What Literature and Film Teaches us about Savings

The theme of money is a very common one in the world of books and film. So what can our favourite fictional characters teach us about increasing our savings?

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It’s not too much of a stretch to suggest that procurement can learn a lot about saving from literary and film characters. Money is a common central theme in so many novels and movies and so it shouldn’t come as a surprise that there is a multitude of good and bad examples of how organisations can manage their money. 

One of the many options available to organisations is to look for external assistance in the form of procurement consulting. To tie in with the idea of drawing inspiration from a network of sources, one particular strategy would be to use a Group Purchasing Organisation (GPO). A GPO draws uses the collective purchasing power of its members to achieve greater discounts and lower prices from suppliers. 

The benefits don’t stop there. A GPO can apply various procurement strategies and actually increase organisational savings year-on-year. It’s about selecting the right strategy or strategies. And this is where our movie and book characters come in.

Strategic Buying and Mr. Micawber

Wilkins Micawber is a primary character in the Charles Dickens novel, David Copperfield. The character has begat the ‘Micawber Principle’, which simply and eloquently states that if annual expenditure exceeds annual income, then the result is ‘misery’. Though he seems to be better at offering this advice than taking it himself, this shows a good example of strategic buying.

In spite of some criticism faced, GPOs don’t encourage greater spending or higher volume of purchasing – this is a myth! They do, however, utilise the greater buying power of the collective over the individual to provide lower prices for members. And then, in addition, keep these prices lower in the long-term by leveraging higher volumes and pre-negotiated contracts. 

Definitely no misery here if the strategic buying is carried out effectively, as this will result in continued savings for the organisation.

Monty Brewster and Centralised Procurement 

If you haven’t seen the 1985 comedy classic, ‘Brewster’s Millions’, then finish reading this first and then go and find it on whichever TV/film/streaming service you use! In the book and film, the titular Brewster must spend $30 million in 30 days in order to inherit $300 million. And there are a couple of catches: 

  1. if he fails to spend the full amount he is left with nothing; and 
  2. he cannot tell anyone the reason for his spending spree.

Let’s set aside for a moment that this is every procurement professional’s nightmare end user – off doing their own thing without communicating anything. 

One of Brewster’s main issues in spending the money is his well-meaning friend, Spike. While Brewster is off throwing money away, Spike is making shrewd investments and actually earning more. It’s the very definition of decentralised procurement.

A GPO helps to build centralised procurement in the organisation and in its network of members. Communication is key and demand management strategies are developed by procurement in conjunction with end users, reducing excess usage. This is all supported by GPOs providing metrics and benchmarks from the network for all members to use. 

This again helps keeps the price down in the longer term and reduces the likelihood of an end user going on a Brewster-style spending spree!

Procurement Software and Nick Leeson

They say the best stories start with the kernel of truth. Well this one is based on a true story which helps to highlight the benefits of procurement software in both traceability and compliance. Ewan MacGregor plays real-life ‘Rogue Trader’, Nick Leeson, whose attempts to save and recoup money caused one of the biggest scandals in banking history.

Without trivialising the situation, or making light of what was a very damaging time for a large number of people, the film and real-life story highlight why organisations, and procurement within them, need high quality procurement software to track and manage spend. The concept of ‘you can’t save what you can’t see’, as well as ensuring that spend is compliant rather than non-contract or maverick, links heavily to the savings agenda.

Companies like Sourcing Insights provide world-class software and analytics which enable procurement to track and visualise data in real-time and see where future issues may lie. You may not have a Rogue Trader in your midst, but with the application of the right software you’ll have greater control on your spend which will help to deliver savings year after year. 

Managing your Money

There’s an idea in procurement that to get the best from spending, professionals need to spend the money like it’s their own. But how about you engage some procurement consulting and get them to manage your money like it was their own?

Whether you are a Micawber or a Brewster, you can access the best knowledge and software, knowing that your money is safe in their hands. After all, it would be nice to be able to point to this success the next time your CFO asks “show me the money”!

From savings and pre-negotiated agreements, to spend analytics and collective buying power, GPOs provide a wealth of benefits to procurement organisations. Find out more by visiting UNA.com now.

Fillers and Facelifts: How Far Do Men Go to Look Young at Work?

With more over-65s staying in the workplace, how can young people stay competitive in the recruitment game?

Photo by Wendy Scofield on Unsplash

Let’s dispel some myths. Its men – not women – who are most likely to experience age discrimination at work.

And you don’t actually have to be that old to be a victim.

Nearly four in ten say that age has been a factor preventing them from advancing in their career since turning 40. This drops to just a quarter of women.

From then on, (whatever your gender) things only get worse. You are most likely to experience age discrimination aged 51 according to the Hiscox 2019 Ageism in the Workplace Study.

So, some of us are resorting to desperate measures to stay young particularly anti-aging procedures from dermatologists. ever heard the expression, “If you want to get ahead, get Botox”?

Well, in the USA which naturally (or maybe not so naturally) leads the way, the number of injectable filler procedures on men has risen by 99 per cent since 2000 with the American Society of Plastic Surgeons saying cosmetic procedures are up 29 per cent over the same period.

So, what will you do when you’re 65?

If ageism is a problem in your 40s and 50s, imagine how damaging it could be to your carer when you hit your 60s.

Whatever you think of your job today, can you really imagine doing it when you are heading for 70 – or even older?

The state retirement age will rise to 67 from 2028 and then to 68 and possibly 70. So most of us will have to keep working for many years to come.

But if it is hard to get ahead in your 40s and 50s, who is going to employ you when you are in your seventh decade?

Older Jobseekers will be Everywhere

By 2050, one in four people in the UK will be over 65 (it’s currently around one in five) according to recent forecasts from the Office for National Statistics.

That’s an extra 8.2 million older people – a population the size of London – and many of them will be wanting to work.

The next decade or so will see people who were born too late to benefit from generous ‘gold plated’ final salary pensions reaching retirement. Without a decent retirement income they may have no option but to keep in work. Also many want to keep working – feeling they are too young to spend the next few decades playing golf and pottering around in the garden.

More than half of those age 65 plus say they are ‘not ready to retire’ according to insurer Aviva.

That means there will be plenty of them looking for a job – and if you are one of them, how can you compete?

Plan Ahead and Play to your Strengths

What do more mature employees have to offer compared to younger ones? Well, topping the list are invaluable skills, experience and knowledge that they can share with colleagues.

You might believe keeping these to yourself, will protect you – but most employers don’t value these attributes (yet). So, build up a reputation for mentoring and developing younger colleagues.

Continually Up-skill to Remain Relevant

Also address the misconceptions about older workers – they have out-of-date skills, struggle with the latest technology and find it difficult to learn something new.

Some of these myths are based on truths. Four in ten Baby Boomers (born between ‘46 and ‘64) in the UK feel they ‘don’t have the skills needed to win a new job’ according to a Docebo survey with around half feeling younger employers had better tech skills.

Mature workers might be reluctant to demand extra training – not surprisingly. It effectively tells your employer your skills are not up to scratch. So stick to online learning tutorials (preferably ones which lead to recognised qualifications that you can put on your CV). Search coursera.org, udemy.com, futurelearn.com and look at courses offered by professional organisations.

De-Age Your CV – It’s Easy

Well, the good news is that you don’t have to pay for fillers, veneered teeth or spend every waking hour in the gym in a bid to defy age.

One of the biggest challenges once you hit 40 is finding a new job. As increasing numbers of applications are now made online, it is a computer algorithm (rather than a real person) who decides whether you are up for the job. And it’s much easier to fool a computer than an eagle-eyed HR professional who can spot the crow’s feet around your eyes, the sagging jowls and the incongruously youthful business suit.

Also, with candidate shortages, you are increasingly likely to be approached for a new job, rather than applying. So make yourself as appear as employable as possible in the virtual world. You can then work on your real-world appearance when it comes to the interview.

So get rid of:

  • Listing what you did in your first job and early 20s (unless you are in your early 20s!). A longer career history is a tell-tale sign that you’ve been around for quite a long time.
  • Dates – unless they are more recent. So no need to write the dates you were at school or university.
  • Your age – amazingly (even though this is not required for most jobs) some CVs still feature a date of birth. Employers are not allowed to discriminate on the grounds of age, so they are not allowed to even ask! Don’t tell them.
  • O Levels and any other qualification that no longer exists – today, it’s GCSE equivalents that count.

Then add in:

  • Every single quality required on the job advert – if a computer algorithm is searching your CV or application letter, you want it to recognise you have all the skills required. If you don’t quite have the skills listed, try to find a way of including them. For example, “Leadership experience or experience managing a team” could relate to managing a project (with your colleagues) even if your job title is not team manager.
  • Proficiency in the latest software and technology – even if it is not a requirement. It will portray you as “tech savvy” rather than a dinosaur.

But don’t:

  • Tell an outright lie – you can fool technology some of the time, but organisations do check qualifications, references etc. So make sure your social media profile, particularly LinkedIn, matches your CV.

Is Your IP Safe From Flexible Workers?

The world of work is changing, with the younger generations taking advantage of flexible working. But how can organisations safeguard their IP in this new world?

Photo by Philipp Katzenberger on Unsplash

For some of us, it feels like we have just got over the shock of seeing Millennials coming into the workforce (generally considered to be those born in the 1980s/ 90s), when suddenly we are faced with Generation Z youngsters (born around the Millennium, from around 1995 to 2005) appearing in our offices, shops or factories.  

What is clear though is that those individuals are facing a very different employment situation to those of us defined as “Baby Boomers”. That’s not to say all of that post-war baby-boom era have thrived. Many are facing a retirement that will require continuing to work, perhaps via unsatisfactory zero-hours contracts. Particularly if they didn’t get their pensions sorted out in good time. 

Job for Life? Or Jobs A-plenty?

But back to the changes in working life. For those graduating in the 1970s and 80s, a training scheme with a respected large firm, like Shell, Mars, Ford, P&G or IBM was the pinnacle of ambition for many. The expectation then was that if the new entrant performed well, they might be there for life, with a nice final salary pension at the end of it.  

Now that world has not disappeared completely, and there are still huge corporate employers – the big accounting firms having become a major recruiter of graduates, for instance. But for many young people, the world of work looks very different.

These people are more likely to start their own businesses, as true entrepreneurs, for tax reasons, or perhaps to work part-time while pursuing another dream (writing, acting, or charitable work).  They are more likely to end up working for many different employers, and probably carrying out many different roles. They may have part-time jobs, perhaps several at the same time.

Many will end up on flexible or zero-hours contracts at some point. They may well at some point be self-employed. They may work hard for a year, then disappear off travelling for six months.

Not all of this is positive, and some may wish for the old days of the steady nine-to-five. But there are opportunities now to try different things, and take a flexible approach to work, perhaps to follow that dream of being a movie star or the next Bill Gates, whilst making enough money to survive by cycling around town with a Deliveroo bag on your back!

Employing the Right Flexible Workers

This situation has arisen in the main partly because of demand from individuals, but mainly because employers see the advantages in flexible working patterns and approaches. Yet this new world of work has brought issues as well, for both workers and employers.

For the employer, managing a group of often highly independent and intelligent workers, who may have limited real loyalty to the organisation, and who may disappear at any moment off to Thailand or to go on tour with their band, is a challenge.

In many cases, flexible working is attractive for the employer because it helps to cope with changes in demand – peaks and troughs – in an efficient manner. But that assumes the organisation can get hold of the right workers when they are needed. That is difficult enough even in many relatively unskilled roles, but when it comes to finding skilled people, ranging from heavy goods lorry drivers to social workers to film make-up artists, the challenge is even greater.

The Unseen Risks

There are also reputational and even strategic risks for some organisations. In the health, education and social care sectors, ensuring that workers have the right accreditations and qualification is vital. Security clearances come into play in certain cases, for instance in the security and defence sectors, and increasingly in other roles where data comes into play.

In other sectors, such as technology, questions of intellectual property, confidentiality and competition come into play. If you have seen the film Social Network, you may remember that the Winklevoss twins claimed they took on Marc Zuckerberg in effect as a “contract worker” to develop  coding for their business idea of a website to connect students.  We all know what happened next.  Not long after, to their surprise, Zuckerberg’s “The Facebook” hit the dorms of Harvard!

The smart young programmer you’ve taken on to help meet a deadline – where else has she been working? Might she have her own plans for a similar product, game or app?  Is her best friend getting married to your biggest competitor’s head of marketing?  

This may sound paranoid, but in a world of flexible working and workers, these issues are increasingly significant. Protecting the organisation’s reputation and intellectual property are further key imperatives in this emerging world.

So Long to the “Good Old Days”

So, we can assume that “work” is changing for all parties; and it needs to be underpinned by robust data and efficient operational management (and the two are linked, of course). Employees want to find opportunities, to engage easily and quickly with prospective employers, and to experience smooth and effective administration when they are employed.

Employers want to comply with tax and other regulations, know about the available pool of workers, be able to check them out, then manage the employment relationship efficiently and effectively. All of this requires good data, good processes, and good systems.

Any organisation that does not have those in place will struggle to attract, retain and manage their increasingly flexible and dynamic workforce. Whatever comes after Generation Z, we can assume we will never return to the old days! 

This article was written for Procurious by Stephan Beeusaert, UKI Head – SAP Ariba & SAP Fieldglass, and Peter Smith, Managing Director – Procurement Excellence Ltd. If you want to learn more or have any questions,  join SAP Ariba at ValueX – Unleashing the Power of Spend.

Procurement Will: My Takeaways from the Big Ideas Summit

The best insights in the world are no good if nobody acts on them. Time for procurement to follow through with some great, Big Ideas.

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Last week, I had the pleasure of hosting a room full of some of the top procurement professionals in the country. This wasn’t just any old networking event though, it was the Chicago Big Ideas Summit. Not only were we inundated with interesting speakers and lively discussions that inspired us to keep pushing the boundaries of what procurement can do, but we were able to make new connections and let our hair down with our peers.

While we expected to be challenged and excited by the ideas shared, nothing could have prepared us for how much fun the day turned out to be.

As procurement professionals, we have an important role in driving change in the world around us – both locally and globally – and these changes are about so much more than saving money.

While I have enough notes from the day to fill a book, here are three of my biggest takeaways from the Chicago Big Ideas Summit:

Procurement must become the knowledge centre of an organisation

With the reach of procurement growing every year, defining where it sits within an organisation can be a challenge. Strong cases can be made for both operations and finance, but as risk management rises as a crucial pillar for the profession, procurement is increasingly becoming known as the knowledge centre of an organisation. As Justin Crump, CEO of Sibylline said, “The best insight in the world is no good, if nobody acts on it.”

With unique insight into potential and emerging threats including environmental, political and social issues, it’s the procurement professional’s responsibility to not only understand how to navigate these risks, but to share them with the rest of their organisation to ensure swift action can be taken.

Pat McCarthy, SVP & GM for SAP Ariba and SAP Fieldglass, agreed that harnessing this information network is crucial to the future of procurement. “Information and insights light the way for procurement to add value.”

With oversight of risk, slavery and cost to data and solutions, we need to be able to share and integrate this knowledge into our organisations to truly demonstrate the value of effective procurement.

How do we invest in the future of procurement?

The war for talent is underway and with many coming to the profession through alternative channels, we need to be constantly thinking about how we can attract and retain the right type of talent. As Professor Moran Cerf told us, “We might be the last versions of humans that will train the brain to think differently due to technology.”

That means that not only do we need to ensure we’re hiring people who understand and can develop alongside the evolving technologies, but we need to be conscious of emerging soft skills and emotional intelligence to help the next generation of procurement professionals succeed.

We have top talent in the United States, but we need to help unleash them from “inside the box” thinking to ensure we’re working together to innovate and solve emerging issues of the future.

Our panel discussion lead by Dawn Tiura, President and CEO, Sourcing Industry Group, discussed how the procurement professionals who prefer the ‘beat up and buy’ sourcing mentality have become irrelevant, and we’re now more interested in talent who can demonstrate their Adaptability Quotient (AQ). The ability to demonstrate agility, be naturally curious and respond to change will all be crucial going forward.

Supplier and Stakeholder Partnerships are Key

This might not be the most mind-blowing concept in procurement, given that maintaining relationships with stakeholders is at the core of what we do, but how we work with our suppliers in the future is going to be the key to success.

Diego de la Garza, Director of Source One, said, “We need to know the problem we are trying to solve, then facilitate the process between stakeholders and suppliers to create ideas that will solve that problem.” That means that we must let go of the idea that contract negotiations and supplier relationships are about beating down the price and embrace the partnership style of working.

“Reliable supply chains give you control over the unknown,” said Bradley Paster, VP North American Sales, riskmethods during his presentation. The most effective way you can ensure you have a reliable supply chain is by working with your suppliers and stakeholders to add value, solve problems and innovate to find a better way forward.

Value will always drive buying decisions, but the true value of procurement can be measured beyond cost and working with our stakeholders can ensure we’re adding value not just to our bottom line, but to the improvement of our global community.

As Jamila Gordon reminded us in her closing speech of the day, there is hope. The future is bright and procurement is the key for driving great changes in our world.

Feel like you’re late to the party? Or did you just get swamped and weren’t able to tune in on the day? Well, fear not, you can still access all the great content, videos, keynotes, presentations and all the discussion in the Big Ideas Summit Chicago 2019 Group! By clicking here, you can join the group and catch up when it suits you.

6 Sure-Fire Ways To Become A Head Of Supply Chain

We explore six ways that can guarantee you that dream head of supply chain management job…

head of supply chain
By fizkes/ Shutterstock

Firstly, take time to find out what the job is really about. At its simplest level in manufacturing, for example, it means leading the sourcing and procurement of direct and indirect materials from suppliers, production, warehousing, transport and the distribution to the customer and/or end consumer.

A simple supply chain

Secondly, jobs may not even have similar titles: it could be Executive Vice President of Global Supply Chain, Supply Chain Director or just Head of Supply Chain. The job content differs widely across industries so no two jobs at this level are the same.  There is no one definitive job description.

Whatever the title, the Head of Supply Chain is responsible for integrating and optimising all the processes that are involved in every stage of getting a product or service to a customer. If your desired role is in an industry such as agriculture, healthcare, or I.T and telecommunications, there are other considerations including security, waste, safety, managing returns and many other different risks. 

In reality, it has become much more complex. It may rather look like this.

Let’s look at the 6 ways that can get you that dream job.

There is no substitute for experience

Prospective or current supply chain managers that aspire to reach the top job in supply chain should acquire in-depth working experience in at least one of the functional areas within supply chain.  Heads of Supply Chain, in the list of the top 25 leading global supply chains as identified by Gartner in 2019, have all got extensive and relevant work experience, usually in their industry sector.

In fast-moving-consumer-goods (FMCG), global leaders also need expertise in distribution technologies, emerging markets and sustainability.  For example, Sandra MacQuillan, the Executive Vice President, Integrated Supply Chain at Mondelez International, has “a wealth of international expertise in sustainable supply chain and technology strategy, with vast experience in packaged goods at global companies where she has built world-class supply chain capabilities,” according to the CEO.

Get an educational qualification   

The competition for the top jobs is tough, without a recognised qualification it is almost impossible to get hired. An exception may be where the candidate has a spectacular skill in a tight niche where there are no other suitable applicants, but this is rare.   

The most common route into supply chain management is to take a foundation business, finance or engineering degree, and then an advanced diploma or certification in an area such as logistics or procurement within supply chain management.

Demonstrate the required technical skills

As a leader, it may not be necessary to be an expert on all the technical skills that exist in your teams, but some level of proficiency in most of these will provide you with a certain level of respect. 

  • Knowledge of the raw materials, manufacturing processes and distribution methods in your business
  • An understanding of business and management principles and strategic planning
  • Well-developed analytical skills and attention to detail
  • Knowledge of economic and accounting principles, ERP/MRP systems, forecasting, and budgeting

Show your ability to lead others and drive change

Building relationships and influencing others are fundamental to the role.

Change management is ultimately about people and your capability to guide them in a particular direction.  Some of the elements that lead to success in leading a team are:

  • An open and participative style when collaborating with influential stakeholders and their teams
  • Well-developed verbal and written communication skills and the sense to know when and how to use which channel 
  • Ability to work in a fast-paced dynamic environment while keeping calm under pressure
  • Solving problems based on available information
  • Dealing with ambiguity while providing positive outcomes and minimising risks.

A leader will spend a fair portion of their time on employee competency development, building capacity and understanding what people need to perform well.

Keep up with the program!

Because the role is essentially process driven you should be comfortable when implementing new technological solutions. Digital technologies are inserting themselves all over the supply chain from data analytics and e-sourcing through to automated picking and drone deliveries.

The implementation of digital solutions is redefining supply chain operations at leading companies such as BASF, Cisco, Intel, Johnson & Johnson, BMW and many others. As Head of Supply Chain you may not need to be head geek, but you will need to understand the basics of the various applications of each type of technology and be alert to trends. 

Have a global view with a local focus

The head of supply chain often has global responsibilities that entail maintaining supplier relationships across continents and cultures. Understanding these complexities is essential in supply chain planning and its execution. 

It is becoming increasingly important for supply chain leaders to have had global business exposure, either from working in virtual teams or preferably having completed international assignments.

David Cutter, as President, Global Supply & Procurement, for Diageo, a major supplier of alcohol beverages, is responsible for a world-class supply chain delivering their brands to over 180 markets around the world from over 100 production facilities located in some 30+ countries.  

Leading firms are looking for those people with process-driven experience, often in similar size companies, attained from outside their home country.   

There is no one accepted preferred career path or basket of skills that you need to become the head of a supply chain.  However, you will need to be able to apply modern methodologies and solutions to a wide range of responsibilities across the entire supply chain. 

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.

Procurement Across Borders – Understanding CQ Action

Are you able to adapt your behaviours in cross-cultural encounters? Your final step may be to take more account of your CQ Action.

Photo by rawpixel.com from Pexels

Throughout this series of articles we have been looking into Cultural Intelligence (CQ) and it’s relevance to working across culture, distance and time.

We have already explored 3 of the 4 main components of CQ which are CQ Drive, CQ Knowledge and CQ Strategy. We will now discuss the fourth component which is CQ Action.

So What is CQ Action?

CQ Action (Behaviour) can be defined as your ability to adapt both your verbal and non-verbal behaviour when engaging in cross-cultural encounters. Being able to flex your behaviour helps you to respond to others in a way that conveys respect, builds trust and rapport and minimises the risk of miscommunications. CQ Action is in effect the manifestation of all of the other aspects of Cultural intelligence. It is behaviour based on motivation (CQ Drive), cognition (CQ Knowledge), and meta-cognition (CQ Strategy).

There are 3 key aspects to CQ Action, the first is verbal communication. When working across culture it is very important to be conscious of different verbal communication styles. Some cultures are very direct in their communication styles while others are not.

For example, people from South Africa and Israel tend to be very direct and forthright. They readily share their opinions. Compare this to people from Japan or Korea, who are far more indirect with their speech patterns. They tend to be much more circular when they say things. It is important to listen carefully to how people are talking or we may miss the point.

A client shared with me recently that one of their team members realised that the Chinese team with whom he interacted never said ”no” as part of their cultural context. Every time he gave them large quantities of work, they kept saying “yes”, even though they had difficulty in meeting the deadlines. On further investigation, he discovered They simply weren’t explicitly saying “no” in the way he expected or understood.

CQ Actions Speak Louder than Words

The second aspect of CQ Action is around non-verbal communication. This describes your body language – how expressive you are, how you use your hands and your facial expressions. This differs greatly in various parts of the world.

An example of this is touching of the head, in some cultures this is an endearing and friendly gesture, while in others it can be very offensive. Some cultures say a lot without using many words while other cultures use hand and facial expressions to add further meaning to their words.

Developing an understanding of non-verbal cues across cultures can take significant time and patience however by doing so you will better able to adapt yourself into a cross- cultural situation which will hopefully result in more fluid relationships.

Understanding Vocal Cues

The third aspect of CQ Action is Speech Acts. Speech acts refers to how much silence we use when speaking, how often we pause and the time spent in between pauses. If you come from a Western culture, you will understand that when there is a silent pause in a meeting, someone will automatically jump in to break the silence.

In other cultures, people are very comfortable sitting with the silence- no matter how long it continues. Thus, part of CQ Action is becoming familiar with these subtleties so that you have the ability to interact effectively with people of different cultures.

When working with a different culture, you may possess a great deal of knowledge, have the best strategy and be really motivated however if you are unable to execute or implement these aspects effectively then success will be very limited.

CQ Action involves implementing the appropriate social etiquette and behaviour to suit a diverse range of situations and people which in turn leads to a diverse and sincere connection.

Traditional vs Automated Procurement Process

Got major procurement issues in your organisation? You may well be able to use technology and automated procurement to solve them.

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The procurement process is much more complex than it looks. The more complex it is, the higher the number of issues. An automated procurement process can help you prevent and resolve these issues. However, many companies still rely on a manual process. 

Let’s understand the challenges of the traditional procurement process and the ways automation can help.

Challenges of Traditional Procurement Process

A company practicing traditional procurement process faces a lot of challenges. Here are some of the major challenges of a traditional approach:

1. It’s Time Consuming

A traditional procurement process consumes a lot of time of both vendors and companies. As a result, it slows down the entire process and affects productivity. In addition to this, it can take days to communicate a single message and get the job done.

2. Chances of Duplication and Fraud

In a traditional procurement process, everything happens on paper so it becomes difficult for your team to keep track of everything. That’s why there’s little to no transparency in the dealings. This can lead to malpractice such as duplication of contracts or fraud. A single incident of fraud can affect your company’s reputation. 

3. Inefficient Data Management

An offline procurement process involves a lot of paperwork, so data management becomes challenging. In addition to that, it also increases the risk of errors. In spite of this, 54% of companies are still using a paper-based invoice process. 

Paper-based records are always vulnerable to tampering or loss of information and data. This can put your company in a troublesome position.

Benefits of Using Automated Procurement Process

Here are some important benefits of using an automated procurement process: 

1. Improves Efficiency and Speed of Procurement Process

By automating your procurement process, you can not only speed up the process but also increase efficiency. This helps your procurement team by saving a lot of their time for other important tasks.  

With an automated process, you can automate all the repetitive tasks. This helps you cut down on the amount of manual work for your team. It allows them to handle much more important and complex tasks. 

2. Creates a Centralised System

As mentioned above, a traditional procurement process can lead to duplication and fraud in contracts. For any company, there’s nothing scarier than this.

However, automation can help you minimize instances of duplication and fraud. It helps you create a centralized system for all of your data and documents. This allows your procurement team to easily track down the required documents.

3. Reduce Manual Errors

Unlike a traditional approach, automation eliminates paper-based documentation and decreases the risk of errors. When you follow a traditional approach, it not only consumes a lot of time but also invites risk.

So, it’s best to automate your procurement process and encourage a paperless process to reduce manual errors. It also allows you to store information and data easily and safely.

Do you want to learn more about issues in the procurement process and how automation can help you fix them? If so, check out this infographic from PurchaseControl.

Major Procurement Issues & How to Fix Them with Technology

Image courtesy: PurchaseControl

Blockchain – A New Flavour of Traceability

Why did the chicken cross the road? More importantly, was there traceability of its journey and how many miles did it cover? Maybe blockchain can help us answer this age-old question…

Courtesy of Portlandia

Do you find yourself thinking more and more about the journey your food has taken to get to your plate? It’s not just because you’re a supply chain professional. It’s because, as a community, we are increasingly interested in the origin and safety of the food we consume.

Farm to Plate – Tracked and Traced

Consumers have an increasing interest in and focus on sustainability, food miles and the concept of ‘farm to plate’. The pressure is on the supply chain to maintain quality while providing both transparency and a fully auditable trail.

Production lines can be stopped and deadlines missed. But if fresh produce doesn’t get to where it needs to be on time, there isn’t any end product.

Delayed, incomplete, incorrect or damaged shipments create a monumental volume of administration. Productivity tanks, costs mount and trust erodes as the parties enter into a “we said, they said” situation, with each party trying to avoid being the ones to blame. This has led to a situation that as the food supply chain has grown, the level of trust has diminished.

However, one of the hottest new technologies, blockchain, has proved to be an invaluable tool in helping provide transparency and maintain trust.

Network of Networks

In most supply chains, communication is point-to-point and one direction. There is no single, shared record of events across multiple parties. Damages or changes – malicious or accidental – may surface in the moment, or potentially only when they are raised by consumers.

According to research published by Gartner in 2017, there is a movement for mature supply chains to operate in a “network of networks”. The network of networks acts as a self-fulfilling prophecy, as mature supply chains in these networks achieve higher levels of maturity, including improving ecosystem visibility.

By placing a supply chain on the blockchain, it makes the process more traceable, transparent and fully digital. Each node on the blockchain could represent an entity that has handled the food on the way to the store, making it much easier and faster to identify the source of food safety issues with much greater precision.

The attributes of blockchain technology are ideally suited to networks of partners, big and small. By providing a shared, single version of the truth through a shared, digital ledger, blockchain increases trust and creates efficiencies by eliminating the “we said, they said” problem and creating a shared understanding of all possible disruptions that could impact OTIF delivery.

With blockchain, transaction records are immutable, or tamperproof, and agreed upon by all parties. Immutability creates an audit trail. Privacy is maintained by setting the appropriate levels of data visibility for different parties. And business rules are shared and enforced by the system through smart contracts.

Trust and Traceability

A prime example of the effectiveness of blockchain in the food supply chain is Walmart. The retail giant has been working with IBM on a food safety solution, using IBM’s ‘Food Trust‘ solution, which was specifically designed for this purpose.

Before working with IBM to move some of its food supply chain to blockchain, it typically took Walmart approximately 7 days to trace the source of food. With the blockchain, it’s been reduced to 2.2 seconds. This time may be the difference between a consumer eating unsafe food and it never reaching the shelves in the first place.

IBM has also played a major role in the development of blockchain tracking for another retailer, Carrefour. The organisation uses blockchain ledger technology to track produce including meat, milk and fruit from source to shelf. The technology has enabled tracking on the consumer side too, with shoppers able to scan QR codes on products, allowing them to read product information on provenance and process.

Carrefour has credited the technology with increasing consumer trust in the brand, resulting in an increase in sales. It’s an example that many other retailers may look to follow soon.

Supplier ‘Passports’

IBM very recently announced a new blockchain network, ‘Trust Your Supplier’. The network, not solely limited to the food supply chain, has been designed to improve supplier qualification by creating a form of passport for suppliers. This will help to reduce time and resources for validation, with everything verified by third parties, such as Dun & Bradstreet, to square the circle.

The network, and network of networks, look set to revolutionise how organisations and consumers look at supply chains. The food supply chain is merely the first where the technology is making strides, though the fashion industry has also made moves to implement with significant success.

As consumers buy less fresh produce to reduce food waste, they are willing to spend a bit more to ensure quality. With blockchain, organisations can shine a light on the provenance of their goods, but also earn the trust of consumers by proving the safety and traceability of the goods. And in a fast-paced environment, those organisations who don’t engage with blockchain face the reality of being left behind.

We might never know why the chicken crossed the road. But with blockchain tracking the supply chain, we’ll be able to understand where it came from, how far away and track it’s route all the way to your plate (sorry Colin!).

Blockchain: Supply Chain’s 21st Century Truthsayer

From farm to plate, the food supply chain can now be tracked in an open, transparent, fully traceable and entirely digital way. We may never know the why, but the how and where are within our grasp!

In our latest webinar, Blockchain: Supply Chain’s 21st Century Truthsayer, we’ll be exploring the full applicability of this great technological innovation, understanding how Walmart and Carrefour have turned this to their advantage and revealing why it’s a must have for supply chains of the future! Click here to sign up now.

The Leadership Styles That Work Best

Leadership is as much a skill as sales, accounting, engineering or programming, but is rarely treated that way by companies making hiring decisions.

By Flamingo Images/ Shutterstock

There is a lot of complicated management theory about management and leadership.  There are detailed guides to choosing the correct management style.  Should your leaders be Authoritative or Visionary or Transactional or a Pacesetter or a Servant or Democratic?  You could spend your life studying the mountains of research and still be none the wiser.  But the reality is likely to boil down to just one rule.

Don’t hire psychopathic leaders.

Leadership is as much a skill as sales, accounting, engineering or programming, but is rarely treated that way by companies making hiring decisions. A recent study has found that a staggering 82 per cent of hiring decisions concerning leadership roles select an inappropriate person. Companies are choosing the wrong person for the leadership role an alarming rate of only once in every five hires.

Leadership Talents = Engaged Employees

Gallup has spent two decades studying the performance of 27 million employees across hundreds of organisations. They have calculated that the innate leadership talents of managers account for 70 per cent of the variance in employee engagement from company to company. 

In an average company in 2018, around 50 per cent of the employees were disengaged and a further 13 percent were actively disengaged. An actively disengaged worker has a miserable work experience and would quit tomorrow if they had any other choice.

The research shows that employee engagement is strongly linked to customer ratings, profitability, productivity, staff turnover, safety incidents, staff theft, absenteeism and product quality. There is however an easy solution at hand. 

The research also shows that increasing the number of hires of talented leaders can significantly increase the engagement of employees.  If the percentage of actively disengaged employees can be reduced below 10 per cent, then earnings can be increased dramatically. 

Lowering Active Disengagement

In 2012 Gallup examined the performance of 49 publicly traded companies and compared their results with engagement results from their survey data.  They found that companies that did manage to lower active disengagement experienced on average 147 per cent higher earnings per share than companies with more typical levels of active disengagement.

Hiring more talented managers can therefore have a massive and direct impact on the bottom line and a significant array of critical business measures. Gallup’s research has left it convinced that all good leaders share just five critical talents:

  1. They motivate every employee with a compelling mission and vision
  2. They are assertive, drive outcomes and persist in overcoming adversity and resistance
  3. They insist on clear accountability
  4. They enforce a culture of integrity and honesty and build relationships that create trust
  5. They make decisions based on productivity, not politics.

In short they must be honest, empathetic and have a clear vision. Or in even shorter, they must not be a psychopath. 

The critical difference between a psychopath and the rest of us is their complete inability to feel empathy.  There care for nobody but themselves and are quite happy to use any means possible to remove anything which gets between them and their goal.  That goal is accumulating more power and money for themselves.

Power over People

As a general rule, a psychopath will be drawn to jobs which give them power over other people. Psychopaths believe they are superior to everybody and that the role of all other people is to deliver rewards to the psychopath.

Add this to their prodigious ability to charm interviewers, and their propensity to make up whatever achievements they need to get the job, and it’s easy to see how they may be fast-tracked. As a result, we can expect them to be towards the top of any corporate structure.

To the psychopath, the team that works for them need to be tightly controlled and completely compliant.  Psychopaths achieve that using classic manipulation tactics, singling out members for public punishment, rotating those with favoured status, implementing ever more detailed micromanagement and the ramping up of secrecy.  

The workplace under a psychopath is in constant turmoil.  Factions are rife, sick leave sky-rockets, staff turnover becomes endemic and productivity drops like a stone.

Power of the People

Luckily the cure is easy.  Well, easy to say.  It’s honesty and transparency.  The best place to hide a murder is in a massacre and the best place to hide a lie is in a company full of liars. It is much harder for a psychopath to use deceit to their advantage if everybody else is honest. 

Companies that ban secret communication channels, reward honesty, punish dishonesty, encourage whistle-blowing and who have strong, honest and independent human resources divisions (and boards that listen to them) are much more likely to control psychopaths and massively limit the harm they can inflict.

This will not stop you employing psychopaths but it will ensure they are working for the greater good of your company rather than destroying its culture and its future.

Ignore Supply Chain Risks… At Your Own Peril!

Despite the general consensus that risk management is important, recent studies have found that many companies still have a long way to go and a lot of work to do…

By Wallenrock/ Shutterstock

“The Supply Chain stuff is tricky!” – Elon Musk at Code Conference in 2016.

When someone like Elon Musk says that something is tricky, it means something! The examples that Musk mentions in the video show that modern supply chains are becoming more global and more complex. This complexity also leaves organisations exposed to more risks because the current business environment is characterised by VUCA (Volatility, Uncertainty, Complexity, and Ambiguity).

The uncertainty surrounding Brexit aside, other recent events, like growing tensions with China and Iran, are daily reminders that today’s global business ecosystems are precarious. And it’s not just the potential for international conflict and instability that is making business riskier. Many countries have also introduced new regulations on sustainability (modern slavery, conflict minerals), or diversity, which add new risk factors in terms of compliance.

Make Risk Management Part of DNA

Between business continuity aspects, legal or normative aspects, and protection against a public backlash whenever malpractice is discovered in an organisation’s supply chain, there are more than enough reasons to make risk-management part of a company’s DNA.

Despite the general consensus that risk management is important, recent studies have found that many companies still have a long way to go and a lot of work to do.

Some of this work should include building better relationships with suppliers and colleagues. As I mentioned in a previous article, these relationships can play an important role in helping companies identify and mitigate certain types of risk — but not all. In addition to being on good terms with suppliers, companies will need to cover many other aspects to manage risk effectively and protect themselves.

These days, procurement organisations cannot afford to ignore leave risk management off their list of top priorities. There are many reasons for this. Here are three of the most important ones.

Reason #1: Risk is everywhere

I don’t want to sound alarmist, but we live in a troubled and complex world. There is no shortage of events that could jeopardise and/or disrupt a business, potentially impacting their profitability, business continuity, image, and reputation.

Protecting your business from these disruptions is challenging, because they can originate from so many different sources. Natural disasters, accidents, social events, changes in regulations, intellectual property infringement, quality issues, and attacks on cybersecurity are just a few examples.

“Governments are also taking action by engaging in an escalating global competition to maintain and improve national competitiveness in the 21st-century digital economy. […]. While such cross-border competition is by no means new, the geopolitical undertones in this battle for dominance raise the risk that the digital economy will continue to fragment, complicating global supply chains and the operations of international companies, and acting as a drag on economic growth.”

A.T. Kearney in Competing in an Age of Digital Disorder

Another key factor is that our world is changing faster than ever. Just look at the political, technological, and societal changes that have taken place in the past few years; many of them fuelled directly or indirectly by the impact of digitalisation.

As a consequence, the lifespan of companies is shrinking, year over year, as illustrated by the evolution of lifespan of companies in the S&P 500 index. All organisations are in danger, not just the large ones, and that includes your company and the companies you buy from.

Survival Through Prevention

Despite this reality, risk management has been a relatively passive domain for a long time, and it has frequently (and problematically) been equated with crisis/incident management. People were looking into risk management after an event had already happened; i.e., too late!

This was because the world of yesteryear was more stable and pretty predictable. In today’s world and in the future, the accelerating pace of change and the expanding globalisation of the economy mean that anticipation is crucial.

The risk management of today and tomorrow is about survival and making the right procurement decisions, which requires procurement to think about what “comes after” and how certain choices can make a company more or less safe in the long run. Prevention is better than cure!

“[An] enterprise is facing increasing danger that key sourcing decisions will prove uneconomic sooner, and with more damaging consequences than would normally have been anticipated by risk equations that presumed the older supply chain model. Starkly put, the odds of supply chain disruption are growing and will grow even greater in the future.”

CSCMP’s Supply Chain Quarterly

Obviously, what represents a risk depends on many factors and varies from one company to another:

  • Companies in B2C may be more vulnerable to risk related to their image and their reputation. If something happens that jeopardizes either of these, their brand could suffer.
  • Companies or organizations from the public sector and/or selling to administrations may be more vulnerable to regulation changes.
  • Standards/regulations regarding fraud and ethics may also vary from one sector to another.

Reason #2: Black swans are not an excuse to ignore risks

“Everybody has plans until they get hit.” -Mike Tyson

Anything can happen, even a shootout at the Mexican border, as told by Musk in his interview. Such “black swans” exist, and planning for the seemingly impossible is another lesson learned from “Best in Class” organisations regarding risk management: being prepared for problems enables companies to react faster to unforeseen events. They become anti-fragile!

It’s true that, by definition, risks reflect potential future disruptions. The goal is to foresee them and define ways to reduce the probability that such events ever happen and/or to reduce their impact if they do happen. Unfortunately, there is no crystal ball for Procurement; no one knows for sure what the future holds.

The only solution is to imagine different scenarios for potential problems. These scenarios can either be based on experience (problems that already happened to other organisations) and based on brainstorming (a.k.a. risk identification).

This may sound like daunting work, but it’s worth it. Organisations that have invested time and energy into identifying risks, assessing them, and defining ways to mitigate them are better at managing incidents they did not anticipate.

Reason #3: Supply chain issues are costly

There is no universal “best practice” recipe per se; only best practices in a certain context. But, what is certain is that not taking care of risk can be costly.

A 2018 study by the Business Continuity Institute and Zurich Insurance Company examined the financial impact of supply chain disruptions. The findings revealed that not only disruptions have a cost when they occur, their effects can do lasting damage. It takes months to recover and, in many cases, there is no full recovery!

So, in the war against risk, being prepared, defining various scenarios and recovery plans/actions, having the right skills, and the proper technology makes an organisation more resilient and more agile when something unexpected happens because:

  • they can re-use a predefined recovery plan
  • they have the processes and governance in place to act and decide fast
  • the people in the organisation have risk management in their DNA