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Procurement Experts Outlook 2019

An interview with the Senior Research Director at The Hackett Group, Jimmy LeFever.


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Welcome to Zycus Procurement Experts Outlook 2019. In this interview, we have Senior Research Director, Procurement Advisory Practice at The Hackett Group, Jimmy LeFever.

Zycus: What is the most prominent trend visible in 2019?

Jimmy LeFever: Digital transformation is the ruling trend which Procurement has to continue focusing on to develop strategic roadmaps. While some organizations have significantly outperformed others, some organizations have are fast gearing up for digital transformation.

Zycus: As you mentioned, digital transformation does give an organization an edge over others. What is it that best-in-class organizations do differently to stay ahead of the curve?

Jimmy: Best-in-class organisations have a focus on talent and skills. They are rethinking their approach to attract talent, invest in development, and plan better retention strategies. Some organizations are even beginning to create new roles, e.g., procurement-specific data scientists and digital specialists. Many organizations have implemented advanced data, analytics, and visualization tools. The focus on digital skills is as strong as the focus on storytelling and explaining complex concepts helping businesses find the right market solution.

Zycus:  Do you mean that along with attracting the right talent pool, organizations should also focus on talent retention to benefit in the long run?

Jimmy LeFever: Absolutely! I can see more and more companies focusing on stakeholder experience. This means Procurement is going beyond delivering primary responsibilities to the stakeholder and moving towards improving the stakeholder experience via streamlined processes and promoting the wellbeing of the business.

Zycus:  Most people consider procurement, tactical and technical. But when you talk about stakeholder experience, it is beyond technology and strategy. Do you think Procurement requires rebranding?

Jimmy LeFever: The brand perception that Procurement has is myopic around savings and savings alone. Such knowledge holds people back from seeing the strategic impact procurement can have in the organization’s overall objective. The function can play a massive part in making the organization more agile during times of unpredictable changes. However, to change this perception of a rigid, slow, and tactical function, Procurement needs to take a few steps in the direction of rebranding itself.

Zycus: Procurement’s scope of work is changing and expanding, but the image transition hasn’t been proportional to this. What are some things Procurement can do to rebrand or reinvent its image in an organization?

Jimmy LeFever: First and foremost, organizations should strive to build a strong brand identity, brand value, and brand goal. Then, all the teams should work in sync to deliver the goal. For example, many organizations are moving towards more sustainable ways of doing business. As supply-chain and procurement professionals, we can provide that brand value by adopting a sustainable procurement model. Such a change in behavior will significantly impact both the global economy as well as the environment.

Zycus: Since we are talking about sustainability, what suggestions do you have for procurement teams when they look into the market for a source-to-pay provider?

Jimmy LeFever: My suggestion will be that they should select a vendor who can make a difference by employing rigorous standards. They should look out for providers who can assess the way they operate and do business, and affect their local communities and the environment. Many organizations are also looking to grow their supplier diversity programs to be more inclusive of underrepresented groups within their supply base.

A provider with stringent practices and standards will be impactful when measured consistently. Benchmarking is another way, a systematic method of regular monitoring to discover best practices and improve continuously. As you’re probably aware, The Hackett Group is the leader when it comes to process and technology benchmarking. For Procurement, it is to critical benchmark and measure to identify problem areas, weak links, and modification and debugging of the current strategy.

Zycus: What are procurement benchmark metrics that a procurement leader should track to measure his team’s performance effectively?

Jimmy LeFever: The two primary measurements that have long been at the forefront are the cost of Procurement and the cost savings that Procurement can achieve. For procurement leaders, those should continue as great metrics.

Zycus: We often see Procurement Leaders focused on just savings as a holistic parameter to measure performance effectively. Do you think the result garnered would be the complete picture? What other things can we consider?

Jimmy LeFever: Yes, organizations overlook two other metrics. I have already discussed stakeholder experience, and the second one is ROI. ROI is an excellent performance measure because it looks at cost and cost savings holistically. Stakeholder experience is a little tricky because it isn’t easily quantifiable. What can drive value for the business is to acknowledge Procurement’s role aligned with business objectives. Focusing on cost savings alone will rarely line up to meet the broader goal.

Zycus: As we conclude, what are the three things procurement leaders should start/stop doing in 2019 to achieve the goals you have informed us?

Jimmy LeFever: First, stop pushing out information that nobody cares. Second, stop focusing on just savings and widen your scope. Third, for an organization to value Procurement’s efforts, staff should be aligned with the business objectives.


From this interview, we can conclude that if Procurement has any directive this year, it is to widen its horizon! And to do so, organizations need to-

  • Move from tactical to strategic, which is more value-based
  • Align goals with their brand value
  • Adopt sustainable Procurement

Following these three will not only rebrand Procurement’s image as a strategic partner but will also increase its impact and value within the organization.


Read our latest eBook “Procurement Experts Outlook 2019” to gain more insights into what eight other experts predict for the procurement future.

Human Rights Falter In Grey Areas Of Procurement Policy

Workers are often the victims when there are gaps in legal procurement and ethical procurement, but businesses nowadays have a lot to lose as the lines between profit and social conscience are no longer so easily defined… 

Back in 2010, rotten Apple stories started flashing up on smartphones everywhere. Forget tales of environmental unsustainability, these concerned social injustice: poor pay, unhealthy conditions and worryingly low levels of worker welfare. Then came the shocking news of staff suicides.

Attention focused on a prime link in the Apple supply chain: a vast 1.4-square-mile megafactory complex owned and run by Foxconn Technology Group, a Taiwanese multinational contract-manufacturing company, specialising in electronics.

Dubbed ‘Foxconn City’, the mini metropolis housed almost half a million workers on a giant industrial park in Shenzhen, China.

Fast forward to 2019 and Apple is still sourcing from Foxconn, across various sites. The roll-call of Foxconn manufacturing, present and past, still reads like a who’s who of the tech world, and includes other monster brands such as Google, Huawei, Microsoft and Sony, to name but a few.

So, given that Apple was soon to become the first public company on the planet worth $1 trillion, how did it get embroiled in such a dubious ethical sourcing saga in the first place, plus seemingly fail to crisis-manage its public relations effectively when the story broke?

The simple, grim fact is that Apple and the tech community are by no means alone in this. The recent history of procurement by global consumer brands is littered with the reputational detritus of bad ethics and selective legality.

Fast fashion, in particular, has struggled to keep its name out of incriminating headlines, with ethical procurement issues ranging from ongoing stories around ‘dirty’ cotton, through ‘cry for help’ labels sewn into high street clothes, to the tragic Rana Plaza factory collapse in 2013, where 1,134 lost their lives.

Sourcing scandals also continue to flood out of food and agriculture. Ethical issues served up for public consumption range from TV exposés of supermarket chicken suppliers tampering with ‘kill dates’, to the abuse of water rights by industrial-scale avocado farmers in Chile.

Across all sectors and societies, employment remains the most mapped, but least navigable, legal and ethical intersection.

Figures from the International Labour Organization (ILO), released most recently in 2017, revealed that more than 40 million people worldwide were in modern slavery in 2016, including around 25 million in forced labour. Of those in forced labour, some 16 million were being exploited in the private sector. Furthermore, there were more than 152 million estimated victims of child labour, almost half of whom were aged between 5 and 11.

Ethical procurement is essentially a people business, affecting lives and livelihoods, for good or ill, says group director at the Chartered Institute of Procurement & Supply (CIPS), Cath Hill.

“Applying rigorous ethical standards to your supply chain is not just about compliance or completing necessary paperwork, but implementing good governance and preventing exploitation of human beings across the globe for the sake of profit,” she says.

In international waters, though, standardisation is a slippery fish.

If not a definitive and demonstrable difference, often at least, there exists a commercial and cultural tension between the norms of legal and ethical procurement. Discrepancies abound in a grey area between the two disciplines and, if unchecked and unpoliced, carve out a policy gap where human rights fall down.

Legal standards can lag behind best practice, especially in relation to global companies with complex supply chains, explains Martin Buttle, strategic lead for general merchandise at the Ethical Trading Initiative (ETI).

“A company that meets local labour laws in one country could still breach international minimum standards. The UN Guiding Principles on Business and Human Rights make it clear that businesses have a responsibility to respect human rights even in countries where national law is weak, or poorly enforced,” he says.

Based on ILO conventions, the internationally recognised ETI Base Code of labour standards has been designed to tackle exactly this kind of cross-border inconsistency and jumble of jurisdictions, representing a commitment to ensure all workers are free from exploitation and discrimination, paid a living wage and enjoy conditions of safety, security and equity.

Stepping out of the moral maze for a moment, there are also many bottom-line business-case benefits to be gained by adopting such an ethical approach, suggests Mr Buttle: “It can maintain the supply of goods, increase productivity and quality, and enhance a company’s reputation with its customer base, which is increasingly expected by consumers.”

However, it is often the pressure of competitive marketplaces and overly aggressive procurement practices or pricing policies that result in damaging knock-on effects, he says.

“Brands should understand how their actions impact on their suppliers’ ability to uphold labour rights. For example, a company with poor purchasing practices, such as unrealistic deadlines or unit prices, can cause challenges for its suppliers, leading to increased risk of poor wages and excessive working hours. This is particularly the case if a supplier feels forced to accept orders below the cost of production to win contracts.”

All too often, there is little communication and accountability, says Alex Saric, smart procurement expert at Ivalua: “Cost is the only discussion point and data isn’t shared effectively, while risk and CSR assessments can be a ‘tick-box’ exercise, meaning transparency initiatives end up half-baked.”

Weaknesses notwithstanding, big brands can still set a positive agenda for supplier behaviour, beyond compliance. “If suppliers see that being responsible is more likely to win them a contract, ethical practices change from a minimum requirement to a valuable key differentiator. They must operate sustainably, or face losing out to more ethical competitors,” Mr Saric says.

While any ethical shift is relatively slow and undoubtedly late, legislative momentum is only pushing in one direction and businesses would do well to watch this space closely, suggests Lee Rubin, counsel and global sourcing expert at international law firm Pillsbury Winthrop Shaw Pittman.

“When it comes to lawmaking, legal and ethical considerations are merging, typified by the Modern Slavery Act. While not all sections of the Act are directly applicable to business, the provision around ‘transparency in supply chains’ impacts the largest brands and companies.”

Serious money is also flowing more towards the good and the green, adds Mr Buttle: “Many investors understand that poor human rights practices in the supply chain can put their investment at risk. With a growing interest in social impact, we are starting to see the investment community influencing business decisions.”

All in all, this collective chorus calling for ethical procurement is simply becoming too important to ignore, says Ms Hill: “It is not only the right thing to do, but also the lines between profit and social conscience are no longer so easily defined. News travels fast and bad news travels at lightning speed.”

The heat is most definitely on, says Shaun McCarthy, director at leaders in sustainable procurement Action Sustainability: “These days the court of public opinion is an unforgiving place and brands need to be aware they are playing with fire when it comes to ethical procurement.”

Ultimately, therefore, brands that muddy transparency, frustrate traceability and neglect communications get burned, concludes retail expert and consumer champion Martin Newman: “Consumers will shop with their feet and their mouse. If you pay this lip service or they think you’re being disingenuous, they will not only not buy now, they’ll never come back; and they’ll tell all their friends and family about it.”

This article, edited by Jim McClelland, was taken from the Raconteur Future of Procurement report, as featured in The Times. 

4 Terms We Should Ban In Procurement

We asked a number of procurement leaders to reveal the procurement term they would most like to ban, for good!

Every procurement professional has a different opinion on the terms that should and shouldn’t be used in their day-to-day working lives. Some terms are loathed because they undervalue the huge contributions procurement make to the organisation. Others are just downright confusing to anyone unfamiliar with procurement lingo.

Because we quite like a healthy debate, we asked a number of procurement leaders to reveal the procurement term they would most like to ban, for good!

1. Cost-cutters

“This is something I really feel is doing a discredit to the profession – it’s very important we are being seen as value-adding procurement people.”

Amelle Mestari, Head of Procurement – Bouygues Energies & Services

“We’ve been spending a lot of time reeducating the business around the extra value we bring so it’s not simply about getting a better unit price it’s about the wider value we can bring to the organisation.”

Gemma Bell, Head of Purchasing – L’Oreal

2. Savings Targets

“Sure, Procurement has to reduce costs and be financially motivated but you don’t see many organisations mission statements being to save money. Nowadays it’s crucial that procurement is measured on its contribution to delivering organisational goals and not just on savings.”

Chris Cliffe, Director – CJC Procurement



3. RFP

“I think there is still a lot of confusion around RFP as silly as it sounds. It’s something we band about and we know exactly what it means but when you speak to stakeholders it’s always the first thing they ask ‘what is an RFP and what does it mean’ and it actually means different things to different people. So I would there must be a different term we could use or a different way we could articulate what that particular process is.”

Chris Emberton, CPO – Clifford Chance

“If I’m going to speak to one of my stakeholders, if they don’t understand the language I’m speaking, how on earth is that going to help me in the business.”

Lucy Bunting, Head of Procurement

4. Negotiation

“It’s what everyone assumes we do and I think it comes to a point where you always get the hospital pass at the end of the day when someone says ‘I need you to negotiate this’ – so it means you’ve done something wrong.

Matt Beddoe, Head of Procurement – Nestle

These responses were obtained from attendees at Big Ideas Summit London earlier this year. If you’re a procurement leader and you’d like to get involved with similar discussions and networking at Big Ideas Chicago on 18th September, we’d love to have you there!

Big Ideas Summit Chicago 2019

It’s never too late to take control of your procurement career. And what better way to do so than spending a day with the profession’s best and brightest minds. 

At Big Ideas Summit Chicago 2019 we’ll be joined by 50 thought leaders to discuss how to set yourself apart from the pack, the neuroscience of decision-making, the evolving relationship between human and machine and procurement with purpose. 

By enrolling as a digital delegate, no matter where you are in the word, you’ll be able to…

  • Follow the day’s action from the comfort of your sofa
  • Submit questions to our speakers and the 50 CPOs who will be in attendance on the day
  • Gain an insight into the future of procurement
  • Watch video footage from the event including exclusive interviews with our speakers and live-streams of the day in action!

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

How Public Sector Procurement Can Have Social Value

With public sector organisations becoming increasingly aware that their procurement decisions have an impact on local communities, some are rethinking how they award contracts.

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Both private and public sector entities are becoming more interested in how their organisations impact society. Whether it’s in contributing to the community or managing the impact on the environment, organisations recognise they can change their local communities through who they pick to deliver goods or services.

Traditionally, it had been assumed that choosing a supplier that added social value may mean compromising for a sub-standard quality product or service, but views are slowly starting to change.

“They recognise the benefits of working with social enterprises, but are ruled by the need to mitigate risk and deliver efficient and economic services,” says Beth Pilgrim, co-founder of Supply Change.

“Often companies will just go to suppliers they know. What we are trying to explain to the public sector is that adding social value into your supply chain doesn’t have to be difficult or require extra work.”

Ms Pilgrim established Supply Change in 2018 with colleagues Aoise Keogan-Nooshabadi and Verena Wimmer after the trio conducted a series of research studies on the public sector procurement process. They found that while public sector bodies were keen to award contracts to social enterprises, they struggled to do so.

“One of the key themes that came out of our research was that social enterprises struggle to navigate public sector procurement processes,” Ms Pilgrim says. “The existing portals are not really tailored towards them, so they don’t get good visibility.”

In 2013, the UK government’s Social Value Act came into force, obligating public sector bodies to look at the social and environmental benefits of awarding a contract to a supplier, as well as the economic ones.

Heralded as a game-changer by the then-government, the Act has nudged public bodies to look more closely at the attributes of companies bidding to win work.

Despite this, some experts say that the legislation doesn’t go far enough, with a company’s social and environmental points score only accounting for a very small percentage of the overall total, and the outcome weighted towards other factors such as quality and cost.

“A number of leading authorities have recognised this and increased the social value element of their contracts,” says Ed Cross, executive director at procurement advisory group Odesma.

Mr Cross says that upping consideration of social value attributes could be good news for smaller businesses competing for contracts, but adds that the public sector still has some way to go.

“There seems to be a lack of trust in smaller enterprises, particularly social enterprises, from the public sector,” he explains.

“Part of this is down to the false assumption that social enterprises working with volunteers or part-time employees aren’t as reliable as larger organisations with full-time, paid employees.”

Mr Cross’s sentiments are shared by many, who feel that smaller enterprises can often face a real battle just to get an initial foot in the door.

“One of the biggest challenges smaller businesses face when it comes to gaining access to contracts that offer social benefits is the tick-box process of tenders for contracts, as well as how public sector guidelines are inflexible,” says Craig Knowles, marketing manager at procurement software group Market Dojo.

“The tick-box approach often means small businesses that might not fit specific criteria are left at the door before they’ve even been given the chance to prove themselves.

“There needs to be a change in attitude on taking “risks” on small business as many, often wrongly, believe they don’t have resources to work through big tenders when in reality this couldn’t be further from the truth.”

Despite widespread concerns that social enterprises and small and medium-sized enterprises (SMEs) are still missing out on contacts from the public sector, there is evidence of innovation.

Supply Change’s Ms Pilgrim says initiatives at some local authorities show how awarding contracts to smaller, local businesses can be transformative for the local community. She cites Preston in Lancashire as an example.

In 2013, the council brought in external consultants to evaluate whether it would be possible to redirect some of its annual contract-award budget to local businesses which had clear social impact objectives. Since doing so it has stimulated the local economy, putting money into local firms and increasing employment.

“We have seen how that can be a real success story,” says Ms Pilgrim. “Preston has a strategy of spending money within their local economy to build up SMEs, social enterprises and the voluntary sector as much as possible. It has resulted in a turnaround in the local economy.”

Similar projects are now underway across the UK, with Manchester City Council and Birmingham City Council among the larger authorities to consider how they can alter their approaches.

For SMEs and social enterprises looking to get a piece of the action, Malcolm Harrison, group chief executive of the Chartered Institute of Procurement & Supply, says small firms should play to their strengths.

“SMEs and social enterprises need to work hard to showcase the flexibility, innovation and financial rigour they can provide,” he says.

“To help SMEs, government should do more. Simpler language, less jargon and the chance for an open dialogue all help SMEs to compete with large companies. SMEs can themselves take charge and become more visible to potential contractors, and websites such as Contracts Finder and Compete For can be a great way of finding opportunities.”

One of the biggest challenges smaller businesses face is the tick-box process of tenders for contracts, as well as how public sector guidelines are inflexible.

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times. 

5 Common Interview Mistakes Recruiters Should Overlook

It’s up to the person recruiting to decide whether a mistake is due to anxiety or a sign that the candidate is a bad match for the organisation. Here’s five mistakes you should overlook…

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Nightmares focusing on poor performance at work, especially job interviews, are common among adults in the US – and it’s easy to see why. Job interviews are stressful. Horror stories of interviews gone wrong are all over the internet. While they may be fun to read, it’s not easy to get through a job interview without making at least one mistake. 

What does a “perfect” interview really mean anyway? Interviews have disqualified candidates for everything from being late to “being too attractive.” Candidate error is just one factor in the overall equation; and it’s all too common to make a mistake under pressure. At the end of the day, it’s up to the recruiter to decide whether a mistake is due to anxiety or a sign that the candidate is a bad match for the organization. 

Here are some of the most common, but forgivable, job interview mistakes that recruiters should overlook. 

A candidate sounds rehearsed

Many candidates don’t make it through the first-round interview because they sound too stiff.Recruiters lose interest when a candidate sounds like they’ve memorized their answers. It’s hard to get a good sense of who that person is when they answer questions robotically. 

However, recruiters should consider that the problem isn’t the candidate’s presentation. It’s the questions they’re asking. Candidates apply to dozens of jobs during their search. Eventually, all the interview questions start to sound the same. Recruiters should avoid asking outdated, all too common interview questions that applicants answer at nearly every job interview. 

There’s a certain script that’s easy to fall into. If you find your candidate sounds a bit canned, try a different approach in the next round. 

A candidate talks too much

The opposite of a candidate who sounds rehearsed is a candidate who is too chatty. Anxiety or under-preparation is usually the driver behind a candidate who talks at length. Talking too much is usually seen by recruiters as a red flag – what if a candidate talks too much in a client presentation? Will this person be a distraction when working in teams? 

It’s not necessarily fair to assume that chattiness is a sign of weakness. It could be a sign of under preparation, or it could be a lack of experience: two factors that job training can address. But for recruiters who don’t have time to spend all day in an interview, using a one-way video interview can help. Generally, we’re against putting restrictive timers on pre-recorded videos. What if the candidate has technical difficulties? But, you can set the time to be long enough to account for technical glitches while still cutting down on nervous chatter. 

A candidate immediately responds to an interview request

Some recruiters consider replying to an interview request right away to be a red flag. Likewise, following up “too much” can make a candidate seem needy or desperate. In today’s hyper-connected society, expecting a candidate to wait an appropriate amount of time is a little too selective. 

It could be that a candidate follows up because so few companies are transparent about their process. While talking to your job interviewee, make sure to be upfront about your timeline and next steps. Managing expectations can help prevent any lingering confusion or excessive follow up from your potential new hires. 

A candidate is asking questions “on the fly”

It has become almost cliche for hiring experts to recommend candidates prepare their own questions. Recruiters disqualify candidates who ask questions “on the fly” – but why? Asking questions that are not pre-rehearsed can show genuine interest. A candidate who comes upwith questions on the spot is engaged, paying attention, and quick on their feet. Recruiters should prefer that over a candidate who simply pays lip service to the interview script. 

A candidate doesn’t bring a hard copy of their resume

It’s time to go green! If recruiters want a hard copy of the candidate’s resume, they are capable of printing it out themselves. Some recruiters see this as a sign that the candidate is under-prepared or careless. In reality, many people don’t have access to a printer. It’s an arbitrary ask that recruiters use to disqualify a candidate from making it to the next round. Wouldn’t you rather see an employee show their real-world skills rather than their ability to press print?

This article was written by Emily Heaslip was originally published on vervoe.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

3 Ways Procurement Can Make A Lasting Impact On The Organisation

Advanced procurement functions, and the CPOs that lead them, can make a significant and lasting impact on the success of their companies, but only by focusing on the real value and innovation that suppliers can bring…

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There’s no doubt that procurement enjoys a privileged position in a company’s value chain. Sitting between a network of thousands of suppliers and the business, it has clear visibility of customer need, company strategy and the capabilities that exist in the supply base

From such a position, advanced procurement functions, and the chief procurement officers (CPOs) that lead them, can make a significant and lasting impact on the success of their companies, but only by focusing on the real value and innovation that suppliers can bring and how this can support the organisation’s ultimate value proposition.

To do so, procurement must drive change in three broad areas. Firstly, CPOs must address the procurement operating model so it is better aligned with company strategy and end-customer value. Historically, procurement has segmented third-party spend into categories, from raw materials to office furniture to semiconductors and so on, with the ultimate goal of leveraging scale to reduce price, while also managing risk and quality.

Smart chief executives, however, will be far more interested in how suppliers can enhance the product portfolio to maximise the company’s competitive position in the market. Aligning the supply base around that portfolio will enable supplier innovations to feed more successfully into that goal and ensure collaboration with suppliers is more productive and more focused on value creation.

Of course, this isn’t feasible for every last drop of third-party spending so CPOs must differentiate between core and non-core spend, so 100 per cent of the procurement function’s energy can be applied to those suppliers that really matter.

Secondly, for this to be feasible, CPOs must ensure procurement is a frictionless experience for those in the business who buy as part of their role. Every effort should be made to automate through digital technologies and platforms, so the actual buying process is seamless and efficient.

Robust governance and a sophisticated suite of digital technologies that have been designed with the end-user in mind must underpin such an environment. And the ultimate goal must be to reduce the time and resource spent on non-core products and services, without sacrificing low cost, impacting quality or introducing risk.

This laser-guided focus on execution must be a cross-functional effort, so the right specifications are secured and any savings go straight to the bottom line and are locked into the profit and loss.

Thirdly, the very fundamentals of supply markets continue to evolve. It’s clear an increasing volume of the world’s innovation is being developed outside the walls of large corporates and big, traditional suppliers, with smaller, niche companies and startups working on new technologies and approaches that regularly disrupt traditional, incumbent markets.

Further, these non-traditional players work differently, are more agile, less process led, more open to collaboration and come with large amounts of risk. But despite this, corporates cannot afford to close their doors to the innovation taking place within them.

CPOs must develop the capability to engage with these outliers and engineer how the intellectual property they produce can be introduced into their organisation’s value chain, whether through traditional onboarding as suppliers, technology licensing, collaboration with other suppliers in the network or myriad other potential approaches.

In essence, CPOs must build and exploit supply networks, or ecosystems, capturing value during the collaboration that takes place between third parties at all points in the value chain.

None of this is straightforward and few organisations are even close to making it a reality. To be successful, it demands the support of a visionary chief executive who understands the dynamics at play in the supply base and beyond, as well as a procurement team full of intellectually curious, entrepreneurial and collaborative personalities.

But if done well, procurement will evolve from a position of controller to one of value architect, and one of the most critical functions in any modern corporation able to positively impact revenue, sustainability and profit targets.

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times.  

A Brief Overview Of The 2019 Procurement Job Market

So far this year, most organisations have been more actively hiring procurement employees on a permanent basis as opposed to on contracts.

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How has the supply chain & procurement hiring landscape been over the first half of 2019?

As all contracts with suppliers from the European Union continue to be reviewed as part of Brexit contingency planning, the first half of 2019 has revealed an increased level of permanent recruitment compared to the hiring of contract or temporary supply chain & procurement professionals. As cost savings remain key in the City, the market has remained extremely buoyant, with a strong preference from hiring managers for individuals possessing experience in IT or tech. The thirst for data is continually increasing and with procurement in mind, lots of emerging solutions that provide procurement and vendor dashboards are always needed. Therefore, these roles have frequently been recruited for.

Across Financial Services, Banking and Insurance, organisations are still busy and hiring. More specifically, the mid-tier and SME businesses have been busier than the larger tier 1 banks, as they seek to reduce their spend and ensure contract risks are minimal in these uncertain times.

Procurement is a money driven profession and salaries are particularly competitive at present, so bonuses and benefits packages can be crucial deciding factors when professionals are looking for new roles. From the perspective of hiring organisations, they have to be prepared to exercise flexibility in terms of salaries or day rates if they want to bring professionals with the right skill sets to the business. 

How to keep the workforce motivated and attract new employees

A large number of professionals are now requesting an element of flexibility in their role or the opportunity to work remotely.  The 9 – 5 working day is no longer how professionals in the UK operate. Flexible working, in terms of hours or being able to work remotely, is expected by the majority of employees in the UK. Organisations have to offer a level of flexibility if they want to attract high quality applicants in what has become a highly competitive marketplace.  

Some organisations continue to lean towards implementing tools or programmes for learning and development that are tailored specifically to procurement professionals. This shows an increased effort to bolster their candidate attraction and retention in these key business areas. In turn, this empowers employees to increase their knowledge in areas such as ‘best practice procurement’, sourcing methodologies and stakeholder engagement. This has become a real talking point, showing the right business highly prioritises procurement and its people.

What has made a Supply Chain & Procurement CV stand out?

Category Management remains a key area of hiring, so upskilling in this is hugely beneficial for all procurement professionals. Those candidates possessing detailed Category Management experience, including spend, savings and projects have been highly sought after by hiring managers. The increase in specialist IT category roles was category specific, mainly consisting of infrastructure, applications and digital transformation spend areas.

Any candidates who upskill in these areas will put themselves in a strong position. Having a good level of experience in any of these will make you stand out against other applicants. Businesses have also continued searching for tendering specialists who can help them mitigate risk on their EU contracts amid all the Brexit confusion. Those with transformation experience is sought after as businesses will require such support to guide them through the uncertainty of Brexit.

How can supply chain & procurement job seekers stay motivated over the slower summer months?

It is not looking like things are going to slow down for Procurement professionals during the summer months – it is a busy time for the industry. For those job seekers actively engaged in any processes, it’s important to keep in touch with your recruitment consultant. Call in weekly to make sure you are hearing about all suitable opportunities; this will keep you at the forefront of your consultant’s mind.

Procurement specialists need to develop their wider skills to implement in negotiations to ensure ‘compliant contracts’ that mitigate risk without over-engineering a low risk engagement – robust frameworks to manage third party engagements could inhibit flexibility for a negotiator.

This article was written by Natalie Limerick, Director – Morgan McKinley

How To Create The Interview Formula That Makes The Right Candidate Stand Out

Despite taking extra steps to evaluate a job applicant, managers too often fail to choose the right candidate. How do you get it right?

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Many recruiters know the importance of assessing a candidate beyond a polished resume and well-rehearsed interview. Yet, despite taking extra steps to evaluate a job applicant, managers too often fail to choose the right candidate. In a 2016 CareerBuilder study, 75 per cent of employers interviewed said they hired the wrong person, costing companies an average of $17,000.

The issue? Recruiters were not interviewing for the actual skills candidates needed to thrive in their new role. During the hiring process, recruiters were relying too much on resumes, misidentifying the skills needed to succeed, or asking the wrong questions. Here’s how recruiters can adjust their approach to interviewing candidates to lead to better hires and improve talent retention.

Identify the non-negotiable skills for each position

Recruiters should begin with a basic understanding of the non-negotiable skills the new hire needs to succeed. Get the entire team involved in narrowing down the essential skills a new hire should possess to help the team to perform better. Walk through a typical work day and identify the inefficiencies or bottlenecks that could be improved by a new hire.   

With this baseline in mind, recruiters set up a case-study scenario or Talent Trial that allows the candidate to showcase their abilities in specific scenarios. For example, Pro R.E.A. Staffing used Vervoe’s “knockout” questionnaire to test candidates on the non-negotiable job requirements. This questionnaire replaced the phone screen, and successful candidates were automatically invited to complete a skills-based Talent Trial containing behavioral questions, tasks in Excel, and writing exercises.

The result? Hiring managers at Pro R.E.A. noticed big differences between candidates’ claims of their skills and their actual skill level. They were able to test skills they previously couldn’t discern, save time, and only progress with candidates who could perform the core skills needed to succeed.

Highlight the soft skills needed to advance in the company

Some employers wait until the first day on the job to discuss company culture with new hires. Instead, recruiters should start this conversation during the hiring process by highlighting the skills needed for the candidate to advance within the company. Successful CEOs emphasize the importance of soft skills – things like leadership and teamwork. But, all too often, new hires disappoint because they lacked the soft skills needed to adapt to their new team, not necessarily the skills to perform the job.

When we talk about “culture fit,” that can mistakenly translate into hiring someone whose background – education, skills, or network – is similar to the existing team. This stifles innovation and diversity. Instead, recruiters should seek out soft skills that will diversify the team, such as hiring someone who values clarity and structure to balance out the visionary but impulsive senior manager.

AI-powered ranking and skills tests are just two important ways to remove bias from the hiring process. Vervoe’s platform has shown impressive stats in hiring for diverse teams: companies who switched to our AI tool and skills assessments saw a 62% increase in female candidates. Vervoe’s library of content can also help hiring managers seek out those critical soft skills that predict long-term success. These validated psychometric assessments are key to assessing “culture fit” in isolation from a candidate’s resume.

Look out for common red flags

There are some red flags that many recruiters miss during the interview stage that can come back to haunt them. For example, referral hires often get a carte blanche during the interview process. If a candidate name-drops during the interview, do not be seduced by his connections if he cannot back it up with examples of genuine relationship building and past collaboration.

Learning from our past hiring mistakes at Vervoe, we created a character assessment so we can avoid making these mistakes in the future. Many of the things we look for – curiosity, grit, collaboration, resourcefulness, tenacity, dexterity – are important in every role at the company. By implementing a character assessment at the top of our hiring process, we screen candidates to between five and ten percent of applicants, who then progress to the next level. An applicant may be a coding magician, but if they won’t be happy at Vervoe, we’re not interested in wasting their time.

This article was written by Emily Heaslip and was originally published on vervoe.

Supplier-Enabled Innovation Is An Opportunity To Add Value

Businesses are tapping into the expertise of their supplier network to bring new products to market faster and streamline their processes.

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Where do new ideas come from? For many organisations, the answer is research and development. But imagine if the R&D department included not only your own people, but those from hundreds or even thousands of your suppliers too.

This is the promise of supplier-enabled innovation (SEI), which enables companies to tap into the expertise of their supplier network to develop new products and services or refine existing ones.

It’s not exactly a new idea, but according to David Rae, head of the Supplier-Enabled Innovation Center, it is an underutilised one. “If you have thousands of suppliers and a portion of them have R&D divisions focused on your sector, then you’d be mad not to tap into that resource,” he says.

Companies that combine their innovation efforts with those of their suppliers typically bring products to market faster, giving them a competitive advantage. The inevitable risks and costs of developing new products or services are also spread among a wide network of stakeholders. And due to their specific expertise, suppliers are often able to suggest product improvements that are unlikely to occur to internal teams.

It makes sense to partner with companies specialising in a particular area, says Omer Abdullah, co-founder and managing director of The Smart Cube, which provides procurement, analytics and research expertise. He uses the example of a packaging supplier to illustrate the point. “They’re the ones who have a vested interest in knowing what the latest packaging types are, what the latest packaging sizes are and what are consumers demanding,” he explains.

That’s certainly true in the case of Bayer, which works closely with suppliers such as Schott to find the best packaging for specific drugs. By collaborating early in the ampoule or vial selection process, with Schott contributing its expertise in how certain active ingredients interact with different types of containers, new medication can be brought to market in a quick and safe manner.

The procurement team are ideally placed to drive the innovation partnerships behind SEI, acting as the link between internal R&D, sales and marketing teams, and suppliers. Johnson & Johnson, for example, has focused on turning procurement into a team of “innovation scouts”, seeking out suppliers who understand emerging trends and plan their business accordingly.

This is one of the vital elements of SEI: if you can’t find innovative suppliers to work with, then the whole concept quickly falls apart. If you’re interested in using SEI to improve your R&D function, for example, “you need to take into account things like what percentage of their [the supplier’s] revenue they are putting towards R&D, their strategic goals and where they’re actually headed as a company”, says Mr Rae.

It can be tempting to focus on the current supply chain when selecting SEI partners, but this may not offer the kind of cutting-edge innovation that will really expand internal capabilities, says Simon McGuire, health systems leader for Philips UK and Ireland. “I believe a good procurement team will ensure any supplier activity is initiated with clear alignment and agreement on capability gaps and unmet customer needs, together with an ability to secure the required technology and skillsets from the marketplace,” he says.

An awareness of market trends and shifts, competitor moves and the company’s own patent pipeline is also a key part of an informed view of what suppliers might be able to offer. “For me the most essential element of a good supplier partnership that will deliver is the strong alignment of goals and visions, with clear definitions, responsibilities and objectives from the start,” says Mr McGuire.

Online platforms are a relatively common way of communicating innovation challenges to supplier networks. Philips, for example, has an open innovation portal called SPICE, which allows suppliers, companies and individual inventors to collaborate to both view Philips innovation challenges and suggest ideas of their own. But the success of these platforms depends upon suppliers receiving relevant, timely feedback on their ideas and transparency around the development of any proposals.

Indeed, the trust at the heart of any good partnership flows both ways. “Surprisingly, suppliers do not always take their innovation first to their largest or even their most profitable, highest-margin customers,” says Clive R. Heal, a procurement innovation expert who leads Voicinn, a group of global innovation keynote speakers, and founded and led the Roche Innovation Center of Excellence. “They target customers with whom they have the closest relationships and see the best longer-term growth opportunities.”

Both companies should also be clear about who will own the intellectual property (IP) for any new products or services before embarking on a partnership. For instance, would a licensing approach, with the company granted exclusive rights to use a particular technology or service for an agreed period, work best? Or is a joint IP model the better option? Many innovation partnerships fail to clear this hurdle due to competing interests, Mr Heal points out.

Regardless of which ownership approach is agreed, successful SEI initiatives nearly always follow a long-term approach to innovation, focusing on mutual benefits for both customer and supplier. In other words, a true partnership that runs counter to the “not invented here” syndrome still found in many businesses.

“Overcoming this is difficult,” says Mr Rae. “But with the disruption now happening – the platform business models cropping up, the growth in startups, the fact that innovation is taking place everywhere and not just in R&D labs – companies will have to change, otherwise they’re going to get disrupted too.”

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times.  

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Four Ways Brexit Has Rattled CPOs

With Brexit headlines continuing to dominate the daily news, what have been the biggest lessons for procurement leaders on how to approach geopolitical risk?

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As cross-party Brexit talks collapsed, stockpiling reached its highest level since records began in the 1950s. A final decision on Brexit looks like it has, yet again, been thrust into the distance. But by now chief procurement officers (CPOs), those charged with ensuring businesses have enough raw materials and goods, have learnt to live beyond politicians’ promises. 

Procurement teams have begun to view geopolitical risk as an unwanted yet permanent factor. It’s no longer just the prospect of Brexit that has procurement officers grappling with greater risk in their jobs. Any emerging geopolitical risk poses potential obstacles for global supply chains, which over the past few decades have become tightly interwoven. 

Lesson 1: Uncertainty is certain 

Procurement chiefs have learnt quickly that they cannot count on politicians. But they can control the steady flow of goods and materials to their organisations by risk-mapping and establishing alternatives. 

Dairy Crest, a manufacturer of British food brands, approved additional suppliers, extra sources of material and alternatives by identifying pinch points in the supply chain, ensuring greater flexibility. 

CPO Chris Thomson reviewed the stock management processes in terms of ingredients and packaging, factory planning processes and customer order to stock processes. All these processes had been in place for many years and were effective, but Brexit made it necessary to revisit all systems and processes. 

“It’s been quite an interesting experience to have a serious situation like this to open your eyes again and to challenge some of the existing business processes,” he says. 

He is not alone in his approach. Neil Butters, head of procurement at Inprova Group, says: “Before you think big, think small. I’d been trying to understand geopolitical risk and Brexit and other areas, and trying to work out how that impacted my organisation. What I ultimately decided to do was to take a fresh view of my organisation and the risk factors, and map them out.” 

Lesson 2: Revisit systems and processes 

“Brexit has forced many CPOs and their teams to look again at their suppliers, local sourcing plans, local versus international, and start to make some decisions about what their future supply should look like,” says Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS). 

Indeed, CPOs have been evaluating their supply chains at a more granular level. Many procurement teams have looked at what happens in the supply chain beyond the first contact with their own company. The view is if they can understand the risks posed at that distance, then they will be able to manage them before there is a direct impact on their business. 

“We haven’t fundamentally changed our sourcing approach. What we have done is put a lot more emphasis on our category management in our processes, and a lot more emphasis on how far up the supply chain we understand what’s going on,” says Dairy Crest’s Mr Thomson. 

Localisation might help some businesses, but switching to UK suppliers doesn’t always solve the problem. Establishing new suppliers has its own challenges and is rarely a seamless process, particularly if you are sourcing a strategic supplier. 

According to research by CIPS, almost a quarter of companies it surveyed were looking for alternative non-European Union suppliers. But the study also showed that half of British companies would struggle to find the suppliers and skills they need in the UK if they were forced to bring parts of their supply chain back home post-Brexit. 

“Anybody who approaches their suppliers in business as purely a transactional thing misses the opportunity to work special situations and to work closely together to manage whatever it is thrown at us. We treat our suppliers really as part of the business,” says Neil Ginger, chief executive of Origin, a UK manufacturer of aluminium doors and windows. 

Lesson 3: Stockpiling can’t solve everything 

Filling up warehouses with raw materials and medicines is a short-term solution. Stockpiling is an option for some, but many do not have the facilities to store surplus stock and those with perishable goods simply won’t be able to. 

Longer-term stockpiling won’t fix the challenges companies face over trading with EU customers and suppliers. Moreover, the additional costs of paying for the stock and then paying for warehousing that stock can be crippling, particularly for smaller businesses with fewer resources. 

Earlier this year, door and window manufacturer Origin began stockpiling aluminium extrusion from its supplier based in northern Spain in preparation for Brexit and disruption at the border. In total, the company stockpiled around £750,000-worth of materials, which is not an insignificant amount of money to add to your inventory. And then Brexit Day never came. 

“Beyond the things you can’t control, you’re just trying to stay as flexible as you possibly can. We bought more material to make sure we could see ourselves through some very short-term disruption at the border,” says Origin’s Mr Ginger. 

Lesson 4: Ditch the silos 

CPOs have become more rounded business people as a result of Brexit. They have had to work more intensively with other teams within their organisations, and have had to explain what they are doing to the board to ensure the business can keep functioning and fulfilling customers’ orders. 

Like many companies, Dairy Crest set up a cross-functional leadership group focused on medium to long-term Brexit planning. In addition, the company established a standalone cross-functional group focused solely on preparing for Brexit Day. They based their business planning on a hard Brexit, the worst-case scenario for many businesses. 

“We really focused our efforts on planning for the worst case and knowing that if it didn’t turn out to be the reality, we would be in a sensible position,” says Dairy Crest’s Mr Thomson.

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times.  

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