Tag Archives: procurement news

Yahoo Breaks Record – For The Biggest Hack in History

The biggest hack in history – it’s certainly not an award to be envious about. But Yahoo broke the record after announcing a major breach from 2013.

hack record

It’s been a bad week for embattled internet giant, Yahoo, as the company announced details of a huge cyber security breach from 2013. The hack impacted over one billion accounts, twice as big as the previous largest breach.

Yahoo was also the victim of the previous hack ‘record’, which it announced in September. It means that user data from over 1.5 billion accounts has been stolen from the company between 2013 and 2014.

Both the FBI and the New York Attorney General are investigating the hack. However, the company is likely to suffer as trust in its security and systems falls.

Hack Included US Officials

The first, and largest, of the hacks occurred in August 2013. Yahoo have said that data such as usernames, passwords, phone numbers and security questions were all stolen. The company is taking steps to contact users affected by the hack, asking them to change passwords and security questions.

It’s an embarrassing turns of events for Yahoo, who are already struggling to keep pace in the tech industry. It’s the second hack the company have announced this year. To further their embarrassment, it has come to light that 150,000 of the affected accounts belonged to US Government Officials.

According to a Bloomberg report, the data stolen from the officials in the hack could be a threat to national security. Data could allow cyber criminals to identify officials, target them, and further hack personal and professional accounts.

Organisations affected included:

  • Current and former White House staff;
  • FBI agents;
  • US Congressmen and their aides;
  • Officials at the NSA and CIA;
  • Current and former US diplomats; and
  • Every branch of the US Armed Forces.

Trouble on the Verizon?

The two breaches, and the high-profile nature of the accounts included, come at a bad time for Yahoo. In recent months CEO Marissa Meyer has come under increasing criticism for how the company is performing.

The hacks may also have a major impact on the deal Yahoo currently has to sell its core internet assets to Verizon. The deal, currently estimated to be worth $4.8 billion, has still to be finalised. And while it’s likely to still go ahead, Verizon have already said it will be looking for a lower price.

In October, when the first hack was announced, Verizon stated that it was “reviewing the deal“. It’s unlikely that a second breach will assist Yahoo’s negotiation position much either. With shares prices falling 6.5 per cent in Thursday trading last week, the deal valuation is likely to be put back on the table.

However, some experts believe that the deal will still be closed at its original price. The impact of the breaches will not be seen for some time, and certainly not in a way that would show any monetary damage. But at a time when a smooth deal was top of the priority list, Yahoo will need to work very hard to recover consumer confidence.

What Should I Do?

While you will be contacted by Yahoo if you are impacted by the hack, we’ve pulled together some things you can do in the mean time.

  • Log into your e-mail account and change your password

Make it a brand new password, with upper and lower cases, special characters and numbers. No dates of birth!

  • Check accounts the e-mail is linked to

Like most people, you’ll use your e-mail to log into other online accounts. Check all these accounts to make sure there’s no unusual activity. Change your passwords.

Once you’ve done this, check for any password reset requests that you haven’t asked for in your e-mail. Report anything suspicious to the site in question.

  • Check Sent Mail for Spam

Your account might have been used for sending spam mails to your contact list. Do a quick check of your sent mail for this.

  • Two Factor Identification

In light of the increasing number of hacks, sites have begun to introduce two factor identification. This works alongside your password as part of the logging in process. Register for it where you can.

You’re never going to be 100 per cent safe from a hack. But by using strong passwords (different ones for different sites), you can help to minimise the impact and possibility.

While we frantically try to remember all our passwords, we’ve looked out some of the top headlines for this week…

Trump Holds Silicon Valley Tech Summit

  • Silicon Valley tech heavyweights sat down with President-elect Donald Trump for two hours last week.
  • The leaders including Apple’s Tim Cook, Facebook’s Sheryl Sandberg and Amazon’s Jeff Bezos.
  • Topics discussed included vocational education, trade with China, and the need for data analysis technology to detect and reduce government waste.
  • The tech industry and Trump were frequently at loggerheads during the election. Trump also singled out a number of them for criticism on non-US supply chains.

Read more at the New York Times

Amazon in Drone Delivery First

  • Amazon made history last week with its first delivery by a fully-autonomous flying drone.
  • The delivery, containing a TV remote control and a bag of popcorn, was made to a customer in Cambridge, U.K.
  • The delivery took 13 minutes from Amazon’s local warehouse to the customer’s home. Amazon intends to extend the trial to hundreds of users.
  • Packages must weigh five pounds or less and can only be delivered during the day and in clear weather.

Read more at the Wall Street Journal and watch the video here 

Mexican Government Deploys Troops for Shipment Protection

  • As many as 1000 troops have been deployed along rail lines in Mexico to protect automotive cargo from thieves.
  • Thieves have been boarding trains to steal tyres, batteries and other automotive parts.
  • Mazda and General Motors are among the companies that have been impacted by the thefts.
  • American Honda has also been affected, and takes the damage into account when deciding between rail and sea-borne deliveries.

Read more at Automotive Logistics

UK Falling Behind on Timber Requirements

  • The UK faces a future timber shortage thanks to delays in planting of forests.
  • In order to meet Government requirements of 10-12 per cent increase in woodland areas in England, 11 million tree need to be planted between now and 2020.
  • However, the Chief Executive of Confor has highlighted serious delays due to inefficiencies in the grant system for planting.
  • The highly bureaucratic process means it can take up to three years before permission is granted to plant trees on a large scale.

Read more at Supply Management

Are We Witnessing the End of the Fairtrade Movement?

Mondelēz International have chosen to pull the Fairtrade label from all Cadbury branded products. Are we witnessing the beginning of the end for the movement?

fairtrade movement

In 1997, the formation of FLO International brought ‘Fair Trade’ labelling to shops for the first time. Later rebranded as Fairtrade International, it was recognised as the global leader in fair trade standards and labelling.

Since that time, hundreds of organisations have hosted the Fair Trade label on their products. While the labelling was voluntary, organisations and the general public viewed this movement as a great step forward for developing countries.

However, in the past week, Mondelēz International have taken the decision to bring all of its fair trade policies in house. And it’s left many people wondering about the future of the movement in its current state.

What is Fairtrade?

Fairtrade is just as it sounds. The aim of the movement is to create better working and living conditions for farmers and workers in developing countries. This includes paying better prices for crops (which don’t fall below the market price), and embedding local sustainability.

Crops range from coffee and cocoa, to bananas and cotton. It also includes products you might not immediately link to it, like flowers, gold and wine.

Some facts and figures around the movement are (courtesy of the Fairtrade Foundation):

  • More than 1.65 million farmers and workers work for Fairtrade certified organisations
  • 56 per cent of these farmers grow coffee
  • There are 1,226 certified Fairtrade organisations across 74 countries
  • $106.2 million was paid to Fairtrade producers in 2013-14
  • 26 per cent of all farmers and workers in the organisations are female
  • Organisations invested 31 per cent of their Fairtrade premiums on productivity or quality improvements; 26 per cent was invested in education

The movement has clearly helped millions of farmers and workers around the world, giving them a better deal for their crops. And, as social consciousness has grown, so have consumer tastes for Fairtrade products.

The UK is one of the largest markets in the world for Fairtrade products. In 2012 (more recent figures are hard to come by), UK consumers spent more than £1.3 billion on these goods.

Is It Really Fair?

However, unfairly or otherwise, the movement has been dogged by criticism about how fair it actually is. As far back as 2007 (and beyond), critics were questioning how good a deal these farmers and workers were getting.

Some critics have argued that by being affiliated with the movement, farmers are actually limiting their markets. Others have argued that it doesn’t account for mechanisation in production and doesn’t give the opportunity to improve production processes.

And a report in 2014 by the School of Oriental and African Studies (SOAS) in London raised concerns that some workers were actually earning less than non-Fairtrade workers.

Some products don’t quality for Fairtrade labelling, and specialist brands are likely to miss out. Additionally, it’s often difficult for farmers to join the movement, with fees and a lack of organisation frequently cited.

And despite its position in the public eye, Fairtrade isn’t the only organisation offering this service. The Rainforest Alliance is one such organisation, but perhaps suffers from being less well-known.

Companies Changing Strategies

All of which brings us back to the change about to be undertaken by Mondelēz with its Cadbury brands. The global organisation plans to bring all of its certification in-house, under its ‘Cocoa Life‘ fair trade scheme.

While the company maintains that the move won’t impact the percentage of fair trade products it produces, it’s raising concerns about the future of the Fairtrade movement.

When Cadbury joined Fairtrade in 2009, it prompted many of its competitors to do likewise. Critics are concerned that its move away from Fairtrade might see other organisations follow suit. There are concerns that ethical standards may drop, even although Fairtrade will continue to monitor Cadbury’s work.

The company has committed to ensuring that its supply chains retain the protection they currently have. And even Fairtrade International have welcomed the move, seeing it as a company taking accountability for its supply chain and sustainability efforts.

Whether this ultimately means the end for Fairtrade is unclear. It’s highly unlikely that the movement will cease to be, but it may have to change to remain relevant. Public social consciousness will only increase, and manufacturers will need to be able to prove the transparency and legitimacy of their supply chains.

In that respect, whether it’s in-house, or done by an external NGO, sustainability labelling will continue to exist. And Fairtrade will still be seen as the cornerstone in the movement.

What do you think about the move by Mondelēz? Do you think it will make a major difference? Let us know in the comments below.

While we take some time out to evaluate our food purchases, we’ve compiled some top headlines for your consideration.

Pentagon Buries Evidence of Bureaucratic Waste

  • The Pentagon suppressed the results of an internal study which exposed huge levels of administrative waste.
  • A dramatic report from The Washington Post revealed the extent of the waste to be an estimated $125 billion.
  • Reporters believe the Pentagon feared Congress would use the findings as an excuse to slash the Defence budget.
  • The study was originally requested to help make the Pentagon’s back-office more efficient and reinvest any savings in combat power.

Read more at the Washington Post

Apple Supply Chain “On Move to USA”

  • A large part of the Apple supply chain may be on the move back to the USA, according to one report.
  • Foxconn, one of Apple’s key producers, currently carries out the majority of manufacturing in Chinese factories.
  • However, the company is in talks about expanding its US-based operations to iPhone and other product build.
  • The move comes following strong criticism of the company by President-elect Donald Trump during the US elections.

Read more at the Wall Street Journal

Trump Air Force One Tweet Sends Markets into Chaos

  • The social media habits, and impact, of President-elect Trump were highlighted again last week.
  • A tweet calling for the cancellation of an order for a new 747 Air Force One, built by Boeing, caused chaos in US markets.
  • Immediate effects included a sudden plunge in Boeing’s stock, which recovered as clarity emerged around the true budget – $1.65 billion. Boeing currently has a $170 million contract with the Air Force.
  • Trump and the CEO of Boeing have since spoken by phone regarding the order and the tweet.

Read more on ABC News

Fujitsu and DHL to Use IoT to Disrupt Logistics

  • Fujitsu has announced a partnership with DHL Supply Chain UK which will focus on using the Internet of Things in logistics.
  • The two companies plan to share expertise to jointly develop innovative solutions for supply chains, and also emergency services.
  • One example of wearable technology is UBIQUITOUSWARE which helps emergency services track individuals.
  • The technology provides real-time tracking insights, as well as ensuring timely responses in emergency situations.

Read more at Supply Chain Digital

Peak Oil – From Global Catastrophe to Global Opportunity

Modern economics is a matter of supply and demand. And when it comes to ‘peak oil’, it’s the difference between catastrophe and opportunity.

peak oil

Since the early 20th Century, scientists, experts, and economists have been predicting the manifestation of ‘peak oil’. For years, many people viewed ‘peak oil’ as a herald of global catastrophe, and the end of major economies.

However, in recent years, the supply and demand situation for oil has turned in favour of supply. It now appears that peak oil demand is what organisations and countries need to be aware of.

What’s more, some experts are predicting that this demand will happen sooner than expected. And global oil and gas organisations need to consider their next move in order to stay competitive.

What Do We Mean By ‘Peak Oil’?

Peak Oil‘ describes a situation where global oil production hits its peak, then is in perpetual decline. The first prediction of this was in 1919, and an expectation that peak would be reached by the mid-1920s.

Throughout the last century, a number of geoscientists have continued to make predictions. And these predictions have all been proved to be wrong. However, some experts believe this peak may already have happened without anyone really noticing.

Studies have shown that in North America, the volume of oil discovered has dropped consistently since the 1930s. In addition, production of oil in the region has dropped year on year since the 1970s. That’s not to say that overall fossil fuel production has dropped – we’ll come to that shortly.

What people have agreed upon is that the concerns over ‘peak oil’ have abated, or disappeared entirely. The expected global economic collapse is unlikely to take place (or at least be a result of running out of oil).

Supply Outstripping Demand

So what has changed? Well, there are three reasons that keep appearing in a lot of the articles written about ‘peak oil’. They are:

  1. A huge increase in the volume of shale oil being produced. The oil is produced differently, but can be a direct substitute for crude oil.
  2. The US-Iran deal signed in 2015 has lifted sanctions on the oil-rich Middle-Eastern country.
  3. OPEC, which accounts for 43 per cent of global oil production, has, until recently, refused to cut supply. This surplus of supply was the reason the price of a barrel of oil dropped dramatically earlier this year.

This has shifted the thinking on a surplus of demand for crude oil, to a surplus of global supply. Or from ‘peak oil’ to peak oil demand.

Simon Henry, the Chief Financial Officer at Royal Dutch Shell, has predicted that this could happen in as little as five years. Henry stated that, “peak may be somewhere between 5 and 15 years hence…driven by efficiency and substitution.”

This view is at odds with many of the other major global oil producers, however. Exxon Mobil is anticipating a 20 per cent rise to 2040, while Saudi Arabia, the world’s largest crude oil producer, has argued that demand will rise on the back of increased consumption in emerging markets.

But, as some experts point out, even these predictions are built of shifting sands. The global trade slowdown, combined with the events of 2016, could adversely impact demand in developing countries.

Consumers & Organisations Shifting Focus

Whether it’s five years, or fifty years, what is clear is that oil is still a finite resource. Production will eventually diminish, and consumer requirements will change alongside this. This is where the global opportunities come in, but only for organisations willing to keep pace with change.

Public interest in renewable energy is increasing rapidly, and consumer buying habits are changing too. Even industries traditionally driving oil consumption, like the automotive industry, are seeing massive change.

In the UK alone, sales of electric cars have increased by 48 per cent in the past year. Sales of hybrid cars during the same period have increased a whopping 133 per cent. There are large solar panel fields being built around the world, and Ikea is even selling them to consumers in the UK.

Shell and BP are just two of the organisations expanding their portfolios into renewable energy sources, such as biofuels and natural gas. Greater investment in the renewables industry by major organisations has also helped to reduce costs associated with it. And as costs fall, demand from organisations and individuals will inevitably rise.

It would be foolish to make predications given how difficult it is to predict correctly about oil and energy. It’s a topic that is unlikely to go away any time soon, and one that organisations and wider supply chains need to be keeping up to date with.

Do you have a view on ‘peak oil demand’? Do you think it’s time to focus more on renewable energies? Let us know what you think in the comments below.

Like a treat behind each door of your advent calendar, we’ve found the tastiest procurement headlines this week.

Robotic Exoskeleton Gives Workers Super-Strength

  • SuitX, a Californian robotics company, has unveiled a new Modular Agile Exoskeleton for manual workers.
  • The suit is expected to greatly improve worker productivity and limit exposure to long-term health risks such as back injuries.
  • The exoskeleton is comprised of three modules – backX, shoulderX, and legX – which can be worn separately or as a single system.
  • The exoskeleton supports the body, reducing the amount of effort required to perform tasks such as lifting heavy weights.

Watch the video on THOMASNET

U.S. CEOs Face Consumer Backlash over Trump Victory Response

  • US Corporate CEOs have not hesitated to make their political views known in light of Donald Trump’s election victory.
  • Responses have ranged from congratulatory, to calls for unity, and commitments to company diversity policies.
  • Statements in support or against President-elect Trump have put brands at risk of consumer backlash.
  • Some CEOs who have spoken out have seen calls for boycotts of their brands on social media. Other CEOs have experienced backlash from their own employees on the other side of the political spectrum.

Read more at the Washington Post

Bank of England Seeking £5 Note Solutions

  • The supplier for the new £5 is looking for solutions to the make-up of the note’s base polymer following a backlash this week.
  • It was revealed that the note’s polymer contains animal fat in the form of beef tallow.
  • A petition on behalf of groups including vegetarians, vegans, and religious groups garnered more than 100,000 signatures in two days.
  • The Bank of England has said that their supplier, Innovia, is working with its supply chain to come up with a resolution.

Read more on Supply Management

Maersk Line Acquires Hamburg Sud

  • A.P. Moller-Maersk has agreed a deal to acquire German shipping line Hamburg Sud from the Oetker Group.
  • It’s estimated that the deal is worth over $4 billion, after Maersk won out in the bidding process.
  • The deal brings Maersk’s share of the global container market to 18 per cent, and it hopes to use the deal to return to profitability.
  • It’s the latest in a long line of mergers and acquisitions in the shipping industry, thanks to a huge downturn in 2016.

Read more on Supply Chain Dive

Are Supply Chains Already Feeling the Trump Effect?

President-elect Trump doesn’t take office until January 20th 2017, but his impact is already being felt in global supply chains.

Trump trade deals

Yes, it’s been a little over two weeks since Donald Trump won the US Presidential election. And it’s still nearly two months until he officially takes office. Yet, it’s hard to get away from media reports on what will happen during Trump’s first 100 days in office.

NAFTA, the Trans-Pacific Partnership (TTP), and import tariffs have all been in the news. And if global supply chains weren’t already watching with interest, they certainly should be now.

NAFTA – Overhaul on Cards

During the election campaign, Donald Trump made much of the movement of US manufacturing jobs to Mexico. One solution was to end US involvement in NAFTA, pushing companies to move jobs back to US heartlands.

The North Atlantic Free Trade Agreement was signed in 1994, effectively eliminating tariffs between the USA, Canada and Mexico. The agreement has allowed for seamless movement of goods across borders. It also means that the US currently has more trade with Canada and Mexico, than Europe and China.

An estimated $1.4 billion worth of goods cross the US-Mexico border every day. However, it’s not all been positive, with many organisations moving production to Mexico, where costs are lower.

However, in the past week, the stance from the Trump camp appears to be one of overhaul, rather than withdrawal. The President-elect wants to ensure a “better deal” for America, as well as reduce America’s $76 billion trade deficit.

This could include tariffs of up to 35 per cent on Mexican imports, and penalising companies moving production there. Other changes could include issue to do with currency manipulation, as well as labelling of meat products, and lumber production.

However, experts have warned that any or all of these measures could hurt the USA too. Increased meat prices in US supermarkets, higher house prices, and Mexican tariffs on US goods could all be on the cards. And that’s without the guarantee that jobs would come back to the US.

Relocating Supply Chains

One company subject to plenty of Donald Trump’s ire during the election was Apple. The President-elect singled out Apple several times as an example of a company that should re-shore its production.

To emphasise his point, Trump has threatened to put a 45 per cent import tariff on all Chinese-made goods. At present, Apple devices are assembled in China, with key components sourced from specialised suppliers throughout Asia. In spite of this, however, re-shoring is not that simple for Apple.

Experts have warned that moving production would be challenging, citing a lack of skilled workers and a steep hike in costs. There is also the matter of the highly complex supply chain Apple has established in Asia.

Analysis carried out by the MIT Technology Review stated that higher labour costs, and logistics costs of transporting components to the US, would add between $30 and $40 to the cost of producing each iPhone.

However, the Nikkei Asian Review has reported  that Apple is actually looking at moving some elements of production. It would not be unprecedented either. In 2012, key Apple supplier Foxconn set up an iMac assembly line in Texas. And in 2013, Apple supported Flextronics, another contractor, in building a Mac Pro production line in Texas too.

The media this week reported a call between Donald Trump and Apple CEO, Tim Cook, leading many to suspect that discussions are already taking place. However this ultimately plays out, global supply chain movement and disruption could happen. And if Apple were to move first, it seems like that others would follow suit.

‘Made in China’ Great Again?

One country not looking favourably on President Trump’s policies and tariffs is China. It has been reported that China is unhappy with potential import tariffs, as well as being labelled as a currency manipulator by the future President.

Reports from state media have stated that any tariffs would be met with tariffs of China’s own. There was also a thinly veiled threat against raising tariffs above agreed WTO levels, and starting a trade war.

However, at the same time, China could be a major beneficiary of Trump’s plans to pull the US out of the TPP on his first day in office.

The aim of the TPP was to create a common market, similar to the EU, between its members – the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. As these countries make up 40 per cent of the world’s economy, it was seen as a great opportunity for many.

However, critics argue that it favours big business, and Donald Trump looks set to abandon it in favour of freshly negotiated trade deals. The belief is that, without the USA, the TPP would be dead in the water. But that would open up markets to greater deals and trade with China.

Australia was one country that signalled it would be interested in a China-led trade deal. Deals such as the Regional Comprehensive Economic Partnership (RCEP) could see China increase its power in Asia, leaving America in the cold.

What do you make of the policies announced by President-elect Trump in the past week? Could the US suffer by going down a protectionist route? Tell us your thoughts below.

So you’ve got more time to bargain hunt this Cyber Monday, we’ve tracked down the top news headlines this week…

Samsung and Panasonic Investigate Labour Abuses

  • A Guardian investigation has revealed exploitation of migrant workers in Malaysian factories producing goods for leading electronic brands Samsung and Panasonic.
  • The group of Nepalese migrant workers claim they have been deceived about pay, as well as having to pay large sums of money to secure the jobs.
  • Working conditions are reported to include 14 hours on their feet without adequate rest and with restricted toilet breaks.
  • Samsung and Panasonic have opened investigations into the conduct of their suppliers following the claims.

Read more at The Guardian

BMW Logistics Using Autonomous Robots

  • The first fleet of autonomous transport robots to be used in everyday operation has been launched by BMW.
  • The first fleet of ten robots has been put into operation at the car maker’s Wackersdorf plant.
  • The robots will transport components around the facility, and are capable of carrying loads up to 500kg.
  • The move comes as the company aims to remove as much CO2 emission from its manufacturing processes.

Read more at Supply Chain 24/7

Shell May Face UK Trial Over Nigeria Spills

  • A High Court is to make a decision on whether two Nigerian communities can bring cases against Shell.
  • The communities claim that pollution from repeated spills has caused lasting damage to their environment.
  • Lawyers representing the communities argue that Shell controls and directs its Nigerian subsidiary, and is therefore responsible.
  • However, Shell have also lodged applications to challenge the jurisdiction of the English courts in the matter.

Read more on Supply Management

Canada Energy Decisions to Impact Freight Carriers

  • Canada has announced a plan to phase out all coal power by the year 2030.
  • Four affected coal power plants will will have the option of switching to lower-emitting resources or using carbon-capture and storage technology.
  • The move will have a knock-on effect on the country’s freight carriers, particularly the railroads.
  • Volumes of coal carried by railroads have fallen by 12 per cent this year, and are likely to get smaller still in the next decade.

Read more at the Wall Street Journal

The Power of the Hackathon: Putting Theory into Practice

The concept of a hackathon is nothing new. But more and more organisations are realising the benefits found in these events.

mcg hackathon

Many people associate the concept of a hackathon with the emergence of the digital age. However, it may come as a surprise to you, but the term ‘hackathon‘ was first coined in 1999. They started out as highly collaborative events, aimed at pooling computing resources for testing ahead of Beta launches.

However, in recent years, the hackathon has been hijacked by organisations who have recognised the benefits of these events. Now, everything from technological innovation to Blockchain have been the subject of a hackathon.

And there are more coming that you might be able to get involved with too!

This Hackathon is Spotless

This week, integrated facilities service provider, Spotless Group, are hosting a hackathon in conjunction with global start-up accelerator network Startupbootcamp. The two-day event, held at the iconic MCG in Melbourne, Australia, will focus on the Internet of Things (IoT) and DataTech.

Spotless recently highlighted innovation as a key priority for its business. The organisation is hoping that the event will help provide solutions to real problems, enhancing its overall customer service.

Julian Fogarty, Spotless’ General Manager of Brand, Innovation, and Technology, said, “By investing in external strategic programs, partnerships and events, Spotless is demonstrating to customers and shareholders its commitment to pioneering industry-leading services.”

The partnership with Startupbootcamp will ultimately help with a key issue found with hackathons – turning innovation into reality. The organisation connects corporates with start-ups and entrepreneurs, and helps put the ideas generated at a hackathon into practice.

The winners at the event will receive up to $10,000 and six months in Startupbootcamp’s start-up workplace. These teams will also receive advice from mentors and fellow hackers as they work on their ideas.

Digital Cities

It’s not just organisations that are organising hackathons to drive innovative ideas. The city of Sacramento, California, recently hosted a Startup Weekend to generate new business ideas for the city.

Teams were created on the first day, then ideas were generated over the course of the weekend, with business pitches on the Sunday evening. From there, the three winning ideas went to pitch to investors at a venture capitalist event in the city, with the hope of securing funding to go forward.

Another place looking to hackathons to generate innovation is Delta State, Nigeria. The event is aiming to generate new solutions in line with the UN’s ‘Sustainable Development Goals’, with a particular focus on critical needs and solutions for African countries.

The hackathon is being supported by Google, who is not only hosting, but providing some of their own developers to help kick-start the process. It’s expected that around 3,000 people will attend the event in December, either as participants or in the audience.

Hackathons and the Blockchain

One term that has been coined recently is ‘The Hackonomy’. The concept is derived from the Blockchain, and has much in common with bitcoin. To drive a more official side of hackathons, and to provide reward for innovation, a crypto-currency, HackerGold, has been developed.

The currency will allow “frictionless” access to a marketplace of developer talent pools and code libraries for start-up companies. By opening up this market, it should also enable previously unconnected ‘hackers’ to connect and work together.

Blockchain Lab, a blockchain technology pioneer, is set to be the first organisation to accept HackerGold. It will use the currency to pay for services, such as auditing on smart contracts, and code development.

There’s plenty more to come from this space in the shape of a 5 week hackathon, ether.camp, currently being held in London. It’s the first hackathon to be held entirely using Blockchain, and looks set to create a new generation of start-ups using this digital technology. We’ll be interested to see the outcomes when the event finishes on December 22nd.

Have you used a hackathon in your organisation? Or have you been involved with one? Was it a success? Let us know below.

While we try to get our heads around a whole new set of terminology, we’ve sourced your top headlines for this week…

Apple’s Rumoured Expansion into Digital Glasses

  • Apple is rumoured to be considering an expansion into the production of smart glasses.
  • Apple Inc. is reported to have spoken with potential suppliers about the wearable technology, and ordered small quantities of near-eye displays from one supplier for testing.
  • CEO Tim Cook is a known enthusiastic for augmented reality (AR), particularly after the success of Pokémon Go earlier this year.
  • The Apple glasses would be the company’s first product targeted at the AR market.

Read more on Bloomberg

Solar-power Shingles Cheaper Than Roof Tiles

  • Tesla and SpaceX Founder Elon Musk has unveiled a new product – a roof consisting entirely of solar-power generating shingles.
  • The tiles are comparable to high-performing solar panels in terms of power generation.
  • The roof costs less to manufacture and install than a traditional roof, on top of the predicted electricity savings.
  • The anticipated cost savings are due to lower shipping costs, as the tempered-glass tiles are only a fifth of the weight of traditional roofing materials and are less susceptible to breakage in transit. 

Read more on Bloomberg

Procurement Fraud Worsens in Australian Public Sector

  • A recent investigation has found that public sector fraud in the Australian state of New South Wales (NSW) cost the government up to $10 million between July 2012 and June 2015.
  • Procurement and contract management fraud caused the heaviest losses, with each case costing an average of $225,000 and, in one case, $1.7 million.
  • Scams involved invoices for work never done, inflating invoices, or invoicing for non-existent work done by non-existent companies.
  • Incidents also included falsified timesheets and records created for goods and services that had never been delivered.

Read more on Government News

VW to Cut 30,000 Jobs from VW Brand

  • Car-maker Volkswagen has announced it will cut approximately 30,000 jobs at its VW brand over the next five years.
  • 23,000 of the jobs set to be cut will be in Germany, the company’s biggest unit.
  • VW said the decision was aimed at improving profitability in addition to funding a shift towards producing electric and self-driving vehicles.
  • However, it added that it will create around 9,000 new jobs by increasing investments in electric car technology.

Read more at International Business Times

Can Procurement Lead the Fight Against Protectionism?

Protectionism will never produce a win-win situation. And it can be a huge wall for procurement to work around.

protectionism

Few procurement professionals view their role through the lenses of either protectionism or free trade. But the protectionism-free trade dimension is a crucial topic for procurement, so it is certainly worth thinking about the impacts on procurement the world over.

The Oxford English Dictionary defines protectionism as, “the theory or practice of shielding a country’s domestic industries from foreign competition.” Further, protectionism is a mind set as much as formal policy; it is the intentional or inadvertent preference for domestic industries over foreign industries.

Free trade meanwhile is “international trade left to its natural course without tariffs, quotas or other restrictions”.

The translation into procurement is fairly simple. Protectionism is limiting access to domestic procurement markets to foreign suppliers, and the preference for awarding public contracts to domestic rather than foreign suppliers. Free trade is the absence of this.

Protectionism is largely, or partly, illegal between numerous countries with free trade agreements (FTAs), such as the North American Free Trade Agreement (NAFTA), or are part of a trade bloc such as the European Union. But protectionism includes more subtle biases.

Ideas around boosting the local economy, creating local jobs and protecting the local environment are all protectionist when preferred over equal boosts to an economy, job creation, or the environment elsewhere.

Protectionism – A Zero Sum Game

The first strand of this article is that protectionism harms economies, jobs and prosperity, locally and globally, for two reasons.

Firstly, it is intuitive to think that sourcing goods and services locally has positive impacts, creating jobs and economic growth in the local area. But this is a zero sum game.

Protectionism is normally reciprocated. If one country has policy preference for domestic businesses, then other countries respond in the same way, offsetting the benefit. Protectionism may allow Country A to create more local jobs by awarding contracts to domestic businesses. However, when Country B does the same, export jobs in Country A are lost.

No more jobs are created and no additional economic growth is produced by procuring from domestic suppliers. Domestic industries get some short term benefit and exporters lose out.

Should We Really Favour Our Own Country?

Protectionists argue that public procurement in their own country should favour domestic businesses. In the UK, the contract for a large rail project in London was awarded to Germany’s Siemens, ahead of UK-based Bombardier. Cue outrage at job losses in the UK factory because the government awarded to a foreign business.

Unless protectionists believe they deserve double standards, this logic dictates that Bombardier should not have won contracts with Trenitalia, Italy’s main train operator. Nor should British architects have been awarded the contract to build the dome for the German Reichstag.

These created British jobs from German and Italian taxpayers. Hundreds of thousands of British jobs rely on British businesses winning public contracts outside the UK through non-discriminatory competition.

In the USA, incoming president Trump has riled against other countries “stealing” American jobs. However, he does not seem to oppose German, Japanese and Korean car manufacturers employing hundreds of thousands of workers in American factories. But surely the British and American governments’ obligations are to their own workers and businesses?

Maybe so. A country having an obligation to help domestic businesses and workers more than the rest of the world is understandable, but there is not actually any gain. Protectionism also makes British and American citizens and workers worse off.

Reducing Choice & Raising Costs

This leads onto the second reason. Protectionism gives citizens fewer choices of what they can buy and increases their living costs. The belief that protectionism helps local communities at all is flawed.

Free trade allows consumers to have the best goods, regardless of location. In the developed world, the UK is bad at growing bananas and the USA makes expensive toys, so free trade enriches citizens by allowing better bananas and cheaper toys.

Free trade allows businesses and citizens in the developing world to access the best technology and equipment that is not or cannot be effectively produced locally. In essence, protectionism limits the goods that citizens can buy, to everyone’s loss.

Hamstrung by Protectionism?

This has the exact same impact on procurement and the second strand of this article is that the procurement industry is hamstrung by protectionism. Protectionism harms both the procuring entity and ultimately the users of public services.

If a hospital needs new radiotherapy machines, it should procure the machines with the best combination of quality and price. In a world of 7 billion people, the best radiotherapy machines will probably not be made locally, and maybe not domestically.

Basing buying decisions on nationality rather than value for money and effectiveness of the radiotherapy machines hurts cancer patients and increases costs for taxpayers. As protectionism is reciprocated, it decreases consumer choices and increases import costs. This is without even a net benefit for domestic industries or workers.

This conclusion that should therefore be reached is that every protectionist move has pros and cons, but the pros are directly and equally offset by counter-moves, leaving only the cons intact and everyone worse off. Hardly a desirable outcome.

So in the context of the Brexit vote, Trump’s victory and the stagnation in global trade, the case needs to be made now more than ever that protectionism on net harms prosperity. Procurement functions have a large role and responsibility to their organisations, countries and the world to avoid it.

Could President Trump Make Procurement Great Again?

Not that we’re saying that procurement isn’t already pretty great. But could a new man at the top mean major changes for the profession?

trump great

If you missed the result of the US Election last week, then you must have been on Mars. Or living under a rock/hiding behind your sofa. In an unexpected turn of events, Donald Trump was elected as the 45th President of the United States of America.

And irrespective of your thoughts on both the campaigns, and the ultimate result, it’s clear that there are changes coming. We have no idea what Trump’s first 100 days in office will look like, so much of what we’re seeing is still very much educated guesswork.

But should many of the agendas and policies from the campaign come to fruition, then procurement and supply chains, both domestically in the US, and globally, will be affected.

Automotive Indecision

A great deal of campaign rhetoric from the Trump camp came in the shape of American industry, and American jobs. The President-elect frequently stated he would look to remove the US from the North Atlantic Free Trade Agreement (NAFTA) should he win the election.

If this were to happen, it could potentially boost the US’ ailing car industry. In the past year, 8 new manufacturing plants have been created in Mexico, having been moved from the US for lower wages. Included in this number is Ford, who moved all small car production from Michigan to Mexico in September.

If Trump were to end US involvement in NAFTA, these car manufacturers would be just a few of the organisations with a big decision on their hands. Should they manufacture abroad and risk rising import costs? Or return operations to the US heartlands, and pay considerably higher wages?

However, though it’s easy for America to withdraw from NAFTA, it’s unclear what tariffs would be placed on imported goods. Beyond this, it’s likely to result in higher prices for American consumers (and buyers too), without any guarantee that jobs would return to the US either.

From a global supply chain point of view, it wouldn’t create much change. Mexico will remain an attractive proposition for non-US companies, such as Audi, BMW, and Toyota, none of whom are subject to NAFTA. So concerns the Mexican economy will collapse are unlikely to be realised.

Great Big Business Benefits

However, some big businesses and industries would stand to gain significantly from a Trump presidency. In the days following the election, shares in Oil and Gas companies shot up, following Trump’s pledge to make the US energy independent.

This would mean great exploration of the US mainland, and potentially relaxation of environmental policies put in place by President Obama. This would in turn impact procurement, who would have to bear in mind any changes in longer-term contracts.

Another group to benefit could be the Defence sector. There is likely to be great investment in defence in America, which may in turn move other countries to do likewise. Increased spending could free up previously-stalled projects, and kick off new projects benefitting both procurement and suppliers.

Finally, it’s fully anticipated that infrastructure procurement will be increased. With more money being promised to federal budgets, but greater efficiencies required, procurement will play a pivotal role in ensuring that funds are used wisely.

Investment Nerves

In the hours following the announcement of Trump’s victory, global markets dropped significantly. However, the drop, unlike Brexit, was a temporary one, with nearly every major market reporting an increase by close of trading.

Long-term, however, no-one is exactly sure what will happen. As one media source put it, “Investors are in wait and see mode”. This is likely to continue until the middle of 2017 at least, when formal policies will become much clearer.

strong anti-globalisation message resonated through the Trump campaign, and there are concerns that major investments will be hedged until such times that investors are clearer on what the outcomes might be.

Countries like India have traditionally relied on US investment. Any major policy changes could in turn impact significantly on the linked global supply chain. Whichever way it happens, organisations at least have a while to prepare, with President Trump due to take office on the 20th of January 2017.

What do you make of the procurement implications of the election? How major do you think the changes will be? Let us know in the comments below (procurement/business only, no political views please!).

It’s not been easy with news cycles dominated by other events, but we’ve found some great headlines this week.

GM to Cut Production Shifts in US

  • General Motors are to cut production shifts and lay off 2,000 workers at car assembly plants in Ohio and Michigan.
  • The move comes amid falling demand for passenger cars, and shifting consumer trends.
  • GM is the latest in a series of auto makers taking steps to deal with softer retail sales.
  • Earlier this year, GM announced plans to invest up to $691 million to build new plants and expand current ones in Mexico.

Read more at the Wall Street Journal

Burberry Cuts Product Lines

  • UK luxury retailer, Burberry, is to cut the range of products it offers by between 15 and 20 per cent.
  • The company reported a 40 per cent drop in first-half profits, blaming rising costs for the fall.
  • Pretax profit for the first six months of 2016 was £72 million, compared with £119.5 million in 2015.
  • The company has recently written down a number of assets, as well as incurring major costs for restructuring plans.

Read more at Market Watch

Rio Tinto Suspends Executive Over Alleged Payments

  • Rio Tinto has suspended a senior member of staff following an inquiry into a $10.5m payment made to a consultant on a mining project in West Africa.
  • The company launched an investigation in August 2016 after email correspondence from 2011 was found.
  • The emails showed “contractual payments” made to a consultant providing “advisory services” on the Simandou scheme in Guinea.
  • Rio Tinto has also announced that its selling its stake in the Simandou scheme to another project stakeholder.

Read more at Supply Management

Review Called After Contract Dispute Payout

  • Calls for an urgent review have been made after new details emerged about a £1.25m compensation payment following a contract dispute.
  • Legal proceedings were brought by Triumph Furniture after it challenged a contract awarded to a rival.
  • It has now emerged the Welsh Government was alleged by the bidder to have breached EU rules.
  • The Welsh Government said it was taking the issue “extremely seriously”.

Read more on The BBC

How Executives Can Avoid a Social Media Headache

Navigating the increasingly complex world of social media is the norm for executives. Here’s what you need to know.

executives headache

Social media can be a hugely important tool for executives in this day and age. When used appropriately, it can help you land your next job, help you communicate what you’re working on in your role, and help keep you on top of industry news and trends.

But setting up and occasionally maintaining your LinkedIn profile is just the tip of the social media iceberg these days.

According to a study conducted by Forbes and reported on SocialTimes, CEO engagement on social media will double by 2017.

Brands are doing this for good reason, with 82 per cent of people more likely to trust a company with CEOs on social media, according to the study.

You could get a tap on the shoulder by your HR leader any day, too. Companies often look across their organisation when considering a social media strategy for executives, with subject matter experts in different areas of the business (such as procurement) often having great insights to share.

Blurring Personal & Professional Boundaries

Of course, it takes extra time to be active in the social media. In fact, it’s blurred the lines between people’s personal and professional time and space. Used unwisely, a person’s social media presence can have repercussions in both their personal and professional lives.

This not only includes LinkedIn and Twitter, but also blogging, Instagram and Pinterest.

And at times, a lot that can go wrong. For example, the media stories of a Scottish executive who lost his $US2 million-a-year position as CEO last year when he decided to talk to his daughter during a ‘boring’ board meeting.

The executive told his daughter how he hated board meetings and that he was tired of the session that morning. He used Snapchat to share photos of the board meeting, along with tagged messages to his daughter, saying he was bored.

His daughter using a screen grabbing app to save the photos and posted them on her Instagram page, prompting a backlash that cost him his job.

This is just one of the many headlines about social media misuse that have caused headaches for successful corporate executives. There have also been plenty of accusations, misinterpretations and media headlines due to social media use.

Use Social Media as Tool for Good

However, don’t let this deter you from using social media, with executives able to use social media to their advantage rather than using it to ruin their career.

On the other hand, when used responsibly, social media has helped politicians win elections, startups take their new brand to the world and executives land new positions.

Posting blogs on LinkedIn or your company blog can also be a great way to bolster your corporate profile and help position you as an industry expert.

Outsourcing this process to a freelance journalist or copywriter can be a great way to ensure you meet your blogging goals.

Start by familiarising yourself with your company’s social media policy, which should outline their expectations. Raise any clarifications with your HR or communications department.

Avoiding the Executive Headache

When it comes to security, you can never be too careful. Here are a few ways to ensure you aren’t giving away too much information online.

Avoid checking-in: Don’t check in on Facebook at airports, on trips away for work or in specific locations during your time off. You never know who is watching for this information to be made public.

Set status updates to private: If you’re going to post business photos of delicious meals at a restaurant or tell people where you are on social media, make sure that your status settings are private, so that only your connections can view this.

Manually approve online tags: There’s an option on Facebook, Instagram and Twitter to approve photos and status updates you’ve been tagged in, which could reduce the chance of attackers actively monitoring your movements.

Key Social Media Platforms

And just in case you weren’t sure where to start, here is a brief run-down of the key platforms for you.

  • Facebook

The largest social network on the web both in terms of name recognition and total number of users. It’s a great medium for businesses to connect with customers.

  • Twitter

Share 140 or fewer character text updates to your followers, along with videos, images, links and polls. Twitter enables you to interact with other users by mentioning their usernames in your posts.

  • LinkedIn

Nowadays, if you’re a professional not on LinkedIn, you’re in a small minority. Allows you to create a professional profile and connect with people around the world, from peers, to colleagues, to competitors, to potential business partners.

  • Procurious

The world’s first online business network for procurement and supply chain professionals. With over 18,000 members, there’s a wealth of knowledge and potential collaboration with fellow global professionals.

  • Instagram

This visual social media platform is based entirely on photo and video posts, with many users posting about food, art, travel, fashion, architecture, hobbies and similar subjects. Growing numbers of retailers have had strong sales growth on the back of utilising this platform to display their collections.

  • Tumblr

This is one of the most difficult social media platforms to use as a business, but it’s also one of the most interesting. Users can post text, chat posts, quotes, audio, photo and video, while reposting other users’ content is quick and easy.

  • YouTube

This video platform allows businesses to show their products in action. It’s particularly useful for companies that mostly sell over the internet.

  • Blogs

Posting interesting articles either on your own personal blog, the company blog or post articles to LinkedIn can be a great way to bolster your corporate profile.

Will Procurement Have a Fight to Stay Relevant in the Future?

Is procurement facing an uphill struggle to stay relevant? Could strategy and technology hold the key to both destruction and survival?

fight for relevant

Procurious is at ProcureCon Europe this week. Stay up to date with what’s happening on Procurious, and by following us on Twitter.

It’s the end of Day 1 at ProcureCon Europe, and the Procurious team are looking forward to winding down with the best Berlin has to offer. First, though, we’re reflecting on what we heard from the speakers and delegates at the conference.

Procurement’s Burning Platforms

After fortifying ourselves with the great coffee on offer, Procurious stepped into the conference hall to listen to David Noble’s ‘State of the Profession‘ address. The CIPS CEO was positive about the situation procurement currently finds itself in, but had words of warning for the future.

One particular quote stuck in our minds as we considered the question of how procurement could remain relevant:

“If we don’t show our true value, our profession will cease to exist in its current form.”

Noble outlined what he termed as procurement’s “Burning Platforms” – those factors the global profession needs to be aware of now, and in the next few years.

First, the spectre of supply chain risk. Global risk is at its highest level (a peak of 80.8 in CIPS’ Risk Index in Q2 this year) since 2013.

Second was ethical supply. Linked heavily to supply chain risk, it appears that procurement is still struggling with transparency and ethics. Only 57 per cent of buyers have visibility of their Tier 1 and Tier 2 suppliers, and the percentage drops to single figures when it gets to Tier 3 and beyond.

The final burning platform was professional relevance, and how procurement could embed strategies to remain relevant. Noble touched on the ‘gig economy‘. This area is a double-edged sword, giving procurement the opportunity to train those not in the profession, but also challenges in maintaining the profession’s reputation.

Innovation & Frank Assessments

Automation and technology was a topic covered by a number of keynotes (more on that in the near future). However, it’s worth touching on a couple of areas of innovation, particularly in the area of stakeholder engagement.

JJ van der Meer, Partner at PA Consulting, outlined some of the activities that procurement can do to bring stakeholders on board. He and his team have coined a new word, “entreprocurement”, as a way of describing this innovation. While a bit unusual, it’s a term that’s likely to stick in the procurement world, we’re sure!

Innovation, and the drive to do better and better, was also the focus of Kristian Saksida’s keynote. Saksida, CPO at Solvay, offered a refreshingly honest assessment of his team’s transformation journey.

He was open to admitting the mistakes they had made while striving for more, but it was clear he wanted the room to have the benefit of this knowledge to avoid the same pitfalls.

Saksida’s background in Finance helped put an interesting spin on his material. However, he made some key points about the need for procurement to be speaking the same language as the business.

For two functions which have often had a troubled relationship, Saksida’s keynote gave a sense of positivity for the future at Solvay.

Sport and Procurement – A Creative Mix

Lastly we stopped in on Celia Sanchez San Juan’s interactive case study on optimising business partnering. Having seen Sanchez San Juan in a panel earlier, it offered a chance to dig deeper into Adidas’ fledgeling procurement team.

You may not see how sport is relevant to business partnering, but the link was far from tenuous. Adidas look at sport as having the power to change lives, and approach their procurement in the same way.

Sanchez San Juan offered Adidas’ maxim, “The Guiding Principle is Helping to Make a Difference, in the Game and in the World”, by way of explaining how the company puts its people at the heart of its change in procurement.

The journey to becoming a strategic business partner drew on the ideas of insights, impact, and innovation. Moving procurement from ‘Support’ to ‘Creator’ drives greater collaboration, and ultimately delivers greater value for the customer. In the world of sport and procurement, it was all about playing on the same team.

Isn’t that a good thought to finish the day with!

Raising the Curtain on the Future of IT Procurement

Few categories receive the same attention as IT procurement. So how can professionals demonstrate the value they deliver to organisations?

raising curtain it procurement

IT procurement is the most important spend category for most large businesses today. As a result, the category is under pressure to demonstrate its ability deliver cost savings against a backdrop of financial pressure and restricted budgets.

In just a few weeks, Procurement pros from all over Europe will gather in Amsterdam to discuss the future of their industry at ProcureCon IT Europe.

Progressive procurement leaders know that it’s not just about saving on the bottom line, it’s about adding value to the business too. It’s a subject which is bound to be top of the list of priorities in Amsterdam.

We asked 100 IT Procurement executives from some of the world’s largest organisations what they are doing to innovate, inspire and add value as part of our research for ProcureCon IT.

Creating a Best-in-Class IT Procurement Function

Procurement is becoming a more integrated part of many organisations, and IT Procurement increasingly has the skills required to deliver value to its stakeholders and make a significant impact on this important category of spend.

But what are the best-in-class procurement pros focussing on now to improve their effectiveness?

procurecon-it-blog

Our research highlights a focus on tightening up the relationship with suppliers. Nearly 60 per cent of our research participants named contract management as their number one focus. Procurement teams seek to optimise all contract-related costs, and provide both clarity and transparency for both parties.

Other priorities speak directly to the supplier relationship. More than half of respondents named vendor innovation as a key area of focus, and a similar amount highlighted supplier rationalisation.

Clearly, IT Procurement is on the hunt for the innovative solutions which will create a competitive advantage for their business. It’s not all about quantity though. It’s about slimming your roster down and making sure that every supplier is pulling its weight.

Thriving in the Future IT Procurement Landscape

What does some of this innovation look like? There is no doubt that the digital innovation which has turned the world upside down in the last ten years is also changing procurement too.

Cloud technology is an important area of growth for our respondents – more than half of our respondents are already heavily invested in these solutions. Some of the latest innovations in this area use app-based user interfaces and cloud-based analytical platforms to provide real-time access to information about who is spending what and when (and that’s just the beginning).

Even better, these systems generate an incredible amount of data with which to hone your operations further.

Data on this scale has the power to enhance planning, delivery and reporting on opportunities for cost savings, value creation, and a host of other things. Trend analysis can uncover patterns which will predict both future opportunities and future threats.

As a result, learning how to harness the information you already have inside your business is now of critical importance for those seeking to thrive in this new economic reality.

The Solutions Zone

ProcureCon IT is all about finding practical solutions to the challenges which IT procurement pros face on a daily basis. It’s the only truly peer-led conference of its kind in Europe!

Not only will you meet hundreds of people who are successfully taking their IT procurement operations successfully to the next level, but it’s also a superb opportunity to meet with some of the most innovative solution providers in the market place today.

To get industry-leading insight on the issues mentioned here, as well as lots more, join us on the 5th and 6th of December at the Mövenpick Hotel Amsterdam for ProcureCon IT.

Take a look at the full event agenda here.