Nobody gets fired for outsourcing to India, but they should

Jon-Butler_100.jpgBy Jon Butler, an expert in technology operations, outsourcing, offshoring and nearshoring

For many years India was the jewel of the American outsourcer's eye. English speaking resources coupled with a flashy rate card proved hard for companies to resist. In fact, outsourcing to India had developed into such a standard solution that it recalled another era, during which everyone bought standard IBM solutions. This happened so frequently that it was not uncommon to hear the expression "no one ever got fired for buying IBM".

But as Forbes writer, Duena Blomstrom, explains in her well-crafted article on fear-induced purchasing, Nobody Gets Fired For Buying IBM. But They Should, this risk-aversion strategy is fraught with a false sense of security.

Blomstrom explains that frequent IBM buyers did not feel entitled to purchase anything different from the status quo - even if there were better options. In fact, not falling in line with prior purchasing history would always make them look like risk-takers and irresponsible stewards of company resources. So, they repeat the same safe behaviours even when they know there are better options.

Today, many people see 'buying India' as a safe bet for those same flawed reasons.

Companies' procurement skills woefully lacking

KateVitasek_100.jpgBy Kate Vitasek, Professor in Supply Chain Management, University of Tennessee

A report by the American Productivity and Quality Center (APQC) outlines the critical skills gaps that face today's procurement professionals.

The good news is that companies have pushed procurement out of the back office and onto centre stage, accelerating the demand for skilled procurement talent. But the bad news is that today's procurement professionals lack the essential skills that they need to succeed. In addition, finding individuals with the right talent is getting harder and harder.

Africa's largest virtual conference for supply chain and procurement professionals coming in August

ASCA_125.pngSmartProcurement has joined forces with SAPICS to offer Africa's largest-ever online event for supply chain and procurement professionals.

Africa Supply Chain in Action takes place on 19 and 20 August 2020. It is expected to bring together more than 1 000 supply chain and procurement professionals.

Understanding and managing IT vendor relationships: do they matter?

Gunarathna_Koneru_200.pngBy Tiran Gunarathna, Senior IT Category Lead, Infosys Business Process Management; and
SriKrishna Koneru, AVP - Strategic Business Practice Head, Sourcing and Procurement, Infosys Business Process Management

We often hear about vendor management in sourcing and procurement organisations, but how frequently do we talk about vendor relationship management? Are they the same or are they different?

Procurement empowered by cognitive and intelligent applications

Marcel_Vollmer_100.jpgBy Dr Marcell Vollmer, Chief Innovation Officer, Celonis

Across all industries, procurement leaders are seeking significant and measurable productivity gains. New technology, based on machine learning and artificial intelligence, is driving the digital transformation of the procurement function to deliver value, driving supplier innovations, performing risk management, securing a sustainable supply chain and, of course, managing budgets.

The traditional mindset of cost savings is dead

Hemant_Porwal_100.jpgBy Hemant Porwal, Executive Vice President: Supply Chain and Operations, WESCO Distribution

Over time, the concept of measuring savings has evolved to creating a baseline by comparing items under the form, fit and function framework.

Top-quartile procurement teams have taken this further by adopting total cost of ownership (TCO) into their request for proposal (RFP) models, instead of pure price comparisons. A key point is that these TCO criteria measure costs can be principally influenced by procurement teams.

However, this is not enough. We need a more holistic metric which measures cost from the first mile to the last mile and, ultimately, within reach of customers in the last three feet. The metric to use is total cost to serve (TCS).

Agility and sustainable sourcing are SCM's new focus areas

NdabeniBagosi_100.jpgBy Ndabeni Bagosi, Head: Cost and Agility Programme, Total South Africa

Leading and forward-thinking organisations rely on the agility of their supply chains for sustainability. Traditionally, the focus of supply chain has been on compliance and cost cutting. However, increasing competition, changing customer needs and a changing economic environment are challenging organisations to think beyond cost.

Increasingly, chief procurement officers (CPOs) are required to provide solutions on how they can contribute to organisations' agility, safety, cost reduction and environmental compliance (sustainable procurement).

SMME Clinic | SABS standards during Covid-19 - Session 9

SMME Clinic interviews Dumisani Ngadi, from the South African Bureau Standards (SABS), on how small business can secure SABS accreditation for their products in Covid-19.

For more information email Dumisani Ngadi at dumisani.mngadi@sabs.co.za or contact him on +27 72 267 7955

Which region regulates procurement the most?

Regulating_procurement_100.jpgBy Marko Grujicic, Analyst, Growth Analytics;
Joseph Lemoine, Analyst - Growth Analytics, Development Economics Vice Presidency; and
Greta Polo, Private Sector Development Analyst, World Bank

It might be assumed that public procurement is most heavily regulated in high-income countries, given that they have greater public sector capacity, more efficient institutions and longer traditions of regulation. This assumption is further supported by the fact that weaker institutions, informality and business activities outside of the scope of law are prevalent among low- and middle-income countries.

However, an analysis by the World Bank shows that this assumption is not true: high-income countries regulate public procurement less than low- and middle-income countries do.

PMI: activity continues to improve as lockdown easing lifts production levels

PMI_June2020_200.pngThe Absa Purchasing Managers' Index (PMI) for June 2020 showed that conditions continued to improve in the South African manufacturing sector. This is after most of the sector came to a near standstill during the nationwide Level 5 lockdown in April 2020 and only partially returned to normal production levels in May 2020.

The headline PMI rose further to 53.9 index points in June, up from 50.2 in May.

Importantly, while the headline PMI rose to a multi-year high, this does not mean that the level of actual manufacturing production rose to a multi-year high. "Instead, the further rise in June merely means that a solid month-on-month increase was likely recorded", said the Bureau for Economic Research (BER).

Coronavirus has exposed just how delicate our procurement eco-system really is

IanThompson_100.jpgDo we need to fundamentally re-imagine what our procurement eco-system looks like? Ian Thompson, Regional Head at Ivalua, thinks so and here is why...


 

 

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