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Articles in category: Value creation
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)
As the purchasing function evolves, procurement chiefs are increasingly being asked what else they can offer the business beyond cost savings. Procurement outsourcing and consultancy company Optimum Procurement held a roundtable discussion that considered the issue of value and whether we are on the brink of seeing the function deliver this, particularly in the areas of innovation, risk and sustainability.
The pressure is on purchasing functions after delivering increasingly tough savings targets through some of the most challenging trading conditions in living memory. Business leaders have seen these achievements and want more, more innovation, less risk, a deeper understanding of ...
There is widespread acknowledgement in the procurement industry of the importance of collaborating with suppliers and service providers to achieve non-zero sum results. However, the challenge boils down to identifying practical opportunities that allow both parties to benefit while ensuring buy-in from all stakeholders impacted by the identified areas of improvement. The procurement of corrugated packaging presents significant opportunities for achieving positive results from such collaboration.
The best buyers are achieving cost savings at a rate more than three-and-a-half times higher than the rest, according to a study. The State of Strategic Sourcing 2013 , published by Ardent Partners, also shows that ‘best-in-class’ procurement departments formally source 80 per cent of spend, a volume two-and-a-half times greater than rivals. The difference is highlighted as CPOs report that identifying more savings is the top business pressure in 2013.(Read Full Article)
South Africa’s National Development Plan 2030 (NDP2030) is a plan developed for the country to eliminate poverty and reduce inequality by 2030 through uniting South Africans, unleashing the energies of its citizens, growing an inclusive economy, building capabilities, enhancing the capability of the state and leaders working together to solve complex problems. The plan specifically addresses the challenges faced in public sector procurement and proposes five areas of focus to ‘ensure procurement systems deliver value for money’.(Read Full Article)
Finding and extracting value from sourcing activities is becoming ever more challenging. Suppliers know all too well that buyers will try and negotiate the best deal and sourcing teams are under more pressure than ever before to extract savings and efficiencies from the supply chain. A tried and tested method of extracting value from sourcing initiatives is a structured Sourcing Opportunity Analysis. This process, adopted by Bespoke, has realized meaningful savings and supply chain efficiencies on the sourcing projects we have worked on.(Read Full Article)
IBM says companies with high-performing procurement organizations are driving better bottom line results. According to the study, these organizations report profit margins of 7.12 percent as compared to just 5.83 percent for companies with low-performing procurement organizations. Also, companies with top performing procurement organizations report profit margins 15 percent higher than the average company – and 22 percent higher margins than companies with low performing procurement organizations. The 2013 Chief Procurement Officer Study was conducted by the IBM Institute of Business Value (IBV) and highlights the business impact that Chief Procurement Officers (CPOs) can have on a company’s ...(Read Full Article)
Business and government must encourage social entrepreneurs to focus on problem areas such as health, education, climate change and social care, writes Richard Branson. Entrepreneurship isn’t about selling things — it’s about finding innovative ways to improve people’s lives. Until recently, most people in business focused on products and services that would appeal to consumers, and this resulted in the creation of many great companies and a lot of jobs, but attitudes are changing. A new generation of entrepreneurs is using approaches from the commercial world and employing technology to tackle social and environmental problems, areas that used ...(Read Full Article)
Actis LLP, a private-equity company, will lead investment of as much as $1.5 billion in African commercial property to meet rising demand from international companies targeting a growing middle class. “We are seeing a shift in interest from South African brands to European retailers” seeking opportunities in fast-growing economies such as Nigeria, Ghana and Kenya, Kevin Teeroovengadum, 39, director of Actis’ sub-Saharan Africa real estate unit, said in an interview in Johannesburg on June 11. “They want to tap into the emerging middle class.” Actis, which is based in London, plans to invest in projects including shopping centres, office ...(Read Full Article)
Better procurement has enabled the government to cut £3.8 billion from its cost base and beat its total savings target for the year by 25 per cent, Cabinet Office minister Francis Maude has announced. He announced £1.6 billion had been saved by reducing the use of consulting and contractors, £800 million through better supplier relations, £1 billion through centralising procurement across the whole public sector - of which £600 million came from central government - and £380 million on advertising and marketing.
Don’t let procurement be a missed opportunity for your business. An article on the IndustryWeek website says executives should make procurement a priority. A procurement function maximizes profit while increasing quality. This article offers another perspective on how a functional team in a business environment can have a major impact on the bottom line. The key is that integrated data enables internal and external business partners to have access to real-time information that can drive business efficiencies.
A study by the IBM Institute for Business Value found profit margin at companies where CPOs “rose to the challenge of the downturn” to contribute to strategic objectives was 7.12 per cent. This compared to 5.83 per cent at the worst performers. The average profit margin across all businesses surveyed was 6.19 per cent. The 2013 Chief Procurement Officer Study, which canvassed 1,128 purchasing executives in 22 countries, described high performers as those who could combine traditional procurement capabilities with influence and innovation.(Read Full Article)