The Supply Century Andrew Coulcher, Group Knowledge and Membership Director CIPS Leading global excellence in procurement and supply
“The Voice, the Standard” The largest global professional body in Procurement and Supply • Offices on 4 continents in 6 countries • Community of over 120,000 in more than 100 countries The global standard for the profession • Mandated by sovereign countries, multi-lateral agencies and multi-national companies The profession’s advocate for ‘Licensing the Profession’ The only professional P&S body to degree level, independently regulated The leading voice of the profession • www.cips.org - c1.3 million annual users Leading global excellence in procurement and supply
CIPS Membership Leading global excellence in procurement and supply
The Global Environment Changing Business Models Economic Shifts • Digital economy • Global trade deals – a • The rise of Block chains, new paradigm? Internet of things and AI • Rise of the east and mega cities Key Trends (CEO concerns) Ethics and • Cyber security Compliance • Increasing supply risk • Increased regulatory pressures • Clean supply chains Human Knowledge Rise of protectionism • Will double every 12 hrs by 2020 • NTBs (Non-tariff barriers) Leading global excellence in procurement and supply
The Procurement and Supply Environment Outsourcing Technology • Offshoring/reshoring • 3D printing trends • Big data & Digital Supply • Divestment of assets Chains Public Supply Risk Procurement • Lowering tolerance of risk • Increasing % of Global (Modern slavery / Supply GDP (20%+) Chain Cyber security • Increasingly used for protectionist policies Changing Expectations Mergers and Acquisitions • 48% of CEOs believe CSO will be a boardroom role by • 60-80% M&A fail often due to 2020 Procurement non involvement Leading global excellence in procurement and supply
CIPS Dun & Bradstreet Risk Index • Global supply chain risk index reaches 24 year high at 82.6/100 • Uncertainty from significant U.S trade and policy changes • Europe contributing to rise – Depressed £ adding to high cost of UK imports – Uncertainty with outcome of Brexit negotiations – High rates immigration Leading global excellence in procurement and supply
How Resilient Are You? 83% of CEOs believe their supply chains are not optimal to meet todays demands 81% of businesses experiences at least one supply chain disruption last year 15% believe their supply chain is resilient enough to address external disruptions 60% pay only marginal attention to risk reduction processes Leading global excellence in procurement and supply
Artificial Intelligence • Those implementing this technology are not seeking our permission to implement • Algorithms with intelligence can replace large parts of our roles • Their arrival is raising the intellectual entry point 98% - Bookkeeping, accounting and purchasing clerks 94% - Accountants and auditors 64% - Stock clerks and Buyers 48% - Computer programmers 43% - Economists “To benefit from AI, managers will need 3% - Purchasing to sharpen EI” managers Source: The Future of Employment: How susceptible are jobs to automation, Michael Osborne and Carl Frey, Oxford University Leading global excellence in procurement and supply
Responsible Procurement 45.8m people are forced How many tiers of your supply chain would you to live in slavery ascertain your organisation have visibility of? Third world 20% leakage in government budgets due 57% to fraud More than US $1 trillion are paid in bribes annually 17% 15% Corruption adds 10% to the cost of business and 11% 25% to public procurement in developing countries Every day 6,300 people around the world die from work-related accidents or First Tier only First and Tier Three and Complete Second Tier Beyond Visibility all the diseases only way down CIPS YouGov Survey 2014 Base: B2B senior decision makers whose business has a supply chain Leading global excellence in procurement and supply
The Supply Century We must shape our future, not wait for others “ The best way to decide it to predict your for us future is to create it” Abraham Lincoln Leading global excellence in procurement and supply
Technology and the disruption that it has caused to traditional procurement roles… eProcurement Procurement’s tools have Role is elevated enabled the where business to self serve AI meets EI “everyone’s a buyer” With increased automation comes a contraction of roles Leading global excellence in procurement and supply
From gatekeeper to trusted advisor… CIPS must cross- skill other professions who carry out procurement Elevated role of “Trusted Adviser” and “Guardian of the Standard” Leading global excellence in procurement and supply
The boundaries of the profession stretch, change shape and become blurred… A shift to more trans-disciplinary and cross-functional Today’s working problems are often too difficult to solve by one department Leading global excellence in procurement and supply
Architects of innovation… A new era of “ interpreneurs ” are leading on innovation Procurement and supply professionals are at the juncture where innovation and cash coincide. Leading global excellence in procurement and supply
Procurement and supply is an agent of change… Senior procurement professionals should place more focus on becoming Procurement effective ‘change can take a leaders’ leading role in shaping policy designed to alter behaviour globally Leading global excellence in procurement and supply
The Supply Century We must shape our future, not wait for others to decide it for us • CIPS position paper which manifests latest thinking and implications - October 2016 • CIPS President, Sam Walsh will continue the debate at CEO roundtables next year • Academic research with Aston University early 2018 • Feed in emerging themes in to CIPS Global Standard Leading global excellence in procurement and supply
Thank You Any Questions? Leading global excellence in procurement and supply
Leading global excellence in procurement and supply
Talent Management Case Studies Gerry Walsh, Group CEO Leading global excellence in procurement and supply
Talent Management Case Study: Rank Hovis McDougall – now part of Premier Foods Leading global excellence in procurement and supply
Using the Right Ingredients… • Skills audit to establish gaps • Technical and soft skills • Weakest performers exited from the business • New talent brought in
A Winning Recipe… • Accept that not everyone is the right fit • Take the bold and the brave on your change journey • Beware of the terrorists
Aah now you’re talking… • Invested in training and development of team e.g. CIPS study, transfers, courses such as presentation skills etc • Succession planning was crucial • Built team spirit e.g. go-karting, bowling
Exceedingly Good Results • £20m cost savings in 2 years and successful IPO • Rationalised 13,000 suppliers down to 8,000 • Supply Management Award winner - 2005 • First food manufacturer to be awarded CIPS Certification
Talent Management Case Study: Olympics 2012 Leading global excellence in procurement and supply
A Reminder! Just in case you’ve forgotten what happened the summer of 2012....
Delivering the Games Olympic Delivery Authority (ODA) • £9.3bn for infrastructure and regeneration • Government funded London Organising Committee of the Olympic Games and Paralympic Games Ltd (LOCOG) • £2bn+ for staging the Games • Privately funded
LOCOG defined eight categories of supply Artists, Performance Sports & Events Security Technology Transport & Services Logistics Facilities Venues & Management & Infrastructure Catering
LOCOG Procurement faced a unique mix of challenges 1. Unprecedented set of requirements 2. The immovable deadline 3. Resource-constrained 4. Temporary organisation 5. Supporting the wider aims of London 2012 All under a significant level of media and public scrutiny
Finding a Winning Team • Recruitment is key – attract only the best • Selling in the vision/strategy • Prioritisation of sustainability, diversity and inclusion – attractive to many potential recruits
The Challenge • Attracting people into roles that will be made redundant • Salary and bonus were not the best in the market • Pressure and stress of the roles • Under world media spotlight
The Opportunities • Contributing to the biggest event in the world in 2012 • Learning experience and growth opportunities • Meeting glamourous people • Being a member of a great team
Development • Performance review system • Training and development programme • New projects e.g. sports • Helped prepare team members for life after LOCOG
Results • Cost savings of £118 million • Revenue generation of £40 million • Major contributor to sustainability, diversity and inclusive agenda • On time, right specifications and favourable to budget
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