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Articles in category: Sourcing
The declining cost of hosting technology applications in the cloud means this is one avenue for corporations to drive efficiency and add value. The business case for CPOs and CIOs is strong, but due to uncertainty and its nascency, it’s only recently that many companies have begun to engage with these services. There are some benefits of this: • Addressing shifting needs. An abundance of data is available in today’s connected world.(Read Full Article)
Retailers should put their own checks in place when sourcing from other countries and not blame governments for a lack of regulation, says Tesco’s group director of ethical trading.
According to Giles Bolton: “It is not impossible if you are a responsible retailer - regardless to what else is going on in the industry - to make sure you are sourcing responsibly.”
He added companies should not blame governments for not doing enough in terms of regulation. “If you want to trade from that country the responsible thing to do is to make sure that you have your own systems in ...(Read Full Article)
Businesses should map their supply chains, review supply chain practices and hold their suppliers accountable to control anti-trafficking risks in their operations.
These recommendations are in a briefing aimed at tackling modern-day slavery by not-for-profit organisation Sedex Global. It includes information from Verité and Sedex on the causes of modern-day slavery, how workers are affected, and indicators of forced labour in factories and on farms.(Read Full Article)
A procurement professional is unique, maybe more so than their counterparts in finance or sales. Every business has different suppliers, different supply challenges and, of course, it needs a unique profile of expertise to deliver value in those circumstances.
The perception of procurement, which individuals and teams are working to dissipate, is often that buyers know everything about cost, but nothing about what suppliers are worth to the business. Undoubtedly that’s true in some cases, but where procurement can prove its worth is by knowing more than anyone else in the room about what the business is buying, why ...(Read Full Article)
We have heard the rationale behind strategic sourcing for so long that you’d think the concept would be universal today, or at least widespread. Is it? Bob Rudzki doesn’t think so, and he has a theory of why it isn’t.
Back in the early 1980s, the venerable Harvard Business Review published an analytical piece by Prof. Peter Krajlic that called for a more strategic approach to purchasing. Even before then, some leading CPOs had been preaching the gospel of strategic sourcing.
When looking at complex spend categories there are a number of things to take into consideration. First: Don’t make assumptions. Second: Gathering requirements from budget holders and users of the goods or services is vital. In this paper, Peter Smith of Spend Matters UK/Europe provides other important practices in executing category management processes.(Read Full Article)
The phrase “the customer is king” is well known, you don’t hear words like this when procurement people talk about suppliers. It is no coincidence that companies that really value their customers also treat their suppliers well.
Influencing and persuasion skills are competencies that both procurement executives and their stakeholders need to develop to be successful in creating fully workable supplier relationships.(Read Full Article)
Australian retailer David Jones has agreed to a takeover by Woolworths that values the company at US$1.9bn. Woolworths [JSE:WHL] has offered R21.4bn to acquire the entire issued share capital of Australian retailer David Jones for AUS$4.00 per share. The offer represents a 25.4% premium to the closing David Jones share price on April 8 2014.(Read Full Article)
The David Jones board of directors has unanimously recommended that its shareholders vote in favour of the transaction. The combination of Woolworths and David Jones will create a retailer with revenue of over R51bn from 1 151 stores ...
The complexities of modern-day competitiveness certainly challenge the traditional business process. Take supply chain, for example: it is progressively evolving from overseeing a few disjointed back office functions into a strategic 'big picture' role that can radically increase profit margins by up to 22%, according to an IBM CPO study.(Read Full Article)
This IDC Manufacturing Insights report presents annual top 10 supply chain predictions.
"In the context of the 3D value chain, operational resiliency is clearly dependent upon being demand aware and data driven, but it is also about digital execution: leveraging data to broaden and extend 'supply chain intelligence'; so IDC Manufacturing Insights expects that for 2014, operational resilience will come to the forefront and underpin manufacturers supply chain strategy moving forward," says Simon Ellis, practice director, Global Supply Chain Strategies for IDC Manufacturing Insights.(Read Full Article)
Supply Chain Digital recently published an interesting piece on three core trends impacting UK supply chain skills in 2014 where they noted that, even across the Atlantic, globalization is taking a new spin. According to the article, complex supply networks are now deployed to offset inventory risk, balancing low production costs of far away places with short-lead time replenishment from factories closer to market.(Read Full Article)
It’s widely acknowledged in product-development circles that about 80% of the final cost of a product is baked in during the engineering and design stages. Designing for manufacturing is one of the strategies for lowering that cost, something that many engineers strive to do. Procurement helps largely by choosing suppliers of components, materials, and manufacturing services who can suggest design alternatives that make final manufacturing more efficient and less costly.
So, analyzing suppliers’ capabilities is a critical job, no matter the industry. That’s why procurement professionals spend so much time on supplier selection.(Read Full Article)
Procurement leaders are expanding their priorities for 2014, moving beyond a historic emphasis on reducing purchase costs and adding focus on expanding and deepening the scope of spend influence as well as supporting supplier-led product innovation, according to 2014 Procurement Key Issues research from The Hackett Group, Inc.
The Hackett Group’s research reveals a major change in procurement’s priorities from last year, when cost reduction/avoidance was their number one concern. For 2014, the highest-ranked issue is expanding the scope of procurement’s spend influence. Over three quarters of the executives placed this first in their priority ranking.(Read Full Article)
The South African trade and industry minister Rob Davies has called on the private sector and consumers to “throw its weight” behind the country’s Buy Local Campaign.
Speaking at the Buy Local Summit and Expo in Ekurhuleni, Davies (pictured) said that both companies and consumers need to “make it their business” to promote and buy locally-produced goods.
“If all of us can take decision to buy locally manufactured products, we can create a more positive future for our country in terms of employment opportunities,” he said.(Read Full Article)
APQC recently conducted a best practices study that examined how high-performing organizations establish and run supplier category management programs. The study revealed that successful organizations align their procurement and overall business strategies by creating cross-functional category management teams. In addition to procurement staff, these teams can include technical experts, quality representatives, and others, depending on the organization’s needs.(Read Full Article)
A helicopter view of South Africa’s public-sector procurement system highlights not just its scale, scope and complexity, but also some of its key fragilities. Every year, departments and agencies across the three tiers of government spend more than R460-billion on procuring goods and services, ranging from automobiles for the police, to textbooks for schools and medication for hospitals.(Read Full Article)
Due to the complexity and inter-dependencies of these megatrends and the diversity of affected countries, markets and companies it’s difficult to assess the impact on procurement but leading procurement managers foresee major changes in a couple of focal areas within the next decade.(Read Full Article)
The typical business challenge when you go to market with an RFP centers on getting ideas for what is possible, and identifying suppliers that either already have these ideas or are willing to work with you toward that end. Targeted activities are often services or complex products where quality, service, or the engineered final product will be different from each vendor responding.(Read Full Article)
One of the most interesting phenomena of social science is the power of group decision making. Social science has few well evidenced and proven laws, but the ‘wisdom of crowds’ is one of the few. This relies on the principle that multiple people generally make better decisions collectively than one person. This phenomenon is present throughout societies, with democracy being the obvious example.
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Accenture (NYSE:ACN) has completed its acquisition of Procurian, a leading provider of procurement business process solutions. The acquisition, originally announced on Oct. 3, 2013, further enhances Accenture’s capabilities in procurement business process outsourcing (BPO) across a range of industries including manufacturing, consumer goods, high-tech and financial services, and adds key analytics capabilities and technology assets.
Through the acquisition, Procurian’s approximately 780 employees in the United States, United Kingdom, Czech Republic, India, China and Brazil have joined Accenture.
“With the acquisition complete, we look forward to integrating Procurian’s deep strategic sourcing category expertise, advanced analytics capabilities and ...(Read Full Article)
The number of countries deemed to be an “extreme risk” for human rights abuses has increased by 70 per cent since 2008. According to Maplecroft’s Human Rights Risk Atlas, the number of countries in the category has risen from 20 to 34.
Countries that have seen the worst deterioration in their human rights since 2008 include war-torn Syria, which is ranked at number one out of 197 nations, Egypt, Libya, Mali and Guinea-Bissau.
The key emerging economies of Nigeria, India, the Philippines and Indonesia have also dropped into the worst category. MENA and other African countries account for the ...(Read Full Article)
A campaign has been launched in South Africa to encourage consumers and firms to buy locally produced goods and services. Buy Back SA, backed by the South African government’s Department of Trade and Industry and including a TV ad fronted by the actor John Kani (see below), calls on purchasing departments to “reconsider procurement channels”.
Francois Boshoff, creative director at marketing agency The Volcano Group that developed the campaign with The Manufacturing Circle, said: “If people could stop and consider even for a moment the impact of that single imported goods purchase, then the first phase of this campaign ...(Read Full Article)
More than eight out of 10 firms say category management is a top priority for procurement, a survey has revealed. Future Purchasing’s Category Management Study found 85 per cent of companies thought category management was a top-three priority.
However, just 2 per cent rated their use of category management as excellent, with a quarter of respondents describing themselves as “leaders” and the rest as “followers”.
The study revealed that a fifth of followers, defined as those who described the level of category management in their organisation as basic or improving, had no measure of savings. This compared with leaders ...(Read Full Article)
Future Purchasing’s Category Management Study was released this week. The 42 page report contains detailed and insightful information from over 300 global companies about their category management approaches.(Read Full Article)