IBM quizzes procurement role models in leading 2014 study

Procurious comments on the week’s top headlines

The IBM Institute of Business Value (IBV) 2014 Chief Procurement Officer (CPO) Study examines the “journey to value” for procurement organisations. The survey covers more than 1,000 CPOs and senior procurement executives at global companies across 41 countries and details the specific procurement strategies that drive positive business results and bottom-line impact.

The study took a closer look at “procurement role models,” the 100+ companies that achieved the most impressive revenue and profit performance relative to their industry peers. The results were then mapped to identify common attributes that separated the role models from the rest of the pack.

These high-performing procurement organisations:

  • Focus on improving enterprise success, not just procurement performance.
  • Engage with stakeholders to understand and anticipate their needs and values.
  • Embrace progressive procurement practices and technologies to drive results.

Download the full report here.

At a time where Procurement sometimes struggle to communicate the value that they bring to an organisation, and many departments are not afforded a seat at the executive table, this study gives some excellent pointers to CPOs and senior procurement professionals as to how they can catch up with leading organisations.

The procurement role models provide a blueprint for high performance – take a wider view of the whole organisation and how procurement fits into that, understand the stakeholder map and make sure that you engage both internally and externally, and be a first mover or early adopter with technologies that will assist with management, risk and efficiency.

Here at Procurious, we expect 2015 to be a pivotal year for procurement departments being recognised for adding value to organisations. The ever-increasing use of technology and social media will help to support this, while research like IBM’s will continue to provide a benchmark we should all be looking to reach.

Even as IBM’s report emphasised the requirement for engaging stakeholders, other news highlighted that procurement departments often forget that suppliers are stakeholders too. Reports of ‘bullying’ in supply chains and treatment of suppliers by Premier Foods show both a lack of trust and long-term vision.

Costs can certainly be cut in the short-term by squeezing suppliers, but real value can only be realised by building relationships and engaging with suppliers early on. We all have the responsibility to ensure organisations conduct business responsibly and it’s perhaps time for procurement to step up and put their foot down. Having research to point to should help back up our point!

One in five firms face supply chain bullying, says FSB

  • Almost a fifth of companies face unfair supply chain practices, including “pay-to-stay”, according to the Federation of Small Businesses (FSB). The FSB said it had found “alarming evidence of supply chain bullying” in a survey of about 2,500 of its members.
  • It found that 5 per cent of businesses had been asked to make a payment by a customer or face being taken off a supplier list.In a “pay-to-stay” arrangement, a company demands that suppliers pay a fee to continue doing business with the firm. In the last week Premier Foods backtracked on its controversial “pay-to-stay” policy.
  • “When the public think of their favourite brands, they are unlikely to connect them with the sort of immoral payment practices which are becoming all too common across an increasing number of industries,” said FSB national chairman John Allan. “However, it is clear that whenever these examples come to light, the public shares the same sense of moral outrage as the small firms that have to put up with them on a daily basis.”
  • Further “sharp practices” included retrospective discounts, where firms seek to apply discounts to outstanding money owed to a suppler, late payment and discounts for paying on time, FSB said. The Department for Business, Innovation and Skills (BIS) said: “This behaviour is unacceptable and we want it to stop.”

Read more on BBC News

Taiwan supply chain claims Apple Watch production will begin in January

  • A supply chain leak out of Taiwan is claiming that Apple and Quanta have solved yield issues that will allow Apple Watch production to ramp up starting in January. United Daily News reported (via MacRumorsthat the first wave of Apple Watches will number in the 3-5 million mark, with 24 million scheduled for all of calendar 2015.
  • The report indicates that Apple would be in a position to ship Apple Watch earlier than competing rumors and analyst reports have indicated—perhaps towards the end of the first quarter. Analyst Brian Blair from Rosenblatt Securities issued a report in October claiming that Apple had to push back release of the Apple Watch due to problems in the supply chain.
  • UDN also claimed that Quanta has increased its Apple Watch-related workforce from 3,000 employees to 10,000. The company is reportedly aiming to have between 30,000 and 40,000 people working on the device when full-scale production begins.
  • Apple has said only that Apple Watch will ship in “early 2015.” Angela Ahrendts, Senior Vice President of Retail and Online Sales for Apple, intimated in a note to her retail employees that Apple Watch would ship “in the spring.” Spring officially begins on March 20th and lasts until June.

Read more on Mac Observer

Seahorse Club celebrates excellence in freight transport journalism

  • The Seahorse Club held its Annual Awards and Christmas Party, in association with Associated British Ports (ABP) in London on 9 December. Professionals from the freight transport sector, as well as those from the forwarding and logistics fraternity were all represented.
  • International Editor of the Year (sponsored by PSA International) was awarded to Paul Avery, editor of World Cargo News.
  • The Geodis Wilson sponsored Supply Chain Journalist of the Year was Gavin van Marle of The Loadstar for his consistently relevant piece on e-Returns, a challenge of growing proportions across numerous retail supply chains.
  • Bob Jaques of Seatrade Global was named Seahorse Club Journalist of the Year for a range of articles on diverse subjects including over-capacity in the supply chain, and safety at sea following a spate of high-profile maritime casualties.

To view the full list of winners head along to All About Shipping

Belgium national strike causing major transport disruption

  • Belgian trade unions have called a national strike to voice their discontent over government plans to implement austerity measures and hike the pension age.
  • The strike, which commenced at midnight on 14 December and will continue through to midnight on 15 December, has been called by national unions to protest against new measures being taken by the Belgian Federal Government.
  • ISS Antwerp has reported that the unions represented in the National Joint Committee for the Port of Antwerp have called upon their members to participate. Severe disturbance to services in the Port of Antwerp, such as shortages of gangs and possible closure of the locks, are therefore anticipated. All Belgian ports are likely to be similarly affected, as will the Belgian railway and Belgian Customs.

Read more on Supply Chain Digital

Is there humour in your supply chain?

“Comedy is acting out optimism.” – Robin Williams

“Humour is everywhere, in that there’s irony in just about anything a human does.” – Bill Nye

We’ve probably all been exposed to Jim Carrey showing the funny side of a supply chain risk in the classic Ace Ventura… But here’s a few other examples you might not have seen.

These videos all use comedy to highlight (and in some cases, solve) problems in the supply chain – taking in everything from sourcing to logistics.

Supply chain blackhole? Better check the stock room…

A group of MBA students use skills learned in their Supply Chain class to point out the inefficiencies of the latest “green” bathroom remodel at ASU’s WP Carey School of Business.

Like any good MBA students, they don’t just point out the problem, they offer solutions…

Greg tries to outsmart Diego and find a cheaper Less than Truckload (LTL) freight solution in the pilot episode of Logistically Challenged.

Have you come across any other humorous examples? Highlight your video picks in the comments below.

Why are we making it so hard for the next generation?

Bright young things are turning well-worn tropes on their head – sound familiar?* 

*Procurement had an image problem – that’s why we created Procurious.

Female engineers recognised by the Institution of Engineering and Technology (IET)

The engineering industry is facing an uphill struggle…

Promising, young procurement professionals will find common ground in the lack of careers advice, visibility and fractured career pathways that female engineers are all experiencing.

Which leads us to pose the question: why are we making it so hard for the next generation?

Engineers are the backbone of our operations, their work can be felt in everything from production and manufacturing processes, through to transport and logistics solutions. And as they’re increasingly being exposed to more modern technologies – 3D printing being one such example – our reliance on these wunderkind will only increase.

This week saw three outstanding female engineers recognised by the Institution of Engineering and Technology (IET) for their professional achievements and the work they do encouraging other young people into engineering.

28-year-old senior hardware engineer Naomi Mitchison from Selex-ES has been named the IET Young Woman Engineer of the Year, and will play an ambassadorial role for the profession in the forthcoming months.

20-year-old Jessica Bestwick, who works for Rolls Royce, was presented with the IET’s Mary George Prize for Apprentices, and 27-year-old Lucy Ackland who works for Renishaw PLC in Stone, Staffordshire won the Women’s Engineering Society (WES) Award.

Recognising outstanding female engineers has never been so important after the IET revealed worrying new statistics charting skills and demand. The survey showed that women represent only six per cent of the engineering workforce – the lowest percentage in the whole of Europe. If this trend continues, the UK will be in a significantly weakened position to find the 87,000 new engineers it is estimated the country will need each year over the next decade (according to Engineering UK 2014, the state of engineering).

Michelle Richmond, IET Director of Membership, and a former YWE winner, said: “The lack of women in engineering is a huge problem for this country, contributing to skills shortages which threaten the economy. It also means that women are missing out on interesting and rewarding careers.

How to tag Procurious members in your status and posts

UPDATED: You’re probably already familiar with tagging from using it on the likes of Facebook and LinkedIn… Well here’s how to use tags on Procurious.

How to tag friends in a status or post

We’ve had a lot of people asking if they can tag their contacts/other Procurious members in posts on their page. The short answer was “sorry that’s not possible”, however if you stuck around for us to elaborate we’d have told you “OK it’s not possible right now, but don’t worry – it’s coming!”

What is tagging and how does it work?

To take advantage of this new feature simply begin to write a new post as usual. Then (at the desired location), tap the @ key – now start typing and Procurious will suggest other members in your network based on the keystrokes made.

When you’re done, just post the status as you normally would and wait for those you’ve tagged to see their notifications. (Notifications will appear in the usual location).

Tagging is supported site-wide, – no matter where you are: Tag Procurious members in your Community Feed when posting a new status, or when commenting on another status, directly in a new Discussion topic, or responding to another member’s question.

Tag other Procurious members

Say you want to congratulate a team for a big win, have a question that you know people in your network can help with, or maybe you want to brighten someone’s day by sharing a funny video. Whatever the use may be – tag you’re it!

There are countless more uses that put this cool new functionality to good use:

Maybe you’ve seen an Event that is right-up Lisa Malone’s street, have stumbled across a discussion that could really do with Euan Granger’s input, or you took a funny picture of Jack Slade at #bringthedonuts?

Try it out now – tag someone from your network in the comments below!

 What can you post on Procurious?

This also provides us with the perfect opportunity to highlight a little addition you may have missed. As well as posting text and image-based updates to your Community Feed, you can now also choose a document to share with your network. Just select ‘Choose File’, perhaps include a little explainer too, then hit ‘Post’. Magic.

Stay up-to-date with Procurious




Recommended reading: your procurement bookshelf

Need something to put on your Xmas list for Santa? The Procurious community can lend a hand… here’s some of the most popular choices.

Well, come on, we all know that Santa must have excellent procurement skills including elf negotiation, stakeholder management (keep your reindeer happy) and customer relationship management (seeing all those kids needs to be worth the effort!), as well as managing one of the world’s most complex supply chains (it’s not like he gets all his materials for toy making by magic, you know…).

So, Saint Nick will be well up on his procurement literature and here are a few ideas from the Procurious community of what you can ask him for:

  • Winning! – Clive Woodward (leadership)
  • Poorly Made in China – Paul Midler (production and ‘games’ in China)
  • The CPO – Schuh and Strohmer (supply transformation)
  • The Procurement Value Proposition – Chick and Handfield (supply management)

Getting To Yes

  • Getting to Yes – Fisher and Ury (negotiation)
  • Procurement 20/20 – Spiller and Reinecke (supply entrepreneurship)
  • Procurement and Supply Chain Management – Farrington and Lysons

Shackleton's Way

  • Shackleton’s Way – Morrell and Capparell (leadership)
  • The Complete Guide to Business Risk Management – Sadgrove
  • Leadership and Self Deception: Getting out of the Box – Arbinger
  • Good to Great – Jim Collins (change)
  • Negotiation Series – Herb Cohen
  • Supply Market Intelligence for Procurement Professionals – Barner and Jones

Who Moved My Cheese

  • Who Moved My Cheese – Spencer Johnson (change)
  • Strategic Global Sourcing – Sollish and Semanik
  • The Purchasing Chessboard – Strohmer, Perez and Triplat
  • The Straight to the Bottom Line: an executive roadmap to world class supply management – Rudzki, Smock, Katzorke and Stewart

And if all else fails, read the complete works of Sherlock Holmes by Arthur Conan-Doyle.

Happy reading!

Have more? Leave your recommendations in the comments below.

Selling secrets of the supply chain

There’s nothing sexy about selling secrets – it’s just silly… as our top story demonstrates:

Selling secrets in the supply chain
Ex-Apple supply chain manager fined, sentenced to 1 year in prison for kickback scheme
  • Former Apple Global Supply Manager Paul Devine — who ran afoul of the law in 2010 for selling details of upcoming Apple products to Asian manufacturers — has been sentenced to one year in prison and fined $4.5 million for his role in the conspiracy.
  • Devine plead guilty to the crimes in 2011, but was only sentenced this week. He will begin serving his prison term — which will be followed by three years of supervised probation — on Feb. 19, 2015.
  • Alongside Singaporean partner Andrew Ang, Devine was charged in 2010 with 23 counts including wire fraud, kickbacks, and money laundering. Devine used his position as a senior supply chain manager to pass information about upcoming products to Apple suppliers, which used the information to gain leverage in negotiations with Apple and paid kickbacks to Devine and Ang.

Read more on Apple Insider

Agencies urged to raise concerns over Premier Foods’ investment payment scheme

  • Agencies that work with Premier Foods are being urged to contact the Marketing Agencies Association’s Pitch Watchdog anonymously to flag concerns over controversial ‘pay to stay’ payments, as it calls on government to take action.
  • The MAA has urged agencies to come forward to raise concerns over the practice, after it emerged food giant Premier Foods, which owns brands including Mr Kipling and Oxo, had been making “millions” of pounds from investment payments made by suppliers into the business.
  • Premier Foods launched an investment payment scheme 18 months ago as part of its strategy to consolidate its supplier base and invest in innovation, promotion and marketing by asking suppliers to make an upfront investment in the business. Suppliers accused the business of forcing them to make payments, or risk being cut off of its supply base.
  • Premier Foods backtracked over the controversial scheme over the weekend and said it would “simplify” its strategy to recoup money and discounts from its suppliers, claiming there was widespread misunderstanding and misrepresentation of the scheme. However, it defended the scheme as “standard business practice.”

Read more at Marketing Magazine

Reshoring boosts British manufacturer’s supply chain

  • A British manufacturer claims to have strengthened its supply chain and boosted local jobs by reshoring production from China. Vent-Axia, which produces fan and ventilation systems, has brought its manufacturing back to the UK, investing £350,000 in tooling for new production lines and associated building works.
  • The move has enhanced innovation in its products, sped up the research and development cycle and improved the company’s responsiveness to customers. Reshoring has also reduced its carbon footprint, the company told the Sussex Manufacturing Forum.
  • “We are now much closer to our market,” said Jenny Smith, marketing services manager. “We have cut our lead times from three months to a matter of weeks, which not only means that we have less cash tied up in inventory, it also enables us to respond much more quickly to market opportunities.”

Read more at Supply Management 

Hospitals eye mHealth to reduce supply chain costs

  • As health systems look to trim costs in 2015 to address the impact of the Affordable Care Act, they’ll want to look at the supply chain. And mHealth could come in handy.
  • That’s the opinion of Jump Technologies, an Eagan, Minn.-based developer of cloud-based inventory management solutions, which recently issued its list of predictions for the coming year.
  • The company sees mobile supply chain management solutions as an important part of the healthcare budget – especially as health system administrators focus on more important matters like EMRs, meaningful use, ICD-10 and regulatory issues. It references a 2014 survey by Jamie C. Kowalski Consulting, which found that nine out of every 10 hospital C-level executives and supply chain adminstrators see supply chain management as one of the top three areas for reducing expenses.

Read more at mHealthNews

Cyber criminals are targeting smartphone supply chains, warn researchers

  • A new mobile trojan dubbed “DeathRing” is being pre-loaded on to smartphones somewhere in the supply chain, warn researchers at mobile security firm Lookout.
  • DeathRing is a Trojan believed to be of Chinese origin that masquerades as a ringtone app, but can download SMS and browser content from its command and control server to the victim’s phone.
  • This is of concern to original equipment makers (OEMs) and retailers because the compromise of mobiles in the supply chain could have a significant impact on customer loyalty and trust in the brand. Mainly affecting lower-tier smartphones bought in Asian and African countries, this is the second significant example of pre-installed mobile malware that Lookout has found on phones in 2014.
  • Researchers said this signals a potential shift in cyber-criminal strategy towards distributing mobile malware through the supply chain.

Read more at Computer Weekly

Most popular discussions on Procurious

After a successful wrap a last month, there has been a fantastic increase in the number of new discussions, top answers and flow of information on the boards.

Off the back of this, we felt it was time to wrap up some more of the most popular discussions on Procurious.

What trends do you think are going to be big in the Procurement world in 2015?

There have been a number of articles written on this subject in media and across the procurement space and this provided Procurious with its most popular discussion to date.

The most popular answer on the boards was Relationships, including strategic relationships, supplier relationships and stakeholder relationships, as well as the management of them all.

Comments on this answer also included systems to manage these relationships and ensuring that the relationships are open and that employees have the required skills to manage relationships effectively.

Other answers included:

  • Risk Management and Ethical Procurement
  • Using technology tools to enhance the procurement process
  • The use of social media (like Procurious…!) for procurement to engage in conversations, knowledge transfer and suppliers management
  • The basics – are organisations getting these right?
  • Linking the value that procurement generates to companies’ bottom lines
  • Deliverables and delivering the value obtained at the front end in relationships and contract management
  • An appreciation of cultural fit
  • The formation of ‘high performing’ procurement teams
  • Social and sustainable procurement
  • Cost reduction and outsourcing
  • Big data
  • The migration from Low Cost Country to Best Cost Country

A link was shared to a new initiative by Shropshire Council (UK) using WhatsApp to communicate with local people on a whole raft of matters (https://shropshire.gov.uk/news/2014/11/council-to-trial-the-use-of-whatsapp/)

One of the other ways to keep track of trends over the course of 2015 is to stay connected, either through Procurious or other social media. Make sure you are connected with 24 of the most influential people in procurement, as listed by Procurious – https://www.procurious.com/blog/procurious-news/24-of-the-most-influential-people-in-procurement

How does social media change the way you work in Procurement?

On the topic of social media and staying connected, this topic raised the question of what social media has offered that wasn’t available before and how it has changed the way people operate in procurement, individually or for their company?

The two most popular answers covered the immediacy of availability of information, both in finding out about suppliers, individual experiences and procedures, as well as across the wider procurement space. Social media helps the individual to easily find information that might have been harder to come by otherwise.

Another answer highlighted the power that it gives to customers to voice concerns on issues from service in stores, through to the full scope of a firm’s activities. All decisions are open for wider discussion in the social media environment, for positive or negative.

The answer also highlighted that organisations need to have a social media strategy in place to deal with and respond to these commentaries and deal with any ‘trolls’. But, it’s also important to make sure that any responses cover what they need to but can also be interesting and witty to help instil confidence in users.

Other answers covered the ability to have access to information that can then be validated later information that is found, as well as considering social media a tool that can be used to used to our advantage, while always maintaining an individual presence (don’t be a follower, make sure there is a human side!) and deciding for yourself which platforms to use.

Other thoughts:

To contribute to all of these discussions and more, head to https://www.procurious.com/discussions/

Amazon’s Christmas logistics robot army

The robots are coming… and they’re bringing Christmas presents!

In its latest bid to boost productivity and expedite delivery, Internet retailer Amazon is deploying a robot army – yep, just in time for Christmas.

Various sources are reporting that squat, orange, robots have entered several of its U.S. warehouses. The addition of these wheeled droids will save workers having to traipse the factory floor and scour long aisles chockful of Amazon goodies (sometimes up to 20 miles a day).

The addition of the robots is expected to bring in an impressive productivity boost – making picking and scanning 300+ items an hour a reality (compared to 100 previously).

Amazon founder Jeff Bezos told investors earlier this year that in total the company hoped to move 10,000 robots onto the factory floor. Such a move was only made possible after Amazon bought Kiva Systems’ material handling solution in 2012.

The procurement professional: a reluctant hero?

Procurement is sometimes like a jack-in-the-box.

Procurement, one of the key parts of business process, is often downplayed. Businesses try to box it off concluding it is more important to speed things up, bypassing some best practice behaviours with the perception of saving time and money.

Procurement then springs out of its box just when you least expect it: to act as an honest broker to challenge business decisions and choices.

So here’s how I applied my top ten Procurement best practices when directing security procurement for the London 2012 Olympics:

See procurement as a key business function

Developing stakeholder engagement across the business is critical. Building these relationships ensures that spend is under Procurement’s influence will deliver optimal results.  Within LOCOG stakeholder engagement was complex with LOCOG executives, Civil servants, Government ministers and security experts all demanding consultation.

Be a leader in your profession

Adopt a visible style both within your business and also explore new opportunities in your profession.  When I sat on my profession’s board of management with responsibility for education I identified similarities between my business role and my non-exec role in the institute to make Procurement a relevant business function. Someone recently referred to me as a character of the profession. I am not sure if this was complimentary but it means I get visibility.

Articulate a clear vision

With clear objectives that link to the business your agreed objectives should then be driven by you and include:

  • high savings delivery per buyer;
  • high compliance with your process;
  • full coverage in all areas of spend; and
  • improved new benefits  each year.

Clearly communicate

In many businesses, procurement staff are the reluctant heroes. At LOCOG procurement’s activities and achievements were published and acknowledged. Among other things, this included commercial cost savings and protecting the Olympics from risk.

Broaden your expertise

Build your business knowledge, your soft skills and behaviours as well as your Procurement expertise.  This broader capability helps business engagement, and is crucial for procurement staff to advance beyond their core expertise in order to make them more commercially aware. Without my wide range of skills I would not have been as effective in LOCOG.

Always achieve your key results

Procurement had a clear set of London 2012 Objectives including the diversity of the supply base as this delivered the Olympic values.

Don’t over-promise

Procurement needs strong role models and ambassadors. Life can be challenging especially working in the Olympics spotlight so you want people to trust and support you to get the job done in the challenging time scales. Just be careful not to over-promise as non-delivery will quickly loose that hard earned trust.

Stay calm and don’t overreact

Procurement faces many challenges and frustrations. The familiar comment at the Olympics was its unprecedented meaning it had never been done before immediately causing panic and a victim mind set. So just stop and count to 10 and respond with facts rather than emotion.

Never miss your opportunity

At The Olympics I was constantly asked to present in front of boards and senior stakeholders. Just don’t forget you want senior management to know about procurement and see that as an opportunity to sell procurements value. During my time at the Olympics I encountered experts in their own specialism who wont know about Procurement so you should always be passionate about what we can do.

Don’t ignore the power of networking

My time at the Olympics opened up many doors for networking opportunities but just be selective about the events you attend. It is worth remembering that however strong your policies and process are, new opinions and practices can often provide inspiration!

Influential procurement writers: share your favourites

In search of influential procurement reading…

Those members who regularly visit Procurious may have seen our recently published list of who we think number among the 24 most influential people in procurement.

Need a refresh? Check out the full 24 here.

Our list was compiled from prominent Procurious members, and those making a splash across other social media platforms (like Twitter).

https://www.procurious.com/blog/procurious-news/24-of-the-most-influential-people-in-procurement

In-keeping with the theme we want you to share examples of influential writing that has stuck with you. Perhaps a writer that has bowled you over with their insights, or a piece you feel will benefit others.

Nominate using the comments section below, listing your reasons (and a URL). We’ll collate the best into a future feature on Procurious.