Setting the standard - 19 December 2008

A new European standard for purchasing management has been launched by CEN, the European Committee for Standardisation. The document, reference CWA 15896, can be found at www.cen.eu  The standard has been developed by a working party of European purchasing associations, in which CIPS took a lead role.

Purchasing associations can now certify the purchasing performance of organisations against the new standard, and have the option of using the CIPS Certification service as the assessment tool. CIPS is helping to develop guidelines for European associations to use when measuring client companies against the standard, to ensure we all use the same type of assessment criteria.

And finally …..

As this is my last blog of 2008 I’d like to take this opportunity to wish members and other readers a very happy Christmas. By all indications 2009 is not going to be a walk in the park for any of us. The need for smart purchasing has never been greater, both to get through the lean years and to be positioned for competitive growth immediately after. So 2009 will be a year of particular opportunity for our profession. I hope it is one of peace and prosperity for you.
Impact of professional bodies - 12 December 2008

Lord Young, Under-Secretary of State for Skills, spoke at the launch on Tuesday of a major new report on the impact of professional bodies on the UK economy. Commissioned by a group of eight UK professional institutes including CIPS, the report highlights the positive contribution qualified professionals make to the country’s financial well-being and quantifies the effect of professional qualifications on career opportunities and earning potential.

There’s general recognition across government and among employers that high level skills are essential to ensure the UK’s future competitiveness. Professional bodies play an important role in delivering and supporting these skills through the promotion of lifelong development. CIPS and its partners are lobbying the UK Commission for Employment and Skills to create a Professional Skills Council so that we can work with government and industry to meet the increasing demand for high level business skills to drive economic recovery.

Charitable intentions - 12 December 2008

Charities are bracing themselves for a tough winter, with demand for their services rising at a time when income from investments and donations is falling. Recognising that good procurement practices can help them make the most of their income, more charities are providing P&SM training for their staff and creating senior procurement posts.

It’s a growing segment in the CIPS membership and two of our current Council members hold senior posts with household name fundraisers. In response, CIPS has set up a Charities Procurement Group to help practitioners share experience and persuade charities that qualified professionals can make their funds go further.

Breaking down barriers - 28 November 2008

I recently attended a roundtable of European CPOs and procurement institutes held in Paris by Procurement Leaders. The discussion was around whether there should be a worldwide standard for procurement. On the face of it there should be. Not only is good procurement vital to success regardless of location, but sourcing is a global activity. 

Big corporates increasingly provide their own skills development through a corporate academy and tailor it to corporate goals and contexts. But this does not reduce the need for consistency around the world, nor for qualifications that are recognized on all continents. 

CIPS qualifications are in use in 150 countries and we see lots of advantage in P&SM institutes working together to develop a common standards and mutual recognition.

Supply chain gateway - 28 November 2008

Excellence in supply chain management is a key driver in the oil and gas business. It’s vital that oil companies attract and retain skilled practitioners to ensure the long term sustainability of the industry and the global supply chain it supports.

In partnership with Oil & Gas UK and in conjunction with OPITO, the Oil & Gas Academy, CIPS has launched a web-based education pathway, the Supply Chain Gateway. Developed specifically for practitioners in the oil and gas industry, the Gateway is based on the CIPS ladder of qualifications. Offering pathways at a range of levels, it will help practitioners improve their skills and develop their careers in supply chain management.

The Gateway has attracted government and trade association support, underlining the importance to the sector of developing a highly skilled and well trained workforce.

For more information, go to www.opito.com/supplychaingateway

Carbon Management - 21 November 2008

The Climate Change Bill, which comes into force early next year, will set a legally binding target for reducing UK carbon dioxide emissions by at least 26 per cent by 2020 and at least 60 per cent by 2050, compared with 1990 levels.

How organisations gear up to meet this challenge will influence how we do business for years to come. Some companies are already getting ahead of the game by basing their buying decisions on carbon management targets.

One utilities company recently awarded a stationery contract to a supplier making a £250k saving with a massive carbon reduction, in preference to an alternative supplier offering a £400k saving but only half the carbon reduction. Within two years they expect this to be their policy for all purchases. How long before it becomes the industry norm?

Credit Cover Threat - 21 November 2008

A less reported consequence of the economic downturn is the withdrawal of credit insurance cover. In the past week it’s been reported that more than 12,000 UK suppliers have had their credit insurance cover withdrawn by insurers. The total number who have had their cover withdrawn, or refused cover for new business, is believed to be much higher.

This could have a big impact on supply chains. Not being able to obtain cover against bad debts or late payment and secure cash flow has a significant impact on business confidence. With cash flow and availability of credit already a major problem, many suppliers will be asking themselves if they can keep on supplying to high risk customers.

Make sure you talk to your suppliers about this issue and work with them to maintain cash flow and continuity of supply.

Celebrating green procurement - 14 November 2008

This week I had the privilege of presenting the 2008 Mayor of London’s Green Procurement Code Awards. The awards recognise outstanding achievements in green procurement but they’re much more than a pat on the back for environmentally-conscious companies.

Green – at CIPS we prefer to call it ‘responsible’ - procurement is not just about making us feel good about ourselves, it’s a commercial necessity. Yes, it’s great for the planet to reduce our carbon emissions and recycle our waste, but there are important long term business benefits too. It’s about securing sustainable supply chains and using sourcing decisions to support local communities and develop global markets.

Green procurement is a key driver of commercial survival and these awards are a great way to spread the message.

For more information go to www.greenprocurementcodeawards.co.uk 

Get it paid - 14 November 2008

Managing cashflow, especially for small businesses, is becoming a real challenge as the recession begins to bite. Borrowing remains difficult and many organisations SMEs sell to are lengthening their payment terms.

CIPS, along with a group of other professional bodies and business organisations, is supporting a new series of guides designed to help companies survive the downturn. Produced by the Institute of Credit Management with the Department of Business, Enterprise and Regulatory Reform and badged by CIPS, the ‘Managing Cashflow’ guides offer straightforward advice and practical tips for keeping afloat.

Take a look at www.creditmanagement.org.uk/berrguides

Reaching across boundaries - 07 November 2008

Whatever your politics, there’s no doubt that the election of Barack Obama to the most powerful office in the world is going to have global consequences. The USA’s first African-American president was voted in on the promise of change and the world will be watching to see how this unfolds.

With 50,000 members in 150 countries, at CIPS we recognise that we are now a truly international organisation. We have just appointed our first President from outside the UK, Bola Afolabi, the senior procurement professional in the Nigerian National Petroleum Company. Under Bola’s theme for his presidential year ‘leadership without boundaries’, we will be focusing on developing the leadership potential of procurement practitioners worldwide, regardless of ethnicity, gender, age or cultural barriers.

Closer to home - 07 November 2008

This week I spoke at the SOPO (Society of Procurement Officers in Local Government) annual conference in the West Midlands. The landscape in local authority purchasing is changing steadily with a drive for greater professionalism, increased dependence on external service providers, complex and sometimes conflicting policy objectives, and the legal and political imperatives for transparency.

CIPS has around 6,500 members working in the UK public sector. Of these, just over 1,500 are employed in local government. Their challenge is to ensure that local authorities achieve best value for their communities. The conference highlighted the growing momentum for collaboration as well as showcasing some of the best procurement initiatives round the country.

Running the risk - 31 October 2008

If your organisation lacks a procurement risk management strategy you’re not alone. A recent survey suggests 70% of European companies have no procedures for assessing and managing supply risks. Yet supply chain vulnerability has been identified as one of the four key global business risks for the next decade.

To survive the current economic downturn and be ready to move fast when the markets recover, organisations have to be able to handle whatever gets thrown at them to remain competitive. To help managers re-evaluate their organisation’s risk appetite and improve contingency planning, CIPS has just launched a new Masterclass which takes a fresh look at the whole topic. Visit www.cips.org/trainingevents/masterclasses for more details.

Good governance - 31 October 2008

Business commentators have been asking why our regulated financial institutions appear to have been able to operate with scant regard for good governance. It’s likely that we will see stricter controls in future, with more checks and greater transparency.

CIPS’ Council has just completed an audit of its own governance arrangements and the results have been illuminating. While there’s not much wrong with our structure and processes, where we have been given a ‘can do better’ is around how we communicate what we do, not just between the various parts of governance, but with the wider membership.

We’re looking at how we can improve our delegation, monitoring and reporting processes and clarify where, and how, decisions are made, to ensure our members can continue to have full confidence in the body they elect to manage CIPS on their behalf. 

Australasia - 24 October 2008

Last week I visited CIPS Australia. With its executive team of 9 and a membership approaching 3000, and led by an enthusiastic Steering Group of respected procurement leaders, CIPSA is having a visible impact. Nearly 700 attended the 4th Annual Conference with 50 organisations exhibiting in the accompanying Purchasing Exchange. Speakers from the platform and the floor displayed the excitement and confidence of a profession fast finding its feet.

As in UK, the government sector is setting a keen pace. The incoming Chairman of CIPSA, John Tondut, Executive Director of the Office of Government Procurement in Western Australia, is a key figure in the APCC, a consortium of governments covering Australia and New Zealand working together to ‘professionalize’ public sector procurement. Whilst there I sat in on productive talks with the Papua New Guinea government who are seeking a partnership with CIPSA towards the same end.

Web 2.0 - 24 October 2008

Thanks to new information and communication technologies, geography no longer puts boundaries on collaboration. With membership now close to 50,000 in 150 countries, the Institute is re-examining its role and modus operandi.

If we are to provide members with the knowledge and information they need, and enable the profession to find, develop and share the latest thinking in P&SM, we need to make greater use of web-based collaboration and develop our own Wiki-culture. Whether it is through the transforming power of search, community-building activities, the development of micro-markets via blogs and podcasts or developing a self-service element to our education offerings, CIPS is gearing up to lead this transformation. 

PMIs influence interest rate cut - 17 October 2008

There’s good evidence that the CIPS Purchasing Managers’ Indices had an influence on the Bank of England’s recent decision to cut interest rates. All three PMIs (economic surveys covering the manufacturing, services and construction sectors) showed record reductions in business activity in September, prompting commentators to predict a rate cut.

After holding rates steady for six months the bank’s Monetary Policy Committee has responded with a 0.5% cut to boost business confidence.

The bank’s Deputy Governor, Charlie Bain, recently told CIPS that the PMIs are an important source of market intelligence. In particular, with all eyes currently on the financial sector, the services PMI is particularly valued. It’s a strong endorsement of our profession that procurement’s perspective on the state of the market is considered a reliable indicator in these turbulent times.  

Working with CIPS - 17 October 2008

Those members who serve on our Board and Council, support the branch network or contribute to the development of procurement knowledge, are an immensely valuable resource. Without them, we simply couldn’t deliver.

So, one thing that’s really important is to make the most of the time and expertise these volunteers bring to CIPS. Part of that is ensuring we help them prepare for their roles. This weekend sees the induction of the new Board and Council members taking up their posts on 1 November.

These inductions aren’t just about imparting information, they’re about helping members get as much out of working with CIPS as they put in: access to networks, influence on the institute’s future direction and first hand knowledge of the latest developments at the heart of the profession.

If you’d like to find out more about working with CIPS as a volunteer, please contact margaret.west-burnham@cips.org 

The winning formula - 10 October 2008

This week finds me writing my blog from the other side of the world. I’m here in Melbourne to speak at the 4th CIPS Australia Annual Conference and meet the members of the CIPSA team.

Since we started up operations in Australia in early 2005, CIPSA has made rapid progress and its fast growing membership base now reaches as far as New Zealand, Fiji and Samoa.

Procurement professionals here are embracing the CIPS message but it’s clear our real challenge is to make sure procurement is well understood at board level. We can only do this by convincing CEOs that procurement done well can deliver organisational success. With its theme “The Winning Formula”, the conference aims to help practitioners win the argument for procurement in their organisations.

Talent spotting - 10 October 2008

When delegates at this week’s Premier Conference were asked to identify the main challenge currently facing procurement, 70% cited the lack of quality people entering the profession. To turn this around we have to make procurement the profession of choice for our brightest young graduates and do more to attract talent and nurture the leaders of tomorrow.

At CIPS we are handling more and more enquiries from young people wanting to learn all about the profession and what opportunities there are to get to the top. Together with Supply Management, we have produced a comprehensive career guide to answer all their questions, aimed specifically at students in higher education.

The guide is full of useful information about the wide range of businesses they could work in, how to get qualified and – most importantly – how much they can expect to earn. Take a look at the on-line student guide. 

Countdown to the conference - 03 October 2008

Just a few days to go to the CIPS 2008 Premier Conference at the Sofitel, Heathrow Terminal 5, and the team is busy putting the final touches to an event which this year has a really innovative approach to helping delegates get the most out of the experience.

For a start, it’s much more participative in style and delegates can put together their own programme that includes the opportunity to have 1-2-1 discussions with top business leaders.

I’m really looking forward to the ‘Evening with Willie Walsh’, which kicks off our event. Willie, CEO of BA, will be in conversation with Dick Russill on the challenges of running one of the world’s best known airlines at a time when the industry is under the greatest pressure it’s ever experienced.

We've got some terrific speakers, too, for the keynote sessions on our conference theme 'Leadership in the 21st Century'. To pick out just two, John Armitt will be talking about his role as chairman of the Olympic Delivery Authority, and David Nussbaum, CEO of WWF-UK, will explain his mission to try and halt the impact we humans are having on the world we live in. 

We’ve got a great conference at a great venue –  I look forward to seeing you there. 

An international perspective - 26 September 2008

I am writing this in Amsterdam where the International Federation of Purchasing and Supply Management (IFPSM) is holding its bi-annual meeting. Round the table are CEOs or Presidents of 40 institutes or associations for procurement. Half of these are European.

Last week I announced a new structure for the Executive Team for CIPS which from now will include an International Director. CIPS is not only the biggest procurement institute in the world, but one of the few whose qualifications have currency in all continents.

Supply management is a global activity and practitioners need support with global reach. Partnership with sister associations will likely play an increasing part in CIPS’ continued growth and relevance.

Hedging your bets - 26 September 2008

As commodity prices continue to rise, organisations are looking to their procurement teams to protect them from spiralling costs. One of the techniques buyers can consider is hedging, but this can be a high-risk strategy unless the potential pitfalls are well understood.

UK companies lag behind the rest of the world in this respect. One recent study found that only a third of the UK companies surveyed had a hedging strategy, compared with a global average of over 50%.

Many major gas and electricity contracts come up for renewal in October and the CIPS Energy Committee and professional practice team have been busy giving guidance to members about their options. Their recommendation is always to seek specialist advice before taking the hedging route.

Home or away - 19 September 2008

What will our supply chains look like in future? Will we continue to source our supplies from the other side of the world to reduce costs or will we build local partnerships and minimise our carbon footprint?

This was the dilemma debated by Professors Richard Lamming and Martin Christopher at the CIPS Fellows’ autumn event held in London this week. CIPS Fellows include many of the most senior and respected figures in procurement.

If you are an experienced MCIPS interested in Fellowship, please contact fellowship@cips.org for information.

Invest in the best - 19 September 2008

The top issue facing leaders across Europe is not the carbon footprint but the search for talent. This is the finding of a survey of P&SM institutes carried out by the European Committee of Procurement and Supply (ECPS).

Graduate schemes can be a powerful tool to recruit and retain young business talent and CIPS works with a number of organisations to support schemes leading to CIPS professional qualifications. Last week saw the publication of the first Supply Management/CIPS career guide to procurement which will be sent to careers advisors around the country.

Earlier this week I spoke to the latest intake for the Office of Government Commerce’s graduate scheme. These young high-flyers have beaten fierce competition for a fast-track career in central government and will be preparing for the CIPS Graduate Diploma in two years' time.

Cabinet Secretary Gus O'Donnell also took part in their induction day and underlined the priority which professional procurement holds in today's Civil Service.

Purchasing intelligence - 12 September 2008

The Financial Times gave front page coverage last week to September’s Purchasing Managers’ Indices – economic indicators on manufacturing, services and construction published monthly by CIPS/Markit. Amid all the talk of recession the PMIs are attracting a lot of media attention. Procurement managers are uniquely placed to know what is actually happening, inside and outside their business, up and down the supply chain.

It’s not just the press who are taking notice. Copies of the PMIs are issued to members of the Bank of England’s Monetary Policy Committee. September’s PMIs show a worsening picture in all three sectors, though the decline eased for the first time since the Spring. The MPC held interest rates at 5% again, but for how long?

Knowledge is power - 12 September 2008

Like any SME, CIPS is not recession-proof. We must make sure we can go on investing in member services and raising the profile of procurement. This week the Board put the final touches to the business plan for 2008/09. We’ve set ourselves some stretching targets including faster membership growth in the UK. CIPS is already the biggest procurement association in the world with over 46,000 members in 150 countries. But we know that there are many practitioners out there who haven’t yet got the message. We are determined to make membership of CIPS a ‘must have’ for anyone who wants to get ahead in our profession.

An important new member benefit was launched last week. We have teamed up with EBSCO to offer a virtual library of top management and academic journals, 3,000 magazines, 1,100 country economic reports, 5,000 industry reports and 10,000 company profiles.   

Celebrating excellence - 05 September 2008

Among all the conferences, dinners, seminars and forums that the Institute organises in UK and elsewhere, the CIPS/Supply Management Awards dinner has to be a highlight of the CIPS calendar. Held this Thursday at the Grosvenor House in London's Park Lane, the Awards once again displayed and rewarded excellence in our profession.

What made it special was the capacity audience of 1200 practitioners at all levels from all sectors, many of them in whole work teams, setting aside for once their targets and deadlines to celebrate and to party. For all of us the success of the winners is a reminder that what we do in procurement is really important to the success of every business and the effectiveness of every public service.

This year we had the highest ever number of entries - and are more than ever grateful to the judges' panel for their Herculean effort. Altogether 11 team awards and 2 individual awards were presented.

University challenges - 05 September 2008

Earlier in the week I had the pleasure of speaking at the AUPO (Association of University Procurement Officers) conference at the University of Bournemouth. The key aim of the conference was to develop a leadership strategy to ensure CPOs in the sector are ready to meet future challenges.

Last October the government pledged to significantly increase investment in the sector but said this would be dependent on institutions achieving savings of £1.5 billion between now and 2011. Of that, procurement will be expected to generate £75 million worth of savings with another £75 million coming from increased use of shared services.

CIPS has around 600 members in the sector, half of whom are AUPO members. We have agreed to work more closely together to develop the next generation of procurement leaders and increase recognition – particularly among Vice-Chancellors and university finance directors - of the contribution professional procurement makes to the quality of higher education. 

Going for Gold - 29 August 2008

Team GB’s Olympic triumphs are focusing attention on the 2012 Games in London. Like all major projects success will depend on effective and professional procurement, in this case amounting to an estimated £9.3 billion.

CIPS has been working with the Olympic Delivery Authority for some months now following their application for the Institute’s Certificate of Excellence in Purchasing Policies and Procedures.

The certification service enables public and private sector organisations to benchmark their procurement processes against a standard of excellence set by the Institute. Altogether 90 companies, agencies and government departments have achieved CIPS Certification.

The ODA’s successful transition onto that list of top performers was celebrated at its own medal ceremony on 13 August.

CIPS Premier Conference - 29 August 2008

Now is the time to book places for you and your team at the profession’s Premier Conference which takes place on 7 and 8 October at the new Sofitel next to Europe’s most prestigious airport terminal, London Heathrow Terminal 5.

The conference theme is “Leading in the 21st Century”. We have a new venue, a new time of year, and an innovative programme which is flexible to the needs of each delegate, and which includes the opportunity for a 1-2-1 with a range of procurement leaders.

Highlight of this year’s programme is “An Evening with Willie Walsh”, the CEO of British Airways, on the evening of 6 October.