Beyond Red & Green Books..

Away from AMS, OPs, BPs & NOLs, this is a snippet of procurement happenings around us. An informal medium for procurement colleagues to share news, views and new developments in Procurement]
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1st PCDC Flash Poll The Role of Procurement

Results, 15 September 2011

Global Manufacturing Outlook: Managing Volatility leads to Industries reshaping Supply Chains :

Vol. X October 2011

The Procurement Capacity Development Centre (PCDC) of the UN has initiated a series of flash polls to gauge the opinions of the global public procurement community, including practitioners, policy makers, advisors and other stakeholders. The first flash poll looked into the role of procurement, asking how respondents see the current role procurement being perceived, and how it will be perceived in the future. Respondents to the first poll were spread globally with every major region in the world represented. 40 organizations and institutions from National and state Governments, Development Agencies, Academia, Consultants and Civil Society were represented in the poll. Key findings were:

According to KPMG's 2011 Global Manufacturing Outlook, standardisation is one of the key strategies - 55% of manufacturers plan to standardise their production process while 45% will require standardised inputs. Further, just over 40% said they will focus on cost reduction through a shortening of the overall product development life cycle. This new research reveals that, to better manage volatility, most global manufacturers are reshaping their supply chain models. Despite continued volatility, manufacturers are cautiously realigning their businesses toward top-line growth while managing a multitude of challenges. KPMGs new report, Global Manufacturing Outlook: Growth while Managing Volatility, provides a comprehensive overview of the global manufacturing sector, along with observations and insights from a wide range of industry experts and leaders based on a recent industry-wide survey and executive interviews. Nearly half of respondents say they will invest in technology to improve visibility across the supply chain, the single most important tool for managing risk. Other measures include helping suppliers develop risk management standards and assessing supply chain processes.

Asia Procurement News Round-up:

1.Bangladeshs gain : Bangladesh The country is well-poised to take on the role of a global low-cost sourcing destination after China loses its position due to increasing labour costs and an aging workforce. A report by KPMG International revealed that while "no single country can match the scale of China, countries such as Bangladesh have large low-wage workforces that are now starting to be employed, while Southeast Asian countries are making moves to remove tariffs and customs restrictions". Bangladesh is well-positioned to improve as a sourcing destination due to its strong sectors such as apparel, frozen food, and agricultural products. With an export target of US$26.36 billion for the year ending next July, executive director of the Bangldesh Frozen Food Exporters Association Mohammad Abul Bashar believed the country is likely to exceed the target by 20-25%. The country is seeing a growing number of exports of nonconventional goods and services such as ship, jute, and IT. Source: Procurement Asia Magazine 2. Singapore to see wage hike in Procurement Singapore A growing demand for procurement professionals in Singapore, with many companies expecting to increase hiring and belt out salary increases in the sector, a new Michael Page survey revealed. 3. Procurement Benefits Decline in China and India? The advantages of procuring goods and services from lowcost countries are diminishing, prompting companies to use more sophisticated techniques for identifying the right suppliers.

How is Procurement Function Perceived Today?

Where do you believe Procurement Function will be in 5 years?

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There is a greater The cost benefits need for skills in of procuring goods procurement and and services from cost management countries with low due to the numlabor costs remain ber of new prodsignificant: up to Happy Birthday !!! 15% for plastic ucts launched in Singapore, according to Michael Page components, 10-25% for machine compoInternational's Salary Forecast 2011/2012. nents and 40% for tools, according to The Boston Consulting Group (BCG). But the Apart from a need for skills in demand planning, there is also a growing require- low-cost effects are expected to erode as ment for skilled logistics professionals and production technologies catch up with project managers within both procurement higher Western standards. Andreas Gocke, senior partner and managing director of and supply chain sectors. BCG's procurement practice says "But Salary increases of 3-7% will typically be 'low cost' is not low cost anymore." For plastics, the cost advantages could fall to awarded to help retain top performers, 510% by 2020 from about 15% currently, while increases in excess of 10% may be more common for professionals with skills he predicts. Fluctuating exchange rates and logistics costs mean that companies in higher demand. need to be constantly prepared for the next step. Companies in multinational companies can expect an average salary increase of Whereas fluctuations of low-cost country 15-20% depending on their skill sets. currencies compared with import currenThe survey also stated hiring activity in the procurement and supply chain sectors cies was historically 20%, procurement departments now must allow for a spread is expected to strengthen, with skills in of up to 45%, Gocke says. "Shipping costs most demand include energy, FMCG, have likewise proven to be increasingly healthcare, and third-party logistics asvolatile, having gone up by a factor of six pects. over the last four years." Source: Procurement Asia Magazine Source: ICB

Guest Editors Pick :

Procurement How important was it for Steve Jobs in the recipe of Apples success?
"No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. ....... it is quite true. Procurement How important was it for Steve Jobs in the recipe of Apples success? What role did Supply Chain play in Apples mammoth success. Apple has ranked #1 for four years running in Gartners Supply Chain Top 25. In the 2011 list, published in June of this year, Gartner identified four key themes that were emerging in 2011: (i) How companies deal with volatility; (ii) Their approach to value chain network integration; (iii) Their focus on sustainable execution; and (iv) Their ability to orchestrate movement up the demanddriven maturity curve. The themes above in fact talks about one core capability of Supply Chain to meet the changing customer needs. For Apples fast changing product lines, the procurement has to be attuned to the pace of marketing and RnD department to make it a successful tango of success. That, in fact is Apples supply management philosophy: Measure your supply chain as your customers experience it. Develop the capability to internalize customer needs, and proactively build customer feedback into your supply chain design. So, is Apples procurement philosophy too aggressive to ignore core procurement values? Quote from the procurement website of Apple: Apples sourcing process is designed to ensure equal and fair treatment of suppliers so that they can fully participate in a competitive procurement process. The 2011 Apple Supplier Progress Report reflects upon Apples and Suppliers responsibility to ensure Empowering Workers, Protecting Foreign Contract Workers, Preventing underage labor etc. Having one of the best supply chains in the world has played a tremendous role in Apples success. And that is why; its no coincidence that Apple has named Tim Cook, former Apple COO, to replace Steve Jobs as CEO. Tim Cook came to Apple with deep procurement knowledge. He came from Compaq where, as Vice President of Corporate Materials, he was responsible for procuring and managing product inventory of entire Compaq. Before being CEO, Tim Cook has been responsible for end-to-end management of Apples supply chain. Putting their supply chain guru in the top spot reflects a growing recognition of the importance of supply chain management and procurement to the overall business strategy of Apple. According to a CNN article How Apple blocks its Competition, by David Goldman, Apples supply chain benefits from having streamlined components and a consolidated supply base. According to Goldman, Apple predominately sells just five different gadgets iPad, iPhone, iPod, Mac and Apple TV and a combined total of 15 different variations of those devices, excluding modifications like the amount of available memory. Only small handful of products shares many parts common to all the devices. It shouldnt be amazing to procurement professional that one of the most profitable companies in the world benefits from such a basic sourcing practice, which contributes to a simple sourcing strategy. This simple practice, all companies should follow no matter how big or small they are. Steve Jobs was always a big proponent of simple solutions. Rest in peace Steve Jobs.

Procurement Humor:
Happy Birthday !!! Amadou Tidiane Toure Oct 01 Arun Kumar KolsurOct 02 Swayamsiddha Mohanty Oct 17 Palwasha AndishaOct 25

Only 3 Biddings: A Brain Teaser. You are given twelve (12) identical spheres, one (1) among which is of a different weight. Identify the odd one using a weighing balance only 3 times.

Source:

WSP's cartoon calendar 2012

. ..*This Newsletter is a collage of available articles from public domain for limited internal sharing of information. This does not reflect views or positions of World Bank or any of its offices. For any further information contact pmmadan@worldbank.org*.