Tag Archives: political landscape

The Brexit Horror Show: It’s Going To Be Rocky!

We all like to watch a good horror show.. but UK customs trying to manually process our imports? Entertainment it is not!

Are you ready to watch the Brexit horror show unfold?

The National Audit Office (NAO) pubilished a report last Thursday reviewing HM Revenue & Customs’ development of the new Customs Declaration Service (CDS).  The system is being developed in an attempt to manage the predicted 255 million UK customs declarations per year (an increase from 55 million)  once the UK leaves the EU.

But, with a significant amount of work still to be completed before March  2019,  many are concerned about what chaos might ensue.

Amyas Morse,  head of the NAO, did little to disguise his own concerns when he briefed the media on the report this week. He warned of a potential “horror show” at customs if the transition to CDS is not made by January 2019.

He said “What we don’t want to find is that, at the first tap, this falls apart like a chocolate orange.”  (Yep, we were confused by this too – it’s well known that Terry’s Chocolate Oranges are not known for their fragility; hence the marketing slogan “Don’t tap it, whack it!”.)

“It needs to be coming through as uniform, a little bit more like a cricket ball” he continued.

What Is The Customs Declarations Service?

The CDS is a new system, which will be installed to manage all imports and exports post-Brexit, replacing existing system, Customs Handling of Import and Export Freight (CHIEF).

CHIEF can currently process only 100 million declarations per year.  This leaves no question that a new system is needed given that HMRC are estimating an increase to 255 million once new trade and customs agreements are made during Brexit.

Completion of the installation is forecasted for January 2019 which doesn’t allow much room for error or delay given that the UK will officially leave the EU in March 2019. Indeed, the report confirms that there is still a “significant” amount of work to complete and a number of vacancies to fill, which means there’s a pretty good chance that the full functionality of CDS won’t be ready in time.

Ironically, in 2016, the UK came fifth out of 160 countries in the World Bank’s ranking of the efficiency of the border clearance process, including customs. Time will tell if this can be maintained post-Brexit!

Why Should Businesses Be Concerned?

The National Audit Office believes the government is only just starting to realise how difficult Brexit will be.  In a worst-case scenario it would become impossible for customs to collect the £34bn of duty, excise, and VAT taken at the border every year.

Customs officials might have to manually process imports and exports if the new electronic system is not in place, which would of course be a nightmarish scenario for businesses and their supply chains.

Mike Cherry, chairman of the Federation of Small Businesses, said “It’s extremely concerning that the UK’s new customs system may not be ready in time for Brexit, potentially resulting in massive delays to trade and leaving thousands of businesses in the lurch.” And hat’s not to mention a lack of confidence businesses will feel in the UK if their flow of goods is disrupted.

“Can government actually step up in these very difficult circumstances and deliver a unified response?” Morse asked. “I’m not seeing it yet.”

The report, and the alarming comments made by Amyas Morse will no doubt increase the pressure on the prime minister to re-evaluate Brexit progress and policy, but will it be in time to stop a customs horror show?

Let us know your thoughts on the NAO report in the comments section below. 

In other procurement and supply-chain news this week….

Bangladesh Factory Blast

  • Major European buyers of apparel supplied by a Bangladesh garment plant have started investigations after a boiler explosion in the plant killed 13 people and injured dozens
  • The explosion occurred during maintenance work at the factory, whose top buyers include Finnish fashion chain Lindex, which is part of Stockmann
  • Stockmann communications manager Anna Bjarland confirmed to SM that the factory supplied garments to both Stockmann and Lindex saying that the company was investigating

Read more on Supply Management

Hazardous chemicals in Tesco’s clothing supply chain

  • Tesco has joined a growing list of major high street retailers in beginning to remove chemicals thought to be hazardous from the supply chain of its clothing brand
  • Greenpeace said Tesco will immediately begin the process of eliminating 11 groups of hazardous substances from its F&F brand, including phthalates, brominated and chlorinated flame retardants, chlorinated solvents and heavy metals
  • Alan Wragg, technical director for clothing at Tesco, said: “This commitment is part of our goal to protect the environment by sourcing products sustainably and responsibly for our customers.”

Read more on Business Reporter 

Could China lead the way with AI?

  • In the battle of technological innovation between East and West, artificial intelligence (AI) is on the front line. And China’s influence is growing
  • China has invested massively in AI research since 2013, and these efforts are yielding incredible results. China’s AI pioneers are already making great strides in core AI fields
  • It is becoming clear that belief in U.S. dominance of the tech world is flagging. As it stands, China is in the driver’s seat

Read more on Venturebeat

From Pittsburgh to Paris – Let’s Clear the Air

It’s all very well putting Pittsburgh before Paris, but did you know that modern anti-pollution laws first started in Pennsylvania? Tania Seary gives the run-down on steel cities, “death-fogs” and Pittsburgh’s incredible transformation into an innovation hub.      

It’s not every day Pittsburgh hits the news, but it certainly did last week with the comment, “I was elected to represent the citizens of Pittsburgh, not Paris”. The subtext is that there’s an obligation to protect the steel industry before the climate.

I’m not a political analyst, nor a climate change expert, but I have lived in Pittsburgh, visited Paris and worked in the metals industry. I therefore wanted to share some of my own personal learnings (and give some historical context) for those of who are trying to catch up with all the news.    

The Donora Death Fog

Ironically, Pittsburgh is only 30 miles north of a town which famously claims to have kick-started modern anti-pollution laws.

You may not have heard of the Donora Death Fog (actually a smog), where the deadly combination of an atmospheric inversion, toxic gases from the town’s zinc and steel works led to the death of 20 people and half a town hospitalised in 1948.

Comparable to the Great Smog of London and perhaps even modern-day Shanghai, the Death Fog played a big part in opening the eyes of Americans to the hazards of air pollution. The tagline at the Donora Smog Museum is “Clean Air Started Here”, because concerted political action saw the first act concerning air pollution being put into law in 1959. Pennsylvania passed legislation that afforded the state the authority to prevent the “pollution of the air by smokes, dusts, fumes, gases, odours, mists, vapours, pollens and similar matter, or any combination thereof”.

Modern Pittsburgh is a tech hub, not a steel city

The jobs that the administration wants to save left Pittsburgh in the 1970s. Since then, Pittsburgh has built itself into a great example of a city that has thrived on new opportunities.

I had the pleasure of working in Pittsburgh for a couple of years around the turn of the century – in fact, I was there during the Y2K frenzy. For those of you who weren’t in the workforce then, the “Y2K bug” caused a panic when people thought the world’s computing systems would go into a meltdown when dates changed from 1999 to 2000. The consulting companies made a fortune!

Although it was once among the most polluted cities in the country, Pittsburgh has reinvented itself from a steel town to a centre of “eds and meds”. It has become a hub of technical innovation and medical research. The city even has its own Google outpost, along with a test track for autonomous cars.

In reinventing itself, Pittsburgh has benefited from flagship universities like Carnegie Mellon and the University of Pittsburgh, which produce their own tech entrepreneurs and medical breakthroughs.

Pittsburgh nurtures entrepreneurs

I have to mention two of the city’s most famous entrepreneurs – both named Andrew. Andrew Carnegie and Andrew Mellon were huge drivers and beneficiaries of the steel industry (like the U.S. itself) and then spent the large majority of their lives giving their money away.

Born in 1835, Andrew Carnegie was a Scottish-American industrialist who is still identified as one of the richest Americans ever. By the time he was 50, he had almost total control of steel production in Pennsylvania. He squeezed every penny out of his mills, living by a famous motto that every procurement professional can relate to: “Watch the costs, and the profits will take care of themselves.”

He sold Pittsburgh’s Carnegie Steel Company to J.P. Morgan in 1901 for half a billion dollars, propelling him to the position of richest American (surpassing even John D Rockefeller). While J.P. Morgan transformed his company into the U.S. Steel Corporation, Carnegie devoted the rest of his life to large-scale philanthropy, with Pittsburgh itself benefiting enormously with stunning libraries, a university, museums, a gilded concert hall and more.

It seems like the state governors and city mayors who are committed to upholding the 2015 Paris agreement agree with Andrew Carnegie’s quote: “Do your duty, and a little more, and the future will take care of itself.”

Or, in Andrew Mellon’s words, “Every man wants to connect his life with something he thinks eternal”.

Andrew Mellon built up a financial-industrial empire throughout the late nineteenth century by supplying capital for Pittsburgh-based corporations. He founded the Aluminium Company of America (Alcoa) and branched into industrial activities including oil, steel, shipbuilding and construction. Mellon also reformed the US Government’s tax structure while he was secretary of the treasury. Like Carnegie, he gave back an enormous amount of his wealth, with his philanthropy making possible the the building of the National Gallery of Art in Washington, D.C.

These days, Pittsburgh is home to one of the procurement profession’s all-time entrepreneurs, the legendary Glen Meakem. Meakem founded Freemarkets Inc., the first online auction technology, which was later purchased by Ariba. Keeping with tradition, Meakem has also invested a lot of his resources into philanthropy.

Giving back

The story of these entrepreneurs all point to a wider trend as Pittsburgh continues to evolve. Like Carnegie and Mellon, the city grew rich on the steel industry, but now it’s giving back. Firstly, by producing a new generation of entrepreneurs whose success ultimately benefits the community, and secondly, by being part of a climate alliance that is looking for future opportunities rather than trying to bring back the past.

Big Ideas Summit 2017: Understand Your World

Every procurement pro needs somebody to tell them the world weather forecast so they can figure out when they’re going to need an umbrella! 

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!

Be Sure To Understand Your World Weather Forecast

Justin Crump, CEO at Sibylline thinks that procurement organisations need to become more worldly wise in order to better manage future risk.

At present, larger organisations might be competent at managing risk but often this is very much in silos. This makes it very hard to fully understand what they are facing as a result of global events.

Given the rate at which technology is evolving and how global events are impacting the world, it is increasingly difficult for companies to keep up without considering risk in real-time.

Intelligence about the world we live in drives business operations and the better informed we are the easier it is to drive progress.

Justin urges us to gain a clear view of the world to measure against so the we can focus  our resources on what world means to us.

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 enjoy 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. 

What Can Procurement Learn From 2016?

From politics to procurement – 2016 has changed our outlooks. But what can the profession learn as we head towards the new year?

politics of change

I’m not a political person, never have been, but maybe 2016 has put paid to that. It could be my advancing years or the direct relevance the events of 2016 have created, but politics has now piqued my interest.

Furthermore, as a business owner, parent and amateur investor, it’s beholden on me to be well informed and to put in place risk mitigating strategies should the worst happen.

Different Outlook

To anyone who knows me, I think I’d fairly describe myself as a cautious optimist. Someone who believes in the enduring power of ‘doing the right thing’. I must say this outlook has been tested to its limits these last three months.

And with the result of last Wednesday’s US election now a reality, I find myself having to re-evaluate this mantra.

I think it’s fair to say that few people in business expected the UK to vote for Brexit. Even fewer expected the US to elect Donald Trump as President. To say that the pollsters who predicted strong contrary outcomes have been wrong-footed is an understatement.

As BBC correspondent Mark Mardell wrote on Wednesday, “it is perhaps ironic that our two countries, with a reputation for stable political systems, have declared political revolutions of such importance”.

Ironic or inevitable, if find myself asking. As Trump put it, his path to victory was ‘not a campaign, but a great movement’.

Undoubtedly from these 2 cataclysmic events there is the notion that globalisation has given folk a raw deal. There is a belief that the gap between rich and poor has widened. This is clearly nothing new.

But the events of 2016 are now showing us that people are willing to express their desire for change in a manifest way, and that the UK’s referendum and US elections have facilitated this expression. Clearly the belief that ‘we need people who change the world, rather than describe it’ has never been more true.

Politics & Procurement

So aside from emotive connotations of such seismic change, what can the Procurement profession learn about these events?

I’ve always read with interest the term ‘Force Majeure’ in contracts, essentially the common clause that frees parties from legal obligation when an extraordinary event occurs. Is 2016 now the year of Force Majeure?

As organisations have historically rushed to globalise their supply chains, are we now going to see a reversal of this and a more localised, protectionist approach to markets? The challenge for Procurement Leaders will be how to predict these events and to mitigate the risks associated with global change.

Without doubt we are entering an era that favours a less politically correct approach of yesteryear, one that rewards forthright opinions and direct action. The new breed of procurement practitioner will need to build this thinking into category plans, sourcing strategies and contracts.

I, for one, will be watching with interest.