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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

Networking with peers

I’ve just returned from another CIPS UK annual conference and this year’s discussions were nuanced in ways not experienced before. Apart from the atmosphere of a new venue in Bishopsgate in London, the subject of standards, ethics and innovation was bang on, and reflected what evidently some businesses desperately need.

The foyer was buzzing with insights and thoughts into the latest supermarket supply chain debacle, this time involving Tesco and the subsequent suspension of senior officials. Though the full detail will not be clear for some time, this is just another instance that the message needs to be driven home that transparent, ethical supply chains are not a luxury but are crucial. The failure to be vigilant has dreadful consequences.

But with this backdrop of failure, at the conference it was good to hear from companies that had really taken the issue of ethics and sustainability to heart and were able to offer more positive stories of the success of good practice.

Licensing the profession was still high on the agenda and Tesco’s troubles only served to highlight this continuing need. I announced that The United Nations is sponsoring a multi-agency event in Washington DC, in the US, to get licensing across borders. This is a huge opportunity for CIPS to get that message across to those organisations in the world that have the influence to stand up and say it’s a good thing.

We also announced the development of schools of excellence supported by the CIPS Foundation and we wait with bated breath on the announcement around Chartered Status.

Last but not least, we announced that the Global Standard for Procurement and Supply has now been developed into an interactive version. Launched earlier this year in hard and soft copy, this comprehensive competency framework will enhance organisational and individual performance in the profession as it offers a benchmark for all levels in the and can be used 

The Global Standard will be revised annually: http://www.cips.org/en/Careers/Global-Standard-for-Procurement-and-Supply/

Our conference season comes at the end of our financial year so it was good to reflect on what had happened in the year and what is next to come. Next conference stop – Australia.

New knowledge partnership

As part of our campaign to offer support to members at various levels of expertise and seniority in the oil and gas industry, I’m delighted that we have a new knowledge partnership with Total Gas & Power.

Through this partnership our global membership has a range of industry-specific resources including knowledge, market reports and access to expertise from one of the leading energy companies in the world. TOTAL is one of the top five international oil and gas companies; they operate in over 130 countries worldwide.  

Though good procurement and supply management principles are relevant across all sectors, sometimes sector knowledge is particularly valuable as each industry has its own set of challenges. This is a boon to our members working in the energy industry as we expect to offer more knowledge opportunities in the coming months.

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 magazine