Tag Archives: supply chain news

Supply Chain Review Pressure Following Chicken Scare

Public confidence in supermarkets and their supply chains has taken another hit, following a scare about contaminated chicken.

chicken

A recent report has found that one in four chicken samples bought from major supermarket chains contain antibiotic-resistant E.coli. The findings are again putting pressure on supermarkets to tighten their supply chain quality assurance processes.

While supermarkets have worked hard to improve supply chain traceability, this report shows there is much work to be done. It also serves to highlight a wider issue in the food supply chain – the use of antibiotics.

There is on-going criticism about the overuse of antibiotics by humans, but use of the drugs on livestock is contributing to increased resistance to antibiotics by so-called “super-bugs”.

Issues Raised in Chicken Testing

The study of chicken samples was carried out by the University of Cambridge. It revealed that from 92 chicken pieces, including whole chicken, thigh pieces, drumsticks and diced breast meat, 22 pieces contained potentially deadly bacteria.

The “superbug” strain of E.coli was found in chicken samples from all leading UK supermarkets, including Tesco, Waitrose, Aldi and Morrisons. Similar strains were found in supermarket pork samples tested in the same study.

The findings raise concerns about the quality of factory farming in the UK, as well as the end-to-end supply chains of the big retailers.

Dr. Mark Holmes, part of the research team that conducted the study, suggested that more resources needed to be put into assessment of antibiotic resistance in animals in the supply chain.

“These results highlight the need for improvements in antibiotic stewardship in veterinary medicine,” Holmes said. “The levels of resistant E.coli that we have found are worrying. Every time someone falls ill, instead of just getting a food poisoning bug they might also be getting a bug that is antibiotic resistant.”

Supply Chain Quality Assurance

Quality control software experts InfinityQS suggest that, while the supermarkets themselves might argue that their quality assurances are sound, the findings suggest this is not the case.

“It’s clear that a disconnect exists across these supermarkets’ supply chains. It’s likely they’ll have stringent procedures in place for their own food traceability, but it’s imperative these are adhered to amongst their suppliers.”

The company suggested that closer relationships with both suppliers and farmers was necessary. This could mean a more pro-active approach to site visits to where they source food from, and understand how they could help farmers to make improvements.

“An effective supply chain process will ensure that controls are in place to manage the necessary people, activities, resources and data throughout the supply chain.

“If done correctly, that product will be delivered with the correct documents, with an agreed quantity, adhering to a set quality standard and all sent at the right time to the right place.”

Antibiotic Overuse Creating Resistance 

The report also serves to highlight the wider issue of overuse of antibiotics in humans and animals. As well as depleting global supplies of antibiotics, systematic overuse is creating resistant strains of potentially deadly bacteria, including E.coli.

It’s predicted that, by 2050, one person will die every 3 seconds around the world from antibiotic resistant bacteria. Globally, 70 per cent of bacteria have now developed antibiotic resistance, including to traditionally ‘last line of defence’ treatment.

It’s estimated that around 40 per cent of antibiotic use in the UK is for animals in the food supply chain. The drugs are frequently given to large groups of completely healthy animals, with the intention of stopping the spread of infections. Mass medication accounts for an estimated 90 per cent of all animal antibiotic use in the UK.

Intensive farming practices, and keeping large groups of animals in close quarters, is to blame for such practices. In such crowded conditions, even one unhealthy animal can have devastating consequences.

However, as farming practices change, and retailers aim to ensure higher animal welfares standards, this issue may be lessened. Retailers have also been urged to pay a higher price for meat such as chicken and pork. This would relieve productivity pressures on farmers, and reduce intensive farming too.

Will this change your dietary habits? How can procurement get more involved in changing the underlying issues? Let us know in the comments below.

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We’ve been on the look out for all the top stories in procurement and supply chain this week. And here they are…

Bailout Rejection Makes Hanjin Liquidation Likely

  • The chances of a bailout for stricken shipping company Hanjin look unlikely, increasing the possibility of liquidation.
  • The bailout was needed to help the company combat $5.4 billion debts, and allow it to unload cargo at ports.
  • However, with decisions still to be made, the South Korean Government criticised the company for “economic irresponsibility”.
  • The company is conducting sales fund the release of $14 million worth of stock currently stuck on its cargo ships.

Read more at Supply Chain Dive

Sewing Robots to Join Garment Workforce

  • A company called Sewbo has developed a robot that can sew, and intends to replace humans in the garment manufacturing process.
  • The machine uses stiffened, pre-cut garment pieces and feeds them into a sewing machine, before dropping the completed garment into hot water to remove the non-toxic stiffener.
  • Automated clothing production provides a potential solution to labour abuses and sweat-shop conditions in the developing world.
  • However, large-scale automation would also put millions of people in the garment industry out of work.

Read more and watch the video at Engadget

Study Says Petrol Must Be Phased Out by 2035

  • According to a Climate Action Tracker report, the last petrol powered car will have to be sold by 2035 to limit global warming to 1.5 degrees Celsius.
  • A ceiling of 1.5 degrees was the most stringent goal set by world leaders at the Paris summit last December.
  • Current projections suggest that electric vehicles will make up only 5 per cent of the world’s car fleets by 2030
  • This means aggressive measures will be required to shift rapidly away from fossil-fuel powered vehicles much earlier than expected.

Read more at Fortune

“Poor Procurement” To Blame For Detention Centre Cost Blowout

  • Australia’s scandal-ridden offshore detention centres for asylum seekers have come under intense scrutiny once again.
  • An audit of the centres revealed “serious and persistent deficiencies” in the relevant department’s management of the contracts.
  • It identified failures in the open tender process for security, cleaning, catering and welfare services, with costs blowing out from a $351 million contract in 2012, to a current $2.2 billion contract.
  • The report also criticised the original open tender process, and negotiations that took place with suppliers in 2012.

Read more at The Guardian

Time to Panic? Climate Change Driving Coffee and Chocolate ‘Extinction’

Like to start your day with a latte? Make the most of it while it lasts, as climate change threatens extinction of the coffee bean.

coffee climate change

No, it’s not scare-mongering. And yes, there are more important things in the world than a daily espresso. However, the possible extinction of the coffee bean could have a wider-ranging, and more devastating, impact than you think.

And that’s not all. Climate change is also threatening a number of other popular foods and drinks, including chocolate, wine and beer.

Climate Change Destroying Farmland

A new report by the Climate Institute has shed light on a number of worrying facts. They argue that, should global warming continue at the same rate, wild coffee could be “extinct” by 2080.

In addition, rising global temperatures, and increasing pests and funghi could halve the available farmland suitable for growing coffee by 2050.

And it’s not just gourmet beans, and your local Starbucks’ supply of arabica beans that are set to be impacted. With a global temperature increase of 3 degrees as a result of climate change, even instant coffee is going to suffer.

Climate change is also causing the spread of pests and funghi to coffee growing areas not previously affected.  Coffee Leaf Rust, a fungus, and the coffee berry borer, a pest, have destroyed crops in South America, and have started to appear at higher altitudes, impacting a greater number of crops.

Coffee – Supply Chains and Livelihoods

Around the world, people drink more than 2.25 billion cups of coffee each and every day. In the UK alone, 70 million cups of coffee are consumed each year. And by 2020, it’s predicted that there will be 21,000 coffee shops around the country.

Coffee is a major export for a number of developing countries. An estimated 120 million people would be impacted by the total extinction of coffee crops. In countries like Burundi, coffee makes up 59 per cent of its exports, while it accounts for 33 per cent of Ethiopia’s.

However, climate change is already taking its toll in a number of other coffee producing countries. In Tanzania, where 2.4 million people work in the coffee supply chain, output has dropped by 50 per cent since the 1960s.

In 2012-13, the spread of coffee leaf rust in South America destroyed 85 per cent of Guatemala’s coffee crop, caused damage worth $500 million across the region, and cost 350,000 people their jobs.

And while some growers can move crops to higher altitudes to mitigate this risk, it’s not an option for small farmers who make up 80-90 per cent of total coffee growers.

Making a Difference

However, there is still time to make a difference and help sustain the livelihoods of the millions of people who rely on coffee for an income.

Helping to reduce emissions is a good place to start. Limiting temperature rises to 1.5 degrees could make a major difference to coffee producers. On your daily coffee run, use a reusable cup – one paper cup has the equivalent carbon footprint to 811 passenger vehicles.

Consumers can also buy brands that give a good deal to small farmers. These funds can then be used to help the farmers adapt their practices and mitigate future risks.

Not Just Coffee…

Sadly for all the foodies out there, coffee isn’t the only crop that is under threat from climate change. Avocados, chick peas, honey, and bananas are all on the food equivalent of the ‘endangered’ list if current trends continue.

And what’s more, chocolate, wine and beer may also be at risk. Chocolate is suffering from over-demand (70,000 more tonnes were consumed than produced last year), and cocoa supplies could be exhausted in the next 16 years.

As for wine, with current temperature rises, an estimated 73 per cent of land in Australia, and all of the Bordeaux region, will be unsuitable for grape crops by 2050.

As consumers it’s time to change our habits, or face running out of some of our staples and luxuries. It’s high time we all make some changes.

Away from a world without coffee, chocolate and wine, we’ve been collecting the big stories in procurement and supply chain this week…

Hanjin Bankruptcy Continues to Disrupt Supply Chains

  • The fallout from the bankruptcy of South Korean shipping company, Hanjin, has continued throughout the week.
  • Despite a US Court granting Hanjin ships access to ports, there are still concerns that delays will create significant bottlenecks for retailers.
  • Companies including Samsung, Hugo Boss, and Nike have all reported having to source alternative logistics options due to shipping delays.
  • Hanjin Group has made an offer of 100 billion won ($92 billion) to help contain supply chain disruptions.

Read more at The Globe and Mail

Australia Asks Chinese Shipping Company to Pay Clean-Up Costs

  • The Australian government has asked Shenzhen Energy Transport to pay $120 million towards the clean-up of a 100-acre area of the Great Barrier Reef.
  • One of the company’s ships ran aground on the southern edge of the reef in 2010 after going off-course.
  • According to the Great Barrier Reef Marine Park Authority, the ship caused severe physical damage and considerable contamination by toxic chemicals, including the now-banned anti-fouling agent tributyltin.
  • Shenzhen is fighting the bill, arguing the costs are unrealistic, and that the Great Barrier Reef is “self healing”.

Read more at Mashable

UK Local Government “Off Message” on Cloud

  • A new report from Eduserv suggests that UK local council procurement teams are “off message” on the Government’s G-Cloud software.
  • Only one in three councils say they have both a cloud IT strategy and a procurement policy which allows them to use G-Cloud.
  • Over 27 per cent claim they have an in-house procurement policy that doesn’t let them use G-Cloud at all.
  • The report has suggested that councils need to bridge the gap between IT and procurement to drive G-Cloud usage.

Read more at UK Authority

Coupa Moves to Register for Public Offering

  • Cloud-based spend management platform Coupa Software has publicly filed a registration statement with the U.S. SEC for an initial public offering.
  • The number of shares to be offered and the price range for the offering have not yet been determined.
  • The company has announced plans to raise $75 million in IPO.
  • Coupa intends to list its common stock on the NASDAQ Global Market under the ticker symbol “COUP.”

Read more at VentureBeat

Reliance on Outdated Tools Hamstrings International Growth

An over-reliance on outdated tools and processes in the supply chain is harming growth, and cutting competitive advantage.

Outdated Tools

Today’s international business environment is more complex than ever. As this complexity, and volatility, continue to grow, companies need to ensure that processes and tools are up to date. Without doing this, they risk cutting their growth prospects, and erasing their competitive advantage.

Growing global risks, evolving supplier networks, and economic difficulties in key, and traditionally stable, markets all must be factored in. Businesses not taking advantage of Advanced Planning & Scheduling (APS) systems run the risk of much increased costs.

Failure to adapt to new technology also means that companies will be left with limited flexibility to respond to changing market conditions.

Responsiveness and Agility

In the past twelve months, the global economy has suffered from a period of unprecedented, and unheralded, volatility. Events like Brexit, ongoing civil unrest, and the rise of extremist terrorist organisations, have left global supply chains in jeopardy.

Organisations can no longer rest on their laurels and bank on continuing success. Ensuring success in this environment requires robust scenario planning, the ability to adapt quickly to change, and the capability to deal with changing suppliers and business partners.

As many experts have highlighted, procurement and supply chains need to be agile in order to adapt to external changes.

Outdated Tools and Systems

Global supply chain consultancy, Crimson & Co, recently conducted research into the tools and processes organisations were using in their supply chains. At a majority of respondents, they found a continued reliance on outdated tools, and legacy systems.

The research found that over two-thirds of those surveyed still relied upon ERP and spreadsheet systems.

The findings also showed the benefits that an effective APS system could deliver. Respondents highlighted a potential 20 per cent reduction in working capital, 5 per cent increase in service level, 6 per cent reduction in logistics costs, and 3 per cent reduction in the cost of goods sold.

This research has gained more credence in recent weeks, with the bankruptcy of Hanjin shipping, and the associated issues for US retailers.

Failure to Rise to Challenges

Dave Alberts, Director at Crimson & Co, explained:

“A continued reliance upon outdated planning tools like Enterprise Resource Planning (ERP) systems, bolstered by an array of spreadsheets, prevents many businesses rising to these supply chain challenges.

“If supply routes need to change following disaster, or old trade agreements can no longer direct freight transport, businesses leaning on ERP systems can find themselves on the back foot and unable to take advantage of such changes.

“All in all, these outdated tools can result in significantly increased capital and service costs in the case of any changes to the supply chain status quo.”

Alberts also highlighted the need for businesses to update their planning tools in order to remain competitive. Legacy systems inhibit the ability to innovate and improve supply chain processes.

Alberts argues that these companies will likely fall behind more reactive and agile businesses supported by more flexible planning tools.

“There is a clear incentive for businesses to adopt a robust APS system. Through benchmarking of planning and scheduling solutions, companies can quickly work out the systems that need updating and the practices that need improving. They can then work to develop these areas where necessary.

“In most scenarios, the adoption of an APS system can result in reduced overall supply chain costs and greater ability to deal with complex business decisions,” Alberts concluded.

Bankruptcy Spells Supply Chain Trouble on the High Seas

Global supply chains are sailing into troubled waters again this week following the bankruptcy of a major shipping firm.

Hanjin Shipping Bankruptcy

A storm is brewing on the high seas for global supply chains thanks to the latest issue for the global shipping industry. One of the world’s largest shipping firms has filed for bankruptcy, having lost support from its national banks.

Hanjin Shipping, South Korea’s largest shipping firm cited debts totalling $5.4 billion, following a long period of financial distress. It is the largest container line bankruptcy in history.

The bankruptcy comes at a time of major strife in the global shipping industry. A combination of oversupply of ships, and an undersupply of cargo, has led to a raft of mergers, acquisitions, and cost-cutting exercises.

Seized Ships and Stranded Cargo

Hanjin currently owns and operates nearly 100 cargo vessels, as well as a further 11 ports. The ships move an estimated 25,000 cargo containers across the Pacific every day.

As a result of the bankruptcy, Hanjin has stopped accepting new cargo from customers, while the situation spells trouble for those ships already in transit to and from Asia.

Dozens of ships have been denied entry to ports in North America and Asia, including South Korea’s largest port, Busan. This is due to concerns that the company wouldn’t be able to pay fees for loading and unloading of vessels.

In China, 10 ships operated by Hanjin have been, or are expected to be seized, on behalf of creditors. This is in addition to another vessel seized in Singapore earlier last week.

The South Korean Government has stated that it will start help to prop up the company, a move that will enable it to stop ships and other assets being seized. However, it is unlikely to save the operator, with experts stating that Hanjin will struggle to recover from losing both its business and reputation.

Unhappy Holidays

The company’s bankruptcy has opened the door for other operators to pick up the slack. However, the situation stands to make life more difficult for retailers, with holiday season shipping on the horizon.

Manufacturers are being forced to look for new routes for a number of products, while on some major trans-Pacific routes, shipping costs have jumped by up to 55 per cent. There are further concerns about the potential knock-on effect further down the supply chain.

Rising transportation costs, delays, and a reliance on Hanjin as a freight carrier, could push other trucking and logistics firms out of business too.

Retail Woes Continue

All of this is set to have a major impact on US retailers in the lead up to the traditional holiday season. Retailers are anticipating a two to three-month delay on the arrival of South Korean goods being transported by Hanjin.

Concerns about the impact on the US economy has prompted The National Retail Federation to ask the US Government to intervene.

“Retailers’ main concern is that there [are] millions of dollars’ worth of merchandise that needs to be on store shelves that could be impacted by this,” said Jonathan Gold, the group’s vice president for supply chain and customs policy.

The situation is the latest in a long line of shipping-related trouble for US retailers. In early 2015, a strike by West Coast port workers saw ships similarly stranded, causing months’ worth of delays.

Whether the impact this time around will be as great remains to be seen. Should cargo be released soon, retailers may not suffer as much as expected. However, irrespective of how long the delays are, it’s sure to test the resilience of major global supply chains.

Are you impacted by the Hanjin bankruptcy? Do you have contingencies in place to mitigate the delays? Let us know in the comments below.

Away from the high seas, we’ve been hunting down the top procurement and supply chain headlines this week… 

Fire Closes Gap Distribution Centre

  • Gap Inc.’s main distribution centre in Fishkill, New York State, has been shut down after a massive fire damaged the premises.
  • All employees were safely evacuated, and investigators are working to understand the extent of the damage and cause of the fire.
  • The clothing and accessories retailer has launched contingency plans to move product through its North American network of distribution centres.
  • However, there are concerns that the disruption will create a bottleneck ahead of the upcoming holiday season.

Read more at MarketWatch

DHL Trials Augmented Reality Glasses

  • Logistics giant DHL is to roll out a UK trial of “vision picking”, following a similar trial in the Netherlands.
  • In “vision picking”, warehouse operatives are equipped with advanced smart glasses which visually display where each picked item needs to be placed on the trolley.
  • The company expects that having a hands-free augmented reality display will increase productivity, decrease error rates and improve employee satisfaction.
  • The augmented reality trial is part of DHL’s move towards “Industry 4.0”, which includes testing technologies including robotics and the Internet of Things across the supply chain.

Read more at Logistics Manager

GE Acquires Supply Chain Software Company

  • GE’s Transportation division has announced the purchase of supply chain software company, ShipXpress.
  • GE said the acquisition of the cloud-based software developer would expand its portfolio into the logistics value chain.
  • The company also sees this as a way of increasing its ability to deliver information and transaction services for railway customers around the world.
  • GE Transportation President & CEO Jamie Miller said the acquisition would “deliver the industry’s most advanced, scalable cloud-based solution to accelerate the movement of goods and information”.

Read more at Railway Gazette

SpaceX Explosion Threatens Launch Programme

  • A SpaceX rocket has exploded during a test, destroying the rocket and the satellite it was due to launch.
  • The explosion happened while the rocket was being fuelled, but that the cause of the blast is still unknown.
  • The rocket was due to carry a Facebook satellite into orbit, aimed at providing internet connection to Africa, the Middle East, and Europe.
  • The explosion could delay the launch of its programme to carry American astronauts in the future.

Read more at CNN Money

Supply chain risk drops to 18 month low

Enjoy this week’s news bulletin on your chemical-free Apple device, while enjoying a bowl of cornflakes, before washing it all down with some refreshing coconut water.

Popularity of coconut water

The rise and rise of coconut water

  • Once the drink of exotic holidays and childhood funfairs, coconut water is now the de rigueur beverage available in food emporia, bodegas and hotel minibars from New Delhi to New York. Indeed, in North America – the biggest global market for coconut water today – sales of the top three most popular brands went from almost zero in 2004 to nearly $400m by 2013.
  • Yet far from lifting coconut farmers out of poverty, we’re left in a situation whereby farmers receive about $0.12 – $0.25 per coconut and earn anything between $72 – $7,000 a year, according to Fair Trade USA. In contrast, the average serving of coconut water sells for $1.50 in the US, or £1.85 in a UK supermarket for a 330ml carton.

Apple bans hazardous chemicals from supply chain

  • Tech giant Apple has banned the use of two hazardous chemicals in its production line, after investors urged the firm to better protect the workers in its supply chain.
  • The firm announced in a statement this week that benzene and n-hexane would no longer be used in its production plants, though it insisted it had found no evidence that workers had been harmed.
  • In an open letter to Lisa Jackson, vice-president of environmental initiatives at Apple, investors, asset managers and businesses therefore demanded that Apple eliminate all dangerous chemicals from its supplier factories. The campaign group Green America also launched a consumer petition, urging Apple to better protect Chinese workers.

Read more at Blue & Green Tomorrow

Read the full feature on The Guardian’s Sustainable Business pages

Kenya eyes e-procurement system to curb corruption

  • In a move expected to curb corruption and improve transparency in Kenya’s public procurement, the Kenyan government has unveiled a landmark electronic procurement and payment system.
  • The system, e-procurement, was launched by President Uhuru Kenyatta with the promise of helping the Government eliminate middlemen and corruption in its much-tainted procurement process.
  • It is estimated that weaknesses in public procurement, including vulnerability to corruption, are a global problem with approximately KSh34.9 trillion reported as being lost to bribery and corruption in procurement globally.
  • Deputy President William Ruto said: “The system is significant as it will eliminate gatekeepers, middlemen and brokers who have made procurement a nightmare.”

Read more on East African Business Week

Kellogg’s says it’s crunch time for supply chain emissions

  • Cereals giant Kellogg’s has announced that it wants suppliers to disclose greenhouse gas emissions as part of an ambitious package of new environmental targets.
  • The manufacturer of brands such as Corn Flakes and Pringles unveiled its Sustainability Report featuring new goals for 2020 to expand the use of low carbon energy, reduce water use and eliminate waste, alongside a commitment towards more responsible sourcing of the company’s top 10 ingredients and materials.
  • A Climate Policy statement also outlines how Kellogg’s will for the first time set and disclose a greenhouse gas reduction target for its entire supply chain by the end of December 2015, using a science-based method consistent with the goal of keeping global temperature increases below 2 degrees Celsius.

Read more on BusinessGreen

Cases of ebola fever in Africa from 1979 to 2008.
Cases of ebola fever in Africa from 1979 to 2008.

Ebola outbreak and Ukrainian conflict have little effect on supply chains

  • Geopolitical and major disease risks have had less effect than widely believed on the world economy, with supply chains at their least risky levels for a year and a half.
  • According to the Chartered Institute of Purchasing and Supply (CIPS), supply chain risk dropped to an 18-month low in the second quarter of the year, having fallen for three quarters in a row.
  • The CIPS index attempts to take account of economic, social and political factors.
  • However, the group believes that there may be something of a downturn in the second half of the year, especially given the risk of an increasingly violent conflict in eastern Ukraine and frostier western relations with Russia.

Read more on City A.M.

Americans to manage MoD military procurement

  • Unions and industry insiders are up in arms because two US engineering companies have been asked to oversee the way in which the Ministry of Defence runs the £14bn arm that buys military kit.
  • The Independent can reveal that San Francisco-based Bechtel and Denver’s CH2M Hill have bagged the programme management contracts for the Bristol-based Defence Equipment and Support (DE&S). This agency buys and looks after everything from forklift trucks to Astute class submarines, but is being overhauled by the Government so as to get better value for the taxpayer.
  • Sources said around half of these experts will be flown in from the US. This would cost around £5m more than just using British staff, with the remuneration including food and accommodation expenses.

Read more on the Independent

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Bite-size procurement takeaways for the time-poor

Gordon Donovan provides his insights into procurement-related articles and news stories.

I am a principal consultant with The Faculty a management consultancy specialising in procurement. I have been involved with the profession for 25 years as a practitioner, consultant, trainer and coach. I am passionate about procurement, and am one of the few that made a conscious choice to go into procurement. It was a choice made when I witnessed my father (who was a sales manager for many years) dealing with buyers –  and I thought I’d much rather be on the other end of that conversation. In later years it made for some very interesting dinner conversations…

Gordon Donovan on procurement

In this blog series I will trawl the news and provide you with my personal procurement take-aways.

First up is an article I found on LinkedIn on why the supplier selection process is dying [read it here]. It is written for selecting marketing or creative agencies, but I think its just as relevant for selection of any strategic supplier of goods and services.

To summarise it suggests that the “traditional way” of selecting (RFI, Shortlist, RFT, Shortlist, Presentation/trial, Award) isn’t working and fails to find a supplier that’s best suited for the organisation about 50 per cent of the time.

This reminds me of an article written some time ago which stated that 80 per cent of the things we buy are from distorted supply markets, yet 80 per cent of the tools we use are for competitive markets.

Don’t get me wrong, I think that RFT/P/Q are great tools, but we should use them where they are the most effective, or at least do some groundwork to ensure that they are effective when we use them. They rely on competition (or the illusion of competition) to be successful. The worry for me is that ignore can be bliss; we don’t really know when we don’t get the value unless our preparation is good enough.

Talking about preparation brings me to the second article that caught my eye. This is for a podcast I subscribe to by AT Kearney (yes it’s a procurement podcast, don’t judge me!)

Download ‘Wave of the Future’ from iTunes

This episode is all about why Googling isn’t enough. It hits a nerve with me as I hear a lot of my workshop delegates chime “well we will just Google it”.

The podcast says that while Google has made things quicker and simpler, it doesn’t give you the breadth or depth of information that you really need to fully understand supply markets.

According to ATK, 60 per cent of information is in commercial online databases. Some tips provided within include:

  • Use the advanced search feature rather than the vanilla search. Click the cog icon to select this mode.
  • Disable the personal settings. As a default it will look at your previous searches and location and customise the results – especially useful if you’re trying to source a supplier from overseas.
  • Compliment with other more traditional methods (such as interviewing subject matter experts.
  • When reviewing a web site think about who wrote it, for whom and why.

Finally, I came across an interesting article from Mckinsey about different sourcing strategies.

It’s not ground-breaking but contains some interesting insights.

My main takeaways are:

  • The vast majority of onshoring initiatives were in manufacturing.
  • A two-thirds decline in the US price of natural gas since 2008 is attracting some manufacturing industries that use gas as direct fuel or feedstock.
  • Strategic offshoring of IT and business processes retains the promise of reducing costs, hedging production risk, and increasing access to talent by employing a network of offshoring locations.
  • American International Group (AIG), is moving ahead with the creation of nearshore centres in multiple regions.
  • Many companies are discovering that sourcing decisions cannot simply be made based on the notion that ‘noncore’ business activities can be offshored.

I trust that you find these articles and insights useful, and if you wanted to discuss please feel free to contact me via Procurious, join my network, or follow me on Twitter @gdonovan1971