Category Archives: Procurious News

Big Ideas Summit 2016: Big Idea #9 – Help Inspire Millennials

Lucy Harding has called on procurement leaders to help inspire Millennials by inviting them to thought leadership events.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Help Inspire Millennials

Lucy Harding, Partner and Global Head of Practice, Procurement and Supply Chain at Odgers Berndtson, challenged CPOs to open up access to events, such as the Big Ideas Summit, to the Millennials in their organisations.

Lucy argues that such events can inspire Millennials. By accessing thought leadership and innovative events, it can encourage them to sell key message to their generation in their organisations.

Catch up with all the delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

Want to find out more about Big Ideas 2016? And maybe what we have planned for 2017? You can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 16,000 like-minded procurement professionals from across the world.

Read All About It! Procurious Pioneering Conversations in the News

Wherever you look, procurement is in the news. And Procurious is helping to drive this by pioneering conversations in the media. So come, read all about it!

In the News

Here at Procurious, our goal is always to help our community advance. We do this by sharing effective strategies and fresh insights on the latest hot button news, trends, and events shaping the procurement and supply chain profession.

Of course, we do so daily on our platform. But we’re also working to really extend our value in the news media by sharing information that procurement needs on a day-to-day basis.

All this helps to grow awareness of not only the Procurious community, but also the procurement profession as a whole. We don’t want to limit ourselves to just talking procurement. We want people to know the procurement perspective on all the major events happening around the world now.

Here are just some of the topics our founder Tania Seary, and the Procurious team, have been commenting on recently.

Showing the Value of Your Profession

As the conversation around procurement grows online, and CPOs increasingly command a seat in the boardroom, it’s more important than ever for procurement professionals to be bold and share information that demonstrates the value that procurement brings to an organisation.

That could be something as simple as using positive words and imagery in discussions online. Or as complex as a CPO defining value metrics around a key business issue. These conversations can help draw a direct, positive link between what procurement are doing, and what the C-suite is concerned about.

Having the Courage to Drive Global Change

The procurement profession is being challenged to recalibrate its thinking and skills around new realities facing our world.

To add the most value to their organisations, leaders must be agile enough to handle unexpected global events like Brexit; master futuristic technology such as cognitive procurement; turn innovations like 3-D printing into business opportunities, and more.

Today’s procurement professionals must be willing to take new risks to tackle these challenges together. This can happen through social collaboration and online conversations with their teams and stakeholders. None of us can go it alone! By tapping into the broader procurement community, we can summon the courage we need to drive global change.

Winning the War for Talent

The supply chain has grown increasingly complex and global. With this comes more demand for workers who have greater technical skills to tackle these changes head on.

Procurement needs professionals who can specialise in one area, but also understand the broader businesses issues and can have conversations with stakeholders.

The true test for organisations is ultimately attracting those individuals, which comes down to having a responsive and engaging presence on social media.

Stay Tuned for More News!

As a profession, we need to stay dedicated to educating people outside of our community on what procurement is all about.

Stay tuned for additional “New and Noteworthy” blogs to hear more about some of the hot news topics and conversations we’re having, to help our profession and community thrive in this changing world.

Smarter relationship management with ClientLoyalty

Procurious caught up with Kent Barnett, Chairman and CEO of ClientLoyalty at ISM2016, Indianapolis USA.

solving_loyalty_equation

CPOs worldwide recognise the need to keep track of supplier relationships to reduce costs, minimise risk, and uncover opportunities to grow their businesses. Voice of the supplier surveys are common, yet the technology employed is often archaic. Typically, stand-alone web-based surveys are sent out, with the results downloaded into spreadsheets and painstakingly interpreted by analysts. Subsequent surveys are often not linked to the ones that have gone before, and even if they are, it’s left to human analysts to make intelligent connections and interpret the trends.

“This is the gap we discovered in the business services space”, says Kent Barnett, CEO of ClientLoyalty. “Organisations rarely use data to manage the voice of the supplier process, and hence miss out on an enormous opportunity to employ a continuous improvement methodology. They also fail to put that data to work by translating the information into meaningful action.”

The potential impacts of failed business relationships are huge. For buyers, it means wasted time and painful switching costs, while for suppliers, it means churn. In Barnett’s words, “a revolving door is never good for business”. That’s why ClientLoyalty’s founders saw a need to create a supplier performance management system that would build long-term, meaningful relationships between buyers and suppliers.

How ClientLoyalty works

The easy-to-use system is built to optimise relationships through transparency. Users can input operational metrics (KPIs), which are reported using a simple green, yellow and red approach. The system gathers direct feedback and social sentiment, using in-built algorithms to scan the web and track suppliers’ reputation ratings.

The data is delivered in the form of alerts (risk flags), dashboards, and report-out tools. “We call it a data-driven solution”, says Barnett. “The system uses NPS (Net Promoter Score) and the AI generates recommendations on how to reduce detractors and raise your score. Six Sigma is another important part of our measurement methodology – it’s all about smarter relationship management.” All data is benchmarked across ClientLoyalty’s growing client base, showing the low end, high end, and where your supplier falls.

The artificial intelligence kicks in with recommendations on how to improve performance, and is one of the most valuable aspects of ClientLoyalty’s system. This aspect addresses the major gap and frustration many CPOs have with voice of the supplier surveys – there’s really no point in gathering data on relationship strength if you are not going to do anything with that information. ClientLoyalty’s automatically generated recommendations provide a factual base to create a targeted action plan that will improve supplier relationships and save you money.

The results

“We’re creating a business culture that’s based around accountable performance, one company at a time”, says Barnett. “The key is having clear and transparent communications, with the ultimate goal of turning business relationships into business partnerships.”

ClientLoyalty is software that optimises relationships between B2B buyers and suppliers, helping organisations continuously improve by analysing direct feedback, social sentiment and operational data to create stronger bonds of loyalty. If your organization is a buyer of goods and services and needs to manage critical supplier relationships, or a supplier of goods and services and needs to manage strategic client relationships, ClientLoyalty can help you connect with your business partners using data-driven management tools.

Using Community Collaboration to Create a Change Narrative

Finding a way to create a narrative for change can be the difference between an organisation being able to successfully adapt, or not.

Wheeler Centre - Change

One speaker at the 9th Asia-Pacific CPO Forum opened the collective eyes of the audience to the possibility of change, and what that might look like.

Michael Williams, CEO of The Wheeler Centre, a public institution devoted to engaging conversation and Melbourne’s literary advocates, supporting the nation’s literacy activity.

Sharing Ideas and Conversations

Founded, and funded by a State Government injection, in 2009, it supports the health and vitality of the writing and ideas ecosystem. The centre also contributes to a deeper thinking society, and enables the storytelling and story-making that builds communities around the sharing of ideas and conversations.

“I’m very concerned that words used by companies in Australia today are losing their meaning. We seem to be forgetting how we use them, and how they can help customers and run businesses,” the head of the new cultural institution says.

Words such as agility, innovation and disruption, for example, he told the audience.

“We say these words as a sort of shorthand. I’d suggest that we need to stop and think about the words we say, and how we refer to them to do business. We say these words and repeat them to each other, and they’ve ended up being very much like those messages they play about piracy at the start of a DVD. They just almost cease to exist.”

Williams says he hopes that the Wheeler Centre gets to the bottom of some of these words, unravel what they actually mean, and change the conversations and business practices.

Challenging Perceptions

More than 200 events held across Melbourne each year challenge these perceptions, and work to extend the literary culture in the southern city. Speakers discuss everything and anything including pop culture, politics, history, literature, art and ethics. These discussions happen in Melbourne three times per week, and an average of 180 attend to the three weekly events.

Business custodians need to understand that people used to identify themselves as being readers of one of the local newspapers, but as the media landscape shifts, that’s no longer the case.

“We don’t identify ourselves as being a reader of The Age, or Herald Sun anymore. The internet is the biggest disrupter we’ve ever seen. It’s a challenge that we all need to get our heads around.”

Businesses need to understand that instead, consumers are looking to identify with authentic stories from brands.

Williams finished by pressing on the audience of procurement professionals in the room to consider that inviting people to be part of your own conversations, can be a hugely powerful way to engender broader engagement.

“True conversation starts with a question, so you need to consider how that might play out in your organisation, and find a way to make it authentic, rather than just hollow words.”

Happy Birthday – Procurious Is Two!

It hardly seems like any time at all, but it’s been two years to the day (nearly!) since the launch of Procurious. While wishing the site a happy birthday, we look back at how far we’ve come.

2nd Birthday Cake

On May the 14th 2014, the Ebola epidemic was sweeping through East Africa, Ukraine was on the “brink of civil war”, Scotland had scored a chart double with Calvin Harris and Paolo Nutini at number 1, and Donald Trump was still considered a celebrity/businessman, rather than a US Presidential candidate.

And under the shadow of the Sydney Harbour Bridge, at the 7th Annual Asia-Pacific CPO Forum, hosted by The Faculty, Jack Slade stood up and announced the launch of Procurious to the assembled audience.

Getting Started

In the room that day, amongst a Who’s Who of Asia-Pacific CPOs and Procurement leaders, were two future Procurious employees, and a host of people who would be the site’s first movers. At the time, the site was just finding its feet as a community-based, niche network for Procurement and Supply Chain professionals.

The idea of Procurious, originally conceived as a procurement news service, took flight in late 2013, and was steadily developed and streamlined until the site you see today was formed (well, the first iteration at least!).

It took just under 6 months for the site to add its first 2000 members, with first movers coming from across the globe as the word spread. By Christmas 2014, the site had over 3000 members, was engaging with professionals from around the world, and over half of these members returning to the site on a monthly basis.

Making Strides

From that point on, there’s been no stopping Procurious. Earlier this year we celebrated our 10,000th member, but didn’t stop there. As it stands now, the Procurious community numbers nearly 14,500 people from over 140 countries, at an average of 6 per cent week on week growth.

You can see some of our stats in the infographic below:

Happy Birthday Procurious

At the heart of Procurious we want to help build the image of procurement, share learnings and provide a platform for information gathering and collaboration. In the past two years we have seen the following on the site:
  • A truly global community of over 42,000 people across Procurious and our social media channels
  • Coming up on half a million unique sessions from over 220,000 users
  • Over 2 million page views since May 2014, and over 690,000 page views since the start of 2016
  • Over 1,000 high-quality, original blog articles published on topics ranging from procurement systems and sustainability, to community empowerment and breathing techniques
  • 771 discussion questions asked; over 3,500 community answers provided
  • Over 100 free eLearning resources published to the site (with over 100,000 views on YouTube collectively)
  • Over 600 procurement and supply chain events listed

And that’s not to mention two very successful, and well regarded Big Ideas Summits in 2015 and 2016, with more events to follow this year, and Big Ideas 2017 already in the works!

The Future

We’re already excited to see what the next year has in store for Procurious, and are looking forward to taking the site to the next level with your help.

All that is left for us to say is thanks for all your help in making Procurious what it is today. Join us in making a Happy Birthday toast to Procurious, and have a glass of bubbly and a slice of virtual cake on us!

Crewless Drone Ships Look Set to Uberize the High Seas

From crewless drone ships, to matchmaking between procurement and marketing departments, there are game-changing strategies afoot!

Drone Ships

In the past week, SpaceX have successfully landed a rocket on a drone ship, and both Coca-Cola and Target are playing match maker between procurement and marketing departments.

Uber-izing the High Seas

It’s a hot topic in the news when a rocket lands on a drone ship. Last year Amazon raised eyebrows when it announced plans to start drone deliveries. More recently they released a video showcasing a prototype of one if its delivery drones.

Drone technology is rapidly evolving and just this Friday, SpaceX successfully landed its Falcon 9 rocket on a crewless drone ship at sea. This is an even more impressive feat, given that the odds of a successful soft-landing were slim, due to the mission requirements for this particular launch.

Even SpaceX CEO, Elon Musk, expressed his doubts ahead of the launch on Twitter:

Drone Ships

To date, SpaceX has completed two successful rocket recoveries on a moving drone ship, and another when they successfully landed a rocket on a landing pad on stable ground.

The next important step, of course, is reusing a recovered rocket, which Musk has stated they hope to do in the next three or four months.

Remote Control

And while drone deliveries have been making the headlines for sometime, remotely controlled drone ships are just as much a game-changer for the shipping and logistics industry.

It’s a bet FTSE 100 Company Rolls-Royce are willing to make, backed by Tekes, Finland’s technical research funding agency. Rolls Royce is working with offshore engineer Deltamarin, marine certification body DNV GL, and Inmarsat, to develop the technology needed for commercial drone ships.

Speaking to The Guardian, Oskar Levander, Head of Innovation for Rolls Royce’s marine unit, says: “Drone ships will will support existing players to make their businesses more efficient and enable new entrants with new business models to the sector, with a potentially similarly disruptive effect to that caused by Uber, Spotify and Airbnb in other industries.”

Matchmaking Marketing And Procurement

Marketing is often seen as the creative, playful, visionary behind a big brand, while procurement is all too frequently positioned as it’s more serious, strict counterpart.

Marketing wants to spend the money on the big idea, while procurement wants to save as much money as possible. If marketing and procurement can’t see eye to eye, one party is bound to suffer.

Speaking at the ANA’s Financial Management Conference, Target EVP and CMO Jeffrey Jones acknowledged a serious cultural difference between marketing and finance and called out addressing this divide as “one of the top three issues [the business] has to solve.”

Jones criticised marketing departments for not really understanding how their own company makes money, which is a fundamental problem for a department with one of the highest spends in most organisations.

Jones believes that Marketing needs to take account of every dollar it spends in order to demonstrate greater cost consciousness. By taking this strategy, it allows Procurement to be part of the process.

However, Jones also believes that Procurement could loosen up a bit, and understand that sometimes monetary investment is required in order to deliver results, and time is needed to deliver proof of concept.

Jones highlights a simple solution: “Marketing needs to learn more about business; and finance – and through it, procurement – needs to take risks they can’t always calculate.”

A United Front

While Target continues to work out the kinks between marketing and procurement, Coca-Cola have already put the wheels in motion to unite the two departments.

Christina Ruggiero, CPO, Coca-Cola, has taken the step to move her marketing procurement team from the procurement department, into the marketing department. This has facilitated cross-functional learning opportunities, and enabled Procurement to get a grasp on Marketing’s priorities.

As a drone and robotic technology continue evolve, is this innovative technology disruptive to the supply chain. And what will be the repercussions on procurement? Tell us your thoughts in the comments below.

Meanwhile, we’ve been scouring the news to find the top procurement and supply chain headlines this week…

Maersk Predict Meagre Growth in 2016

  • The parent company of shipping giant Maersk Line is projecting meagre growth in demand this year.
  • Danish conglomerate, A.P. Moller-Maersk A/S’s shipping unit, the world’s biggest container line, saw underlying earnings of $32 million in the first quarter, far below the $710 million contribution a year ago.
  • Maersk’s shipping volume grew 7 per cent in the quarter, against 1 per cent growth for the broader industry, and
  • Group Chief Executive Nils Andersen says there is no relief for weak demand and falling freight rates on the horizon, and admitted the carrier will look more to the spot market to provide a revenue boost.

Read more at the Wall Street Journal

Billions Stolen in Nigerian Fraud

  • $15 billion, equal to about half the country’s foreign currency reserves, has been stolen from Nigeria’s public purse through fraudulent arms-procurement deals.
  • Africa’s top oil exporter is going through its worst economic crisis in decades due to the drop in global crude prices, and ministers say these problems have been exacerbated by the impact of fraud under previous administrations.
  • Endemic corruption over decades has enriched a small elite but left many Nigerians mired in poverty despite the country’s oil wealth.

Read more at the African Independent

Nordic Defence Procurement Agreement

  • Representatives of the major Nordic nations have come together to sign a new agreement relating to defence procurement.
  • An update to an agreement originally signed in 2015, it aims to promote joint development between Norway, Sweden, Finland and Denmark.
  • The agreement does not obligate a country to sign to any specific deal, but allows for greater collaboration between the nations.

Read more at Jane’s Defence Weekly

Social Media Clinic – You Asked, We Answered

Our Social Media Clinic gathered some common issues from attendees about social media. We aim to set your minds at rest with these answers.

Social Media Clinic

Procurious were lucky enough to attend the eWorld Procurement and Supply Conference in London at the beginning of March, where we ran a social media clinic. Despite looking like we were just having a good time (which we were…), there was a more serious side to our day.

We are huge advocates of social media in procurement, and we want to help as many procurement professionals get as much from social media as possible. However, professionals still have so many unanswered questions about social media, leading to many of them avoiding social media in their professional lives.

We were given a number of questions and issues on the day at eWorld, about all aspects of social media. We’ve done our best to provide answers to them here.

The Social Media Clinic in Action
The Social Media Clinic in Action

General Tips and Advice

Our first set of issues relate to general social media use, not specifically linked to one platform.

  • Struggling to find interesting content

There is a world of great content on social media, you just need to know where to look. Procurious publishes new content to its blog daily, and there are other influencers and experts in procurement who share their knowledge across various platforms.

Check out Procurious’ top influencers list, as well as this one from Vizibl for suggestions on who to follow. You can also set up Google Alerts and get all the top procurement and supply chain stories delivered daily, straight to your inbox.

  • Struggling to Attract, Retain & Interact with Followers and make my voice heard

There is no hard and fast rule on how to attract and retain followers on social media. The best thing you can do as an individual is to keep sharing great content and thought leadership, and people will be interested in what you’re saying.

If you want to make your voice heard, think about the topics that you are passionate about, or things that only you can say. Followers interact more with a genuine voice, rather than one copying what someone else has done. You can build influence by taking part in discussions and sharing your views.

Think about sharing content from followers, or people you follow, and using tagging on platforms such as LinkedIn and Twitter to start a conversation with an individual or Group.

  • Should I have all social media platforms for my business?

You’re probably better off working out which platforms suit your business best, and which ones you can make the most of. If you are sharing images, then Instagram is worth trying. If you’re creating video or audio content, then try Periscope or YouTube.

Try looking at one or two platforms to begin with and maximise your offering for followers. There’s nothing worse than a half-hearted effort on a social media profile. You take that risk by spreading yourself across all of the available platforms.

LinkedIn

  • How can I improve my LinkedIn profile?

Take a look at our top tips for social media profiles here. Make sure you have a good photo, that your information is up to date, and talks about achievements, rather than responsibilities. It’s worth investing the time in getting your profile up to scratch.

  • Is LinkedIn just for job seekers?

Not at all. It’s a great tool for recruitment and marketing, but that’s by no means the only thing you can use it for. Make use of the site for global networking, connecting with like-minded individuals, and sharing content.

If you’re worried about it being too recruitment heavy, then a more niche network, like Procurious, might be what you’re looking for.

  • Is it ok to ask people for advice over LinkedIn, if I don’t know them?

Absolutely. LinkedIn is first and foremost a networking tool. You can ask people for help, advice and their opinions. They will choose whether or not to respond. We’ve found that people are very willing to share their knowledge if you are asking for the right reasons.

Twitter

  • How to use hashtags (to find followers and relevant content)

Hashtags have been set up on Twitter to help you search more easily for content and people. Unless you are planning on using a hashtag a lot, it’s better to use existing ones, rather than creating your own.

There are hashtags for both #procurement and #supplychain which will lead you to good content, up to date news, and good people to follow. If you have a particular area of interest, hashtags can also help you attract followers.

  • How many times per day is it acceptable to tweet?

This is up to you. Most advice will recommend tweeting between 5 and 8 times per day. Make sure you don’t just keep tweeting the same things, as this is likely to drive followers away. Keep it interesting, relevant, use the correct hashtags and maybe some images, and you’ll find the right balance for you.

Facebook

  • How can I use Facebook more effectively for business?

Facebook might not be a great platform for your business, particularly used in isolation. We’ve found that the best way to leverage the site is by using their advertising and targeting a specific audience to raise awareness of your business. There are good tips on Facebook itself, and you can have a look at these for information.

There you have it. This is by no means a comprehensive list of the questions people have, but hopefully it’s enough to allay some fears and get you started on social media.

Social Media Clinic Scribe by the fantastic Abbie Burch
Social Media Clinic Scribe by the fantastic Abbie Burch

The Procurious team would love to help you out if you have a question or issue on social media. Also, if you want to run a social media clinic for your organisation, get in touch!

Social Media Fever Is The New Man Flu

Fret Not! Doctor Procurious is here to cure your social media fever!

Social Media Clinic

Social media has become a vital tool in both our personal and business lives. Conquering social media platforms can be difficult without the right knowledge and help.  Procurious is running a social media clinic at the eWorld Procurement & Supply conference in London on 2 March. The clinic will cover the following social media areas to give you the best tips and tricks of the trade.

Get noticed: Create Your Powerful Profile

  • Detailed Profile is Strong
  • Proof Read
  • Customise Your URL Profile
  • Have the right profile picture
  • Be part of the correct groups
  • Be aware of LinkedIn Applications
  • Bonus Tips and more on Procurious

Stay In Touch: Supercharge Your Market intelligence

  • Mastering Google Alerts  
  • Wonders of the Google Drive
  • Streamline content with Feedly
  • Must have marketing tools of 2016

Twitter 101: A Beginner’s Guide

  • Getting started – key terms and definitions of Twitter
  • Setting up an account – building the right Twitter profile
  • The Basics – Top tips and tricks
  • Using hashtags – what is ‘trending’?
  • Following Twitter influencers – information gathering

eLearning: Revolutionise Your Professional Development

  • Picking the right platform(s) for you
  • Podcasts and TED Talks – Introducing users to Soundcloud
  • Bite-sized Learning videos
  • Peer to Peer Networking
  • Fitting learning into your routine

Simplify: Make Social Media Work For You

  • Selecting the right platform for you
  • Why time doesn’t have to be a limiting factor
  • Introducing social media tools – Buffer; Hootsuite
  • Scheduling posts – when and where to do it; ensuring your posts make sense on all platforms
Procurious at eWorld
Social Media Fever…Get Cured with Procurious!

Don’t google your symptoms, fight them with Procurious. Come see us at eWorld Procurement & Supply conference!

Procurious eLearning: Upskill – Any Time, Any Where

eLearning is always better when it’s accompanied by a cheeky glass of wine. We have the tips you need to fit personal development into your busy life.

eLearning with wine

We live in a highly connected world, on the go 24/7 – whether it is spending time at work, having fun with family and friends, getting fit and healthy, or trying to fit in some much needed relaxation time. So the chances are high that personal development and doing training courses outside of work time is close to the bottom of your priority list.

It’s hard to find time to fit in training, but if you’re committed and want to, you can get your procurement training in the comfort of your own home. There are a huge number of eLearning courses, training modules, videos and podcasts that can be found online.

These resources are often created by established universities (think MIT, Harvard and Yale) and other subject matter experts, so you know that the quality is going to be high. And what’s more, the majority of them are free.

Online at any Time

The transition of training courses and professional development from classroom to online has followed much the same path as the way many of us now shop for clothes.

Online clothes shopping was virtually unheard of before the launch of Net-a-Porter in the year 2000. Before then, both men and women were far more likely to buy clothes that they had physically held and tried on in store. Net-a-Porter is now the world’s largest online luxury retailer, valued at over $2.5 billion.

CEO Alison Loehnis, who took over from founder Natalie Massinet in 2015, has been quoted as saying that women tend to order the majority of their clothes during the “wine o’clock” period, that time of day they have a bit of downtime away from work and family.

And there’s no reason why eLearning can’t fill that time of day too. Plus, online learning is much cheaper, and a video on supply chain management is less likely to cause feelings of buyer’s remorse the following morning!

Pick Your Resource

Once you’ve decided what course you want to do, it’s just a matter of finding the online resource for you. If you’re thinking about upping your procurement and supply chain knowledge, where better to look than Procurious.

Procurious has over 80 eLearning resources, including eLearning modules, podcasts and thought leadership videos, all of which are completely free for members.

Want to learn about procurement from the very start? Try the ‘Introduction to Procurement’ series, created using The Faculty’s acclaimed ‘Pathways to Procurement’ program. Check out this sample video on Social Procurement:

Get all the thought leadership and ideas from Procurious’ Big Ideas Summit 2015, from the major risks to the profession, to the future of procurement networking.

Whatever you are looking for, there is something for you. Procurious’ bite-sized training modules have been designed to be short enough to allow you to complete them during your lunch break, while our other resources are the perfect length to enjoy with a glass of wine in the evening. You know, instead of internet shopping…

Maverick Purchasing & KPIs – Your Big Discussions

There’s nothing like a good procurement discussion to get the blood flowing! Themes getting our community this month included Maverick Purchasing and KPIs.

Maverick Purchasing

On our agenda this time, we’re looking at the best ways of dealing with maverick purchasing, and what matters more to procurement’s stakeholders, speed of delivery vs. other product factors. And to top it off, no procurement discussion round-up would be complete without a look at that classic – KPIs.

What do you think is the best way to eradicate “maverick purchasing”?

Maverick purchasing is a topic that gets a lot of column inches, but that organisations have had difficulty stamping out completely. Maverick purchasing can be defined as “when an employee purchases goods, parts or materials for a project, going outside of the accepted buying channels of their organisation”.

The most popular answers focused on the two key issues that underline the ‘why’ of maverick purchasing – procurement’s relationship with the business, and the systems in place for purchasing and contract management.

Building relationships with business stakeholders, and knowing their requirements at the outset, could help to minimise maverick purchasing. As well as this, being able to show the value that procurement can bring to the table, and ensuring an understanding of procurement’s role, were also seen as critical.

It’s also important to remember the technological and systems argument. Within procurement, the likely cause of maverick spend was seen to be difficult to use systems. By making systems user-friendly, and putting the required approvals in place, it can help to minimise out of process practices.

It comes down to handling both people and technology, and not, as one answer said, using a taser. Although, for those of us who have seen this while working in procurement, a taser might actually seem to be the right option…!

To what extent would you agree with the following statement: the shorter the average time to procure, the happier the stakeholders?

Most procurement professionals will heard the question, “when will it arrive?” at some point. The focus in this question was whether or not speed was the most important factor for business stakeholders.

The general consensus from the community was that the shorter the time taken to supply against a requirement, the happier the stakeholder was going to be. However, it was also voiced that procurement needed to be involved much earlier in the process than it normally is, in order to supply goods and service in good time.

The idea that procurement needed to be involved with, or understand, the planning cycles was another piece of the puzzle that is often missing. Having all contracts in a single repository, and being involved in specification discussions before parts were agreed, were two of the solutions put forward to allow procurement to do this.

However, the traditional idea that procurement can only offer two of speed, cost and quality in most situations. The lack of leverage in sourcing activities means that one will be compromised, but stakeholders will still be expecting all three.

Being able to do all three is where procurement can weave “magic”, or otherwise, the function needs to get better at saying no and pushing back.

Procurement KPIs – What do you think are 3 key metrics (KPI’s) to evaluate procurement function?; KPIs other than cost saving?

Key Performance Indicators (KPIs) or metrics for individuals and procurement departments are high on the agenda at this time of year. Ensuring that your team is measured, both internally and externally, against the right metrics is key to both good data and success.

When asked about the 3 key metrics to evaluate the procurement function, the community’s answers didn’t spring many surprises. However, in nearly a third of the answers, savings generated were rated as one of the top KPIs. Although other answers highlighted value as a metric, it appeared fewer times than total spend managed, and shows that even now, procurement is still widely viewed as a savings generating function.

It also shows that, despite the profession looking to move towards value generation metrics, many procurement teams are still measured on this.

Other key KPIs highlighted were:

  • Percentage of on time delivery
  • Total Spend
  • Customer satisfaction
  • Stock Turnover
  • Quality
  • Supplier Consolidation
  • Supply Chain Security & Risk
  • Customer of Choice
  • Procurement Engagement
  • Sustainability
  • Ethics

On the other side of the debate was the question of KPIs other than cost savings, particularly in relation to Capital Investments for Projects. Suggested approaches involved the use of a Balanced Scorecard, including cost, quality, delivery, inventory and sustainability amongst others, and with a focus on reduction of Total Cost of Ownership.

What was seen as important in the answers was communication with internal stakeholders to understand their needs, and let them understand what procurement can offer. Within the Capital Projects environment, the feeling was that this was more about generating value for internal stakeholders, rather than focusing solely on cost.

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