1. APPOINTPROCUREMENT
THE SPRING/SUMMER 2015 EDITION
HOW
PROCUREMENT
WORKS WITH
OTHERS
THE GLOBAL MAGAZINE FOR REED. FIRST CHOICE FOR RECRUITMENT
reedglobal.com/procurement

2. 2 Spring/Summer2015 | Procurement
Inside this issue
3 How to: Nurturing collaborative relationships
with non-procurement colleagues across
the business has become a vital part of the
procurement professional’s skill set. So
how can procurement engage its internal
stakeholders?
4-8 Need to know: Top 5 worst supply chain
disruptions in 2014; The new Public Contracts
Directive, which implements the 2014 EU
Public Sector Procurement Directive; Top 3
steps to becoming a procurement role model;
CPOs’ 9 priorities for 2015
9 Market overview: How can recruiting
companies work better with their agencies?
Now that candidates have the upper hand
in the UK jobs market, recruitment agencies
must invest more time and resources in
attracting candidates, planning campaigns and
interviewing, says Lee Gudgeon.
10 Supplying the best:
How do you build a highly successful team?
New videos by REED highlight our thought
leadership and top career tips.
FEATURES
NEWS VIEWS
NEWS VIEWS
PROFESSIONAL PRACTICE
The candidate-led market that we are now in
has meant recruitment specialists at REED
have had to work a lot smarter at their candidate
engagement and sourcing strategy, according
to Lee Gudgeon, business development
director. It also means recruiting companies
must work with their agencies to establish a
strong partnership in order to understand their
needs. Supplier relationship management is a
vital skill for procurement professionals, but so
too is stakeholder engagement. Procurement
professionals must prioritise successful
relationships with internal and external clients
to get ahead.
Time to prioritise
relationships
welcome p2

3. 3
Collaborating with
other departments in the
organisation is essential
for procurement to get
its job done and raise
its profile
Collaboration
“Procurement functions
are often separate
from the rest of the
organisation”
Spring/Summer2015 | Procurement
p3
How to…
engage
internal
your
stakeholders

4. 4 Spring/Summer2015 | Procurement
Collaboration
N
urturing collaborative
relationships with
non-procurement
colleagues across the
business has become
a vital part of the procurement
professional’s skill set. Such
collaboration can create value and
ensure that procurement principles
are established for every penny
the business spends. So how can
procurement engage its internal
stakeholders?
Listen and learn
Procurement functions are often unfairly
tarnished with an image of being the company
cost cutter which has no understanding of what
other departments in the business do, much
less any of the so-called softer skills needed
for a successful relationship with internal
stakeholders. Get back to basics and arrange
meetings with the senior staff in the departments
in your organisation that you need to deal with.
What technology needs does the HR department
have and why? How does the marketing
function measure the return on investment of an
advertising campaign? What challenges does
the IT department face? How do departments
measure what they cannot quantify? Even if
procurement functions have little control over the
indirect spend of these departments, listening to
what kind of environment they work in, what the
pressures are and how they think they can be
solved will provide vital intelligence for the day
when procurement does have more control over
other departments’ spend. Rather than assuming
that they work in a certain way, ask them about
their goals and targets, and the challenges they
face in meeting them.
Communicate
The downturn forced organisations to focus on
costs, and with that, the profile of procurement
grew. In fact, while no business function was
left untouched by redundancies, procurement
fared rather well. Yet procurement functions are
often separate from the rest of the organisation,
with few departments understanding what it
does or how important it is. Organise lunchtime
briefings for other departments offering top tips
on procurement, such as how the tender process
works. Show them the knowledge and experience
you have of creating innovative solutions in
partnership with suppliers, and what effect this
has on the company’s spend. Write short blogs on
the company intranet or ask to present at all-staff
meetings about procurement processes. Raise
your profile among your colleagues, so that their
first impressions of you are not just during the
tender process.
p4

5. Speak the
right language
Jargon typically results in increased distance
between professionals from different functions.
But instead it should be considered short-hand
for complex concepts that would otherwise
take time to explain – when deployed correctly
it is very useful. If you’ve been explaining to
other departments what procurement does,
the necessary jargon will be clear to them. As a
rule, don’t talk in procurement speak, but at the
same time this should not stop you learning the
language of finance, HR or marketing. Successful
professionals take the time to understand the
terminology that different departments use,
which in turn enables them to understand the
challenges they face and perhaps offer solutions
to their problems.
Consult
and engage
Internal stakeholders within other departments
may have a barrage of suppliers approaching
them. This offers a chance to sell your skills as
a procurement professional, consult with them
on ways of assessing their services providers, or
utilising suppliers’ knowledge and experience to
innovate within their own department. Learn about
best procurement practice from peer functions in
other organisations, and share those lessons. For
example, best performing marketing functions may
approach procurement in an entirely different way,
and you can share these lessons with your own
marketing function.
Get
feedback
Developing an effective and mutually beneficial
relationship with internal stakeholders means
getting feedback on what procurement
professionals do and how they do it. Not only
does this show other stakeholders that you
are willing to listen to them but it gives you an
opportunity to assess and amend your own
function’s operations.
Collaboration p5
5 Spring/Summer2015 | Procurement

6. 6 Spring/Summer2015 | Procurement
Need to know
TOP 5 WORST SUPPLY
CHAIN DISRUPTIONS 2014
1Typhoon Halong, South
East Asia
Damages:
$10+ billion
Recovery time:
41 weeks
2Severe flooding, Long
Island, New York, US
Damages:
$4+ billion
Recovery time:
38 weeks
3Typhoon Rammasun,
South East Asia
Damages:
$1.5 billion
Recovery time:
38 weeks
4Gas explosions, Kaohsiung,
Taiwan
Damages:
$900+ million
Recovery time:
26 weeks
5Hazardous chemical spill,
Arizona, US
Damages:
$900+ million
Recovery time:
10 weeks
£20 billion – amount wasted each
year by global companies because they do not
share information about suppliers.
20% – proportion of directors in companies that
are paid late and who have taken a salary cut to keep
cash inside their businesses.
TOP 3 STEPS TO BECOMING A
PROCUREMENT ROLE MODEL
IDENTIFY AND RESOLVE
OPERATIONAL
WEAKNESSES
Whereisprocurementweak,howcan
inconsistencybereducedandhowcanyoualign
withyourinternalandexternalstakeholders?
EMBRACE THE
COMPANY’S AGENDA
Isyourentireteamsynchronisednotjustwith
theirownobjectives,butwiththeobjectivesof
theentirecompany?
MAKE INNOVATION
A PRIORITY
Useprocurement’suniqueabilitytogetideas
fromsupplierstoencourageinnovationinthe
company
p6

7. 7 Spring/Summer2015 | Procurement
The bidding process for public sector contracts
has been made easier for suppliers – particularly
small and medium-sized businesses – to
enter the tendering process. The new Public
Contracts Directive, which implements the 2014
EU Public Sector Procurement Directive, sets
out a number of procedures which must be
followed before a contract is awarded over the
value of £10,000, unless it qualifies for a specific
exclusion, such as being on the grounds
of national security.
All organisations – including central government
departments, local authorities and NHS bodies
– must now make publicly available electronic
versions of the procurement documentation
online. They are also encouraged to break
contracts into lots to facilitate the participation
of SMEs. Contracting authorities will not be able
to set turnover requirements for suppliers at
more than two times the contract value.
More sustainable and better value procurement
will be instigated by taking full life-cycle costing
into account when awarding contracts. The
government hopes contracting authorities will
be able to run procurement exercises faster,
and with less red tape.
For further information, Click here
“Procurement is an incredibly important
part of the business. You are probably
representing 60-70 per cent of your
company’s costs. It’s important to get
that right.”
Sam Walsh, CEO, Rio Tinto
“We need to look beyond our traditional
strength of cost reduction. I know
that people in procurement often
have ideas about transforming the
business. You need to find a way to make
yourselves heard – smart CEOs will always look
for and listen to great ideas.”
Babs Omotowa, CEO, Nigeria LNG
“What gets measured improves.”
Peter Drucker, management writer
“Too many companies believe people are
interchangeable. Truly gifted people
have unique talents. Such people
cannot be forced into roles they are not
suited for, nor should they be. Effective
leaders allow great people to do the work
they were born to do.”
Warren Bennis, management writer
Soundbites
Need to know p7
LAW CHANGES
NEW REGULATIONS ON
SHARED PARENTAL LEAVE
Click here to read the full article

8. 8
Need to know
1 Elevate the role of
procurement to
trusted adviser
2 Reduce/avoid
purchase costs
3 Improve
procurement’s
business agility
4 Expand scope/
influence
5 Deepen influence
on complex
indirect spend
categories
6 Enable innovation,
by studying what
suppliers do
7 Increase the
satisfaction
levels of internal
stakeholders
8 Reduce supply
risk
9 Improve
suppliers’ delivery
performance
Source: The CPO Agenda, Key Issues for Procurement in 2015, The Hackett GroupSpring/Summer2015 | Procurement
CPOs’ 9
priorities
for 2015
p8

9. 9 Spring/Summer2015 | Procurement
p9Market overview
Candidates have the upper
hand in the UK jobs market
right now. So, how can
recruiting companies make
savings on their recruitment
spend? Lee Gudgeon, REED
business development
director, explains
F
or the recruitment industry
as a whole the current
candidate market makes it
harder to not only source,
but also secure candidates
for our clients. In addition to the
increased investment of time and
resources in attracting candidates,
planning campaigns, managing
the offer process and securing
candidates require increased
attention. Managing the offer
process effectively is critical as we
have seen the number of counter
offers increase by 300 per cent in
the last 12 months. Reducing the
candidate drop-off rate because
they have more options is a key part
of our service.
This is great news for candidates
and it’s important for our clients
to respond to the marketplace to
ensure they are able to fill their
vacancies and skills gaps. However,
in such a mature and candidate-
led market it creates challenges
for recruiting companies looking to
make savings from their fees to pass
on to their clients. For recruiters,
the candidate-driven market has
truly driven a need for them to either
increase their fees or dramatically
change how they operate.
Businesses have focussed on
reducing the cost of recruitment
agency fees since 2008. We’re
really at the bottom end of the cost
for this highly procured resource,
so as a business we have been
working with our clients to drive
savings from alternative avenues.
Having a purely transactional
relationship with a supplier is not
always appropriate for something as
important as recruitment. Managed
service or exclusive relationships
offer an extended, more strategic
way for organisations and their
recruitment providers to work
together. Commitment from clients to
remain in a contract with a recruiter
for a number of years can enable
that recruiter to offer specialist and
tactical guidance to reduce the time
to hire and implement cost avoidance
plans, which can be measured as
savings which are passed back to the
recruiting organisation.
For example, we can have a
more strategic conversation about
total workforce management, and
how organisations can blend their
temporary and permanent staff
operations. Rationalising suppliers
and consolidating processes such as
invoicing can contribute savings to both
costs and time.
But it’s time to have a more strategic
conversation about how workforces
are managed more generally, so that
organisations can better plan for future
recruitment needs and assess what
their current workforce looks like.
Employers need to get total visibility of
their workforce. Where are the gaps?
Should temps be made permanent?
Even though most temporary worker
contracts include a fee for moving from
temp to perm, frequently we find that
employers have temps on their books
so long that the fee is waived anyway.
Not only do employers potentially avoid
the fee but they have an inducted,
trained member of staff, with a reduced
time to hire and greater productivity,
morale and less hassle for managers.
We also need to consider how
social media and technology is
deployed to recruit staff members.
Technology has transformed
the visibility and control of both
companies and candidates.
Recruiting companies must engage
with social media – which is free
currently, but may not always be so –
to attract candidates, particularly as
attraction costs are rising. Engaging
with a supplier that can implement a
social media plan is another way of
looking at cost effective candidate
attraction.
It is solutions such as these that
can significantly save companies
on their recruitment costs. But
employers have to start viewing
recruitment agencies as partners
rather than as a transactional
relationship.

10. 10 Spring/Summer2015 | Procurement
Career tips
How do you build a highly successful team?
What’s the best way to advance your career? Three
procurement directors have outlined their tips and
advice in best practice videos by REED
Supplying
the
Best
T
hree procurement industry leaders have taken part in the first set of
videos by REED as part of the recruitment consultancy’s new approach
to thought-leadership.
p10
Fabienne Lesbros
CPO, Britvic Soft Drinks
Andrew Newnham
CPO, ITV
Chris Ayscough
purchasing director, SITA
ChiefpurchasingofficeratBritvic
SoftDrinksandwinneroftheCIPS
ProcurementandSupplyChain
ProfessionaloftheYearawardin2014,
FabienneLesbros,AndrewNewnham,
chiefpurchasingofficeratITV,andChris
Ayscough,purchasingdirectoratSITA,
haveallstarredinthenewvideos.
Thethreeprofessionalsdiscuss
topicsincludingsupplierrelationship
management,buildinganeffective
procurementteamandhow
organisationscangoaboutchanging
theirprocurementstrategy.Theyalso
discusstheall-importantcareertips
forprofessionalshopingtoclimbthe
procurementandmanagementcareer
ladders.
Theirinsighthasbeencapturedinpart
animated/partinterview-styleshortvideos
inwhichfinely-tunedquestionsimmediately
gettotheheartofwhatachievingsuccess
inthesectorreallytakes.
Withaheritagestretchingbackover50
years,ReedProcurementSupplyChain
isattheforefrontoftheUK’sprocurement
andsupplychainrecruitmentmarket.
Fivedecadesofexperiencehave
facilitatedthedevelopmentofunrivalled
expertise,andwithclientsacrosstheUK
andindustry-leadinglevelsofintegrity
andprofessionalism,combinedwith
pioneeringusesoftechnology.
REEDseesitsenviablepositionasa
leadingconsultancyasanopportunity
topromotebestpracticeforthewider
goodoftheindustry.Video,withits
unparalleledvalueasacontentmedium,
istheobviouschannelthroughwhichto
conveythebestpracticemessage,and
directcommunicationwithkeyplayers
inthesectorwaschosenasameansof
generatingastuteandengagingcontent
onthesubject.
Todate,threevideoshavebeenproduced,
whichwillbeavailableonreedglobal.com,
LinkedInandTwitter,andwillappear
onrecruiter.co.ukand
supplymanagement.com.

11. 11 Spring/Summer2015 | Procurement
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