People in Procurement – News and Comment

Procurement sharpens up its act to take lead on recruitment

Posted on 19. Jun, 2009 by .

As unemployment continues to rise across Europe procurement is playing an increasingly important role in labour recruitment – an area that is being scrutinised more heavily than at any time in generation.

The latest figures from the Office for National Statistics in the UK showed that unemployment had risen by 232,000 in the three months through April, and with a similar pattern emerging in Europe, procurement is being called on across the continent to manage a recruitment process that, for many companies, still represents one of their top three cost bases.

And according to Matthew Sanders, CEO of recruitment specialists de Poel consulting, procurement’s role is likely to gain in prominence – even as Europe begins to emerge from recession – as firms look to increase their use of temporary, rather than permanent staff. 

“As we come out of recession temp spend goes up and we’ll probably see this continue for, possibly, the next three or four years,” Sanders told Procurement Leaders. 

“Organisations don’t want to be seen as hiring and firing and while there’s an element of uncertainty in the economy then companies will hold off from embarking on major recruitment drives.

“Procurement is becoming far more actively involved in the recruitment process because spend is being scrutinised more closely than ever. CFOs are looking to get a firmer grip on what they spend and because procurement has a better grasp on spending then they’re taking the lead in front of operations and HR (human resources).

“Ten years ago procurement was a fairly blunt instrument now they’re a lot more commercially savvy – they’re now leading on recruitment in 90% of our contracts.”

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Procurement salaries on the rise

Posted on 05. Jun, 2009 by .

The salaries of US-based supply management professionals increased by almost 7% in 2008 over 2007 levels, according to Institute of Supply Management research. 

In its annual salary survey, the US institute received more than 1,000 responses and found that the average salary of a supply management professional in 2008 was $98,117 – although a discrepancy in gender pay was clearly seen with the average male salary coming in at $106,679 compared to the average female salary of $84,090. 

Chief procurement officers, or the equivalent, earned an average of $256,560, while vice presidents earned $201,338 and directors $131,204. Managers, meanwhile, earned $93,132 and experienced supply management professionals could expect to be paid $69,780.

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Media giant adds procurement expertise

Posted on 15. May, 2009 by .

Media agency, Omnicon, one of the largest advertising agencies in the world, is appointing two senior procurement experts to help in its own negotiation processes.

The move is a significant admission by Omnicon of the value that procurement can bring to the business following years of being on the receiving end of procurement teams who rightly see advertising and media buying as a rich hinting ground for savings.

“Procurement will play a role in helping our negotiators figure out ways to save money on media spends,” Page Thompson, the North American CEO of Omnicom told AdvertisingAge. “The rules are no longer the same, and procurement is becoming a bigger part of the process. Managing the investment costs that we oversee for all of our clients is the most important things we do and clearly this is an opportunity to change the rules of the game and bring a new dimension and perspective to our negotiating teams.”

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Consumer confidence hits all-time low

Posted on 11. May, 2009 by .

Despite murmurings of a recovery, a new survey by the British Retail Consortium suggests that confidence among UK consumers is at a record low, with concerns over job prospects in particular a cause for concern.

Almost 90% workers are worried about their job prospects over the next 12 months, according to the survey, which also revealed that just 13% believe the UK will pull out of recession within the next year. Half of respondents said their finances were in poor shape while almost half said they had to reign in their spending. 

“This survey suggests the economy’s climb back to growth will be harder and slower than the government claims,” Stephen Robertson, director general of the BRC, told the UK’s Daily Telegraph. “Only 13%  of people believe we’ll be out of the recession by this time next year. Six months ago nearly one in five thought the recession would be over by this Christmas.

“Customers and retailers will go on suffering for a good while yet. It’s business that will get us out of recession and retail is a key driver of growth. That means every time a minister thinks up a new idea that will impose regulations and costs, they must ask themselves – is this extra handicap really necessary now?”

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20,000 procurement staff needed at Pentagon

Posted on 07. May, 2009 by .

The defence department of president Barack Obama’s plans to create 20,000 new procurement roles to help revolutionise how it will buy more than $100bn worth of weaponry each year.
 
The news is part of a wider transformation of US defence procurement, which includes pledges to tie contract fees more closely to performance and to enter into long-term deals only when “real, substantial” savings are evident for taxpayers.
 
The developments are in stark contrast to the defence procurement strategy of Obama’s predecessor, president George Bush, and were announced by deputy defence secretary William Lynn. He said that the jobs would be created over the next five years, and that 9,000 of the new roles would be created at two Pentagon agencies charged with auditing and managing contracts for all spend.
 
“This unprecedented, five-year planned workforce initiative will result in a properly sized, well-trained, capable and ethical workforce,” Lynn told the Washington Post. The new jobs will redress the balance between permanent employees and consultants to 147,000 full time and 41,000 consultancy staff, to create an integrated staff of 188,000.

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Nestle sourcing university gets results

Posted on 16. Oct, 2008 by .

Swiss food giant Nestle has successfully put 520 of its buyers through dedicated procurement training using a new initiative known as the Nestle Procurement University.

Speaking at the Procurement Leaders Forum 2009 in Amsterdam, Dr Antonia Wanner, head of procurement excellence at Nestle, shared the initiative with delegates just a year into the new initiative.

She said there have already been four major benefits of the programme. First, and perhaps the most obvious, is a marked improvement in qualified sourcing professionals which provide a real value proposition to the group.

Second, is an improvement in time effectiveness with, for example, the time to establish procurement strategies having reduced significantly. Third, the international scope of the training initiatives improve consistency of sourcing strategies around the world and finally, it allows the practical transfer of knowledge, with subsequent measurable impact on procurement performance.

However, Dr Wanner said that the ultimate measure of success will be internal stakeholder research, something which she is currently in the midst of.
Swiss food giant Nestle has successfully put 520 of its buyers through dedicated procurement training using a new initiative known as the Nestle Procurement University.

Speaking at the Procurement Leaders Forum 2009 in Amsterdam, Dr Antonia Wanner, head of procurement excellence at Nestle, shared the initiative with delegates just a year into the new initiative.

She said there have already been four major benefits of the programme. First, and perhaps the most obvious, is a marked improvement in qualified sourcing professionals which provide a real value proposition to the group.

Second, is an improvement in time effectiveness with, for example, the time to establish procurement strategies having reduced significantly. Third, the international scope of the training initiatives improve consistency of sourcing strategies around the world and finally, it allows the practical transfer of knowledge, with subsequent measurable impact on procurement performance.

However, Dr Wanner said that the ultimate measure of success will be internal stakeholder research, something which she is currently in the midst of.

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India taking action to address BPO talent shortfall

Posted on 17. Sep, 2008 by .

India is launching a new generation of BPO schools, in an attempt to keep up with the soaring demand for outsourcing in the country.

As many as 15 Indian BPO firms, including Genpact and Nasscom, are set to join the initiative, which will look to train over 100,000 people in the next two years.

Nasscom president Som Mittal, said that the explosive growth of the BPO market, and the move from vanilla technical support services to supply chain and high-end analytics, dictated that there was now a talent shortfall that needed to be addressed.

“The world over, even undergrad level people are trained for vocation. In India, on the contrary, even graduates are confused about what career to take up,” said Mittal.

“People are increasingly realising that BPO is a serious career and offers limitless growth opportunity. It’s high time our academia revised the curricula and syllabi to include BPO courses.”

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Procurement “synergies” key to HP success after massive jobs cull

Posted on 16. Sep, 2008 by .

IT giant Hewlett Packard looks set to shake-up its procurement operation after announcing plans to slash almost 25,000 jobs worldwide.

According to a statement on the company’s website, HP is preparing to implement a three-year restructuring programme aimed at saving the company up to $1.8bn annually.

The majority of the job cuts will come in HP’s Electronic Data Systems (EDS) arm – the company HP bought for $13.2bn last year.

The two companies currently have a combined employee count of 320,000, and HP believe the new program will “streamline the combined company’s services businesses.”

“In addition to making changes to its global workforce to better serve its services customers, HP has identified synergies in corporate overhead functions, such as real estate, IT and procurement,” it added.

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Procurement key for new public sector strategy

Posted on 11. Sep, 2008 by .

The UK government has launched a £150m strategy aimed at creating one million new “green collar jobs”.

The new initiative, which aims to help manufacturers take advantage of the low-carbon economy, will see the opening of a new technology centre and two new Government departments as part of an increased focus on public sector procurement.

“We want to support innovation in UK manufacturing by maintaining a world-class research and development infrastructure, through intelligent use of government procurement and regulation to stimulate markets and the growth of innovative business, and to build world-class skills,” said skills secretary John Denham.

The Confederation of British Industry (CBI) welcomed the strategy but warned that procurement had a huge role to play if it was to be a success.

“Determining how UK manufacturing can best take advantage of the challenges and opportunities of the 21st century was a much-needed exercise,” said CBI chief economic adviser, Ian McCafferty.

“But to achieve success the government will also need to put in place a coherent procurement strategy that enables industry to invest with confidence for the long term.”

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