Tuesday, October 19, 2010

Brands paint their supply chains green

Wal-Mart has been making a presence lately. In a span of a week, the retail giant launched a programme seeking to convert recyclable materials into products for pets, while at the end of the totem pole peeked out into the global market for acquisition opportunities.

A clearly admirable work, I would say, as I read the latest piece of news announced yesterday. Wal-Mart has made news once again, this time vowing to make changes to its global sourcing strategy. It will now seek to buy more sustainably-sourced products from small and mid-sized farmers.

This topic of sustainability has gone on for awhile. But just in September, Procter & Gamble decided to compact its entire range of laundry detergents from the US and Canada as it tries to reduce wastage in its supply chain. Apparel giants like H&M put water, chemical and energy usage in their supply chains through their Chinese textile suppliers. Meanwhile, Ersnt & Young's efforts to implement a greener supply chain weren't in vain, as they helped the company reduce its carbon footprint by 15% in the US.

This are just brands off the top of my head. Sustainability today is crucial, and procurement plays a key role in making sure spend is used to the benefit of the entire supply chain and to the environment.

Green is apparently in.

Wednesday, August 11, 2010

Looking at the big procurement picture

Employee productivity is a topic most frequently discussed on ProcurementAsia’s sister brand, Human Resources, but I shall jump into that for this Beer Blog as well.

The reason is simple: procurement professionals are employees and their welfare does matter to the overall productivity and outcome of the organisation.

In procurement, long hours are spent trying to drive a hard bargain and trying not to let a single cost defect slide. Therefore, it is imperative a company does not overlook the health and overall productivity of its procurement department.

In a report by Purcon, it says that employers of procurement workers should take note of the overall productivity of its employees, rather than the number of hours people are putting in.

“The most important thing that managers need to recognise is that the most fundamental thing is output not input,” says Mike Petrook, head of public affairs at The Chartered Management Institute.

However, I would say it is difficult to focus on the big picture sometimes, especially during the recent financial crisis where cost-cutting measures are implemented so drastically and spend is controlled with an iron arm. Hours put in by a company’s employees may not be ignored intentionally, but unfortunately so.

In procurement or any other department out there, it is important to remember to know when it’s enough. If it's inconvenient to take a break, then it's time to think positive. While easier said than done, let this article from Human Resources offer you some insight on how it's done.

Thursday, July 29, 2010

Is IT for procurement?

IT has been (let’s just go out and say this) taking over the world for quite some time, and the benefits are vast and limitations endless. We have cloud computing, complicated algorithms for search engines, countless social media platforms, complex IT databases, the list goes on.

At some point, will procurement start to get entrenched – or to put it gently, influenced by the prowess of IT?

I say, procurement IS already influenced by IT.

A recent study from Gartner believes software applications can be beneficial or even crucial for procurement. The research suggests electronic procurement and sourcing applications can support organisations in saving money.

Of course, some companies have already leveraged the use of IT and reaped results.

But the report doesn’t stop there. It goes on to say that procurement technology programmes, when made mandatory, can be more effective than those allowed to be optional.

I ponder about this for a moment. Some of us welcome change, while some of us stick to the old Microsoft Word 2002 for all eternity because it is familiar. Some embrace the changing face of technology and adapt accordingly, while some linger behind and cling onto what’s safe.

So here’s something to think about on your end. Perhaps procurement could give IT a chance (if your company hasn’t) and adopt a system. It’s all about taking chances, and who knows, Gartner may be right and it will revolutionise the way we do business.

What do you think?

Tuesday, June 8, 2010

Fly me into the ash cloud

While bigger airlines today are coming up with different ideas on how to equip their planes with in-flight WiFi, one small low-cost airline is testing new technology to help detect ash clouds within 100 kilometres in range.

This is after Europe’s infamous case of airspace closures as a result of an Icelandic volcano eruption.

Why the need for that? For starters, Eyjafjallajokull has yet to cease erupting, al beit with less significant and disruptive consequences. However, ash cloud issues won’t disappear anytime soon, especially through the rest of the summer and into autumn. We can’t also assume that other volcanoes, dormant or active, won’t follow suit, especially when the earth’s climate is shifting so rapidly.

EasyJet is a British-based airline which ranks only slightly above its rival, Ryanair. However, it is spending almost US$1.5 million to equip its planes with AVOID, the “Airborne Volcanic Object Identifier and Detector”. The gadget works similar to weather detection systems for thunderstorms, but it is specifically targeted to ash clouds.

AVOID works best with many airlines using it up in the air, and it will not be useful unless other airlines are willing to take on this gadget. But a big thumbs-up to EasyJet. If I had to make a choice, I’ll sacrifice that bit of WiFi goodness for a safe journey anytime.

Tuesday, June 1, 2010

Product recalls: The Tweet Age

We are constantly reminded of the need to get up to speed with changing technology. News is gradually shifting onto online platforms, while companies are jumping on the Twitter bandwagon to promote their goods or services. The latest you’ve heard, though, are product recalls.

A report released by the Australia Competition and Consumer Commission has advocated the use of social media platforms to facilitate product recalls. According to the regulator, there has been more than 10,000 product recalls in Australia in the last 23 years. However, the overall average return rate of recalled goods was only 56.75%.

Now that everything is going digital, recalls through print and other traditional mediums may no longer be sufficient. The use of Twitter or Facebook, for example, may be more prolific than we think.

I believe the convenience of utilising social media is often underestimated. With the newer generation gaining prominence in today’s world, it is almost crucial that members of the supply chain start re-examining the demographics and needs of their consumers.

Bluntly put, product recalls won’t go down with a snap of the finger. Reach out with social media.

Monday, May 24, 2010

To fly or not to fly

The IATA was recently displeased with Europe's decision to make airspace closure measures based on theoretical models rather than facts.

According to a recent press release, IATA reported that there had been countries which allowed flights in the "unsafe" fly zones, and post-flight inspections have deemed it safe to fly.

Considering it from Europe's point of view, prevention is better than cure. After all, the safety and lives of thousands lie in their hands. On the other hand, business for airline and cargo carriers have dwindled and airports are left with many passengers stranded.

In my opinion, I would say it is perhaps a good call for Europe to have closed airspace the first time Eyjafjallajökull spewed volcanic ash. During the virgin eruption, there was no way to determine if flights that were allowed could go wrong, and the only plausible solution was to halt them to prevent any mishaps. However, I believe the following airspace closures could have been better managed and yes, as IATA would say, not close airspace simply based on theoretical assumptions.

What is your take on this?

Thursday, April 8, 2010

Pressures on CSCOs increase as the economy recovers

Singapore - 3M's Snr VP of corporate supply chain operations John Woodworth tells us what he thinks CSCOs need to keep an eye on as the world embarks on the path of recovery.

Hear what he has to say in this video.