© Andrew Aitchison/In pictures via Getty Images
© Andrew Aitchison/In pictures via Getty Images

News review of 2020 - part two

Will Green is news editor of Supply Management
29 December 2020

July

Investing time in developing proper business relationships was the key lesson of Ian Harnett’s career in procurement.

Harnett, who retired from his role as executive director of human resources and global purchasing at Jaguar Land Rover at the end of July, said it was a tricky skill to teach because it required give and take.

“It’s a difficult skill to pass on because you’re asking people not to want to win all the time – you have to lose some of the time,” he told SM.

Meanwhile, the World Federation of Advertisers (WFA) said marketing departments were under pressure to reduce spend due to the coronavirus pandemic but procurement needed to be “recognised for delivering a wider set of benefits than mainly cost saving”.

WFA research found the metric most used by procurement teams, which was not shared with marketing colleagues, was cost reduction, followed by cost avoidance.

James Taylor, global procurement director, media, digital and consumer planning, at drinks company Diageo, who was involved in the research, said: “Procurement teams need to stop using words like ‘stakeholder’ when referring to internal colleagues and instead talk in joint performance language around shared goals.”

Supermarkets acted after an investigation found monkey labour being used in the production of coconut milk.

Morrisons suspended supply from a brand and Waitrose and Co-op committed not to sell products sourced from monkey labour following animal rights organisation PETA’s undercover investigation.

PETA visited eight farms in Thailand and found monkeys were chained or confined to cages and forced to climb trees and pick coconuts for export around the world. The group also discovered four “monkey schools” and a coconut-picking competition.

August

Supply chain lessons from firms that best weathered the 2008 financial crash could help businesses be more resilient in the face of coronavirus, found a report.

The report, from the Association of Supply Chain Management, said the firms most resilient to the 2008 recession were:

• leaner, with lower levels of working capital and less inventory,

• had a variable cost structure,

• and had early warning of the impending downturn and were able to respond more quickly.

Researchers used data from more than 1,800 medium and large public companies across the extraction, manufacturing, communications, trade, and services sectors between 2005 and 2010 to determine the performance of each supply chain.

BrewDog announced it had become carbon negative by offsetting its carbon emissions from its own operations and supply chain.

The brewery said from August 2020, it would be removing twice as much carbon from the air each year as it emits from its direct operations, energy purchases and supply chain. 

Offsetting has been achieved through funding projects to protect woodlands and peatlands, while BrewDog said it would plant 1m trees over 2,050 acres of land in the Scottish Highlands by 2022.

Gartner said monitoring suppliers’ financial health was pivotal for proactive risk management, but many organisations struggled to do it effectively.

The research company found many firms lacked solid data and processes for monitoring supplier financial health, which in turn could cause “irreparable damage to the supply chain”.

September

Shocking facts emerged in the Grenfell inquiry, including that potential cost savings and miscalculated budgets contributed to the decision to use combustible cladding in the refurbishment of the tower in 2014.

Ray Bailey, managing director at Harley Facades, told the inquiry that combustible cladding should be “banned immediately” and “things need to change” with regard to building and fire safety regulations.

In another development, Jin Sahota resigned as CEO of Supply Chain Coordination Ltd (SCCL), following the establishment of a “new national procurement route” for the NHS. 

An NHS Supply Chain spokeswoman told SM it was Sahota’s “personal decision” to leave SCCL – the management function for NHS Supply Chain – and “comes at the conclusion of his assignment to NHS Supply Chain”.

“He was commissioned to design, build and operationalise a new national procurement route for the NHS and the new operating model is now up and running,” she said.

An NAO report into the government’s PPE procurement said NHS Supply Chain warehouse staff were “overwhelmed” when orders rocketed in February, in part because stock was in “deep storage” and couldn’t be accessed easily. Some stock had passed its expiry date and legacy IT systems could not be reconfigured to new ways of working.

The UK government proposed new measures to “hold businesses and public bodies accountable” for tackling modern slavery in their supply chains. 

Under the proposals public bodies with budgets of £36m or more, including local authorities in England and Wales, would be required to report on the steps they have taken to prevent modern slavery in supply chains.

Under the changes businesses and public bodies will be required to publish modern slavery statements on a “digital government reporting service”.

The UK government also launched a new social value procurement model to assess and score suppliers on wider social impacts.

The new measures, coming into effect on 1 January 2021, were expected to increase opportunities for SMEs and social enterprises to win public contracts, creating “a more resilient and diverse supplier base”.

The model will determine a score for bidders based on the “wider positive benefits” they bring.

October

Procurement professionals were recognised in the Queen’s Birthday Honours 2020.

Shirley Cooper, co-founder and board advisor at consultancy Tapestry Compliance, previously commercial and finance director, was awarded an OBE for services to equality, women’s empowerment and procurement.

Tina Butler, head of commercial and procurement at Kent Fire and Rescue Service, and Ighayezomo Philip Orumwense, IT commercial director at Highways England, received gongs.

Claire Salisbury, head of procurement, and Paul Buckingham, procurement officer, both at NHS Wales Shared Services Partnership, were also recognised.

The UK government released details of 10 potential inland sites that will perform border functions for freight from July 2021 as part of its updated Border Operating Model, which will come into force at the end of the Brexit transition period.

The government said infrastructure would be needed from July 2021 when full border controls come into force at the end of a phased introduction from January.

The updated model contained detailed information for importers and exporters that will apply whether there is a Brexit deal or not.

Government procurement practices were branded a “real cause for concern” because £3bn worth of pandemic-related contracts had not been made public.

Three cross-parliamentary MPs and non-profit the Good Law Project filed a judicial review against the government over its “persistent failure to disclose details of Covid-related contracts”, which is “in breach of the law and its own guidance”.

Controversy over the government’s procurement of PPE snowballed from here.

November

As Donald Trump’s term in the US was cut short by the pandemic, president-elect Joe Biden pledged to use federal government purchasing power to boost US manufacturing, build resilient domestic supply chains and limit climate change.

Prior to his victory, Biden outlined his vision for the US, detailing how federal government procurement would be used to rebuild American manufacturing and innovation and domestic supply chains, and to tackle climate change.

Biden said he aimed to use the “full power of the federal government to bolster American industrial and technological strength”, with plans to invest $400bn in US-made goods through federal government procurement.

Meanwhile, BT announced plans to set up a standalone procurement company separate from the rest of the organisation.

The “ProcureCo” would be based in Dublin and headed by CPO Cyril Pourrat, who said it would “radically change our existing procurement capability”.

BT said it was going through a “root and branch process to modernise and simplify the way we do business” and procurement would play a major role in helping to achieve a £2bn savings target by 2025. No mention was made of Brexit and the fact Dublin is in the EU.

The announcement of the Pfizer BioNTech coronavirus vaccine produced much-needed light at the end of the pandemic tunnel, but experts were concerned about the exacting supply chain demands of the vaccine, which must be stored at -70C.

Shane Brennan, chief executive of the UK Cold Chain Federation, told SM the country’s cold chain tended to operate at -10C to -20C.

“There is no large-scale capacity in the UK supply chain for storing and moving product at -70C,” he said.

“They [Pfizer] have designed a bespoke cold box which uses dry ice to maintain product at -70C. That in itself is a significant supply chain innovation.”

December

The UK government proposed a new unit to oversee public procurement as part of wider reforms to “cut red tape, reduce bureaucracy and help unleash wider social benefits from public money”.

The unit, which would sit within the Cabinet Office, would have “powers to review and, if necessary, intervene to improve the commercial capability of contracting authorities”.

The government proposed the unit as part of its green paper on transforming public procurement after the UK exits the EU on 1 January 2021.

Separately, the UK launched an initiative to save or make £1bn for local authorities by September 2022.

The £1B Challenge will involve local authorities generating, sharing and piloting projects to “achieve more with fewer resources”. This will include opportunities for joint procurement and ventures.

To date 113 local authorities have signed up. A digital platform will be used to collect, evaluate and share ideas, which will be voted on to decide which go on to the pilot stage.

As chaos at ports intensified, a group of trade bodies called on the government to increase capacity at UK ports to clear container backlogs.

The group – including the UK Major Ports Group, the British Ports Association and the Road Haulage Association – wrote to transport secretary Grant Shapps suggesting flexibility for logistics firms to operate in “off-peak” times at ports, more and longer trains, and easements to warehouse planning.

The letter said coronavirus, the run-up to Christmas and Brexit had contributed to volatility. But the problem was not confined to the UK with ports around world suffering fallout from the pandemic, which halted shipping, disturbed freight flows and put the distribution of containers out of balance.

Click here for part one

 Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Kent
GBP45000 - GBP70000 per annum + + bonus
Bramwith Consulting
London
GBP50000 - GBP60000 per annum + + Benefits
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE