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Procurement People: Careers, Leadership, People on the move, Talent Management
Articles in category: Value creation
With the cost of capital low and corporate bank accounts flush, there may be more mergers this year, say some economists. Procurement will play a big role in these mergers, so it’s good to see what’s involved and how procurement has handled other mergers.(Read Full Article)
There are many skills required to bring about a consistent change in a function, but there are some qualities that leaders share.
In the latest article for our series The Financial CPO, BravoSolution’s Mickey North Rizza notes that reactive thinking is commonplace, but overcoming that and becoming strategic requires a change of mindset.
She writes: "To start this process, procurement must gain a solid understanding of the function’s performance to date, including self-assessment, and more importantly getting honest feedback from key internal and external stakeholders.
Buyers of outsourcing will focus on service rather than cost savings in the next 12 months, according to Deloitte’s support services predictions.
Oliver Hemming, strategy consulting partner in Deloitte’s business services practice, explained companies are now considering value to be measured on outcomes.
“This is putting increasing pressure on outsourcers to find innovative ways of delivering value to clients, while ensuring that contract margins are maintained,” he said. “Innovative service delivery will be crucial; however, minimising risk in such an environment will be a key challenge for outsourcers in 2014.”(Read Full Article)
Across industries, leaders and managers may be missing a critical piece of the big picture. The increasing importance of procurement to the bottom line success or failure of their companies. In fact, 80% of a typical company's expenditures go toward procured goods and services, and procurement is often the single function that makes decisions around all external costs.(Read Full Article)
Looking for the most innovative way to generate savings remains the number one priority for travel managers worldwide over the next 12 months.
The research from Carlson Wagonlit Travel (CWT) also found traveller experience and user-friendly services are also top priorities for the 970 respondents.
The sixth annual Travel Management Priorities report found 70 per cent of travel managers want to find innovative ways to generate savings. “As business travel and prices grow in 2014, companies with mature travel programs will be looking to exploit opportunities for incremental savings, as well as bring new areas into the scope of the ...(Read Full Article)
For corporate South Africa, the tumbling rand has been both a blessing and a curse: a windfall for mining houses, it has also saddled domestic manufacturers and retailers with higher costs and weaker consumer demand.
The currency free fall has left a raft of companies - including mobile operator Vodacom and the local arm of Toyota Motor Corp - scrambling to contain the damage.(Read Full Article)
This is the second in a two-part series from Pierre Mitchell on having a culture of innovation in your procurement organization. For example, procurement needs to embrace ambiguity. This can be a difficult value, but if we want our supply chains to be more resilient, we also have to challenge ourselves to become more resilient. Read on for principles 4-7 and how to implement them.
There is a clear trend, both in terms of research and anecdotally, that companies are looking to centralise their procurement functions. Is this always the right path to follow?
We have recently published our research into Procurement Operating Models (you can access the executive summary here). One of the key questions of the study relates to impulse to centralise.
Clearly, this trend can be coupled with the dramatic rise of the procurement function. Even in established global brands, a dedicated purchasing department can be a relatively new emergence. The first remit of new CPOs, it seems, is to expand spend ...(Read Full Article)
Early engagement is still an uphill battle: time-consuming and energy-sapping, with a high risk of no reward. Procurement isn’t invited to the party, it’s still waiting by the phone.
In this guest post, Procurement Leaders welcomes a call to action from Bill Young of Kestrel Ops - Procurement needs to get the attention of the business and it needs to think differently in order to do it, he argues.
2013’s biggest stories with the most impact on - or which hold the most potential for - procurement.
Virtually every business publication at this time of year reports on what the editors think were the biggest stories of the year. So, why shouldn’t bloggers and columnists do the same? Hearing no objections, here is my take on the two biggest stories with the most impact on - or hold the most potential for - procurement.
It may seem out for character for someone with procurement and supply chain background to say cost reduction is not the most important thing to work on, but sometimes, it is better to do the exact opposite of what was taught as best practice in business school.
Firms that focus solely on cost reduction as the only major initiative should be very careful. These initiatives do improve profitability - at least for a short time anyway. Simply put, cost reduction or any operational improvement/transformation initiative helps to make a company more efficient, but only to the same revenue base.(Read Full Article)
State-owned power utility Eskom’s eta Awards this week unveiled exceptional efforts by South Africa’s individuals, students, companies and other institutions in energy efficiency initiatives to reduce strain on the national grid. The eta Awards, initially established 20 years ago to create awareness and encourage action in the energy efficiency field, sought to recognise and reward excellence in energy efficiency.
INNOVATION(Read Full Article)
Welding solutions specialist Shield Technologies was the winner of Innovation category with its weld spatter product – Spatter Guard HT Plus – which reduced the amount of spatter caused when welding. Energy intensive methods, such as manual grinding and needle ...
Procurement has been faced with fundamental changes of the business environment over the last few years and from my point of view there is one decisive factor to turn trends into opportunities: people.
The transformation from a traditional purchasing department to a modern service unit requires a radical change of style and mindset. Experienced managers charged with the restructuring of a company’s procurement operations are aware of that hurdle and start their job by determining who of the staff is able and willing to support the endeavor and who is not.(Read Full Article)
A recent post on the HBR Blog Network on Six Drucker Questions that Simplify a Complex Age poses us with a interesting inquiry -- can they simplify a complex supply chain?
- What Does the Customer Value?
SI agrees that regardless of what has happened since his death, Drucker would still be asking this question -- and it would probably be the first question out of his mouth in any business discussion. The tighter times get, the more the customer focusses on what they really need where necessity is concerned and what they really want where discretionary spending, which is limited in difficult ...
- What Does the Customer Value?
Procurement’s numbers have to make sense to finance, otherwise it’s hard to make an argument about adding value.
In the never-ending and always-necessary conversation about aligning procurement goals with corporate goals we almost always talk about what procurement should do to get closer to finance, which is arguably the first among equals in any organization. There’s a case to be made that procurement is where the money is.
The function’s first task in aligning with finance is to learn finance’s language and be able to speak with confidence about earnings per share (EPS), return on ...
THE shareholders of listed agricultural services and diversified foods group Afgri have voted overwhelmingly in favour of selling the company to AgriGroupe investment consortium.
It will pay R7 per share, meaning a total of R2.4bn will be paid to shareholders. It represents a 25% premium on the tangible book value of R5.59 per share on June 30, AgriGroupe said.
AgriGroupe, describing itself as a private investment company incorporated in South Africa, said its shareholders consisted of "both South African and international investors, notably including Bafepi Agricultural ... a South African black empowerment consortium with substantial agricultural expertise and supported ...(Read Full Article)
Darwin’s quote of "It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change" has never been truer than in today’s business environment. Disruptive changes in technology, industry structures, business models, consumer preferences and global boundaries are altering the shape of every company. Some companies are thriving in this environment through ongoing innovation, whereas others are struggling to adapt.
Procurement can be a key driver of innovation if the right resources, processes, incentives and metrics are established.(Read Full Article)
Cereal manufacturer Kellogg’s aims to optimise its supply-chain infrastructure as part of a four-year plan to save up to $475 million (£294.92 million) a year by 2018. ‘Project K’ also plans to strengthen existing business in core markets, increase growth in developing and emerging markets, and drive an increased level of value-added innovation, the company said in its third quarter results.(Read Full Article)
In the first presentation in the Procurement Forum in Zurich, Wolfgang Rauch, CPO of Novartis Pharma explained how his organisation sought to provide more value to the business. “Procurement is the best networked function in any industry,” Rauch maintained. “So the question is: how do we position ourselves to leverage that network?”
Novatis Pharma has launched a programme to push the function to the next level of performance and drive savings and productivity enhancements. The key to this is managing internal business requirements and managing the supply chains to service these needs.
To en·gage ( n-g j ): To pledge or promise, especially to marry; to draw into; to involve; to enter into conflict with
Corporate executives are exhorted daily by well-meaning public leaders that they should support their local entrepreneurs in order to be good corporate citizens and to bolster local economies. But engagement with entrepreneurs is not a question of conscience or moral imperative; it is a question of strategic self-interest.(Read Full Article)
While strategic sourcing and procurement groups around the globe continue to make headway into new departments and address categories previously off the table, their popularity with business owners and stakeholders has never been lower.
Headlines and titles like "Everybody Hates Procurement: Here's How To Fix It" and "The End of Procurement, Forever!" and "The Problem with Procurement: Misalignment" seem to pop up every day. I attribute these headlines to the growing pains strategic sourcing and procurement will naturally experience as the role of this group continues to expand and evolve.
The focus on cost during the global economic downturn has been beneficial to procurement professionals, says REED's group managing director, Tom Lovell. It’s been an opportunity to demonstrate the full extent of the function’s capability. This ranges from improved category management to strategies for offsetting a volatile commodities market, developing more collaborative relationships with suppliers, to drawing out innovative cost saving solutions, or even controlling personnel costs.(Read Full Article)
Financial reporting, or lack thereof, is frequently a huge barrier to gaining credibility from stakeholders. A different mindset may be required to turn that around. Deutsche Bank’s VP global sourcing Justin Pennington explores how procurement functions can shape and improve much needed credibility across their wider organisations.
In one of my earlier roles, it was once said to me that one of the systemic reasons as to why the group had not been successful in the past, was down to the fact that no one "understands or supports" what the team had delivered. By most people’s vantage point ...
Whether you’re a digital start-up or an institutional entrepreneur, three simple heuristics offer an excellent way to determine whether a fledgling innovation initiative should be put out of its misery (and yours). Even if the innovation business case appears compelling and its numbers sound, should these three pathologies appear, don’t hesitate or delay: Kill your innovation effort ASAP.
1) No Pleasant Surprises
Almost all innovation efforts have the hiccoughs and bumps in the road. Design schedules invariably slip and that “quick-and-dirty” prototype ends up costing much more than expected. That’s normal. But listen closely for and pay ...(Read Full Article)