Purchasing in Focus


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Purchasing in Focus

  1. 1. 2010 Edition 2 The PSD newsletter for Purchasing Matters PurchasinginFocus Welcome to the second edition of our redesigned Purchasing in Focus Newsletter. We received a lot of encouraging feedback from our last issue and for the second edition we will focus on sustainability issues in procurement. Prior to the recession, there was a heavy emphasis on green issues and CSR policies when procurement strategies were being formulated. We have asked our contributors to assess whether these issues are still as important when there is increased pressure on procurement departments to deliver much needed savings. Our thanks go to Charles Eddolls, James Martin, Mick Stokes, John Atkinson and Stephen Bradley who have contributed to this issue. STEPHEN FLETCHER At PSD we always aim to offer a premium recruitment service to our clients and Director, PSD candidates, covering both permanent and interim opportunities. We pride ourselves on stephen.fletcher@psdgroup.com building long term relationships by working closely with individuals to understand their needs. We are growing as a team and we are proud to introduce Jane Morgan who recently joined PSD. Jane will be working on interim assignments focusing on the Meet the PSD technology, construction and energy sectors. Purchasing Team ¢ Finally, we recently redesigned our website which went live in March. You can visit the site The London Development at www.psdgroup.com. We are sure you will appreciate the improvements and we Agency vision for a welcome your feedback. sustainable future Michael Stokes ¢ If you have any questions about the points raised in this newsletter, or if you would like to contribute to the next issue, email me at stephen.fletcher@psdgroup.com Green is Good? James E. Martin ¢ Can sustainability be MEET THE PSD PURCHASING TEAM - PLEASE SEE PAGE 2 FOR FURTHER DETAILS integrated into Public Sector Procurement? Charles Eddolls ¢ Still a place for Ethics John Atkinson & Stephen Bradley ¢ Christian Stuart Paul Cara Marsha Andrew Jane Which recruitment Shawcross Walters McIntyre Regan Barsky Moran Morgan service is best for Managing Principal Principal Senior Senior Consultant Consultant Consultant Consultant Consultant Consultant Consultant my requirement? ¢ PSD is an international PSD PSD PSD PSD Other Office recruitment services London Birmingham Manchester Haywards Heath Locations organisation operating at the Middle to Senior 28 Essex Street 85-89 Colmore Row 2nd Floor 7 Perrymount Road Executive level. London Birmingham Abbey House Haywards Heath Frankfurt WC2R 3AT B3 2BB 74 Mosley Street West Sussex We offer expert knowledge Manchester RH16 3TN Munich of our specialist markets: M2 3LW Hong Kong Technology, IT, Finance & Banking, Marketing & Sales, +44 (0)20 7970 9700 +44 (0)121 212 0099 +44 (0)161 234 0300 +44 (0)1293 802000 Shanghai Property & Construction, london@ birmingham@ manchester@ haywardsheath@ Customer Contact, Law, psdgroup.com psdgroup.com psdgroup.com psdgroup.com HR and Purchasing.
  2. 2. PurchasinginFocus Meet the PSD purchasing team The PSD Purchasing team focuses on mid to senior level appointments offering a full range of recruitment services. We specialise in contingency, interim, and search assignments. Stephen Christian Stuart Fletcher Shawcross Walters Director Managing Principal Consultant Consultant Stephen has a wealth of recruitment Christian has ten years' experience Stuart is a Principal Consultant within experience with over 20 years of service in recruitment, all gained at PSD. He the Purchasing Team and has over ten gained at PSD. He has worked across a specialises in the financial services years of recruitment experience. A law number of disciplines and now heads up and professional services sectors. He graduate, Stuart joined PSD in 2003 and the purchasing and supply chain function. graduated from Salford University in set up the highly successful Purchasing He focuses on recruitment into the 1994 with a BA (Hons) in Design Studies. interim team. He has developed an Financial Services and Business christian.shawcross@psdgroup.com extensive network of contacts in the Services sectors. Procurement interim market. stephen.fletcher@psdgroup.com stuart.walters@psdgroup.com Paul Cara Marsha McIntyre Regan Barsky Principal Senior Senior Consultant Consultant Consultant Paul focuses on the Technology and Cara joined the PSD group four years Marsha joined PSD in 2006 and Broadcast Media sectors. He has over ago and has over ten years recruitment specialises in the property and FM ten years’ experience in recruitment expertise. Cara recruits into the not-for- sectors. Prior to PSD she was the specifically in procurement and supply profit sector, providing a specialist service Marketing Manager for Land Securities chain. Before working for PSD, Paul for both clients and candidates. Cara plc. Marsha has completed several worked for a specialist Freight Forwarding graduated in 1998 with a BSc (Hons) successful placements with Blue Chip recruitment consultancy. Paul graduated in Psychology. clients. She graduated in 2003 with a in 1990 with a BSc (Hons) Geography. cara.regan@psdgroup.com BA (Hons) in Media, Culture and Society. paul.mcintyre@psdgroup.com marsha.barsky@psdgroup.com Andrew Jane Moran Morgan Consultant Consultant Andrew Moran focuses on the Energy and Jane graduated from Manchester PSD Utilities, Oil and Gas and Transportation University in 2000, and has seven years' Manchester sectors on a nationwide level. Andrew recruitment experience at senior and has worked with a number of key clients board level. Jane specialises in the UK 2nd Floor within these sectors and has an excellent Procurement Interim market and has Abbey House network of professional talent at his significantly developed her client base 74 Mosley Street disposal. He has worked with PSD for since joining in 2009. Manchester two years. jane.morgan@psdgroup.com M2 3LW andrew.moran@psdgroup.com +44 (0)161 234 0300
  3. 3. PurchasinginFocus The London Development Agency vision for a sustainable future Michael Stokes, Head of Strategic Procurement highlights the London Development Agency’s sustainable procurement policy, its benefits, key challenges and both current and future projects. Can you outline the London Development The RENEW project is similar to the BEEP What new projects do you have in the Authority’s (LDA's) sustainable procurement project but is aimed at retrofitting all homes pipeline? policy? within London. The LDA have provided £9m of funding over the next two years. This project is The LDA is working on a cross London The LDA does not have a sustainable just about to go to the market via the restricted borough project to develop an energy master procurement policy. We work to a much wider OJEU process planning web based tool, a standards manual initiative; the Mayor’s Responsible Procurement for developing district heating projects and Policy. Responsible Procurement means What have been the key challenges of taking energy audits. These services will contribute to pioneering socially, environmentally and this approach? the London Energy map, which will show areas economically responsible procurement to of energy demand, usage and provision. This deliver improved quality of life and better value The key challenges were mainly around will ultimately enable local authorities to for money for our people, our businesses and developing the market. The projects referred to develop district heating projects and other low our city. are relatively new so the market to supply such carbon opportunities services needed to be developed. Another Under Mayor of London Boris Johnson we challenge was convincing clients that the The LDA is looking to set up the London have set new priorities and re-focused our upfront costs required to retrofit buildings Housing Company, which will manage the approach to delivery. The Responsible would pay for itself over a given period. Making development of LDA land through private Procurement Progress Report, ‘Delivering Value investments to make buildings more sector investment and management. This will for London’ provides an account of the work environmentally friendly can be costly and may enable the development of land that is currently we have been doing and the progress we are take 3 – 5 years to recoup the investment. unattractive to developers and help to achieve making in delivering long term value to London. Given the current economic climate facing us results in one of our key themes – regeneration. we had to be certain that such investments The project is still being developed, but there In practice, this means taking action to fulfil the would yield a return. are likely to be opportunities for the private aims of the GLA group responsible sector to get involved by offering project procurement policy. What benefits have you seen? management, construction, investment and What difference has this had on the way you The projects referred to are still very new so supplying housing management services. procure goods and services? although clients that have made these Michael Stokes is Head of changes, the benefits, in terms of cash savings, Strategic Procurement for the Extremely positive. Staff within the LDA have are yet to be realised. received Responsible Procurement training, London Development Agency highlighting considerations to be taken into The paybacks will be in environmental MichaelStokes@lda.gov.uk account when procuring contracts of any improvements and cashable savings. While we nature. For example, we have included clauses are early in this phase of the projects, earlier on creating apprenticeship schemes within tranches have produced performance data that various new environment projects. shows that where the provisions have been implemented, organisations have been able to What projects are you working on at the reduce their energy consumption and CO2 moment? emissions by between 20-30% There are currently three projects: Building How are you engaging with your suppliers to Energy Efficiency Programme (BEEP), RENEW support this approach? Programme and the London Thames Gateway Heat Network (LTGHN). The BEEP project is We held several supplier open days in which open to all Public Sector organisations. The we outlined our vision and requirements and programme deliverable is to retro-fit public sought feedback from suppliers. This helped us buildings to make them more energy efficient. shape our specification to ensure we received a This may involve some capital outlay for positive response. We found these exercises organisations but all savings are measured and very beneficial and feedback from the market a clear payback timeframe is established ahead further confirmed this. This, in turn, led to a of the programme commencing. large number of suppliers responding to the OJEU notices with very innovative and creative This framework comprises twelve providers delivery solutions. and is open to all Public Sector organisations.
  4. 4. PurchasinginFocus Green is Good? James E Martin of AKS Partners looks at the history and benefits of green business policies The need to be “green” in business has made a lot of organisations adjust business practices, review what they do and how they do it. Policies are re-written and changes are implemented, all in the name of environmental philanthropy. My background is deeply rooted in supply chain where as a professional I have spent 15 of 20 years of my career. My most eye-opening experience was during my work at a global media & entertainment company and our efforts toward sustainability. We pledged to become carbon neutral by 2010 (this was back in 2007) and we kicked up a fuss internally and externally. Money was spent to measure how much our carbon footprint was and how we could reduce it. The company intended to be a pioneer in becoming carbon neutral and lots of noise was created to celebrate our efforts. We had other media companies following suit and soon we were all competing to see who could be more environmentally sensitive and who could reduce their footprint the most. But then came the recession in late 2008 which was the worst recession in 50 years. This caused a re-focus on priorities and suddenly being carbon neutral was not so important. Add to this the recent revelations of climate added expenses, all in the name of The efforts companies need to make should experts from East Anglia University and their sustainability. But oddly, the recession took be directed away from sustainable business questionable handling of climate data and care of our plans to reduce carbon-producing and driven towards intelligent business. you get the sense the skies are darkening not activities. Companies like the one I worked for The act of cost cutting and corporate from intense storms driven by global climate drastically reduced staff, shuttered offices, efficiency must always be undertaken change, but from arrows. froze budgets and IT spend, and curtailed regardless of what the feel good movement business travel. These activities were done in of the day is. The recession is showing signs For me, I observed the process and believed the name of saving “green” instead of being of ending and business activity may resume the ideals were woefully misplaced. We were “green” which resonated more with company or surpass previous levels. The people who spending money measuring how our business survival. And they managed to reduce costs will benefit will be those who prove their activities contributed to our carbon footprint, and probably reduce our carbon footprint. businesses shed waste in an effort to remain and then spent more money on figuring out I never found out because we never spent profitable vs. chasing lofty goals set by how to reduce the footprint. While measuring money on measuring it again and I became environmental pioneers. what you do and how you do it is very valuable, a casualty of the workforce reduction. trying to do it in a “green” way seemed silly. In James E Martin my mind, we should have been asking the In my participation in the carbon footprint Principal, AKS Partners question – “why do it at all?” Whether you data-gathering process, I observed a common made a photocopy on 100% virgin copy paper theme again and again – waste. Office space or on paper with 30% recycled content, the was over-lit, overcooled in summer and over- fact is there was wasted paper. We should heated in winter, PCs and copiers left on when have directed our efforts toward eliminating the not in use, IT data centers over compensating need for a photocopy altogether. Instead, we with cooling and equipment redundancy, and introduced the recycled brand which actually unnecessary business travel was rife. Like my cost more per carton but it was better for the photocopy example, instead of looking to do sustainability efforts. We had many other these activities in a sustainable way we should projects we believed would reduce our carbon have looked at whether we should be doing footprint and provide a payback against the them at all.
  5. 5. PurchasinginFocus Can sustainability be integrated into Public Sector Procurement? In this article, Charles Eddolls of Cygnet Consultancy looks at the challenges and benefits of implementing sustainability into public sector procurement functions. In the Society of Local Authority Chief With increasing pressures to reduce costs, to only the largest suppliers, excluding SMEs Executives and Senior Manager’s latest this advice is not always freely available and if some of which are far more in tune with publication entitled “Stand up to the buyers decide to assess the position and get it sustainability than their peers. downturn”, there is little reference to wrong, it is their jobs, pensions and future that sustainability apart from minor comments are at risk. Our public sector buyers can not This tender process encourages dominant on travel, construction and local sourcing. be blamed for simply winding the handle and suppliers to quote for business regardless of This is in contrast to previous advice stating: producing a conventional result with little their ability to deliver. If they are awarded a “Sustainability is being integrated within regard to sustainability. contract they will hastily put the infrastructure the mainstream of procurement policy and in place to meet the need with little regard practice. It is clear that the public sector could This problem is compounded by excessive to sustainability as shareholders in large achieve much more, even within the existing centralisation and the promotion of framework companies seek maximum profits, not European rules and the requirement to secure contracts by Government. Under their compliance with costly green issues. best value for money.” guidance many public authorities habitually put in place or use Government framework In a recent paper for a government department, The current economic climate affects us in contracts for their sourcing needs. I pointed out the problems of sustainability in many ways and we need to be aware that relation to leverage buying and cited as an buyers are not always able to give priority to The standard official journal of the European example a £100+ million fuel tender I had sustainability as was the case a few years ago. Union (OJEU) tendering process can result in structured for another central government Whilst public supply tenders define priorities framework contracts being locally placed and department. I highlighted the fact that I had and objectives covering environmental and this type of competitive process is well known advised and structured the competition to sustainability policies, our public bodies often to our buyers and relatively easy to implement split the supply contracts to cover full-load only focus on energy reduction, recycling, with few pitfalls. deliveries from refineries and terminals and regeneration, social enterprise and this may local delivery for the normal small-load usage. Once a framework is put in place the Significant savings were made in both supply not expand without a change in emphasis. contracted suppliers and specifications are routes with the SME fuel suppliers winning the Our public sector buyers are faced with locked in for the duration of the contract (up local work thus reducing tanker mileage and seemingly inconsistent and insurmountable to four years and sometimes longer) and if lowering pollution. challenges as they should look at sustainability innovative sustainability options have not been whilst reducing costs, using fewer resources, included in the contracts these cannot legally In summary, to seriously address sustainability meeting all of their masters’ needs in processes be added to the contracts at a later date. in the public sector we need more funding that must stand up to any post-action audits. with less regulation and our public sector There is little appetite to address this issue buyers must be given the opportunity to Their tenders must be compliant with UK / EU centrally or locally and even if this was possible regulations which can take away from them accommodate our environmental needs. the additional burden is such that our buyers Financial and regulatory constraints placed on their ability to contribute with serious would not have the time or resource to evaluate sustainability input. public sector buyers are the problem, not their ongoing green suggestions. wish to help to save the planet or their ability Progressive buyers seeking to emulate their Frameworks reflect a belief at government level to assist in this regard. private sector counterparts are liable to fall that by aggregating procurement requirements foul of regulations placed upon them and their Charles Eddolls is a Consultant and creating large supply or service with Cygnet Consultancy sustainability suggestions may need legal frameworks they will automatically provide advice before a competition can be structured. the most environmental and financially charleseddolls@cygnetconsultancy.com beneficial supply. In fact, this is often not the www.cygnetconsultancy.com case as these types of contracts can produce excessive delivery movements with operational and environmental problems. Before “to seriously address amalgamating procurement volumes and sustainability in the restricting supply, buyers need to think very carefully about the knock-on effect, which is public sector we need so important when choosing the most suitable carbon footprint in any supply contract. more funding with less In addition by maximising the value or size of regulation.” supply contracts, buyers restrict participation
  6. 6. PurchasinginFocus Still a place for Ethics John Atkinson of Global Spirit and Stephen Bradley of SB Consulting look at how CSR and ethics can be the basis of a procurement strategy John Atkinson Answering the above will provide an initial window into the strategic direction and Most, if not all, procurement functions are corporate will. As procurement practitioners under increased pressure to deliver cost we have a duty to derive best value for money savings to their organisation’s bottom line. both from unit costs, quality and processes. Coupled with the global growth in low cost But we also surely have a moral duty to country sourcing, it is perhaps tempting to our organisation which extends far beyond re-evaluate the costs and value of corporate protecting it from risks. This is a worthy short social responsibilities within the supply chain term objective for those organisations for for many procurement practitioners. However whom the CSR position is in its infancy. by adopting wider thinking it is possible to Much is made of “partnering” but by fully expand a cost benefit evaluation into improved understanding the impacts of our sourcing processes which not only deliver best value actions we are able to bring about true synergy but also safeguard the organisation from at optimal cost and still operate morally. reputational damage. So how do we achieve such lofty goals? In a strategy and process led environment, any evaluation of corporate social responsibility For any improved strategy or process to be (CSR) compliance by definition must include effective we need to ensure that we fully the commercial and moral/ethical perspective, understand the impacts of our actions on a for only by adopting a combined approach can variety of levels such as the global suppliers the true value to the organisation be defined. we deal with and the communities they are By doing this, risks will be exposed and situated within and the wider socio political and then mitigated. The improvements can then socio geographic impacts. Once we have built be measured. such understanding we are able to balance these with the risks we face as organisations As a starting point for evaluation; the following criteria need to be considered, objectively sourcing globally. A case of seek first to understand and then to be understood “By initiating cross valued and sense checked in order to produce both an effective evaluation of today’s practice will build the basis for synergistic, inclusive functional debate partnerships within the supply chain. Such and to create tomorrow’s improved processes: partnerships then deliver both risk mitigation, and transforming What is the organisation’s procurement strategy over the next three years? CSR compliance which is elevated above mere auditing and which leads to best value the subjective into Which departments are or should be at optimum cost within an improvement framework context. objective strategies, stakeholders? By initiating cross functional debate and the needs of all What level of attention is currently paid to corporate social responsibility within the supply transforming the subjective into objective strategies, the needs of all stakeholders can stakeholders can chain both at the procurement function and be met whilst still finding room for ethics. be met whilst still organisational level? John Atkinson is the Owner of Global Spirit finding room for How does the current compliance process john.atkinson@global-spirit.co.uk work and is it robust, auditable and cost ethics.” effective? Is the process static i.e. just delivering compliance or dynamic in terms of driving improvement? What would be the impact of non compliance upon the organisation both financially and reputationally?
  7. 7. PurchasinginFocus Still a place for Ethics continued... Stephen Bradley actions by explaining the legal and or ethical implications. Emphasise that you are trying to As procurement professionals we have a protect the company and its image. responsibility to our organisations, our suppliers and to ourselves to conduct business with the Treating suppliers equally and fairly in both pre highest ethical and social caring. We all know and post award periods is very important. we are bound by the laws of the UCC and Often in the pre award timeframe, you may give CSIG but more importantly we should be more information to one supplier. This may be bound by our own personal set of principles due to that supplier asking more questions or and the desire to have integrity. your rapport is better with that supplier than the others. We must be aware of this and when What principles and integrity am I referring to it happens ensure we relay that additional with regard to our business dealings whether information onto the other bidders. Sometimes it is domestically or internationally? Let this is troublesome to do so and it may seem me first address integrity as it is the most trivial or even cause for delay in bid due date. straightforward in my mind. Integrity as I define Even if this is the case our principle of fair it is: “What would I do if faced with an ethical dealing must be kept and proper action taken. dilemma and I absolutely knew that no one except me would know about my actions?” Equally important, as we all deal globally, is that Doing the right thing without hesitation defines of social responsibility be it child labour, safety, the highest form of integrity. Once in a foreign environment and so on. It is critically important country after negotiating a multi- million dollar that a proper and complete on-site survey be contract, the supplier slipped two envelopes made of any company where long term containing cash into my translator’s briefcase; business is planned. Most of us utilise audit one for the translator and one for me thanking check lists identifying management, financials, us for the contract. What did I do? The next assets, and quality assurance. This check list morning I returned the money and cancelled the contract. should also include questions concerning employee safety, handling of wastes from “We all need to set the The principals we all should follow are: manufacturing processes and the training example and the bar of employees. It is our responsibility in 1) fair and reasonable dealings, establishing reliable sources of supply for our high to continue to 2) providing fair and accurate information, 3) level playing field for all suppliers, companies that we champion the principles and ethics we follow naturally in our own maintain the integrity 4) awareness of suppliers’ commitment to social responsibilities such as “no child country. It should be no different once we leave the geographical boundaries of our that is the image of labour”, “safety of its workers”, “protection of the environment”. own country. the procurement Too often in today’s fast paced and pressure Much of what has been said is straightforward, practical common sense. However, I have seen professional..” packed world of business, we are either faced people and companies veer away from some with cutting corners or compromising the of the issues noted above and felt it important principles to meet a goal or deadline. to bring to our attention some of these basic Sometimes others apply pressure either directly principles and ethics. We all need to set the or indirectly to influence the compromise. This example and the bar high to continue to is when our true mettle is tested. What do we maintain the integrity that is the image of the do in these instances? procurement professional. I say we step back and slow down. If it is a Stephen J. Bradley is with SB Consulting timing pressure, deal with it professionally and steve.bradleycpm@comcast.net straightforwardly. Reset the timing but don’t be stubborn about your motivation to take your position. Should pressure be applied by peers or superiors, you have every right to explain why it is not appropriate to take the suggested
  8. 8. Which recruitment PSD Purchasing service is best for & Supply my requirement? Chain PSD Purchasing and Supply Chain can provide Over the past 12 months the PSD Purchasing and Supply Chain a bespoke solution to your recruitment needs. team have worked in partnership Collectively, we have over forty years of with a number of clients through both retained and non retained recruitment experience across the team. assignments, we have listed a selection of clients below: So what service can you offer me? Combined Search & Selection This is a very thorough and effective process that combines BUPA BSkyB The answer is simple, we offer a range of both the advertised selection and executive specific, tailored services. search processes. Aviva BP So what does that mean for our File Search (Contingency) We hold an News International GSM clients? extensive database of sector relevant Williams Lea Royal Bank of candidates that provide a quick, effective and Scotland Well, first of all our consultants have an expert immediate recruitment solution. NHS knowledge of all areas of procurement and Legal and General supply chain: from category manager up to Interim & Contracting PSD can also supply Carillion CPO, and offer highly effective recruitment quality professionals on an interim/contract Babcock basis. This provides a quick and very effective Abbot Laboratories skills that enable us to deliver outstanding Steria results and an exceptional level of service. We solution for a short-term assignment, specific Norgine provide a comprehensive range of recruitment project or contract position. Deutsche Bank services aimed at the middle-to-senior Britannia Building Dependent on the role, we will suggest one or a Society The Metropolitan executive level. Whether your task is to recruit a combination of these solutions to produce the number of individuals or to fill a single vacancy, Police best result for the client. Co-op Financial PSD provide fast, efficient and effective Services Buying Solutions recruitment solutions. In addition to the above services we can also offer: Lloyds Banking EDF We offer the following services: Group • Salary benchmarking South Hook Gas Executive Search PSD employs a research LV facility which tracks the careers of key • Extensive research facilities Royal Albert Hall professionals within its specialist markets. Wincanton • Media response handling ROC Insurance From the initial briefing meeting, research EMAP will be carried out to identify relevant • Competency based interviewing American Express professionals within the sector. Once the • Skilled screening and interviewing Patton Air client has approved the “longlist” of potential HSBC candidates, confidential approaches are made, • Personality profiling/psychometric testing explaining/selling the role. We then interview • Interview and conference facilities in the candidates against an agreed set of London, Manchester, Birmingham competencies and provide a shortlist of & Hayward’s Heath c3 - 5 outstanding candidates. The client then interviews the shortlisted individuals, offering So which service is best for my the preferred candidate the role. PSD manages the offer process and maintains close contact requirement? with the candidate through to the start date. Each assignment we handle is unique, which is Advertised Selection We are a major advertiser why we offer a broad range of services and will in trade and national press (we are the UK’s advise on which is most suitable for you. largest advertiser in the quality broadsheets by some distance) and have a strong, distinctive advertising style. Once the brief is taken we will select the relevant media, copyright the advert and handle the response. Interviews and selection will take place followed by offer management until the assignment is complete (as in the process for Executive Search above). www.psdgroup.com/purchasing