to better protect the workers in its supply chain.
  • The firm announced in a statement this week that benzene and n-hexane would no longer be used in its production plants, though it insisted it had found no evidence that workers had been harmed.
  • In an open letter to Lisa Jackson, vice-president of environmental initiatives at Apple, investors, asset managers and businesses therefore demanded that Apple eliminate all dangerous chemicals from its supplier factories. The campaign group Green America also launched a consumer petition, urging Apple to better protect Chinese workers.

Read more at Blue & Green Tomorrow

Read the full feature on The Guardian’s Sustainable Business pages

Kenya eyes e-procurement system to curb corruption

  • In a move expected to curb corruption and improve transparency in Kenya’s public procurement, the Kenyan government has unveiled a landmark electronic procurement and payment system.
  • The system, e-procurement, was launched by President Uhuru Kenyatta with the promise of helping the Government eliminate middlemen and corruption in its much-tainted procurement process.
  • It is estimated that weaknesses in public procurement, including vulnerability to corruption, are a global problem with approximately KSh34.9 trillion reported as being lost to bribery and corruption in procurement globally.
  • Deputy President William Ruto said: “The system is significant as it will eliminate gatekeepers, middlemen and brokers who have made procurement a nightmare.”

Read more on East African Business Week

Kellogg’s says it’s crunch time for supply chain emissions

  • Cereals giant Kellogg’s has announced that it wants suppliers to disclose greenhouse gas emissions as part of an ambitious package of new environmental targets.
  • The manufacturer of brands such as Corn Flakes and Pringles unveiled its Sustainability Report featuring new goals for 2020 to expand the use of low carbon energy, reduce water use and eliminate waste, alongside a commitment towards more responsible sourcing of the company’s top 10 ingredients and materials.
  • A Climate Policy statement also outlines how Kellogg’s will for the first time set and disclose a greenhouse gas reduction target for its entire supply chain by the end of December 2015, using a science-based method consistent with the goal of keeping global temperature increases below 2 degrees Celsius.

Read more on BusinessGreen

Cases of ebola fever in Africa from 1979 to 2008.
Cases of ebola fever in Africa from 1979 to 2008.

Ebola outbreak and Ukrainian conflict have little effect on supply chains

  • Geopolitical and major disease risks have had less effect than widely believed on the world economy, with supply chains at their least risky levels for a year and a half.
  • According to the Chartered Institute of Purchasing and Supply (CIPS), supply chain risk dropped to an 18-month low in the second quarter of the year, having fallen for three quarters in a row.
  • The CIPS index attempts to take account of economic, social and political factors.
  • However, the group believes that there may be something of a downturn in the second half of the year, especially given the risk of an increasingly violent conflict in eastern Ukraine and frostier western relations with Russia.

Read more on City A.M.

Americans to manage MoD military procurement

  • Unions and industry insiders are up in arms because two US engineering companies have been asked to oversee the way in which the Ministry of Defence runs the £14bn arm that buys military kit.
  • The Independent can reveal that San Francisco-based Bechtel and Denver’s CH2M Hill have bagged the programme management contracts for the Bristol-based Defence Equipment and Support (DE&S). This agency buys and looks after everything from forklift trucks to Astute class submarines, but is being overhauled by the Government so as to get better value for the taxpayer.
  • Sources said around half of these experts will be flown in from the US. This would cost around £5m more than just using British staff, with the remuneration including food and accommodation expenses.

Read more on the Independent

Don’t forget you can register to receive daily Procurious news-alerts using our brand-new News service.

Bite-size procurement takeaways for the time-poor

Gordon Donovan provides his insights into procurement-related articles and news stories.

I am a principal consultant with The Faculty a management consultancy specialising in procurement. I have been involved with the profession for 25 years as a practitioner, consultant, trainer and coach. I am passionate about procurement, and am one of the few that made a conscious choice to go into procurement. It was a choice made when I witnessed my father (who was a sales manager for many years) dealing with buyers –  and I thought I’d much rather be on the other end of that conversation. In later years it made for some very interesting dinner conversations…

Gordon Donovan on procurement

In this blog series I will trawl the news and provide you with my personal procurement take-aways.

First up is an article I found on LinkedIn on why the supplier selection process is dying [read it here]. It is written for selecting marketing or creative agencies, but I think its just as relevant for selection of any strategic supplier of goods and services.

To summarise it suggests that the “traditional way” of selecting (RFI, Shortlist, RFT, Shortlist, Presentation/trial, Award) isn’t working and fails to find a supplier that’s best suited for the organisation about 50 per cent of the time.

This reminds me of an article written some time ago which stated that 80 per cent of the things we buy are from distorted supply markets, yet 80 per cent of the tools we use are for competitive markets.

Don’t get me wrong, I think that RFT/P/Q are great tools, but we should use them where they are the most effective, or at least do some groundwork to ensure that they are effective when we use them. They rely on competition (or the illusion of competition) to be successful. The worry for me is that ignore can be bliss; we don’t really know when we don’t get the value unless our preparation is good enough.

Talking about preparation brings me to the second article that caught my eye. This is for a podcast I subscribe to by AT Kearney (yes it’s a procurement podcast, don’t judge me!)

Download ‘Wave of the Future’ from iTunes

This episode is all about why Googling isn’t enough. It hits a nerve with me as I hear a lot of my workshop delegates chime “well we will just Google it”.

The podcast says that while Google has made things quicker and simpler, it doesn’t give you the breadth or depth of information that you really need to fully understand supply markets.

According to ATK, 60 per cent of information is in commercial online databases. Some tips provided within include:

  • Use the advanced search feature rather than the vanilla search. Click the cog icon to select this mode.
  • Disable the personal settings. As a default it will look at your previous searches and location and customise the results – especially useful if you’re trying to source a supplier from overseas.
  • Compliment with other more traditional methods (such as interviewing subject matter experts.
  • When reviewing a web site think about who wrote it, for whom and why.

Finally, I came across an interesting article from Mckinsey about different sourcing strategies.

It’s not ground-breaking but contains some interesting insights.

My main takeaways are:

  • The vast majority of onshoring initiatives were in manufacturing.
  • A two-thirds decline in the US price of natural gas since 2008 is attracting some manufacturing industries that use gas as direct fuel or feedstock.
  • Strategic offshoring of IT and business processes retains the promise of reducing costs, hedging production risk, and increasing access to talent by employing a network of offshoring locations.
  • American International Group (AIG), is moving ahead with the creation of nearshore centres in multiple regions.
  • Many companies are discovering that sourcing decisions cannot simply be made based on the notion that ‘noncore’ business activities can be offshored.

I trust that you find these articles and insights useful, and if you wanted to discuss please feel free to contact me via Procurious, join my network, or follow me on Twitter @gdonovan1971

7 stories you might have missed

Thirsty for news? Lucky for you we’ve prepared a liquid lunch for your pleasure. So pop-back that ring pull, fill that glass with ice, and drink-in our weekly news update.

Coca-Cola supply chain

Coca-Cola pledges $5bn investment

  • The Coca-Cola Company and its African bottling partners announced a new investment of $5bn during the U.S.-Africa Leaders Summit in Washington.
  • The investment, to be made over the next six years, increases its total announced investment in Africa to $17bn from 2010 to 2020.
  • The Company and its bottling partners anticipate that this investment will fund new manufacturing lines, cooling and distribution equipment and production; create additional jobs and opportunities across Coca-Cola’s African supply chain; and support key sustainability initiatives and programs focused on safe water access, sustainable sourcing, women’s economic empowerment, community well-being and operational efficiency improvements.

Read more by Coca-Cola Company

KFC’s Indian ambitions hit by quality-control issues

  • The fast-food chain is already China’s biggest restaurant operator with 4600 outlets, but it appears that opening 2 new stores a day is beginning to take its toll – especially when it comes to quality-control.
  • KFC is reeling after a Chinese supplier was accused of selling expired beef and chicken to it, McDonald’s and possibly other restaurant chains.
  • “On the supplier side, people are not well-trained, or there is not good oversight,” said Ben Cavender of the China Market Research Group. “On the restaurant side, they have people checking the products, but they probably don’t have enough people who are spending enough time at the supplier sites.”

Read more on USA Today

APICS, Supply Chain Council merger completed

  • APICS has announced that it has completed its merger with Supply Chain Council, creating a global provider of supply chain research, education and certification programs.
  • “As APICS and APICS SCC, we now have the resources to ensure supply chain organizations are ready to address two of the most important topics in the global economy today – elevating supply chain performance and developing supply chain talent,” said Abe Eshkenazi, CEO of APICS.
  • The merger creates a global leader in supply chain solutions, poised to benefit members, customers, partners and employees in several ways.

Read more about the merger on Supply Chain Brain

Kimberly-Clark releases sustainability report

  • When it comes to sourcing, Kimberly-Clark has set lofty goals. The target is to source 100 per cent of its wood fiber from suppliers who have achieved third-party certification of their forestry activities by 2015.
  • A 2016 target is to achieve 100 per cent chain of custody certification. All of the Kimberly-Clark tissue mills in North America and Europe are already chain of custody certified.
  • The company also achieved a 26.4 percent reduction in water use in manufacturing in 2013, beating its 2015 goal of 25 per cent. Further reductions can be observed in areas such as greenhouse gas emissions, and energy use.

Read more on TriplePundit

World Bank’s procurement process to undergo reform

  • Under the changes a one-size-fits-all methodology will be replaced with a more tailored approach, with procurement made more “fit for purpose”. Christopher Browne, the bank’s CPO, said: “We’re making World Bank procurement fit for the future.”
  • The new framework introduces sustainability, use of procurement systems other than the World Bank’s, engagement with strategic suppliers and a more streamlined approach to complaints.
  • The bank has a procurement spend of £26 billion a year but its current procurement processes were established in the 1970s.

Read more on Supply Management 

Supply chains becoming increasingly vulnerable to cyber attacks

  • While natural disasters such as earthquakes, tsunamis and flooding have disrupted supply chains around the world, cyber attacks pose even greater risks as companies rely more on computers and the Internet to conduct their business.
  • Companies need to be keenly aware of their cyber and supply chain risks as well as the limits of cyber, business interruption and general liability policies when buying insurance.
  • “Supply chains, especially critical infrastructure supply chains, can potentially be very vulnerable to hacking and malware attacks and, depending upon the attacker’s motivation, susceptible to business interruption and extra expense exposure,” said Ken Goldstein, Hartford, Connecticut-based vice president and worldwide cyber security manager at Chubb Corp.
  • “Space in warehouses is expensive, but what if somebody takes out your weekly shipment?” said Dena L. Magyar, Charlotte, North Carolina-based vice president and national practice leader in the professional risk group at Wells Fargo Insurance Services USA Inc.

Read more on Business Insurance

Drilling tower

Sasol enjoys 17% profit hike, eyes-up local suppliers

  • The world’s largest producer of gasoline from coal said full-year profit probably rose as much as 17 per cent as an increase in synthetic-fuels output exceeded its forecast and the rand weakened.
  • It was recently reported that it was looking to increase the number of local firms in its Mozambican supply chain. Benjamim Cavel, local content manager for Sasol in Mozambique, said the company had to “lead by example” and it was working with local suppliers to bring them up to the level where they can compete with multinationals.
  • Speaking at the CIPS Pan African Conference in Zambia, he said: “Sasol Upstream Oil and Gas intends to grow the economy of Mozambique. One way is to integrate the local supplier market into supply chain activities.

Read more on Bloomberg

And the top 10 industrial supply chains are?

No more inky fingers! We’ve compiled the headlines so you don’t have to. Like what you see? Check out the freshly-pressed Procurious news service – you can find it here.

Factory (Jorge Franganillo)
Jorge Franganillo

Gartner announces top 10 industrial supply chains

  • After releasing the core top 25 list at its supply chain executive conference in May, Gartner has in the past few weeks also named its top 10 “industrial manufacturing” supply chains list.
  • Just three companies Gartner classifies as industrial manufacturers made the overall top 25 supply chain list this year, and all somewhat near the bottom of that list. Therefore it shouldn’t surprise you to learn that these take the top 3 positions in the new ranking…
  • Caterpillar comes in on pole position, while 3M and Cummins rank second and third respectively.

To view the top 10 in its entirety – pay a visit to SC Digest

Forrest Review is good news for Indigenous business 

  • Within the last few days, the Forrest Review has been presented to Australian Government. The 256-page report advocates for the Federal Government to purchase at least 4 per cent of its goods and services directly from Indigenous businesses.
  • The report recommends that this should be implemented over a four year period, with an annual increase of 1 per cent per year. Indigenous businesses could be contracted directly or through subcontractors.
  • The Forrest Review also pushes for tax-free status for Indigenous run businesses.
  • Another recommendation focuses on the establishment of a ‘Top 200 Employers’ policy. This recommendation states that the Federal Government should provide the top 200 companies in Australia, with a strong Indigenous employment record, with tailored contracts to increase the proportion of Indigenous employees within their workforce.

Source: Supply Nation
Read The Forrest Review in full – here

Supply chain and logistics vacancies climb 45 per cent

  • Jobs in UK supply chain & logistics are increasing sharply, according to new research from one of the UK’s leading professional specialist recruiters.
  • Q2 data from the Robert Walters UK Jobs Index, which charts vacancy numbers posted to online platforms, shows year-on-year openings for supply chain & logistics professionals rising by 45 per cent.
  • With this confidence building across the wider economy, projects that had been put on hold are being implemented, creating fresh demand for supply chain professionals.

Read more at Supply Chain Digital

ArrowStream employee shoots CEO

  • Tony DeFrances – the chief technology officer at supply technology firm ArrowStream, mortally wounded his company’s CEO after receiving a demotion.
  • The firm was in the process of downsizing and had demoted a number of people.
  • Steven LaVoie founded ArrowStream in 2000, and DeFrances had been with the firm “virtually since its inception,” according to the company’s website. ArrowStream was named one of Chicago’s best and brightest companies to work for by a business trade group earlier this year, an honour it had received every year since at least 2012.

Read more at Chicago Tribune

China bans Symantec and Kaspersky

Foreign security software off China’s govt procurement list

  • A Chinese government procurement agency has excluded Symantec and Kaspersky, two foreign security software developers, from a security software supplier list.
  • According to a report from Beijing Youth Daily, all the five antivirus softwares in the list are from China, including Qihoo 360, Venustech, CAJinchen, Beijing Jiangmin and Rising.

Read more at Ecns.cn and The Inquirer

Price is most important factor for consumers

  • 80 per cent of consumers believe it is important for companies and brands to behave ethically, however the most significant factors when shopping are price, value and quality.
  • The findings come from online sourcing and optimisation specialists Trade Extensions – and reveal UK and US consumers’ attitudes towards ethics and sustainability.
  • Despite consumers’ relatively low ranking of ethical and sustainability concerns, over 70 per cent say they are more likely or much more likely to buy from companies with strong and proven policies on sustainability and ethics.

Read more on Business Wire

And finally…

 Supply chain headache inspires £1m investment

  • A Norfolk glass manufacturing business frustrated with slow suppliers is chartering a fresh route to growth by investing £1m into a new production plant.
  • Alastair Clayton, managing director of Seaglaze Group, said: “When it became clear that the lack of a reliable supply chain was starting to jeopardise our production schedules we decided to take control of our own destiny.”
  • The new factory – based in a 5,000sq ft unit close to its headquarters – will produce toughened glass for the marine industry, creating six jobs.

Read more on EDP24

Australian Egg Corporation left with egg on its face?

The yolk’s on them…

The Australian Competition and Consumer Commission (ACCC for short) has been trying to crack a hard-boiled mystery…

Cartel investigated in Australian egg probe

Talk of cartels is usually something we leave to the boys on Sons of Anarchy, but it looks like it’s reared its ugly head and triggered an egg pricing war down under.

Cartel arrangements come about when competing firms instigate anti-competitive measures – in this instance the aim was to reduce the supply of eggs to customers and businesses.

Examples of anti-competitive conduct include price fixing, rigging bids (from suppliers and buyers), sharing markets, and other such practices that seek to control the market and increase the profits of all involved.

Allegations were aimed at The Australian Egg Corporation Limited (along with two egg producers), that implied all were aware of such a scheme.

A presentation made to Australia’s top 25 egg producers in Feb 2012 included slides that pertained to disrupting the supply chain. Messages included:

“Dispose of eggs by either donating eggs to one or many charity groups or dumping/burying eggs.”

“Reduce the number of laying hens by culling birds (there is currently capacity with the major processors). Use of an independent auditor?”

And: “Increase demand? (AEC has invested $1 million above budget to assist ‘move’ volume).”

In related news, Qantas and Virgin Australia Holdings have also wandered into the ACCC’s sights over carbon tax. Read more on The Sydney Morning Herald

Brr! DHL enhances its cold chain logistics

It may be a glorious summer across Europe, but the latest news from DHL might send temperatures south… Enjoy that and stories about Amazon, NHS, Johnson Controls, Apple, plus more – below.

Johnson Controls makes new appointment

  • Johnson Controls has appointed Michael Bartschat as its first CPO to develop ‘world-class global procurement function’
  • Bartschat will report to Bruce McDonald, executive vice president and chief financial officer.
  • The company said Bartschat will “optimise cost and value” of purchased materials, products and services. There will also be a focus on supporting the company’s ongoing transformation to a “true multi-industrial through operational and manufacturing excellence across its business units”.

Read more on Supply Management


Amazon second quarter sales up

  • Amazon.com has announced financial results for its second quarter ended June 30, 2014. All-in sales are up 23 percent to $19.34 billion.
  • Jeff Bezos, founder and CEO of Amazon.com said: “We continue working hard on making the Amazon customer experience better and better.
  • “We’ve recently introduced Sunday delivery coverage to 25 percent of the U.S. population, launched European cross-border Two-Day Delivery for Prime, and launched Kindle Unlimited, an eBook subscription service.”

Read more on Supply Chain Digital

State of NHS procurement in UK

A Guardian article on poor NHS procurement has sparked fierce criticism from an NHS procurement director. You can read arguments from both sides at this link.

  • Among the narrative we learn that the NHS procurement price comparison shows that some trusts pay over 135% more for certain products, such as white paper.
  • And despite some excellent initiatives, the procurement community as a whole has failed to produce a strategy to deliver the savings that are needed

DHL

DHL enhances its cold chain logistics

  • DHL Global Forwarding has enhanced its cold chain logistics offerings through the transport of shipments at frozen or cryogenic temperatures.
  • Designed for customers from the life sciences and healthcare industry with an increasing need for sophisticated cryogenic logistics solutions, this service is maintained by LifeConEx, DHL’s temperature management specialist, in collaboration with Cryoport, a provider of complete global frozen shipping services.
  • David Bang, CEO LifeConEx said: “It is specifically designed for customers who require that cryogenic temperature be reliably maintained during storage and transportation of their materials. It also relieves them from more precarious shipping methods such as dry ice or use of hazardous liquid nitrogen”

Read more on Supply Chain Digital

US brand scolded over deceptive labeling

  • The Federal Trade Commission has announced that the Made in the USA Brand, LLC, which provides a “Made in USA” certification seal to marketers, has agreed to drop its certification claims.

Read more on Sourcing Journal Online

Ryder selects LLamasoft Supply Chain Guru

  • Ryder has selected LLamasoft Supply Chain Guru as the primary application for supply chain design and vehicle route optimization throughout the company’s global enterprise.
  • Ryder specializes in fleet management, supply chain management and dedicated transportation services and had revenues in excess of $5 billion in 2013.

  • “We selected LLamasoft for its holistic approach to supply chain design,” said Tom Kroswek, senior director of supply chain excellence, Ryder Global Supply Chain Services. 

Read more on MarketWatch

Apple iPad

Apple ramping up supply chain for mysterious new release?

  • Apple is understood to be working on a slimmed-down iPad Mini Air, as well as a 12.9-inch model so says the company’s Far East manufacturing partners.
  • The new small-screen device will use the Air moniker, like the current flagship iPad, and is understood to be 30 per cent thinner than the 2013 iPad Mini. It will feature Apple’s new A8 processor, which is expected to debut in the iPhone 6.
  • As for the 12.9-inch tablet, United Daily News quoted David Hsieh – Vice President of market research firm DisplaySearch – as saying the device should hit shelves in 2015, motivated by increased competition in the segment from Samsung and other vendors.

Read more on Cable.co.uk

Digital supply chain (in)security

Dave Lewis, a contributor who writes for Forbes, has penned a thoughtful piece on the dangers (and effects) digital technology could have on supply chains the world over.

You can read Lewis’ piece in full here – but in it he cites a Gartner report that predicts “by 2017, IT supply chain integrity will be identified as a top three security-related concern by Global 2000 IT leaders” is actually a real concern in 2014.

Elsewhere Lewis warns companies: “Don’t forsake security in a effort to make a deadline. The cost could be higher in the long run.”