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Global CEO blog

Welcome to the Global CEO (UK) blog. Its aim is to draw attention to developments and ideas in the world of procurement and supply management and in the work of the profession’s Institute.

We change the blog monthly, and I would welcome your comments personally on ceoblog@cips.org

David Noble FCIPS


The next generation

What goes up must come down
The volatility of the global economic markets is still keeping us on our toes.  Just as we are lulled into a false sense of near-security, there are always a few surprises in store.
The worst global recession for a generation appears to be receding into history but it’s a patchy recovery. Though Germany is soaring ahead, France is still stagnating and Chinese manufacturing growth has dropped for three months now. This is the background landscape in which supply chains are operating. Add political, environmental and social factors and it’s a capricious and unpredictable mix.
But data shows that risks to supply chains are actually falling.  This is certainly the result of our findings in Q2 of the CIPS Risk Index (CRI) published this week. For the first time in 18 months, the level of global risk has actually decreased. It is a truth universally acknowledged in our profession and now increasingly amongst governments and businesses that the vulnerability of supply chains is increasing and the number and intensity of the problems are multiplying
So, to see that risk has actually decreased is an attention-grabbing development that deserves further investigation. The index has measured risk decreasing for three consecutive quarters since the financial crisis began in 2007. It tracks all the impacts of economic, political and social factors and showed a fall to 78.1 in Q2 this year, compared to the high of 82.4 in Q3 of 2013. The stability in sub-Saharan Africa appears to have been instrumental in the reduction of risk, along with Kuwait’s achievements in infrastructure projects bringing a level of security in the Middle East which still remains one of the most troubled regions in the world.
So though the immediate future for supply chains may be promising, there are possible storms ahead. No one is yet certain how the Ebola crisis will pan out. Could there be a pandemic on the horizon along the lines of the flu crisis a few years ago and will the war of sanctions between East and West with Russia at its core, tip the balance back into instability. As global recovery is taking hold, there may soon be stagnation and further threats to supply chain health, if these fears become a reality.Catch up with my column in Supply Management magazineThe next generation

 

The business world in the next decade is going to be a radically different place. Development into new business models will obliterate old business mores as well as transforming HR practices when it comes to recruiting and retaining talent. All controlled and directed by the next generation of the workforce like never before.

A report out earlier this year from pwc highlighted the wide-ranging impact of the millennial generation (born between 1980 and 2000) and the radical change to the workplace landscape. Though at first glance this may seem like the same old story for every generation, the millennial generation is quite different. As numerous as the baby boomers who are now reaching retirement age, the millennials are motivated by different needs and aspirations and will take the biggest responsibility in caring for our ageing population. In a few short years, they will account for 50% of the global population.

In the workplace they already have power. Their use and understanding of technology has no precedent.  They will be imaginative in their request for benefits packages - no longer accepting the same as everyone else. Nor will they operate comfortably in corporate structures but will expect their careers to be interesting, flexible and the rewards quick and fulfilling. They will put the hours into additional study to help make all this happen and they will expect regular encouragement and their work to ultimately be worthwhile.

These young people are spurning the accumulation of wealth and possessions choosing instead experiences as their motivation and the fulfilment of their personal needs. The good of the organisation they work for will be secondary and they will move from job to job and chase the best rewards and most gratifying work life.  As a result, they will be larger contributors to the ‘sharing economy’ and will think nothing of renting out rooms, cars or even personal items such as clothing or electrical goods and are already developing a new socio-economic system which removes central control and places it into the hands of ordinary people. Not only is this a new business model, it challenges the foundations of capitalism itself as trust replaces contract and collaboration replaces possession.

Start-ups no longer have to go cap in hand to banks to get the funds they need, when there’s crowdfunding. There is more recycling and upcycling than ever before and a circular economy which focuses on good design and reuse of materials rejecting the old linear model of taking, making and disposing, creating waste and limiting the good use of our natural resources.

Running any kind of business you need to learn from the experiences of the past, act in the present with an eye on future opportunities on the horizon. This looks like a completely different world to the one we’ve been operating within in the last decade where individuals themselves can choose how to live.

New partnership for CIPS members

The Chartered Institute of Procurement & Supply (CIPS) has partnered with dun & bradstreet (D&B) the leading provider of business information for credit risk management in the area of cross border risk, to provide CIPS members with targeted analysis for supply chain management.

Following the launch of the CIPS Risk Index with D&B in 2014, CIPS is developing more insights and support in the areas of risk management. More than 1000 companies rely on D&B to provide meaningful insight to help build quality business relationships with customers and stakeholders and a dedicated area on the website offers CIPS members access to this valuable data.

The dedicated knowledge area includes insights such as the Risk Index report  and D&B’s highly-skilled analysis of developments in global business. With details of videos, webinars, case studies, events and other sources of information, CIPS members receive additional support as part of their membership at no extra cost.