Tag Archives: change makers

Three Reasons I’m Excited About Blockchain

Blockchain – is it the answer to procurement and supply chain’s prayers?  Or is it over hyped, another ‘technological innovation’ that promises much and delivers little?

blockchain
Photo by Mert Guller on Unsplash

I must admit I was leaning towards the pessimistic camp – when were those great use cases really going to happen?  I signed up for the Procurious webinar to find out more about how this new technology is impacting supply chains – and what I learned was very exciting:

Blockchain Lets You Focus on What Is Important

One of the pieces of work we all wish would disappear from the day job is the time-consuming process of supplier onboarding. 

Webinar guest IBM Sterling’s Shari Diaz told us about a blockchain-enabled onboarding process that would “give the procurement professional all that time back”. 

Describing immutable records that the supplier would update themselves and third-party validation of accreditation, Shari encouraged us to think of a world where master data management had transferred from the buyer to the supplier.

Imagine what you could do if you didn’t have to worry about more mundane tasks within your role and could instead give more focus and energy to strategic projects!

A New Way of Measuring Value

One way that Professor Olinga Ta’eed is taking forward the development of a blockchain is through the not for profit Transnational Transaction Procurement Foundation.  Since its launch earlier in 2019 the TPP foundation has grown to over 165,000 members, impressive numbers! 

Olinga set out the goals of the TPP as being practical – to “fathom out” use cases like how we can capture and report things like intangible assets using blockchain to give a broader picture of an organisation’s true value.  

Olinga thinks this new reporting will be liberating for procurement professionals allowing a more strategic focus to the role. 

How much more value could we demonstrate if we could capture and record it?

A Re-Alignment of Values for the 21st Century

Both webinar guests thought that the greatest potential for blockchain will be the ability to articulate the alignment of values.  As we move into a world where values are becoming more important, blockchain is going to provide the traceability and trackability that consumers demand. 

As Shari observed “there’s a huge trend for supply chain to be able to demonstrate their values and consumers are starting to speak with their dollar”.

Shari also stressed that blockchain can enable our eco systems to work together.  “Enterprises [typically] depend on partners for 65 per cent of the value they deliver to their customers.  The more collaborative and connected we are – the more efficient and effective we’re going to be”.

So, blockchain technology is ready to give us time back, new ways of measuring value and for our values to be realigned. 

Our webinar guests have given procurement and supply cause to remain optimistic and in fact licence to dare to dream big.

I’ll leave the last words to Professor Ta’eed,

“Blockchain will light up the path for procurement to align with mankind – making procurement and supply chain the single greatest instrument to change the world”.

A recording of the Procurious-IBM Webinar – Blockchain Supply Chain’s 21st Century Truthsayer – with panel members Shari Diaz, IBM Sterling, Professor Olinga Ta’eed and host Tania Seary, Procurious is available here

Dollars and Sense: What are we Really Saving?

It might have started with dollars and cents, but what should procurement really be saving now? It’s time to shift the dial.

Photo by Kat Yukawa on Unsplash

For years, procurement was stuck in the old ways of doing business. It was the role of the profession to beat down suppliers and the only consideration was cost, but the proponents of this methodology are fast becoming extinct as procurement undergoes a new evolution. While savings will always be an important element in what we do, the important question we now need to address is: what are really trying to save?

I’ve previously spoken about how strategic sourcing in procurement can help us to change the world, but it’s easy to believe that issues like modern slavery and environmental pollution are still beyond our reach. They’re buzz words or problems too big to solve, they’re issues that are unlikely to find a solution within a single career.

But that’s not true. Every day we’re seeing political mandates, new regulations and social pressures that are driving change at an unprecedented pace. However, the window for change to actually solve environmental issues is closing just as fast – meaning we can’t sit back and focus on cost alone if we’re really committed to making change.

Saving vs the Social Good

When we talk about optimising our supply chains, there will never be a time where cost doesn’t form part of the conversation. Even if you’re not solely focussed on cost-cutting measures, there needs to be the ability to invest in solutions that will drive positive outcomes in the years that follow – and that can’t come without the budget to back it up.

In fact, when we look at how much money we’re able to save through strategic sourcing for large multi-million dollar companies, compared with how much their net value can fluctuate on the stock market from day to day, the savings are actually negligible.

What we’re really able to do when we’re effectively reducing costs within our supply chain is reinvest that money back into the organisation. This macro-level approach to cost-saving lets you support the needs, beliefs or even employees of your company to help bring about changes that will actually have an impact. Whether you’re looking for widespread industry reform or to bolster your own company initiatives, cost will always join the conversation.

Saving and the Successful Supply Chain

At Source One, a Corcentric company, we counsel our customers to constantly be improving and optimising the way their companies develop relationship with suppliers. To get the best results and a positive, long-lasting supplier relationship, there needs to be an element of a partnership between procurement professionals and their supply chain.

Good supplier relationships help to create value for both sides of the agreement – whether it’s a new product, process or an improvement that can make everything more efficient. The key piece of supplier and vendor management that is often overlooked is the ability to be creative and innovative to help challenge the status quo.

We’ve seen that by following and developing procurement best practice, and encouraging our suppliers to think about the problem we’re trying to solve together, we can enable these things to have a bigger impact in a tangible and evident way.

What changes the way a company acts?

Not all companies are started with a social responsibility guidebook in place. The organisational stance on environmental, social or political issues usually develops with time and as such, there is rarely a budget set aside for supporting global issues. New regulations or social pressure can both have an impact on the way a company acts.

Its reaction to these pressures is either going to change the way the company is perceived – in market share or reputation – or it will change how the company will need to do business going forward.

For example, a new worldwide mandate will come into effect on 1 January 2020, where all ships and vessels operating anywhere in the world will be required to use fuel with a sulphur content of less than 0.5 per cent, compared with the current regulation of 3.5 per cent.

While those operating in the shipping industry can change to a cleaner type of fuel, they’ll now find these are more expensive due to increased worldwide demand, likewise they could utilise ‘scrubbers’ to essentially clean their current fuel source, but this will come with its own ongoing investment.

Those who don’t comply with these new regulations will face hefty fines – so no matter which solution each company implements we’re looking at $30 billion dollars worth of investment across the industry.

What We’re Really Saving

This type of regulation will fundamentally change how that company does business as they’ll now have to factor in the increased cost of fuel to operate once it comes into effect. This also presents an opportunity for procurement to support the ability for shipping companies to comply, which will present its own positive solutions to environmental issues, while also absorbing some of the cost or finding other ways to mitigate, diversity or reduce their exposure and help lead the way to a more sustainable future.

Procurement really can make a difference, but these outcomes are best achieved when they’re working with and are supported by our cost saving measures rather than being seen as the antithesis to an optimised supply chain. Sure, you can have one without the other, but by reinvesting in the future of the world around us we’ll find the best way forward.

Source One, a Corecentric company, were one of the key sponsors for the Big Ideas Summit Chicago 2019 and Diego was one of our great keynote speakers. If you want to catch up on Diego’s Big Ideas for procurement and saving the world, join the Summit’s group. Click here to join in and catch up now!

Creating a Strategic Procurement Function

Procurement’s Change Makers – The challenges of creating a strategic procurement function in a diverse investment company in the Middle East.

This article is part of the Future Purchasing ‘Change Makers’ series.

Cory Thwaites - Strategic ProcurementIn the second in our series of articles profiling procurement’s ‘Change Makers’, we spoke to Cory Thwaites, Executive Director of Procurement for Tecom Group, the leading  developer and operator of free zone business parks providing a home in Dubai for over 4,600 businesses & representing a total workforce of 74,000.

Cory shares his experience in the changes needed to create a strategic procurement function within this diverse, capital intensive and services orientated organisation.

Lack of Strategic Procurement

I joined Tecom Group, which is part of Dubai Holdings in April 2015. The procurement team size had dropped by 30 per cent with no clear procurement procedures or process in place. In fact, only one person had any formal procurement experience. Each individual handled purchasing, negotiation and order placement, so there was no specialisation or delegation of duties.

Lack of procurement strategy was creating problems with suppliers and stakeholders. It was also holding up the entire business. For example, the tenders committee (which approves projects over AED 1 million) could take more than a week to convene. Add this to lots of other red tape, and it was clear that Procurement was stifling, rather than supporting, the business.

Initially, I sought advice and feedback from the other senior executives. Next, I structured the procurement department into strategic sourcing and operations teams. Then I presented my plan for a sourcing and operations focus to the board. Getting sign-off on this new strategy from the CEO in June was the turning point.

Bridging Knowledge Gaps

I transformed the existing team by bridging their knowledge gaps. A six-week bespoke training programme featured a day of group training and another for one-to-one coaching. This really helped my team understand aspects like opportunity analysis and even basic spending analysis.

The big challenge came with evaluating suppliers. There had been no financial checking or reference calls and stakeholders simply worked on their own instincts. We implemented a scientific evaluation process with key metrics including pair’s analysis.

I’m proud to have kept the team together. Two colleagues were offered jobs elsewhere but chose to stay because they recognise how much procurement is transforming from a tactical to a strategic function.

Future Aims

Two of my ongoing aims are to improve CSR and to develop a supplier relationship programme, particularly within the thriving construction market.

There are a number of organisations in Dubai who are at least five years behind European procurement culture and best practice. My advice to succeed in the UAE is to be patient and recognise the potential skills shortage.

You need senior leaders to follow your vision, too – so promoting the benefits of procurement is vital. Also, be prepared to roll up your sleeves because talking a good game isn’t enough.”  

Working with Cory, we have seen how he has embraced this new role with vigour and relish. His practical attitude, ability to listen to people and willingness to roll his sleeves up to solve the little problems for his team and the big problems for his customers is key to the progress that he is making in this difficult environment.

Future-Purchasing-Change-MakersDo you have experience of creating a strategic procurement function in a diverse organisation? What works and what doesn’t work? Let us know in the comments below.. 

If you would like to appear in our Change Makers series then contact Anna Del Mar for details here .