Packing for the future: big trends, digital print, sustainability

Stuart Kellock, Owner of Label Apeel shares his thoughts on digital print, the next big trends and whether being sustainable is still crucial for business.

What is next for digital print?

In labels and packaging the next step has got to be educating the end user, the marketeers and the brand owners about what is available to them.

Pumping the market with presses does nothing for the innovation being applied. For me, it will be those who can apply themselves to new and innovative applications that will be the winners. Those who are merely using digital presses to produce labels that could be done using conventional, will find that the unseen costs quickly catch up with them, and that the competition very quickly becomes a bit hot to justify the expenditure. We have already seen this model play out in the commercial sheet fed world with disastrous outcomes for some of the less innovative businesses.

Has personalised packaging had its day?

No, personalised packaging is here to stay. With any amount of luck we can all stop treating it as the be all and end all of what digital has to offer. Yes, coke and Absolute Vodka have done some smashing stuff with personalisation, but is it really innovative? I remember 12 years ago turning up to an event and being presented with a bottle of personalized beer. Personalisation is not innovative; the scale of the personalisation that these companies demonstrated was innovative. Digital has so much more to offer and it is only once we can get past personalization, will we start to develop and understand what that is.

Three big packaging trends and techniques for 2015?

I think that 2015 will see a return to fantastic photography being used in packaging. The last few years we have seen bold colour stamping the mark of brands, I think we could see a return of photographic imagery. The challenge for printers will be to get the consistent reproduction quality that is going to be demanded of the designers.

Digital moving in to wide web packaging is going to be something that will be great to watch for those of us not involved and a challenge for those in the market. A continuation of the drive for tactile finishes and added decoration will be how brands make themselves stand out from the crowds.

Is social media having an effect on the print industry?

Social media is having less effect directly on printers than it is having on our customers. This is particularly true of printers like us, who work with small batch exclusive brands. Prior to digital, these brands could not afford the labelling and packaging of the big boys. Now their packaging looks amazing, fresh and desirable. This in conjunction with far reaching social media as a sales tool means that smaller niche brands are having an impact on the market place.

It is no coincidence that we see large brewers launching their own craft breweries or the distillers doing short run exclusive lines. The little guys are having an impact and eroding the big boys market, they are being forced to respond. Social media is allowing this to happen.

Sustainability – is it still a crucial battleground or are brands less worried about their green credentials?

Brands were ever so worried about their green credentials while it was the printer and other suppliers picking up the tab. Then, came the financial downturn of 2008 and the focus was taken elsewhere.

We have seen a return to a concern for sustainability over the past two years and I think now that concern is far more effective. It comes from a real and pragmatic position, rather than a dictatorial (because the marketing bod says we have got to.) Printers now recognise that by reducing waste and by buying sustainably they are able to improve their own business while delivering the real change the planet needs.

We no longer have half-hearted conversations about recycled paper. Our conversations now are about reducing packaging, reducing waste, eliminating landfill and reducing energy consumption from a position that creates a win for all the stakeholders.

The benefits of social networking

Networking… It’s a maligned term that often sits alongside exercising and dieting as things that we know in our hearts we should do, but never seem to get around to. 

Guide to using social networking in the job hunt

Well, we’re here to tell you it needn’t be so. In this post we are going to point out some simple tips that will make your networking efforts more effective and less cringe-worthy.

We’re all in this together

It’s important to remember that on social media platforms and at face-to-face events, everyone is there for the same purpose… To network.

People don’t attend events with the intention of sitting silently in corner, not communicating or not learning. Similarly people don’t join Procurious or LinkedIn to avoid contact with other members.

So the next time you approach someone for networking purposes, remember they are coming from the same place as you. They want to network as well!

Ask for help

As US president Barack Obama once said:

“Asking for help isn’t a sign of weakness, it’s a sign of strength because it shows you have the courage to admit when you don’t know something, and that then allows you to learn something new.” 

Asking people for help should be an active part of your networking strategy as it actually solves two problems.

The first is clear; asking for help will enable you to find solutions to your problems. Not sure who the best procurement recruiter in New York City is? Ask someone! Trying to determine if a CIPS qualification is worth the investment? Ask someone!

The second benefit that comes from asking for help is less apparent but just as important. A study from the University of Wisconsin-Madison found that workers who help others, feel happier about their work than those who decide not to help.  By asking someone for help, you give them the opportunity to display their skills and knowledge and at the same time give their self-esteem a boost.

“Our findings make a simple but profound point about altruism: helping others makes us happier. Altruism is not a form of martyrdom, but operates for many as part of a healthy psychological reward system” – University of Wisconsin-Madison professor Donald Moynihan.

If the person asking the question wins and the person answering the question wins, what’s stopping us from asking more questions?

Now back on the Barrack Obama thread, the Economist magazine recently reported that during his time as a US Senator, Barrack Obama, a man who I think you’ll agree has amassed an impressive network over the years, asked more than one third of his fellow Senators for ‘help’.

Be targeted in your approach

No one likes spam. Not in their email accounts, not in their sandwiches and certainly not when they are networking.

When you are looking to connect with people, be genuine not generic.

If you have a particular person you want to meet at an event, it pays to take some time to research them and their interests. The background work you do will not only spark your targets interest but also help to break the ice.

When connecting with people on social media sites try to send personalised messages rather than the default settings of the platform. It doesn’t have to be much but “Hey, I noticed you also work in advertising procurement, lets connect” is infinitely better than “I’d like to add you to my LinkedIn network”.

Don’t ask for a job

It’s true that social platforms like Procurious and LinkedIn are effectively online CV repositories, and that these platforms are increasing being used by companies and recruiters to fill vacancies.

However, the direction of this flow should not be turned around. Job seekers should avoid directly soliciting for jobs or big-noting themselves to hiring managers through social media platforms or at networking events.

The key here is subtly; it’s OK to ask someone at an event for advice, an opinion or even to meet up for a drink after the conference. However, by asking for a job, you end up alienating yourself from the very person you’re trying to impress.

Keep going, it’s important

Whether it makes your toes curl or not, networking is important. People who network find better jobs more easily than those who don’t.

The Guardian newspaper recently reported that a staggering 90 per cent of UK employers use social media a means to find staff.

The importance of networking is magnified as you progress through your career. A large portion of senior positions are never formally advertised, with firms preferring to rely on references and people they ‘know’ to fill important roles. The question is will they ‘know’ you?

The importance of networking stretches beyond finding your next job. Networks can be a source of inspiration. They can provide you with information and insight you would have never otherwise encountered. Effective networking may help you find your next mentor, role model or god forbid even a friend!

So get out there and network!

Should you ever rehire an ex-employee?

When you rehire an ex-employee, especially one that was a star, it looks like you are getting a great deal. What you see is what you get. They understand your business and its own unique culture, are immediately productive and bring industry knowledge and new ideas.

The best-case scenario is when an employee wants to return because he has had time to learn new skills and has gained in-depth work experience somewhere else that he can share with you.

The good news about rehiring top performers

Rehiring former employees often costs much less than hiring from scratch, especially since you can cut out the extremely costly recruiting and interview process. When budgets are tight, you can explore this avenue using social media, alumni groups and word-of-mouth to find out who is actively looking.

The potential rehires, also known as boomerangs, are easier to assimilate into the organization and you will save you orientation time. The thinking is that since they know exactly what they’ll be signing up for, they will be likely to stay longer the second time and therefore be less risky, more productive and better for your retention statistics.

There’s also some thought that a rehired person can provide you with a fresh perspective, innovative ideas and some industry intelligence.

So what can go wrong? Quite a lot

Not all former employees are worthy of rehiring. Let’s hope they left for the right reasons and of their own accord. Obviously, you will exclude anyone who was fired, incompetent or unproductive or suddenly has accumulated a criminal record.

Here are a few of the main disadvantages of rehiring former employees:

  •  Current managers and co-workers may feel threatened if the employee returns with a new set of skills, and especially irritated if they come back onboard with a higher remuneration package, which is quite likely. They may feel an employee already had their chance.
  •  The reason that they left in the first place may still be a problem: the boss from hell, lack of benefits, poor promotion prospects and/or lack of opportunities to learn.
  •  There may be unintended consequences if the rehire is appointed at a higher level than his previous role. It may trigger other departures if promotional prospects are blocked, i.e. waiting to fill “dead man’s shoes.”
  •  Returning employees may just not fit in. The climate and culture of the company may no longer be the same. In this case, their new presence may be disruptive and cause tension.

Develop a rehiring policy

A definite success factor is having a firm policy that is applied fairly to all potential “Comeback Kids.” Who is eligible to be rehired should be agreed upon internally and be legally defensible.  Two important elements to include are how long after leaving an employee can return, and  what’s a reasonable maximum time to be away.

In some industries, some employers also refuse to rehire an employee who left to go to a competitor. Other organizations may welcome the broader experience and give preference

to ambitious ex-employees who went off to try their hand at consulting or starting their own business.

Booz Allen Hamilton, a leading U.S. consultancy, is such a staunch believer in rehiring that it sponsors a Comeback Kids program, through which it actively reaches out to past employees and those from the military.

A few more things to consider when rehiring

  • Make sure the conditions that caused that person to leave are not still barriers. Exit interviews are notoriously unreliable. so it’s best to work out why the employee really left. If he undervalued the company before, has anything changed?
  • Is this person really the best candidate for the job? It should not be a quick fix — don’t take the lazy recruiter’s solution.
  • Are you overlooking quality internal candidates? Someone else internally might be just as qualified to do the job. Think about the message you’re sending and the possible repercussions of rehiring instead.

Don’t forget to brief the new employee on how things have changed since he left and any new projects that have come up since.  A “welcome back” interview shows that your company is open to hiring the best people, whatever their job history.

Would you rehire a great former employee? Let us know by commenting on the story below.

Supply chain finance schemes: a worrying new trend?

Diageo under fire for increasing payment terms

The Forum of Private Business (FPB) has this week launched a scathing attack on beverage giant Diageo over its plans to extend supplier payment terms from 60 to 90 days in its UK business.

Diageo let suppliers know, via a formal letter, that the payment terms changes would come into effect as of February 1st 2015. The firm announced that the new terms make up part of a “different procurement process” the company plans to implement for future tenders.

Diageo justified the move by stating:

“Diageo continually looks for ways to enable us to invest in the growth of our great brands. This activity supports the long term sustainability of our business and yours.”

Speaking on Diageo’s move to extend payment terms, Phil Orford, the chief executive of The FPB said: 

“We are very concerned, but sadly unsurprised, to learn that Diageo is yet again extending its payment terms, a practice that is hugely damaging for small businesses.”

Countering criticisms that lengthening payment terms will be highly detrimental to small and medium size enterprises in the company’s supply chain; Diageo announced that it would offer supply chain finance programs to any businesses adversely impacted by the new terms.

Supply chain finance programs allow suppliers to access money they are owed more quickly by leveraging the favourable credit lines of larger buying organisation.

In response to this move Mr Orford claimed:

“The practice of big businesses using a supply chain finance scheme in order to extend payment terms and protect their own cash flow is a worrying trend that is spreading across sectors and industries.”

The FPB is now working with the Institute of Credit Management and Department of Business Innovation and Skills to have Diageo’s status as a signatory to the Prompt Payment Code revoked.

Why do we question, comment and discuss?

To answer this [question] we’re going to reflect on findings from a number of social network-specific research papers that have made themselves known to us.

Comaniciu Dan/Shutterstock.com

The Arma International Educational Foundation published its theories around ‘Social networks and their impact on records and information management’ in January 2011.

For clarity, records and information management will be shortened henceforth to RIM:

Arma said: “there is a value in the speed of distribution of questions and answers that can be seen on various Social Networks. RIM professionals who have questions can post them on Social Networks and within minutes—if not seconds—receive answers from other RIM professionals. For the individual, this removes the feeling that may exist of being all alone on the job. This type of Social Network where the topics are specific to RIM professionals creates a community of commonality.”

Now this could be written for any cross-selection of people, it needn’t be profession exclusive (as seen here applied to RIM professionals).

Similarly, a report put together by the European Commission in November 2010 said the following on human-powered community question answering and expert finding:

“Human powered (aka crowdsourcing) systems gave promising solutions to problems that were unsolved for years. The research community should continue working on leveraging human intelligence to solve critical problems and answer questions that otherwise would be impossible to answer automatically. Social networks contain immense knowledge through their users. However, it is not trivial to find the one that has the knowledge and is also available to share it.”

Just look towards the healthy ‘Discussions’ area on Procurious to see this thinking in action.

Discussions on Procurious

From here you are free to browse any open discussion topics, or create your own to pose to other Procurious members.

Start by filling in the ‘Ask a question or start a discussion’ field, then expand in the ‘Add more details’ area. This is the perfect place for any additional details,  or URLs you might want to share. Then you’ll need to select a topic/subtopic from the respective dropdown menus (this will help signpost your discussion to those members with similar interests).

Those dropdown menus will come in handy if you want to dip straight into discussions that touch on your specialty. Use the filters on the main Discussions page to show questions by topic/subtopic, or order by those latest/trending.

Alternatively you can get a heads-up (of the two most recent discussions at least) from the Community homepage. Can’t see it? It’s to the right of your Community Feed.

The European Commission report also touched on a topic it called ‘Personalisation for social interaction’, in which it explains as “In order to improve social interaction and enhance social inclusion, personalization engines that locate peers with possibly common likes, dislikes or developing trends should be engineered. Towards more efficient search engines that will be able to serve the users only with relevant content, personalisation algorithms have to be studied in a greater extent.”

Could we go as far to call Procurious a ‘personalization engine’?

We’re always keen to hear your thoughts so why not add to the discussion by leaving a comment below?

In logistics? Take the ‘joined-up’ approach

Thanks to Maritime Transport and Fargo Systems for providing Procurious with this case study.

The decision to implement Fargo Systems’ TOPS system back in 2004 was a turning point in the way the UK’s largest container transport company, Maritime Transport, approached its IT business model.  Fast forward ten years and Fargo Systems’ technology yields benefits across almost all aspects of Maritime’s business.

Tim Goddard, IT director at Maritime Transport takes up the story: “I was initially brought in by Maritime to oversee the introduction of TOPS.  The decision to invest in this new ‘off the shelf’ technology was made to replace an outdated and inflexible system currently in operation and to equip the business for growth.

 “From the outset, what was appealing about working with Fargo Systems was the team’s understanding of our business; a result of their logistics background, and their commitment to work with us and further develop their systems to meet our evolving needs.”

Managing over 10,000 shipments a week, an impressive 90 per cent of Maritime’s work is now received via EDI directly into TOPS from customers, forwarders and shipping lines’ systems.  TOPS helps to efficiently meet customers’ reporting requirements by sending automated job acknowledgements, status updates and PODs back to the originating systems, and where required can also provide electronic invoice transactions via EDI, which speeds up the process of issuing invoices and of invoices being approved.

The importance of real-time reporting

Interfaces to Maritime’s telematics system, assists the traffic planners by sending job details direct to the drivers in the cabs, who receive automated job updates, which are processed in real time into TOPS and by retrieving vehicle positioning data for use on the traffic sheet.  This data is also of huge benefit to the fleet department.  Creating an electronic process for defect reporting is vital for a fleet of over 3,400 truck/trailer assets.   Defects captured by the telematics are processed into TOPS, where fleet appointments can be scheduled and purchase orders raised.

The partnership between the two companies has strengthened over the last decade and today Fargo Systems works closely with Maritime Transport to develop systems which link together administrative IT functions across the business. Integration is the key to the successful use of technology and TOPS is integrated into Maritime’s accounting system, with plans to use data in other areas such as purchase order processing as well as the payroll and HR systems.

Tim continues: “The size of our operation today, which includes over 350 desktop users, 17 depots, 1,400 vehicles and 2,000 plus trailers, means it is vital that our IT systems maximise every piece of data.” 

MTL head office

Optimise systems for maximum potential

As pioneers of ‘joined up’ IT systems in the logistics industry, Maritime will be taking its integrated IT approach one stage further, when it launches a fleet vendor web portal shortly.

Tim continues: “It’s important that we don’t treat any aspect of our business in isolation. Our fleet and our employees are assets and it’s vital that all are achieving their maximum potential.  An example of the integration the new system will bring is when a driver reports a tyre blow out, the repair company will be notified immediately and will then receive instant approval to attend the breakdown and undertake the repair.  The system will pre-advise the driver of the ETA of the repair van and simultaneously raise a purchase order for the repair company to invoice against.”

Ten years on… the next ten… and the next

Looking ahead to the next ten years, Tim believes Fargo Systems’ CYMAN (Container Yard Management) will play an increasingly important role in the company’s IT portfolio. “Our acquisition of Roadways in August this year has provided us with the impetus to investigate how best to utilise CYMAN in our rail operations at Tamworth, but also within our other Intermodal facilities.  Again, it’s all about joined up thinking – this time with our train and planning functionality.”

When asked about the longevity of the relationship between the two companies, Tim is quick to respond: “Fargo Systems’ understanding of our industry has always played a crucial role in the success of our relationship.  I also believe there are instances when working with the ‘not such big guys’ brings real benefit.  Although both far bigger operations than back in 2004, I believe Fargo Systems’ size is still a key strength as they are able to deliver what we require whilst maintaining the personal touch, something that the larger enterprises miss. And finally, they’re agile, listening to our needs and delivering innovative solutions expediently and to our timeframes.  Fargo Systems definitely has a role to play in the future development of our IT strategies.”

Does bad weather have the power to impact procurement?

It’s too cold… I can’t work in here… my hands don’t work anymore.

So uttered my girlfriend last night. Despite frantically working towards completing her PhD, the current freeze enveloping Granada had halted progress.

As millions of people in the US Northeast braced for blizzard conditions accompanying Winter Storm Juno, Europe is freezing through another winter with record snowfalls posted last week.

The impact of weather on output

The effect the cold weather had on my girlfriend’s ability to work reminded me of a chart I recently stumbled across online. Produced by the Bank of America; it details the monetary impact that severe weather events had on the global economy in 2014.

The chart shows everything from a major drought sweeping across the Californian agriculture belt, to a snowstorm in Tokyo last February that grounded 9,500 airline passengers

More than anything though, this chart highlights our utter vulnerability to weather events. Events that, at least for now, are completely beyond our control.

Severe weather has the ability to stop the transportation of goods, close down production plants and leave office workers stranded at home (or worse still, stranded in the office).

The Bank of America chart was produced in order to stimulate climate change debate at the Davos World Economic Forum (an excellent run down of the event can be found here).

Climate change’s impact on supply chains

Despite some ongoing rumblings to the contrary, the scientific community is in agreement that climate change is indeed ‘a thing’, that it is already happening and that humans are largely to blame.

All of this got me thinking. Procurement is perhaps more vulnerable than any other business function to the impact of severe weather and climate change.

I believe climate change has the potential to impact procurement operations in two main ways:

  1. Impact on the availability of raw materials. Most businesses rely on raw materials either directly or indirectly. Changing weather patterns will likely alter the ability of firms to secure a reliable, ongoing supply of these commodities. As the supply of raw materials becomes scarcer (even if only in the short term), prices are destined to climb.
  2. Impact on transportation links. We are seeing an increase in both the frequency and intensity of storms and severe weather across the world. These weather systems have a direct impact on companies’ ability to move goods across their increasingly globalised supply networks. Our drive for efficiency and appetite for lower inventory levels has left us all the more vulnerable to these delays.

So what exactly are we doing about climate change?

In 2013 a report was released that highlighted just how little some companies were doing to ensure their supply chains were prepared for the impact of climate change. The report showed that while 86 per cent of the 350 UK companies surveyed understood the risks climate change posed, only 14 per cent were taking a long-term approach to managing the phenomenon.

It doesn’t matter what industry you are in, climate change will impact your business.

A storm in Panama could double the cost of bananas in European supermarkets. If coastal settlements in the US Northeast continue to take battering’s from storm systems, insurance companies may be forced to rethink premiums. Oil producers need to understand the impact that storms and unsettled seas will have, not only on the production of offshore platforms, but also on the safety of their workers.

Does your business understand its exposure to severe weather and climate change? Is your supply chain at risk? Are you prepared for unforseen but inevitable events? Or are we about to see an increased prevalence of force majeure clause enactments?

5 disruptive forces that will keep CPOs awake at night in 2015

CPOs around the world may have some sleepless nights in 2015 as they defend themselves and their companies against powerful disruptive forces.

Kuznetsova Julia/Shutterstock.com

In the true spirit of social media, I’ll highlight just five of these disruptive forces and have created the convenient “METOO” acronym to cover – Markets, Ethics, Transparency, Optionality and Organisational alignment.

2015 is the time to make sure you have your bases covered in these areas:

Markets – We would be naive if we didn’t expect more market volatility in the coming year.  In 2014 we saw interest rates remain low, the Rouble depreciate 50 per cent, the Australian dollar depreciate 20 per cent, oil prices drop 50 per cent, iron ore prices drop 40 per cent and Chinese growth at its lowest since 2009.

As we are all exposed to the instability of global markets, CPOs will need to decide how to either protect or profit from this volatility.

Ethics – Some leading global retailers had their public reputations shattered last year with revelations about unscrupulous and bullying behaviour towards their suppliers. CPOs will need to have a clear conscience that they are using squeaky clean negotiation techniques and are taking demonstrative actions to ensure their team, and the entire organisation, has a healthy and ethical approach to managing suppliers.

Transparency  – Discovering that one of your third or fourth tier suppliers is involved in corruption, using child labour, unsafe work practices, or substituting lower quality ingredients or parts will be the stuff of nightmares for CPOs in 2015.

A focus on supply chain transparency will see a whole lot of quality assurance consultancies, and other intermediaries, busy in this booming sector of the services economy.  As one of my mentors has always said, “better to know you’re right, rather than hope you’re not wrong”.

Optionality – Talking recently with a federal government defence advisor and the CPO of a leading European telecommunications company, really brought home to me the dilemma of developing and managing suppliers as we move to operating in an era of the “Internet of Things”.

More than ever, we are actually buying technology more so than the actual product or service (think driverless mining trucks – we’re really buying the technology to manage and maintain these vehicles, more so than the trucks themselves).

As technology increasingly becomes the product, we need to keep our options open in order to take advantage of the frenetic pace of change. Our tenders and contracts will need to more broadly define the functionality and utility we require of a product or service, rather than the exacting specifications we know today.

We will also need to ensure we keep our minds, doors and sourcing processes open to engage new suppliers with break-through technologies.  With most contracts being around 3-5 years long, CPOs will need to build optionality into their contracts to ensure they have the agility and can be opportunistic in adapting and adopting new technologies.

Organisational alignment – Procurement teams today are well-versed at “finding the money” and negotiating great deals that should result in bottom line savings.  That’s 101 stuff – our traditional raison d’etre .The trickier challenge has always been to “keep the money” and make sure that contracted savings actually make their way to the bottom line.

Today’s CPO has to work harder than ever to make sure “everyone is on the bus”, utilising negotiated contracts and treating every dollar as if it were their own.

Creating cost-conscious cultures is a huge change management exercise that requires a vastly different skill-set from the CPO’s traditional tool kit.  This challenge, teamed with frequency and voracity of carpet-pulling and direction-changing that will go on in the boardroom and C-suite this year, will require a lot of creative thinking and schmoozing by leading CPOs.

Anyone need a Xanex? (Is that a sleeping tablet?)

If you agree with my thoughts or have want to comment on the forces impacting procurement in 2015 – please Tweet #metoo #bigideas @taniaseary or just respond “me too” on LinkedIn or Procurious.

Not your average product recall: improving retail safety

The safety expectations placed on suppliers in China are vastly different from those in the west. The growth of Internet giant, Alibaba has seen a new wave of  ‘made in China’ products reach the US, but are they safe?

Buckyballs sweep the US

In 2009 a new toy stormed the US market. Buckyballs – tiny, highly magnetic spheres constructed of rare earth metals were a runaway success and registered $40 million dollars in sales over their first four years.

However, the same magnetic attraction that made the balls so much fun to play with, also made them incredibly dangerous if they wound up inside the human body. Despite only being marketed to adults, the small, candy like appearance of the product meant they had a habit of turning up in the digestive tracts of young children.

In his blog, Gastroenterologist Byran Vartabendian, gave the following horrifying rundown of what happens when the balls are accidentally swallowed.

“When two are ingested they have a way of finding one another. When they catch a loop of intestine, the pressure leads to loss of blood supply, tissue rot, perforation and potentially death.”

It was estimated that between 2009 and 2011, 1700 children passed through US emergency wards after having ingested the high-powered magnet.

In 2014 – the U.S. Consumer Product Safety Commission (CPSC), a US federal agency established to stop hazardous products entering US homes – recalled the product, claiming a ‘substantial risk of injury and death to children and teenagers’.

While this ruling signalled the end for Buckyballs (a then multi-million dollar product), its five years of success and profitability had inspired a number of competitors to emerge. Many of these competitors were selling the same dangerous product direct to US consumers through the Chinese online retail platform Alibaba.

Not your average product recall

This disparate, multinational supply chain presented a significant challenge for the CPSC.

In the past the agency would have simply issued a recall, shut down warehouses and monitored local stores to ensure no substitute products appeared.

Today however, the supply market for the high-powered magnets (as well as thousands of other toys) stretches well beyond US toy stores. The proliferation of online shopping has meant that controlling the purchase point of these products has become infinitely more difficult to manage. The CPSC’s chairman Elliot F. Kaye highlighted this recently when he said:

“Long gone are the days when we could pull stuff off of shelves,”

“We anticipate the next frontier will be outside of US borders.”

Working together for Product Safety

In response to this new challenge, the CPSC has announced a partnership with Alibaba. The agreement, the first of its kind between the CPSC and a foreign owned website, will see the two organisations collaborate to limit the movement of hazardous toys into the US.

The CPSC has given Alibaba a list of 15 Chinese produced products (including Buckyballs) that have been recalled from US shelves and requested that retailers on the e-commerce platform cease selling these goods directly to customers in the United States.

At the time of writing Alibaba was yet to detail how it planned to carry out the promises it has made to the CPSC, but a spokesman from the online retailer did state the company’s intention to:

“work (sic) collaboratively with the chairman and his team to do everything possible to protect consumers.” 

2014 was huge for Alibaba in the US

This commitment to product safety from Alibaba comes at a time when the firm is making significant headway into the US market and arguably represents the company’s dedication to ongoing success in western markets.

In 2014 the online platform became one of the world’s most valuable companies and its owner instantly garnered the title of China’s richest man – after it raised $25 billion USD in its US IPO.

In September of 2014 the company had an estimated market cap of $215 billion USD, a valuation outshone in the tech space only by Apple, Google and Microsoft.

As well as its success on the US stock exchange, Alibaba opened 11 Main – its first website dedicated to US consumers in July of 2014.

Is its size a hindrance to growth?

The greatest challenge for Alibaba’s plans to smoothly and safely transition into western markets is the sheer size of its vast online marketplace.

Alibaba is not only the world’s largest e-commerce marketplace, but it is also the fastest growing. The company has hundreds of millions of users, hosts, and merchants.

This immense size, combined with the fact that Alibaba doesn’t actually own any of the products being sold on its website, makes it nearly impossible to ensure product safety measures are anything but reactive.

A Sea of Counterfeits

This sort of criticism is not new for Alibaba. As recently as last year the company’s inability to effectively control the standards of its sellers came under fire. This time for the way counterfeit or ‘fake’ products sold by its merchants had been managed.

Haydn Simpson – a product director at counterfeit-tracker NetNames, claims his clients (mostly well known international brands), estimate that 20 per cent to 80 per cent of the products listed on Taobao (an Alibaba owned site) with their nametag are in-fact fakes.

In response to these claims, Alibaba last year spent more than $160 million USD attempting to remove fakes from its website. However even the briefest look on the platform shows that this initiative was entirely fruitless and counterfeit products can still easily be found on the website.

So how then is the CPSC – a US federal agency with a 2014-operating budget of $117 million USD, supposed to ensure product safety in this vast marketplace?

One thing is for sure, if they plan on tackling the problem15 products at a time, they’ve got a long road ahead of them.

The WEF 2015 – where, why and what happened?

“Social media has created a historical shift from the historically powerful to the historically powerless. Now everyone has a voice.”

Sheryl Sandberg, COO and Member of the Board, Facebook at the WEF, Davos, 2015

The World Economic Forum

Unless you have been deliberately avoiding the news over the past week, you’ll be aware that The World Economic Forum has just taken place in Davos.

What is it?

According to the founder, Professor Klaus Schwab, the Forum is “a platform for collaborative thinking and searching for solutions, not for making decisions”.

What this means is that business leaders, thought leaders and politicians, as well as some celebrities, gather together to share ideas with the intention of bettering the world.

Does it work?

The jury is still out for many people. A lot of people look upon the event as a who’s who, rich-list party in the Swiss mountains, others that there isn’t enough tangible output from an event able to gather together a group of individuals with sizeable clout.

However, if these leaders leave Davos with fresh ideas on how to solve the major issues in the world, then, for the rest, the Forum will have fulfilled its purpose.

What were the major topics this year?

Key topics on the table this year included the falling price of oil, the Greek election, a growth agenda for Africa, how technology is changing our lives and what the future holds for Iraq. Check out www.weforum.org for the full programme.

Is there anything we take away?

From a Procurement point of view, we know that there were discussions around procurement efficiency on the agenda (as part of wider topics), as well as the business role in environmental sustainability. We should hear some details coming out over the next few weeks.

As we also reported on Procurious, the WEF raised the issue of cyber security. It certainly got people talking about what they needed to be doing and even came close to a consensus on an idea for a global body that sets cyber-security standards.

Otherwise, we would encourage you to check out some of the video content on the WEF website. For one thing, we’ll probably never have the chance to see Pharrell Williams on stage with Al Gore again!

Read on for more of the biggest stories commanding headlines right now:

DHL Express launches helicopter delivery service

  • DHL has launched a helicopter delivery service in the UK that promises next day delivery on packages from New York, Boston and Chicago. The new service, a first for the UK, will ferry up to 300kg of packages between London’s Heathrow Airport and major London business district Canary Wharf.
  • Fully operational from February, it follows similar operations launched in New York and Los Angeles.
  • “This new service from DHL Express offers even greater speed and reliability to our customers,” John Pearson, chief executive of DHL Express Europe said. “For the financial and professional services sector in particular, time really is money, so we are always looking for innovative, more efficient ways to move our customers’ shipments.”

Read more at Arabian Supply Chain

FSB tackles supply chain bullying at Whitehall

  • The Federation of Small Businesses (FSB) has hosted a cross-party group of MPs to identify possible solutions to the deterioration of payment practises in the UK.
  • Recent research by the FSB revealed that almost one in five small businesses had been subject to some form of poor payment tactics recently.
  • FSB national policy chairman Mike Cherry said: “It is simply unacceptable for any company to exploit its market position to enforce unfair and unreasonable payment terms. The money outstanding in late payments is in the billions and has consistently grown larger and larger. We need greater leadership from all parties competing to be in the next government to toughen up the prompt payment code and improve the UK’s payment culture.”

Read more at PRW.com

China smartphone supply chains estimate demand to pick up in March

  • China smartphone supply chain makers estimate they will begin shipments for new devices following the Lunar New Year period as local handset vendors remain concerned over clearing out inventories through the early part of first-quarter 2015.
  • Smartphone shipments were lower-than-expected in the China market during the second half of 2014, which many makers attribute to lagging 4G development and a lack of smartphone subsidies from local telecom providers in China. This led to a pile up in inventory, which vendors are now trying to tackle throughout the 2015 Lunar New Year period when sales are expected to get a boost.
  • Supply chain makers are optimistic, however, that shipments will pick up by March, and estimate that most handset replacement demand from consumers in China during 2015 will be for handsets sized 5-inch and above. Shipments will further pick up going into the second quarter, the makers noted.
  • Many supply chain makers believe that China handset vendors’ shipments will increase 17 per cent in 2015 as the vendors tackle low-priced solutions in emerging markets. Global smartphone shipments in 2015 meanwhile are estimated to grow 12 per cent to around 1.3 billion.

Read more at Digitimes

Top 10 supply chain CEOs of 2015

Supply Chain Digital has published a list of its top 10 supply chain CEOs for the year ahead.

[In ascending order] it named Nills S Andersen of Maersk, Dr Frank Appel of Deutsche Post DHL, and Frederick W. Smith of Fedex in its top 3.

To see the full list (along with selected career highlights from those included) head over to http://www.supplychaindigital.com/top10/3800/TOP-10-SUPPLY-CHAIN-CEOs-2015

How Tesco uses the cloud to work with its suppliers

  • Tesco is using online trading partner community solutions to embrace and extend its Oracle ERP and procure-to-pay systems and has significantly increased automation levels in their B2B e-commerce network during the last twelve months.
  • As a result Tesco has reduced the time to set up and approve new suppliers by 66 per cent.
  • With the help of GXS, Tesco has tackled the challenges that have, in the past, prevented some of its trading partners from adopting EDI. Tesco has significantly increased automation levels in their B2B e-commerce network during the last twelve months.

View the full findings of this case study at Supply Chain 24/7