Tag Archives: ISM

Procurement Pay Gap Shock

The gender pay gap in procurement and supply management has INCREASED, according to US and UK survey results released this week. Have you sponsored your own internal gender salary gap analysis?

Ever considered how procurement salaries measure up with the rest of the working world?

Are you suspicious that your  procurement colleagues might be getting a better deal than you?

If you’re a woman working within procurement and supply chain, have you ever wondered how glaring the pay gap is within your industry or organisation?

This week, ISM’s Twelfth Annual Salary Survey in the US and the CIPS/Hays Salary Survey in the UK have shed some light on all of the above. Whilst there’s clearly still a very long way to go in terms of the  gender pay gap (predicted to take another 170 years to close), things are otherwise looking pretty comfortable for the procurement and supply chain profession….

ISM Salary Survey Results

Now would be a great time to convince your boss you deserve that pay rise, because the Institute for Supply Management’s (ISM) Twelfth Annual Salary Survey has been released. The results are based on data from 3808 supply management professionals who were surveyed throughout February and March 2017 to determine these average salaries:

Average Salary: $115,440

Median Salary: $90,000

Average for Men: $126, 710

Average for Women $96,990

In the US, a person working in professional, management or related occupations earns an average of $63,076 annually, which means these results are pretty good news for the supply management profession.

The figures show a 5 per cent increase in average compensation since 2015. Men’s salaries have risen by 8.2 per cent and women’s by 3 per cent.

The super bad news is that procurement appears to be taking a step backwards with regards to equal pay. In 2015 women earned 24 per cent less than men, compared with 31 per cent this year.

Download a summary of the report here.

UK Pay Gaps Revealed

It’s not just ISM’s figures proving to be disappointing in terms of gender equality.

As of last month, UK organisations employing more than 250 people are obliged to publish their gender pay gap figures.

Virgin Money disclosed that men who work at the bank earn, on average, 36 per cent more than women, asset manager, Schroders, reported a  31 per cent gap and Utility SSE a 24 per cent gap.

Some are against the new legislation arguing that the numbers don’t give a full picture and place all the blame in the hands of the employers. Others are in favour of the full disclosure and think it will spur organisations and governments to crack down harder on gender inequality.

McKinsey’s Global Institute report found that $12 trillion could be added to the Global GDP by 2025 by advancing women’s equality, which is as good a reason as any to close the gap, pronto!

UK Procurement Salaries Outstrip Average

The CIPS/Hays Salary Guide and Insights 2017 has surveyed over 4,000 procurement employers and employees to learn everything from key trends in salaries to challenges faced by employers and the top benefits desired by procurement professionals at all levels of seniority.

Whilst the average annual UK pay increase is 2.2 per cent, procurement professionals in the UK are receiving an average of 5.3 per cent more! Jacki Buist, writing on Supply Management, believes the results show a “continuing enthusiasm for the profession in all regions.”

Unpredictably,  the cause for concern falls once again in the region of gender disparity. Overall, the pay gap is reducing but at the advanced professional level, men receive an average  of £82,000, compared with a woman’s £65,700.

Registrations are open for the CIPS/Hays Procurement Salary Guide and Insights 2017 Webinar, which takes place on Thursday, 11 May 2017 13:00 GMT.

Are you surprised by the figures released in these two surveys? How do you think the UK’s new legalisation will impact the fight for equal pay? Let us know in the comments below.

In other  news this week….

Google Customers Subject to Phishing Attack

  • Google customers have been targeted with a scam that gave hackers access to the contents of emails, contact lists and online documents of victims
  • On opening a given link, Google’s login and permissions page asked users to grant the fake Docs app the ability to “read, send, delete and manage your email”
  • Google has now shut down the attack but have asked customers who received such an email to flag it to them.
  • Victims have been advised to change the passwords to their online accounts

Read more on The Telegraph

Amazon to Expand in the UK

  • Amazon is adding 400 staff to a new research and development centre focused on machine learning, in a move that reinforces the retail group’s long-term investment in the UK
  • The lab will develop  the voice-activated Echo speaker and Prime Air drones
  • By the end of this year, Amazon plans to add another 5,000 British employees to its payroll, open a new 600,000 sq ft headquarters in central London, and operate three new fulfilment centres around the country

Read more on the Financial Times

The future of Blockchain

  • Put simply,  blockchains take out the middle man (banks) and make the transfer of funds more streamlined and safe
  • The United Nations (UN) used one particular blockchain, Ethereum, to distribute funds from the World Food Program (WFP) in a pilot program earlier this year. The experiment successfully, distributed aid to 100 people in Pakistan
  • The system will now be used in Jordan to distribute funds to more than 10,000 people. It’s expected to help support 500,000 recipients by 2018

Read more on Futurism 

Rising Stars: I Fell Into Procurement (With Style!)

Did the ISM and ThomasNet 30 Under 30 Rising Stars always have a burning desire to embark on a procurement career or were they late converts? Procurious investigates….

Last month, THOMASNET and ISM announced the 2016-2017 winners of the 30 Under 30 Rising Supply Chain Stars award, presenting the profession with an inspirational batch of role models who are sure to attract more Millennials to the supply management profession.

Procurious has been lucky enough to sit down with many of the winners to find out what the award means to them, what it takes to be one of the  30 Under 30 Rising Stars and the key skills needed for a procurement and supply chain career.

But how did these rising stars first embark on their careers? Were they passionate about procurement from the offset or did a chance encounter or inspiring internship inspire them to “fall into” procurement later down the line?

Andrew Bagni, Procurement Manager at General Dynamics Mission Systems recalls that “ten years ago supply chain wasn’t as hot a topic as it is today. Specific supply chain degrees weren’t offered at my college at the time but this is now an option for students.”

Perhaps it’s not surprising, then, that 66 per cent of this year’s 30 Under 30 Stars didn’t plan a career in procurement.

The Slow Burners

Bagni applied for an internship with General Dynamics “in the hope of gaining some of the business experience l was lacking at 18 years old! I  worked the internship for the summer, which went really well and carried on throughout college whilst I was studying business management. It’s not been a lengthy career so far but the whole of my career has been spent working in supply-chain despite having fallen into it completely by chance.”

Nick Imison, Subcontract Administrator at Northrop Grumman Systems Corp, had a similar experience to Bagni: “I fell into it sideways. I was a finance major. I went to job trade fairs, interviews, and just wasn’t passionate about finance. One day I stumbled on a supply-specific career fair, which was put on by the University of San Diego who push undergrads and postgrads to the supply chain field. They were very convincing and introduced me to the many sides of the business, giving me a holistic view. That piqued my interest and, from there, I enrolled in a few supply-chain courses.

Corey Gustafson, Senior Buyer at Deluxe Corporation initially attended school in Wisconsin to train in engineering, ” I went on a programme  that focused on the printing industry including graphics and communication management and eventually  started taking a procurement and supply-chain management course. The instructor happened to be the program director for the supply-chain programme and it was the best course I’ve ever taken. I was interested in the way the function  impacts the business and wanted to continue with to focus on that.

The Die-Hard Procurement Pros

Not all of the 30 Under 30 winners came to procurement by accident, however.  Barbara Noseda, Global Sourcing Associate at Johnson & Johnson, has a particularly notable passion for, you guessed it,  shipping containers! “I know it might sound random” she says, “but I swear it’s the truth! I did my bachelors degree agree around shipping and logistics in Hong Kong and  then went into supply chain.  Even  today, every time I can get on a project about shipping containers I jump on it.”

Matthew Montana, Category Lead at Pacific Gas and Electric Company, was also interested in supply-chain at the offset, “supply-chain really caught my attention. I liked the analytical aspect and qualitative aspect. There’s a good balance between creative thinking and working with numbers. It’s the balance of quantitative and qualitative that really drew me to supply chain.

And Matthew has another reason to be passionate about procurement. His father also works for Pacific Gas and Electric. “He’s been in supply chain for several years now. Growing up and seeing him work there and seeing how good the company has been to him and his good career influenced me. It’s a good company and a good industry. I had inside info and insight from him so he was one of my mentors early on.”

Amanda DeCook, Sourcing Associate A.T. Kearney, knew exactly where her career was headed, “I knew which University I was going to and I knew I wanted to pursue a Business Major. Michigan State University’s Eli Broad College of Business has the best supply chain program in the USA, and I loved the tangible,  practical skills involved in the course.”

Indeed, several of the 30 Under 30 stars credit their colleges for propelling their careers. Jeff Novak believes his “college had a lot to do with [his career choices]. I went to Penn State Uni,  which is one of the top supply-chain schools in the states, if not the world. It seems that however your procurement or supply-chain journey starts out, you could have a vibrant and successful career ahead of you- take it from the 30 Under 30’s!

The 30 Under 30 Rising Supply Chain Stars will meet for the first time as a group at ISM2017, where ISM and THOMASNET.com will roll out the red carpet to celebrate the winners’ achievements and broadcast their success stories to other young people considering a career in supply management. 

Executive Recruiter: 4 Must-Have Attributes For Aspiring CPOs

Procurious caught up with Naseem Malik, Managing Partner at the Chicago-based supply management executive search firm MRA Global Sourcing, to find out what attributes recruiters are looking for in the next generation of top CPOs.

Vlad_Chorniy/Shutterstock.com

Naseem Malik has gone from sourcing goods to sourcing talent. After gaining 15 years’ experience as a procurement practitioner, Naseem turned his full attention to something he enjoys most – leveraging his network, connecting the dots and finding the best talent in the profession. Naseem is also a member of the ISM2017 Conference Leadership Committee, and has some excellent tips for getting the most out of ISM’s biggest event of the year. But first, Procurious asked Naseem for his views on what makes a candidate ideal for a CPO-level role.

Naseem, as a specialist in supply management executive search, what are the top attributes you look for in aspiring CPOs?

Based on the trends we’re seeing and what our clients have typically asked for, there are four stand-out attributes that we look for in a CPO-level candidate.

First, and foremost, they need to have a broad perspective. Companies are asking specifically for candidates from different industries to their own, as this brings about fresh, disruptive and innovate thinking.

Secondly, the candidate should be someone who can earn themselves a seat at the table with the CFO and CEO. They can do this by talking confidently about what they can bring to the business in terms of supply and market intelligence, data analytics, and leverage their own broad perspective. They should focus on the things that matter most to the C-Level – risk, compliance, and technological trends.

Operational know-how is also important, particularly change-management skills. Does the candidate have the emotional intelligence (EQ) to truly collaborate? Are they able to engage, influence, persuade and lead people in a global environment, including those that don’t report to them?

I’d like to add a fourth attribute here that ties the other three together, and that’s humility. Yes, you need to be able to talk confidently about your accomplishments, but this has to be balanced with humility and an awareness of your place in the corporate pecking-order. Humility will lead to credibility, which will pay off down the road.

 You mentioned that you got into executive search because of your love of networking. Can you share any tips for effective networking?

Everyone now needs to have a social presence, and continually build upon that presence online. However, without some sort of face-to-face follow-up, your online connections can be specious. To truly leverage the power of your online network, you need to meet people face-to-face at conferences, make phone calls and gather referrals. Face-to-face networking will help you grow you online network, and vice-versa.

Another piece of advice is to embrace the concept of “pay it forward”. Always see if there’s something you can do to help people in your network – for example, see if there’s someone who you can connect them with to help solve a challenge they may be facing. Again, it will pay off in the long-term.

What are you most excited about seeing at ISM2017?

Besides attending Procurious’ “Network Your Way To The Top” session, you mean?

As a member of the Conference Leadership Committee, I’m really excited about ISM2017 because every year we’re seeing the conference gaining incrementally in attraction. There are more people attending than ever, and I don’t think that’s only due to the prospect of meeting Mickey Mouse at Disney World – it’s about the quality of the speakers, the excellent content and the companies attending (Apple, Google, Salesforce and others). The keynotes, including David Cameron and Colin Powell, are also fantastic. Personally, I’ve been involved in helping ISM find good speakers, great topics and promoting the event.

What are your top 3 tips for getting the most out of a procurement conference?

Network – take every opportunity you can to build your network at the event. After the event, follow up with all the people you’ve met, and also be sure to connect with the speakers or presenters you were most impressed by. Consider writing a blog article to share your thoughts and to keep the momentum going.

Have a plan before you go to the conference. There are a lot of learning tracks, lots of great presentations, but there’s only a finite number of sessions you can attend. It pays to have an attack plan before you go. You can target a specific learning track, or mix and match.

ISM’s Learning Tracks are designed to help guide delegates through the maze of options available. As a committee member, I have joint responsibility for the “Outside” track. Outside sessions are all about learning new and effective ways of improving your skills and establishing your relevance, including career-building, building your professional presence, honing your networking skills and building high-value relationships.

There’s still time to register for ISM2017, taking place in Orlando, Florida from May 21-24.

Planning to attend ISM2017? Don’t miss out on Procurious Founder and CEO Tania Seary’s top tips on how to Network Your Way To The Top on Tuesday May 23rd, 3.45pm.

One Skill To Rule Them All

Want to know what it takes to really make it in the procurement world? Cognitive tech expertise? A firm background in supply management? Nope – 72% of the ISM and ThomasNet 30 Under 30 Stars agree there’s another, essential ingredient to success…

Last month, THOMASNET and ISM announced the  winners of the 30 Under 30 Rising Supply Chain Stars award, presenting the profession with an inspirational batch of role models who are sure to attract more Millennials to the supply management profession.

Procurious has been lucky enough to sit down with many of the winners to find out what the award means to them, what it takes to be a 30 Under 30 Rising Star and how they embarked on a career in supply management in the first place. We’ll be revealing all of our findings throughout this series of articles but first up, what key skills are the winners acing?

You can forget prioritising the development of your tech skills. It turns out that communication is absolutely the crowning glory of all procurement skills.

Communication is king

72 per cent of 30 Under 30 winners named communication as one of the top three skills that have been essential for their success, which is unsurprising given the nature of most procurement and supply roles. Nick Imison, Subcontract Administrator at Northrop Grumman Systems Corp,  reminded us, “You often have an extremely short period of time to capture someone’s attention, explain why you need to go down a given path and  effectively relay what it is you’re trying to accomplish.”

Corey Gutafson, Senior Buyer at Deluxe Corporation, explained that he had to hone his communication skills very quickly at the start of his career. “If I’d had to do a five-minute presentation when I was in high school, I might have passed out from nervousness.  But communication in supply management is HUGE! Whether it’s via email, on the phone, presenting online or in person, we’re always talking with many different stakeholders and suppliers. If you’re not a good communicator, you’re going to have a difficult time.”

Barbara Noseda knows a thing or two about communicating under different circumstances. As a Global Sourcing Associate at Johnson & Johnson, she is very much in a global role which might mean she begins the day focusing on Europe and ends it with Africa. As such, she sees enormous value in being conscious of global differences and managing these, as well as being able to communicate effectively internally. “I’m a big fan of CQ (Cultural Intelligence) and I think it should be given much more importance. But internal communication is also important. As a sourcing associate, I often find myself talking with CEOs, having  to explain what I want and packaging it in a way that means they see the benefits.”

Know your data

“It might be cliché but in today’s world you have more data at your fingertips than ever, which means data analysis skills are crucial” says Matthew Montana, Category Lead at Pacific Gas and Electric Company. “It’s important to be able to manipulate data and use it to your advantage.” Indeed, 45 per cent of the 30 Under 30 Stars rated data analytics as one of the top three skills for procurement professionals.

Imison describes data analysis as the “ability to look at a given situation and provide some sort of useful evaluation, such as selecting the best path to go down from a financial perspective.”

But being great at data analytics isn’t just about … well,  being great at data analytics.  Gustafson has found his data skills have worked wonders for his relationships with senior team members. “It’s helped me develop some strong relationships with some of my older colleagues. I help them with analysing data and they can  help me with things like contract terms or negotiation tactics. If you don’t have tech savviness, it can take four or five hours to do a 20 minute job due to lack of efficiency.”

You can’t go wrong with a generous helping of these key skills either…

Some of the other key skills highlighted by the 30 Under 30 winners include:

  • Team work
  • Adaptability
  • Dependability
  • Perseverance
  • Flexibility
  • Empathy
  • Time management

It’s interesting to see that the majority of skills highlighted are “soft skills” (although we hate calling them that!)

Abhishek Dahiya, former Chief of Staff for Global Materials Dell Technologies,  thinks it’s important to stay up to date with the latest developments in the industry. “An openness to learning things that are out of the scope of your job makes you perfect for that job!”

And, of course you can’t go wrong with a persistent attitude, even if it’s in the form of some good old-fashioned relentless pestering as Amanda DeCook, Sourcing Associate A.T. Kearney, points out. “Sometimes you have to have the confidence to just go for it; pick up the phone and cold call a supplier. It can be scary but the worst-case scenario is that they won’t answer. And if they don’t, embrace that can-do attitude and keep calling (whether it’s three or four times) until they do!”

Women in Leadership: Don’t Make The Mistake Of Behaving Like A Man

Women in leadership: Have you ever had to “behave like a man” to get ahead in the workplace? As part of the Bravo campaign, Procurious will be hearing from a number of high-profile procurement leaders on the topics of diversity, equality and women in procurement.

 

This week, Procurious caught up with M.L. Peck, Chief Content & Engagement Officer at the Institute for Supply Management (ISM), who is concerned that even in the modern workplace, many women still feel they have to behave like a man to succeed.

She’s the man 

Remember Twelfth Night? Shakespeare’s comedy featured a shipwrecked woman (Viola) who disguises herself as her lost twin brother (Sebastian) to find work in the service of Duke Orsino. If you’re not a Shakespeare fan, you may have seen the 2006 adaptation She’s The Man (starring Amanda Bynes), where teenager Viola Hastings disguises herself as a boy in order to play on the all-male soccer team. Both Violas have to learn how to behave like a man, with their accidental lapses into femininity providing many of the plot’s gags.

Don’t change

“Women shouldn’t have to change who they are in order to be taken seriously. Nobody should”, says M.L. “What we absolutely don’t want is to create a mold of how to be strong leader. Our differences are what make us an asset to the teams we work in.

“I’ve had the fortune to work with women who brought an inherent, feminine ability to collaborate, empathise, multitask and problem-solve to their teams. These qualities are often overlooked and under-represented in the workplace, where we expect our leaders to be hierarchical and dictatorial in approach. In procurement, particularly, collaboration is key. The characteristics attributed to women are the ones that all of our future leaders will need – you can bet that millennials and generation Z won’t want to work in a male-dominated environment.”

But what does “behaving like a man” actually mean? Stereotypical male qualities might include strength, dominance, bullish confidence and as little display of emotion as possible. M.L. comments that when women find themselves in a male-dominated workplace, “We can make the mistake of trying to behave like a man by adopting the characteristics typically associated with men.”

Workplaces still have a long way to come in accepting that people, and leaders in particular, are able to display emotion. Men and women are taught that leaders must be “strong”, which means emotions such as compassion and empathy are redundant. “We’ve still got some of these issues in 2017”, says M.L. “Men who show empathy are thought of as weak, while empathetic women get labeled as emotional. If you choose to lead a team without resorting to an authoritarian style, it doesn’t mean you won’t be able to add enormous value in your own way”.

This, in a nutshell, is the power of diversity in our organisations. Building a diverse team of people from different genders, backgrounds and experiences will add new perspectives and insights, which ultimately leads to a better decision-making process.

Working twice as hard to be thought of as half as good

M.L. remembers her mother’s experience in the workplace, citing her as one of her inspirations. “My mum was a pipefitter and really lived in a man’s world. She was the first female on the refinery fire-fighting team. I was raised with my mum’s understanding that women needed to work twice as hard to be thought of as half as good.

“In this scenario, it’s easy to feel victimised; to think ‘I’m different, and people are perceiving me that way’. This makes it all the more tempting to conform to certain workplace behaviours, but my mum always retained her own identity.”

3 ways to encourage more women into procurement leadership roles

  • Initiatives that advocate for diversity are vital, particularly in supply management where there aren’t nearly enough women in leadership positions. Procurious’ Bravo campaign is a great example, as is ISM and THOMASNET’s 30 under 30 Rising Supply Chain Stars award, along with ISM’s annual Diversity conference.
  • Providing access to female role models and mentors will help organisations attract and retain women from entry-level through to senior positions. Organisations that want to attract top female talent need to have a diverse and inspiring leadership team.
  • Shout about what you’re doing to address gender disparity in the workplace. Companies that hold special events for women or minority groups really do see a difference – events give people an opportunity to build their networks, and provide direct access to the C-Suite who make the important decisions about diversity and inclusion.

Get involved with the Bravo campaign via our Women in Procurement group. Join M.L. Peck and other members of the ISM Leadership team at ISM2017.

Big Ideas Summit 2017: Be Bold But Nice

The role of procurement is changing and evolving. Professionals have more influence than ever before and Deb Stanton wants them to use their position to be bold but nice!

At the Big Ideas Summit 2017, we once again challenged our thought leaders to share their Big Ideas for the future of procurement.

Our attendees spoke about everything from creativity to politics, from cognitive technology to workplace agility, current affairs, economics and the future. Whatever your industry and wherever you are in the world, there are some top tips to takeaway!

Procurement has elevated within organisations

Deb Stanton, Executive Managing Director at CAPS Research, believes that the procurement function has really elevated within our organisatons.  Data collected by CAPS research shows that 82 per cent of CPOs now report directly to their CEO or one level down.

Under these new circumstances, professionals will have to work differently with their business partners and in their procurement teams.

This is why, Deb believes,  being Bold But Nice, is a valuable mantra. Procurement needs to ask the challenging questions, go in search of new solutions and embrace ideas. Of course, professionals  need their organisation to to work with them, which is why it’s important to be amenable whilst driving new value to our companies. .

Want to find out more about Big Ideas 2017? Join the group on Procurious.

You’ll find all of the Big Ideas Summit 2017 videos in the learning section on Procurious. If you enjoyed this Big Idea  join Procurious for free today ( if you haven’t done so already).  Get connected with over 20,000 like-minded procurement professionals from across the world. 

SpaceX, Red Cross Millennials Amongst 30 Under 30 Rising Supply Chain Stars

Procurement and supply leaders as young as 24 are impacting major companies including SpaceX, A.T. Kearney, Cisco Systems and the American Red Cross. 

ISM and THOMASNET.com today announced the 2016-17 winners of the 30 Under 30 Rising Supply Chain Stars award, presenting the profession with an inspirational batch of role-models who are sure to attract more Millennials to supply management.

Tom Derry, CEO of ISM, says the quality of this year’s crop of stars is inspiring. “Younger generations in the workforce are stepping into leadership roles earlier than their predecessors. This year’s winners are leading the charge, and show that our future is in capable hands.”

“Capable” is an understatement when you look at the achievements of some of these professionals. Andrew Paulsen is a Senior Buyer at SpaceX, one of the highest-profile and most sought-after companies to work for in the U.S. There, he has helped transform the castings commodity into a strategic organisation focused on the reduction of risk and the amplification of innovative designs and production processes.

Amanda DeCook of A.T. Kearney spent nearly a month in Tanzania leading a supply chain diagnostic on life-saving commodities (such as antibiotics) for the remote Sengereme District near Lake Victoria. She was able to make recommendations that would help reduce the likelihood of stock outs in the future, resulting in more lives saved.

Subhash Segireddy, Supply Chain Program Manager at Cisco Systems, led a team which developed a strategy for a manufacturing project which enables resiliency in the supply chain, reduces greenhouse gas emissions and drives millions in cost savings with a vertically aligned supply chain.

In a rapidly changing supply and demand environment, Jaime Todd has created innovative projects for the Red Cross, including a first-ever toolkit for category managers, along with supplier risk frameworks, policies and procedures.

There’s a common thread in the careers of these four Rising Stars, in that they’re all contributing to a wider cause beyond immediate business goals. Whether it’s reducing greenhouse gases, ensuring the supply of life-saving blood, assisting a remote African community or even helping humanity reach Mars, each role taps into the social aspect that has been identified as a major draw-card for Millennial talent.

Three winning characteristics of 30 Under 30 Stars:

According to THOMASNET.com’s Donna Cicale, the judges looked for three main characteristics in this year’s batch of Rising Supply Chain Stars. The 30 winners are:

  • Multi-talented: “We look for people who demonstrate and excel at a wide range of skills beyond business acumen. We’re searching for fast learners, effective communicators, quick thinkers and natural leaders.”
  • Influencers: “Supply chain stars must be ‘movers and shakers’ in their organisations. They need to be skilled in getting others engaged, bringing colleagues on-board, and working towards common goals.”
  • Trailblazers: “We look for individuals with ‘firsts’, or accomplishments not previously realised by their organisation. A ‘first’ can relate to timing, budget, initialisation, integration or adoption.”

Each winner will receive a one-year membership to ISM; complimentary admittance to ISM2017 annual conference in Orlando, Florida (May 21-24); and a THOMASNET.com Team Training Lunch and Learn session for them and their colleagues.

Visit www.thomasnet.com/30under30 for the full list of 30 Under 30 winners.

No More Excuses: Procurement Needs To Take Ownership Of CSR

Supply chain is one of the most critical areas of CSR. So why aren’t more procurement teams taking greater ownership when it comes to establishing policy?

CSR, ethics and sustainability – three topics that it’s hard to get away from in procurement. The greater focus enabled by the Internet and social media means there’s no hiding place for organisations. And there’s certainly no acceptance of organisations burying their heads in the sand.

Organisations are now including these activities in strategic objectives. And as procurement’s strategic influence grows, the profession has greater responsibility for its role in CSR objectives as a whole. In light of this, it’s hard to understand why procurement and supply chain aren’t taking ownership of CSR activities in their organisation.

The Expert View

Gaining better insights into the current situation means speaking to the people on the ground. And that’s exactly what has been done by the ISM Committee for Sustainability and Social Responsibility. The Committee surveyed its members exclusively for Procurious on three questions relating to current CSR practices.

While the responses highlighted a wealth of knowledge in the profession, they also showed that there’s still plenty of work for procurement to do to take more ownership. Happily, there were also some practical suggestions on how procurement can help their organisations improve their CSR efforts.

Here’s what the members had to say:

To what extent do you think that Procurement and Supply Chain professionals “own” CSR?

The responses highlighted that procurement’s ownership was very much dependent on the organisation in question. However, there was a consensus that, in all cases, procurement and supply chain professionals needed to play an active role in the development and execution of CSR policies and initiatives.

While some aspects of CSR strategy are not supply-chain related, the majority of risks and opportunities are. Both social and environmental ‘hotspots’ exist within the extended supply chain, leaving it exposed in the event of any issues. Members stated that most organisations started with a materiality assessment. This assessment was usually focused on mitigating, or improving, financial and reputational loss. Importantly, supply chain was frequently seen as a critical area.

As a result, it was felt that procurement and supply chain professionals needed to be engaged in the process.

What is the real damage of a CSR breach?

The general consensus was that a CSR breach caused major damage in three key areas:

  • Shareholder Value
  • Brand
  • Human Cost

Consequences of a major or public CSR breach include:

  • An inability to recruit and retain top talent.
  • Losing the ability to differentiate the firm by its products, services and values in the marketplace.
  • Losing the opportunity to create an internal culture of commitment founded on ethics and a broader view of the firm’s role in the marketplace.
  • Financial loss through litigation, high cost of supplier replacement, brand, disruptions from labour disputes, etc.

Brands can be quickly damaged. A firm’s exposure can be quickly played out on social networks, within hours and minutes. However, one member of the Committee made an interesting observation on where the impact fell. “If the supplier has brand recognition, the buyer gets off the hook more for a CSR breach in the supply chain. If the supplier is unknown, (e.g. the contractor running the BP Deepwater Horizon rig), then the big brand takes the full brunt.”

This highlights the importance of strong policies, regardless of the size of the organisation.

What are your tips for professionals looking to improve CSR in their organisation?

Each member was asked to give three tips on how professionals can help make improvements in their organisation. There were so many good ones that we’ve been able to come up with a list of 8!

  • Understand the premise of sustainability – it’s not just being good, but meeting the needs of stakeholders impacted by decision. Any resulting actions by investors, business partners, employees, regulators and civil society will be of consequence. Top-down support is key.
  • Establish “rules to live” by and measure compliance across the entire organisation.
  • Create internal incentives for professionals to engage in sustainable purchasing. It’s important to use carrots as well as sticks.
  • A supplier code of conduct – with teeth – is considered best practice.
  • Collaborate with other parts of the organisation – procurement shouldn’t operate in a vacuum.
  • Use data to build the business case for sustainable supply chains.
  • Develop processes to identify risks in the supply chain and teach your suppliers these tools, so that they may employ them in sub-tiers.

Take Ownership Now

With CSR being such a critical activity for organisations, procurement can’t afford to be left behind. It’s time to step up to the plate, put procurement in the spotlight and take greater ownership of policies, processes and outcomes. With a wealth of supporting knowledge out there and so many professionals willing to help shape a robust CSR program, there’s really no excuse any more!

Tributes Continue To Pour In As Global Procurement Community Mourns David Noble

As procurement leaders from around the world send in their personal tributes to mark the sudden and untimely passing of CIPS CEO David Noble, the common theme is one of sadness and shock.

Through these moving tributes, a picture is beginning to emerge of the significant legacy that Mr. Noble has left behind for the profession.

Leave a tribute to David Noble on the Procurious discussion board.

In many ways, the world is divided into two hemispheres when it comes to the professional bodies representing procurement and supply management.

Whether you belong to CIPS or ISM, you can be confident that you’re a part of an organisation with an incredibly long history (85 years in CIPS’s case, over 100 years for ISM), with a network of hundreds of thousands of professional colleagues globally.

It seems fitting, then, that after the Group CEO of CIPS passed away suddenly late last week, the CEO of ISM was one of the first to reach out with a moving tribute for his peer:

I know my personal shock and grief is shared by the global procurement community upon learning of the passing of CIPS Group CEO David Noble. David was more than a trusted ally and colleague. David had a vision of the evolution of procurement that included putting procurement, through licensure, on a footing equal to other formally recognised professions. His moral vision and leadership was also instrumental in CIPS’ crucial role in the passing of the U.K.’s Modern Slavery Act in 2015. ISM extends its deep condolences to David’s wife, his family, and our esteemed colleagues at CIPS.  Tom Derry, CEO, ISM.

Since yesterday’s sad announcement from Tim Richardson, the CIPS Chair of Global Board of Trustees, Mr Noble’s passing has been reported across industry publications including Supply Management, Spend Matters and Procurious. Yesterday’s article on Procurious included early tributes from Sam Walsh, former Rio Tinto CEO and CIPS president; Procurious Founder Tania Seary; Santos CPO David Henchliffe; and Visna Lampasi, General Manager Group Procurement for Woolworths Ltd.

Tributes continue to pour in, led by Mark Lamb, CIPS General Manager for the Asia-Pacific region.

At CIPS, we are deeply saddened to lose our leader and colleague, David Noble. Indeed, it is not simply a loss to CIPS, but also to procurement globally. David was always passionate about the role that procurement plays and how it can change people’s lives for the better. His legacy will long be remembered: CIPS is now recognised as the global professional body for procurement with an impressive global footprint and is improving procurement around the world. He was particularly vocal about ethical procurement, eradicating bribery and corruption, and ensuring that supply chains are free from modern slavery. As I reported to David, I will particularly miss his leadership which has seen CIPS go from strength to strength around the world. Mark Lamb, General Manager CIPS Asia-Pacific.

It is very shocking and sad news for all of the CIPS family and procurement professionals around the globe. David Noble was the voice of the profession in many arenas, and his visionary leadership has led to the success of the institute, its members, and the profession globally. He will be greatly missed, and I do sincerely hope that he rests in peace departing so early in life, and that his family and loved ones find solace and patience at this difficult time of their lives. Sara Abdellatif Omer FCIPS, Member, CIPS Global Board of Trustees

Like many across the global procurement community, I was shocked to hear of David Noble’s passing. Today is a very sad day for our profession, but more importantly, for David’s family, friends and colleagues. David’s legacy will touch every corner of the world. He inspired and advocated for a generation of procurement professionals while his leadership of efforts to eradicate slavery across the supply chain impacts millions of workers without their own voice. Philip Ideson, Host and Producer, The Art of Procurement

I was shocked and saddened today to hear of the passing of David Noble. I have known David as a friend since he joined CIPS in 2009 and worked closely with him on the development of the Ethical Procurement Guide with Andrew Forrest and the Walk Free Foundation. David was instrumental in getting the UK Government to introduce the Modern Slavery Act 2015, and has been a true leader to the procurement profession over the past 8 years. My condolences go out to his family and friends, and his colleagues at CIPS. He will be sadly missed by the Institute. Kevin McCafferty FCIPS, Executive General Manager – Procurement, Broadspectrum 

During my tenure as the only CIPS Trustee representing countries outside of the UK, David was always supportive in bringing a global perspective to CIPS as he worked diligently towards a global goal. Whist David and I had our differences with regards the establishment of the global governance structure, we were always able to share a pint at the bar and have great discussions around the profession. He always had a keen interest in what was happening in the Australian market and how the profession was developing. When I last met David, he was his usual vibrant self, full of energy and looking at ways to continually grow the institute and profession. David’s loss will create a void that any successor would have significant challenges to fill. My condolences to David’s family. Stephen Rowe FCIPS, CPO, Spotless. 

“David was the reason I joined the CIPS Board. He was such a strong advocate for the profession and his visionary approach for CIPS was an inspiration. He believed that the procurement profession was significantly undervalued and with steerage it could drive significant changes in the world, whether that be in eradicating modern slavery or sustainable sourcing. He was a warm-hearted Northerner who was well respected and someone who I’d known for many years. He will be sadly missed. Alison Parker FCIPS, Member, CIPS Global Board of Trustees, MD, HSBC

I was shocked to hear that our leader David sadly passed away on Friday. I first met him in the UK many years ago, before he was CEO of CIPS, and very much admired him in his Procurement roles. He has worked relentlessly for CIPS over his seven years’ tenure to bring value to our profession. David will leave a large gap and I am saddened I will not get to see him in London at our Annual Congress Meeting, just weeks away. Hannah Bodilly FCIPS, Global Congress Member for Australasia, Head of Strategic Sourcing, Bank of Queensland

I first knew David when I was on the CIPS Council (as it then was) back in the noughties. David always had a clear view on where he felt the profession needed to go. He gave strong leadership and direction in globalising CIPS to be the recognised worldwide body that it is today. Whilst being a leader at CIPS he was also a champion for the profession as a whole – his promotion of key causes, such as the Anti-slavery remit being a notable one,  which has such global resonance right now. He raised the profile and importance of procurement across public and private sectors alike, as well as with the media. He also forged links with other Institutes and bodies worldwide. His passion for the profession was without doubt and under his direction CIPS was re-branded. Like the broader profession, CIPS has flourished and grown in importance and stature.
He will be greatly missed by all who knew him and he will be a tough act to follow. Barry Ward, Procurement Brand Manager, Global Business Services, IBM

David and I worked together at Novar (formerly Caradon) for over seven years, arguably during a “golden era” of professional procurement in that organisation. Like many others who worked with him and for him during that period, I have many fond memories of David. From his absolute and authentic passion for our profession (years prior to him achieving his ambition to be part of CIPS), his relentless desire to support the technical development of his team (achieving one of the first CIPS Excellence awards when they launched the program) and his love of football (which many bruised ankles can attest to). He was an authentic, committed leader and a true gentlemen. My heartfelt condolences to his family and the CIPS organisation who have lost a fantastic champion and a great bloke. Very glad to have known him if only for a far too short period of time.  Andrew Brightmore FCIPS, Executive Director at Compass Group Australia 

David was a true advocate for our profession. Through CIPS, he led the charge with the licensing and professionalisation of procurement. His focus was on all areas of ethical practice, culminating in the 2015 Anti-Slavery Act, which was supported by the Vatican. His pragmatic and honest approach delivered the real transparency required when you lead a professional body with ethics as a pillar. Creating growth in any industry is a challenge, so his achievements in growing a membership organisation should also be highlighted as another major accomplishment. I am, and always will be, a proud Fellow of CIPS and a colleague of David. He will be missed by all. Mike Blanchard FCIPS, Deputy Chief Executive – Operations, Tertiary Education Commission, New Zealand 

A legacy of thought-leadership

A valued contributor to the Procurious Blog, Mr Noble appeared at the Big Ideas Summit in 2015. His thought-leadership published on Procurious includes:

Leave a tribute to David Noble on the Procurious discussion board.

Three Economic Indices You Can’t Ignore In Procurement

Procurement professionals need the ability to understand – and react to – changes in inflation, employment and optimism.

Andrey_Kuzmin/Shutterstock.com

Register as an online delegate for the London Big Ideas Summit 2017 here.

The interesting thing about procurement’s typical line of sight is that it very closely aligns with the terms of the sourcing projects we run and the contracts – and therefore supplier relationships – we manage. This might be 6 months, 12 months, 3 years, or 5 years long, but regardless of the exact length of time, you can be assured it is far longer than the changes being seen in global and local economies.

Since the summer of 2016, I have been the Business Survey Chair for the ISM-New York Report on Business. It has been an amazing learning opportunity, and I am fortunate to be working with a career economist to learn to decipher and draw meaning from the data. There are two pieces to the report: 1. the indices (some seasonally adjusted and some not) which provide a monthly trend up or down as the economy contracts or expands, and 2. the narrative, which highlights some of the key figures and milestones and adds some context to the numbers.

You don’t have to be a professor to see the connections between procurement and economics, but it is easy for us to become overly focused on information that is internally available or provided by suppliers. Based on what I’ve learned, the following categories of information tie directly to procurement’s efforts and objectives. And although they may not often come up in internal conversations, they need to be present in procurement’s thinking and strategy development.

Inflation

Investopedia defines inflation as “the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.” Most of what procurement buys tends to be based on pre-negotiated contracts, so we’re unlikely to see annual changes in prices based on inflation. What we might see, however, is a difference in the prices we are able to negotiate every three years. This will be especially true of anything we buy internationally or that has significant foreign-sourced materials in it because the relative purchasing power of the U.S. Dollar in global markets will be affected by inflation. But it’s not just an international issue – for any procurement team that reports into finance, keeping an eye on inflation will give you a benchmark for the minimum project-level ROI, as the alternative might be to just hold onto the cash if the project is expected to return less than 3% (the average rate of inflation) per year.

Employment

Higher levels of employment are usually considered a good indicator or economic growth and stability. From a procurement perspective, however, employment also tells us what to expect about trends in services-category spend. With an increasing portion of organizational demand being met ‘as-a-Service’, employment rates (and therefore costs) are critical to our cost to operate. For some industries, services are so important that even the factors driving alternate economic measures like ‘Prices Paid’ are services too – the New York Metro area is a perfect example of this, as are many other major cities. It’s why you must know the product/service mix in your spend before trying to figure out what approach to take. The other consideration relative to employment is talent availability. Higher employment means lower UNemployment (see how I did that?) and therefore less candidates available to compete for open positions. Luckily for procurement, we have a wide array of talent options at our disposal through contingent workforce programs. Striking an optimal mix of employment models presents an opportunity to maximize both costs and capabilities.

Optimism

The final economic index I’ve learned to appreciate is optimism – in the ISM-New York Report on Business we call this the Six-Month Outlook. In other words, as of today, how much better or worse do you expect things to be going six months from now. It would be unrealistic to expect the outlook to be more specific than a trend up or down, but even this insight provides important information for others watching the economy. The fact that this question is even asked is an indication of how special procurement’s perspective on the economy and business activity is. This perspective is due in part to our understanding of the organization’s anticipated demand levels and the prices we are paying, but also the conversations we have with suppliers about the conditions they are doing business in. Competition drives prices down, differentiation drives margins up, increases in demand drive prices up, and large increases in price may push buyers and suppliers to innovate together to come up with alternatives, and procurement has a front row seat for it all.

Many people in the business world watch the monthly reports on business, whether the ISM national reports or regional reports, like ISM-New York. If they value procurement’s perspective on the economy enough to wait for the numbers to be released each month and report on the findings, then we should have a greater appreciate for our own insight and do everything we can to deepen it.

 2017 could be a pivotal year for the procurement profession. The Big Ideas Summit in London will help lay the ground work for all of  the changes ahead. Our London event takes place on 23rd February and you can now register as a digital delegate now!