Procurement and Supply Chain Professionals

Thursday, 25 February 2010

GE Buyer in new role

A senior buyer for international conglomerate General Electric (GE) has landed an influential new role.

Global sourcing manager Russell Stokes will become vice-president of global services for GE’s transportation arm. The company said in a statement it was a “critical role” that will help drive growth.

Stokes will be responsible for strengthening the transportation subsidiary, which designs, manufactures and services locomotive, signalling, communications and control products for the rail industry.

It also builds wind turbine drive systems and mining vehicles.

In his role as global sourcing manager for GE Aviation, Stokes oversaw a $7 billion (£4.6 billion) spend. He joined the company, widely considered to be the biggest in the world, eight years ago

Wednesday, 24 February 2010

Tasty benefits

Sure, there may be reasons to look at Heinz’ report of 14% growth in operating income with scepticism, or attribute it to any number of factors. But the fact remains, its procurement function has made a consistent show of the transformation it has been undergoing and you’d be hard-pressed to say it isn’t paying off.

It doesn’t seem like that long ago that Procurement Leaders was talking with John Hans, recently appointed VP of purchasing at Heinz, about the measures he would be undertaking to leverage value out of the European supply chain.

Equally, back in October, Procurement Leaders blogged on a speech by the food giant’s chief of procurement Christopher Stockwell, which highlighted the journey from bottom quartile purchasing function in 2004 to second quartile function in 2009. Delivering top-line growth was his target then.

It’s little surprise then that this latest announcement comes with no small nod to the part procurement played. Still, reading that Heinz chairman, president and CEO William R Johnson said that the business has “established a goal of delivering better than $1bn in incremental cost savings over the next five years though our global supply-chain initiatives”, does merit pause for thought.

Yet this isn’t so much an advert for Heinz as an advert for the benefits of well-targeted transformational procurement. Having a CEO enthusing about the good it has done and it’s role going forward is about as good as it gets.

The recent appointment of Bob Ostryniec as chief supply chain officer is perhaps as great a testament to this as any – Heinz means business.

And what may be better for procurement is that it genuinely seems to see supply-chain optimisation as the best way of doing it.

Monday, 22 February 2010

Joint Buying!!!!!

22 February 2010 | Jake Kanter

More than 100 companies in central London are to join forces in a shared procurement plan. It follows a pilot scheme which saved the firms more than £1 million last year.

It is thought there is huge potential for further cost reductions. The programme will cover goods and services including telecoms, couriers, stationery and water filters.

In addition, the companies hope to cut carbon emissions by 10 per cent by sharing deliveries and negotiating better energy deals. 

Participants include office-based businesses, such as law firms. A number of multinationals with locations in the area – including Warner Bros and MediaCom - are also involved.

The project is organised by not-for-profit business improvement organisation inholborn. Chief executive Tass Mavrogordato said it has “massive potential” and there are plans to increase the list of goods and services the companies purchase together.

“It makes sense on a number of levels,” she told SM. “Obviously on cost, but also on the green agenda – with services such as couriers because it gets congested around here. It’s also about a business community - people getting together to do something.”

Thursday, 18 February 2010

Flexi time works!!!!

Research has found that flexible working is good for the heart – and possibly also for mental health.

The Cochrane Library, which reviews published studies, looked at 10 relevant reports covering more than 16,000 people. They discovered employees who have control over their working hours have better blood pressure and heart rates.
Since last year parents with children under 16 have been able to ask for flexi-working. Previously it was only parents with very young or disabled children who could make the request.

Flexi-working is not practical in all parts of the working world, but where it does make sense it need not be limited to parents – and in many cases it isn’t.

Does your organisation allow for flexible working? Do you think it works? Health and happiness are good reasons to alter working hours, but would simply working the hours of a standard working week be a fine thing? Let us know your thoughts.

Read the BBC story here.

Tuesday, 16 February 2010

Women in Purchasing!!

Some of the world’s biggest companies have been commended for buying services from women-owned businesses.

A record high of 21 firms were named in an annual list of the best US firms for supporting vendors owned or run by women. These suppliers are recognised in the US as minority businesses. The list is produced by the Women's Business Enterprise National Council (WBENC).

The awards included telecoms firm AT&T, which spent more than $6 billion (£3.8 billion) with such suppliers last year, and computer manufacturer Dell, which spent more than $2.5 billion (£1.6 billion) with minority vendors in 2008. Both companies said women-owned businesses were critical to their supply chain strategies.

Ernst & Young, Marriott International, Microsoft and the Home Depot were recognised by the WBENC for the first time since the awards were created 11 years ago.

“This expanding list demonstrates that best practices prevail in even the most challenging environments,” said Linda Denny, president and CEO of WBENC.

An awards presentation for the companies recognised in the list will take place on 25 March.

No Bonus for Buyers!!!!!!

Nearly three-quarters of buyers are not rewarded for hitting savings targets, according to the latest SM100 poll.

The survey of 100 international buyers found 73 per cent did not receive a bonus for slashing costs, while 27 per cent were rewarded for their efforts in driving savings.

A number of the respondents expressed displeasure at not securing financial recognition for making cutbacks. Others said that savings were “part of the day job” and it would be unfair to expect rewards for something they were required to do.

In addition, many purchasers said savings targets formed part of a set of goals they need to achieve to release a bonus. These included customer satisfaction ratings and spend visibility.

Those that did receive bonuses said it was important for motivation, but could also result in loss of morale if targets are not hit. Recruiters told SM that bonuses were attractive to talented candidates.

A number of respondents admitted that their bonuses had been cut or reduced during the downturn.

Thursday, 11 February 2010

Designer hospital gowns....

A new fashion catalogue will land on the desks of NHS buyers next year – for designer hospital gowns.

Finally, the traditional gown, famously lacking in material at the rear, is getting a makeover. The Design Council has commissioned American designer Ben de Lisi to create a loose garment that provides easy access for doctors and nurses, but which doesn’t mean your bottom is on show when you walk the wards.
This revolution in patient dignity warranted a leader in yesterday’s Times. (The paper’s website has the story, with a picture of what the gowns might look like.)

Here is a chance for NHS buyers to make a huge difference to people’s experience in hospital, which is scary enough without having the added humiliation of inappropriate gaps in clothing. The new design is expected to be approved by the Department of Health and recommended for purchase by the health service next year. This is a little plea to buyers to take up the new gowns as soon as they come to market.

By Sarah Campbell....

Wednesday, 10 February 2010

Pinnacle Foods outsources indirect spend

Pinnacle Foods Group has outsourced its indirect procurement to ICG Commerce in a three-year deal.

Pinnacle, one of the largest food firms in the US, will hand over spend categories including advertising, logistics, capital equipment, and plant-related supplies and services.

The financial terms of the deal were not revealed, including how much the company plans to save from the move. 

CFO of Pinnacle Craig Steeneck said: “Our goal is to reduce costs associated with indirect spend, while keeping our internal resources laser-focused on generating productivity across our supply chain.” 

The company’s brands include Mrs Butterworth’s and Lender’s Bagels.

It took over Birds Eye Foods last year in a $1.3 billion (£826.7 million) deal.

Consumer goods firms Kimberly-Clark, Chiquita and Whirlpool have also outsourced purchasing to ICG.

The Conference Bug

When you’re given a free gift at a conference, you don’t expect to get involved in something resembling a John Le CarrĂ© novel.

But according to a leaked MI5 document, spies from the People’s Liberation Army and Ministry of Public Security in China have been approaching businessmen at trade fairs with “gifts” and “lavish hospitality”.
The Sunday Times reports that the freebies, such as cameras and memory sticks, contain bugs and viruses that give spies remote access to computers.

It also warns of the perils of business travel, with “hotel rooms in major Chinese cities, such as Beijing and Shanghai likely to be bugged. Hotel rooms have been searched while the occupants are out of the room.”

The goal of this subterfuge is to obtain commercial advantages, with defence, energy, communications and manufacturing companies all attacked.

Of course the Chinese strongly deny any accusations of spying – after all it wouldn’t be very “intelligent” to admit it.
Post by Paul Snell at Supply

Tuesday, 9 February 2010

UK Procurement Tenders

About UK Procurement
UK Procurement is a UK tender contract search and advice service. It provides you with the capability to search for government and local government tenders online and to tender effectively for contracts.

The two main guides currently are:

•Tendering Guide
•Procurement Guide
UK Procurement is aimed at businesses interested in supplying the public sector. We provide help and advice to suppliers on tendering for government contracts and links to Departments' procurement web pages.

UK Procurement searches through more than 600 new public sector contract opportunities from the UK every working day.

All content for the tender guides is taken from workshops provided by Larch Consulting

Monday, 8 February 2010

Capgemini and IBX deal to shake up procurement outsourcing

Capgemini and IBX deal to shake up procurement outsourcing
Posted on Tuesday, February 2 by David Rae in Procurement Outsourcing, Procurement Technology, Technology | 2 Comments While not quite on the scale of Kraft Foods' acquisition of Cadbury, news that Capgemini is to acquire Swedish procurement technology company IBX is, in its own way, a fascinating development which points to interesting times ahead for the procurement outsourcing space.

According to Hubert Giraud, global leader of Capgemini BPO, the deal means that potential clients only need seek a single partner for procurement outsourcing. "Not only does the fully integrated approach achieve significant savings faster, the required investment to recognise and achieve the saving is also less," he says.

This maybe true, but the likes of Accenture or IBM would argue that by partnering with technology companies such as Ariba and Emptoris, they are in a similarly strong position. They could also argue that, in the long term, they will benefit from the advantages an independent company brings (more focus and innovation, for example).

But if we were to don the speculative hat for a moment, could this finally be the move which triggers a wave of consolidation in the e-procurement and sourcing space?

With outsourcing/consulting firms potentially in the market to pick off specialist e-procurement players, traditional enterprise software vendors could well be forced into a move. Oracle's strategy has always been growth by acquisition. SAP's has always been organic, a trend which shifted with its acquisition of Business Objects a couple of year's ago.

But SAP already has a relationship with IBX where the latter provides some enabling capabilities for SAP software; while SAP sells on-demand technology provided by IBX (and Hubwoo, as it happens). Oracle is also a player, with its own on-demand procurement solution.

Currently, it's all a bit of a mess, with lots of small IT providers partnering with the giant software, outsourcing and consulting vendors.

But the Capgemini/IBX deal shows that at least one giant consulting and outsourcing vendor has seen the potential rewards that on-demand e-procurement can bring to its offering. And that could shake things up nicely.

Supply Chain Jobs

Supply chain jobs could be created in 11 areas of Scotland after they were selected to manufacture around 8,000 offshore wind turbines.

The sites, which include Dundee and Aberdeen, could become the future centres of the UK's offshore wind industry, cited as a key area for economic growth in Scotland.

Scottish Enterprise, with support from Highlands and Islands Enterprise, is running the project which will receive close to £20 billion worth of funding.

Identifying the sites has got the National Renewables Infrastructure Plan, set to create tens of thousands of Scottish jobs, underway.

The areas chosen are Leith, Dundee, Nigg, Hunterston, Aberdeen, Arnish, Campbeltown, Machrihanish, Ardersier, Kishorn, Peterhead and Energy Park Fife at Methil.

Scottish National Party Lothians MSP Shirley-Anne Somerville told the Edinburgh Evening News: "The Firth of Forth windfarm project has potential to create around 700 jobs in building and maintenance, and maybe thousands more further up the supply chain."

Paul Willson, of PB Power, recently told the Telegraph that shortages in the supply chain could cause the ambitious programme to stall.

Written by Kevin Clark

Buying of Timber


Defra has said that the government's new socially responsible rules on buying timber will not make life harder for the government's procurement job holders, according to TTJ magazine.

The government last month announced new regulations on procurement of timber, which will come into force in April, to ensure that it comes from a sustainable background.

Commenting on the developments, a Defra spokesperson told the news provider that larger schemes had already indicated that they could meet targets and update.

"We haven't looked at all the schemes so we have no evidence that those schemes might not comply. This is about our choice as a consumer. It's for the schemes to meet our new requirements," he added.

Sheam Satkuru-Granzella, director of the London office of the Malaysian Timber Council, said that schemes specifically responsible for social criteria were beyond the government's mandate and could have a negative impact on timber producers.

Written by Kevin Clark