Category Archives: Procurement News

Social procurement is gathering global momentum

ASDF_MEDIA/Shutterstock.com

Companies bold enough to step into social procurement are discovering that it’s helping solve business problems and also improving the bottom line.

A recent report on social procurement found that the movement is gathering momentum both in governments and private businesses around the world.

The report, Corporate Social Procurement in Australia, was conducted by Australia’s leading social enterprise development organisation, Social Traders and The Faculty, and found that 67 per cent of companies to respond currently undertake social procurement, or intend to do so in the near future.

It found that more than $905 million was directed to social procurement by 11 businesses. This figure is expected to rise quickly, with another 18 respondents committed to connecting social procurement initiatives by 2014. The research included a literature review and a survey of 21 Australian businesses with a market capitalisation of $221 billion.

Many companies tip their toes into social procurement with a pilot program, or undertake work within discrete business areas. Some go on to develop company policies to ensure social procurement becomes the norm.

A program’s success is usually measured by jobs created, volume and percentage of total money spent, and the value delivered to the organisation and the community.

Leighton Contractors chief procurement officer, Visna Lampasi is one of those in this space to facilitate a significant engagement project with indigenous businesses into the supply chain, increasing expenditure with indigenous suppliers to $3 million last year, with a $5 million target set for this year. This achievement has gone partway toward seeing her named CPO of the Year for 2014.

Craig Laslett, managing director of Leighton Contractors says the company believes it has a responsibility to contribute to the growth and advancement of Indigenous people and communities.

“Our organisation-wide focus on strong leadership and advocacy for Aboriginal and Torres Straight people and their communities starts from the top, with my personal commitment to enhancing the lives and opportunities for Indigenous Australians.”

Leading Australian construction, mining and services contractors, Thiess Services moved into this space more than a decade ago when it invited a social enterprise specialising in land care management, Marriott Enviro Services, to provide workers for landscape operations to general maintenance, grass and garden maintenance and painting.

Since 2009, Thiess has spent around $1.3 million a year with Marriott, which employs a large number of people with a disability.

Cadbury

Australian FMCG brand Cadbury also made a strategic decision to shift to Fair Trade certified cocoa in 2010, at a cost of $45 million. Soon after this, Cadbury became the world’s largest buyer of certified cocoa, with sales increasing.

Todd Stitzer, CEO of Cadbury said in an interview included in the report that: “The greatest power consumers have is of their buying dollar … if consumers feel that they want products more ethically produced, they should buy what they value.”

And yet, many corporates have little understanding of social procurement.

Matthew Bonwick of The Faculty Management Consultants says that the greatest challenge to the implementation of social procurement is where to start.

The key is to start small and work up to bigger things, he says.

“Many passionate advocates can be found on the ground floor of corporates, so identify existing leaders from within before scaling up,” he says.

Broad spectrum adoption from within a company is critical to corporate legitimacy in the medium run, he says.

“As markets develop and consumers become more educated, these strategies will become defining elements of competitor advantage. And key enablers will be passionate people and strategic senior managers who are willing to support the learning curve.”

Tag, you’re it! Can you spot yourself?

We’ve posted up a choice selection of photos from The Faculty’s recent FLiP 2014 event. Set against the glorious backdrop of Sydney harbour the event offered procurement’s brightest stars a valuable learning experience that was both engaging and interactive.

Our man Jack Slade talked to the assembled throng about all-things Procurious – talking through its inception, encouraging sign-ups and providing a guided tour.

Stay glued to Procurious.com if you want to be among the first to hear about forthcoming activities.


Spotted yourself? Share photos with your network by hitting the share button.

Video highlights from The Faculty’s CPO Forum

The procurement industry’s finest gathered in Sydney recently for a double-header of insight and opinion.

Now the tables have been cleared away and the last sausage roll eaten, we take a look back at some of the highlights. Quick, fetch the popcorn!

The Faculty ‘Tough Love’ Highlights from Orsino Media on Vimeo.

Enjoy what you saw? Then we’d love you to share it with your friends on Procurious.

Meanwhile in London… (at the World Procurement Congress)

Credit: Steve Budd (@stevembudd)
Credit: Steve Budd (@stevembudd)

The World Procurement Congress 14 as told by Twitter.

Over 19-20 May London played host to the World Procurement Congress. Now in its second year the event brought together CPOs and thinkers in procurement and supply chain management from all over the world.

Here is what attendees have been saying about it on Twitter:

@AlanGleeson Standing room only for Bernd Huber & David Natoff from Google #WPC Prioritisation a key challenge.NB of category knowledge & responsiveness

@XchProcurement Where do #TailEndSpend savings come from? – Spend reclassification, compliance, demand management and automated processes, says Olivier

@HarryJohn_PL #WPC performance roundtable hosted by @Beroe_inc. Want to empower #procurement? Align with finance.

@AlanHollandCork Cynthia Dautrich talks about unleashing the power of the supply base at The World Procurement Congress

@LizmaffeiPL More great insights from Cynthia Dautrich: Experience drives 70% of learning ability, exposure drives 20% & education final component

@Nightingale_PL Women in Procurment…leave perfection at the front door #WPC

@AlanGleeson Hans Melotte CPO @JNJNews advocates greater diversity amongst the #procurement community

‏@markperera 4-5 trillion of spend represented at the World Procurement Congress – wow

@stevembudd The word procurement will disappear in 10 years…CPOs will turn into Value Creation Officers. Clive Heal at Roche #wpc

‏@HarryJohn_PL  How can we make it easier to work with #procurement? @Beroe_inc on the merits of an external view on performance.

@tburt85  Save The Children tell #WPC breakout session that 90% of products it buys are sourced locally.

No normal team-building exercise…

Tikes on Bikes team-building eventWhen your company motto reads “we don’t do group hugs” – you know you’re in for something a little different…

Unsuspecting delegates at the 7th Asia-Pacific CPO Forum took part in an emotional team-building exercise under the Sydney sunshine. Their task (should they choose to accept it) to assemble a brand new bicycle, but under the assumption someone from within the team will race the box-fresh bike. Little did they know what lay in store!

The teams built the bikes as normal using the supplied tools, parts, instruction manuals, pumps and other bits. However, before these grown-ups were let loose on their new wheels the big reveal was made and the new owners of the bikes were revealed…

Pinnacle Team Events works with schools and organisations that look after underprivileged children, and it is these children that are the recipients of the day’s bikes.

Tikes on Bikes

Belinda Toohey (Program Manager Training & Events) from The Faculty Management Consultants spoke to Procurious before the event proper. She explained:

“All along I had hoped to find an activity that wasn’t just about the delegates but would be community minded.  The Faculty has a strong Social Procurement philosophy and we encourage good corporate social responsibility so I thought this activity would be a great fit, provide a touching moment for everyone involved and also give delegates the opportunity to network and work together to achieve an outcome.”

You can discover more about Pinnacle Team Events – the masterminds that made the magic happen, on their official website.

Geoffrey Garrett’s love-letter to Australia

Geoffrey Garrett

Former dean of the Australian School of Business (at UNSW) – Geoffrey Garrett captivated delegates in Sydney, just a few short months before he makes a move to the other side of the world.

Back in March it was announced that Garrett would take the helm at the Wharton School (University of Pennsylvania). The School will welcome its new dean on 1 July 2014.

Before joining UNSW, Garrett served as dean of the Business School at the University of Sydney and as founding CEO of the United States Studies Centre at the University of Sydney.

The United States Studies Centre is an important hub that brings together scholars of business, economics, politics and the humanities to deepen understanding of contemporary American issues across Australia and the Pacific Rim. As such, Garrett’s address to the delegates straddled entire continents and looked to America (in-particular) for inspiration.

During the session Garrett made the point that Australia is a taker and not a maker. Broadly speaking, Australia doesn’t pick up on what the US does well – which is to be the most innovative country in the world. Australia has been getting away with uncompetitive policies for years, and has largely managed to avoid all the tough stuff due to its ties with China.

Geoffrey Garrett speaking at CPO Forum

Elsewhere Garrett placed emphasis on the role that the private sector plays, and that it is one of increasing importance. We learnt too of the long-held political assumption that raw materials are an anti innovation sector, and we should be calling for questions around this belief.

The great orator also warned that world interest rates can be expected to increase as a result of the rise in US monetary policy. But the jury’s still out on how this might affect Australia – which is such a vibrant and rich federation because of its income tax breaks.

Visna Lampasi receives The Faculty’s ‘CPO of the Year’ title

Leighton Contractors Chief Procurement Officer (CPO) Visna Lampasi was last night awarded the prestigious title of CPO of the Year by leading procurement advisors The Faculty.

Announced at the Asia Pacific CPO Forum’s annual gala dinner held at Luna Park, Ms. Lampasi was selected from a pool of some of Asia Pacific’s top performing CPOs who collectively influence over $100 billion of expenditure each year.

Visna Lampasi

Ms. Lampasi is responsible for delivering value across a major annual spend for the company in excess of $5 billion including the management of a cost reduction program worth more than $100 million.

Sponsored by Pacific Brands WORKWEAR, the award highlights the importance of the CPO role in organisations by recognising CPOs who hold strong functional and technical expertise, realise commercial outcomes, demonstrate leadership influence and leverage the value of procurement across their businesses.

Ms. Lampasi came out on top as a result of creating major cost reduction initiatives including the consolidation of warehousing arrangements, winning back client contracts, and establishing a program committed to social procurement.

This program resulted in the company significantly increasing its expenditure with certified indigenous suppliers; which as of March 2014 was double the entire annual spend of 2013.

Ms. Lampasi’s ability to demonstrate the value of procurement across the organisation captured the independent judging panel’s attention in particular, with the company’s CFO nominating her for the award.

Judging panel chairman Dr. Karen Morley said: “Procurement has been the unsung hero within organisations but management is increasingly recognising the impact it can have on positive cultural change across the business.

“Visna has not only realised commercial outcomes that are being replicated across related companies in the construction industry, she’s also created effective sustainability initiatives (such as engaging indigenous suppliers).”

Established in 2012, the awards program, a flagship initiative of The Faculty, was created to recognise and celebrate the achievements of procurement professionals across Asia Pacific.

According to Pacific Brands WORKWEAR Group General Manager Matthew Claughton, despite procurement being one of the fastest growing professions, it is still undervalued making these types of awards programs vital.

CPO of the Year 2014

“The CPO of the Year award provides much needed recognition of the important role that procurement plays in driving real business outcomes. The CPO role is not just about the purchasing process, but includes building or protecting brand reputation, and providing that competitive edge.

“Showcasing the achievements of industry professionals like Visna shines a spotlight on the procurement function within businesses.”

The Faculty’s Founding Chairman Tania Seary added: “Visna is known for having established the leading procurement team within Leighton Contractors which is no mean feat. Project leaders are now coming to seek her recommendations, recognising the business value she contributes.

“We congratulate Visna and her team on their accomplishments, and encourage more procurement leaders to share their success stories to teach and inspire the emerging leaders in the profession.”

For more information on the Faculty’s CPO of the Year Award, please visit here. More photos of the event can be viewed on the CPO Forum event page

The Big Question: Could you live in a world without the iPhone?

A wrinkle in Apple’s supply chain could spell doom for the technology giant. Procurious wonders whether we ought to be worried.

The announcement of a new iPhone/iPad is the stuff of headline news the world over. Apple is one of the most respected titans in the hardware industry, its products have a stranglehold over the hearts and minds of millions (in-fact the level of fanaticism is downright spooky). OK there may be the odd misstep (lest we forget the Apple Maps debacle), but with its impressive track record and market dominance – Apple’s products represent go-to gadgets of choice for most businesses and consummate professionals the world over.

The iPhone’s and iPad’s ability to blend effortlessly into your (doubtless) existing Apple ecosystem makes a world without this modern staple unthinkable to many, but a worrying new report from Taiwan’s Commercial Times hints at dark days ahead for everyone’s favourite fruit.

The rumour mill says we can expect to see two new iPhones (iPhone 6) in the not-too-distant future. According to the paper however, production on the larger (5.5-inch) iPhone handset could be delayed until 2015 due to difficulties in sourcing a supplier for the super-thin 2mm battery. Apple’s tough ask involves shrinking their existing battery technology by a considerable 33% – such a demand puts suppliers under immense strain and will almost certainly affect the production cycle, the effects of which will reverberate the length of the chain.

There’s a convincing argument here for the power of the brand – at this stage in its heritage, Apple’s customers will happily wait for the next-generation to arrive in their hands. But how does this make you feel as procurement professionals – can you sympathise with the situation or this unrelenting thirst for innovation a reckless and dangerous play?

We must wonder too what this could mean for Apple. Can we expect to go through the same motions a few more years down the line – a couple more supply problems, a few more delays? If so disillusionment could surely (and will easily) set in. Look at the once mighty darling of enterprise – BlackBerry. Poor components and overall build-quality affected both the Storm and PlayBook, while delays to BlackBerry software and unsold inventory effectively unseated this once proud King.

It’s not all doom and gloom though – recent iPhone sales figures point to strong Apple earnings. Overall Apple saw a 4.6% increase in quarterly revenue, far-and-away beating Wall Street expectations. However iPad shipments were shown to be on the decline (an almost 20% drop – ouch), and with the company soon to enter the wearables marketplace we wonder whether Cupertino’s finest is starting to spread itself too thin…

We must remember that Apple is also forging ahead and reporting success in BRIC countries – the iPhone has just set sales records in Brazil, Russia, India and China. And with competitor Nokia also looking to developing markets to consolidate their rule, such space could prove quite the battleground in the fight for market dominance. Whatever the outcome, the future looks set to be very interesting indeed…

Are Apple’s products still the apple of your eye? Join in with the discussion! Leave your comments below.