Challenges in the permanent recruitment procurement process
At the dawning of the next decade and as the recession in South Africa begins to gradually fade away, many organizations may tentatively consider appointing more staff. The recruitment market changed from a scarcity of skills on the open market in early 2008 into a relative glut during 2009, with many people sitting tight in their current jobs waiting for an improvement in the economy. Alan Low of Purchasing Index (PI) discusses the challenges the permanent recruitment procurement process faces in this month's SmartProcurement.
Posted by Editor at 9:40 AM
Reducing SA's Carbon Footprint - the Procurement profession's role
Reducing Greenhouse Gases (GHGs) has become a priority for South African business and the Government.What role will procurement professionals play in this regard?
Posted by Editor at 12:00 AM
B2B and B2G Supplier Pricing Strategies
The attractive deals posed by product consolidating vendor/distributors (e.g. Office Supplies and Catering Products) can be just as deceptive as supermarket’s ‘buyonegetonefree’ (BOGOF) pricing, says Wally Johnson, Chairman of Purchasing Index UK, in this month’s SmartProcurement.
Posted by Editor at 1:30 AM
PC benchmark - 'The R / $ conundrum'
SmartProcurement is pleased to bring you the newly published edition of the Purchasing Index (PI) Newsletter for Procurement Professionals.‘Back to the future’ – technology edition
"Every user preference has a commercial consequence.”
Posted by Editor at 10:00 AM
Does single source supply give customers leverage?
During the Apartheid era, organisations often grew by purchasing or amalgamating with their competitors. As a result, in the 1990s, when organisations had access to the world stage, South Africa had and still has many industries that are controlled by monopolies or duopolies.
Posted by StaffWriter at 3:23 PM
PC pricing - New opportunities
“The supply of Personal Computers (PCs) remains a competitive market, particularly as sales volumes in South Africa may hold up better in 2009 than in other parts of the world, such as Europe and America. One can therefore expect suppliers to be particularly keen to increase market share in this sector. Purchasing Index (PI) continues to benchmark PC configurations, usage and prices amongst a growing number of organisations in various industry sectors; the results have become even more interesting”, Alan Low, CEO of Purchasing Index, told SmartProcurement.
Posted by Editor at 11:21 AM
Why should Procurement organisations benchmark?
One of the first organisations to benchmark in the modern business world was Rank Xerox, who in the 1980s formed a dedicated team to find out how other organisations outside of the photocopying industry managed functions, such as transport. The results provided Xerox with invaluable insights into how to spend money more effectively and, in turn, save money.
Posted by Editor at 7:30 AM
Valuable spend information so important in the current economy
It seems as though climate change and recent economic upheavals may have more in common than one might expect. It isn't so much that the weather is getting notably worse, but that short-term changes seem to be becoming more extreme. Recent fatal storms in KwaZulu-Natal this holiday season and flash floods in the Cape last year are just cases in point.
Posted by Editor at 10:00 AM
Cost reductions needed NOW!
Some of the trauma associated with the current global crisis has been due to the speed with which the markets have changed. Twelve weeks ago Platinum was trading at $2,300 an ounce, today it is at $840 – a drop of almost two thirds. With the precipitous decline in global stock markets organisational management are still trying to understand the effect that this will have on their profit and loss accounts and balance sheets in the next one to two years.
Posted by Editor at 9:30 AM
New home grown procurement technology changes the rules of the game
63% of organisations researched by The Aberdeen Group placed ‘reduced cost of processing purchase orders and cheque payments’ as their primary goal for implementing a Purchase Card Program”, Julian Curtiss, Managing Director of Transaction Technology Solutions, told SmartProcurement.
Posted by Editor at 12:35 PM
How to Generate & Track Output Savings in the Desktop Copying & Printing Environment, Utilising a Managed Print Solution
This, the first in a series of 4 articles on the topic of generating and tracking output savings, with particular focus on the Managed Print Solutions (MPS) category. This series of articles will cover the 4 legs of a proven procurement-driven strategy respectively. These legs are:- Benchmarks that need to be applied (as based on a case study of total MPS over a 4 year period);
- Vendor contract re-negotiation;
- The impact of management on paper usage; and
- The impact of management on consumable usage.
Posted by Editor at 10:41 AM
Courier Services Benchmarking Shows Up Rate Discrepancies
"Courier Services is a surprisingly complex spend category to manage as the devil (and delivery of savings!) is in the detail," benchmarker Purchasing Index (PI) MD Alan Low, told SmartProcurement. " We regularly benchmarks domestic courier rates across organisations from a variety of industry sectors...Posted by Editor at 9:30 AM
Automotive & Engineering Lubricants prices follow oil , but not to the same extent
The following two graphs (left: automotive lubricants; right: engineering lubricants) depict the basket indexes of automotive and engineering lubricants for the past two years. "It reflects the inexorable rise of lubricant prices paid by larger SA organisations on the back of the increasing oil price. On closer inspection, however, it is interesting to note that automotive lubricants have risen considerably less than engineering oils (by almost 10%)", Alan Low, MD of Purchasing Index recently told SmartProcurement.
Posted by StaffWriter at 10:30 AM
Steel Prices in SA will continue to rise...Perhaps through 2009
Featured on the left (click to enlarge), is the Purchasing Index for steel showing the rate of increase in a basket of steel bought by the RSA Mining Industry. The graph shows that the basket prices have risen on average by 50% over that last two years with a major spike recently. . "The sudden increase is the effect of the first large increase from Mittal; there is another one due in June 2008," Alan Low, MD of Purchasing Index told SmartProcurement.Posted by StaffWriter at 10:28 AM
PI Mines Index projects inflation above 20% for 2008
"Increases in Steel, Electric cable and the scarcity of commodities such as timber, off-road tyres, etc coupled with the depreciation of the currency have been driving up the costs in the mining segment resulting in average cost increases of 14% in 2007. However 2008 has started with a bang... Alan Low MD of Purchasing Index tells SmartProcurement.Posted by StaffWriter at 8:46 PM
Supply and Demand Theory back-firing on Human Resources in Procurement
Economic theory states that where supply is low, demand will be high. The underlying premise is that a higher premium is paid for those high demand commodities where supply is low. For the last couple of years, we have seen this trend play itself out time and time again when it comes to salaries paid for human resources. However, statistics for the first quarter of this year are turning this theory on its head!, " Priscilla Gibson MD of Tech-Pro Personel tells SmartProcurement.Posted by StaffWriter at 3:00 PM
Savings for Corporate Domestic Air Travel vs published prices on downward slide
Are travel management companies causing increased travel costs? One of the measures used for benchmarking Corporate Air travel is the average savings achieved against the published fares and, while organisations recognise that this savings methodology is not necessarily the best, it has been applied consistently and is useful to track savings over time.
Posted by StaffWriter at 8:58 AM
PC Price Trends, Recruitment Agency commissions, Courier pricing
Vista is pushing up PC prices, recruitment agency commissions vary by as much as 100% and Couriers are overcharging for overnight services. Alan Low of Purchasing Index provided Smart Procurement with a few nuggets from PI's latest research.
Posted by StaffWriter at 8:50 AM
Making the most of Supply Market Intelligence Information
"Most procurement departments have have to deliver savings on an ever-increasing portfolio of goods and services with too few skilled resources," says Alan Low, MD of procurement benchmarking service Purchasing Index (PI).Posted by Bernie at 5:33 PM
Does aggregation really lead to lower prices?
The idea that greater purchasing power delivers lower prices may be accepted wisdom in procurement circles, but it doesn’t always add up writes Alan Low, MD of Purchasing Index. The simple fact is that the “Viking” (volume is king) model, applied ad infinitum to B2B and B2G Purchasing, has not delivered consistently better prices than those being achieved by less volume-intensive purchasing organisations.
Posted by StaffWriter at 8:44 AM
Temporary Recruitment Services - Sourcing Traps
There has been a growing trend in many SA organizations to take on temporary staff instead of employing them permanently. The convenience for employers in doing this, including being able to call on resources as and when required, is often matched by the cost savings, e.g. not having to contribute to pensions, health care, etc. Alan Low MD of Purchasing Index tells SmartProcurement that Setting up temporary recruitment agency agreements was often the preserve of HR departments, without the active involvement of Procurement.
Posted by Bernie at 7:17 PM
Only 30% of promised Procurement savings actually achieved - Time to cut the budget?
"How an organisation measures procurement savings is usually a topic of considerable debate. Of equal interest is "How does Procurement influence / make the savings happen?" says Alan Low of Purchasing Index.
Posted by Bernie at 3:54 PM
Telephony – new era technology saves company R20m in phone costs.
“The last few years’ benchmarks of the local business cell-phone market indicated high costs and a lack of substantial innovation. Now, however, technology is converging and the distinction between voice and data transmission are blurring. These new products promise substantial cost saving opportunities,” Alan Low, Managing Director of Purchasing Index, told Smart Procurement.
Posted by Bernie at 1:18 PM
Update: New developments in the "Catering Services" marketplace.
"After benchmarking staff catering for a number of years some interesting changes have occured that are affecting this crucial support service," says Alan Low of Purchasing index. "At the turn of the century many organizations had outsourced staff catering usually to one of the better known service providers, e.g. Royal, KKS, Fedics, etc. who usually took over the existing in-house staff, and had free use of the organization’s infrastructure. "
Posted by Bernie at 7:20 AM
New procurement best practices Benchmark Service launched
Purchasing Index is launching its international Procuretrak service locally, aimed at benchmarking Procurement leading practices in increasing detail. The attached graph compares the amount of spend controlled by purchasing to best in class companies.
Posted by Bernie at 2:26 PM
Are you getting the best prices in a "downward" cycle? PC market update.
In a cyclical market where prices are going up or down, how do you know when your organisation is getting a good deal from a supplier? The graph (click on the image to view it) shows what happened to one major UK organisation over a six and a half year period as the prices in this particular (major) spend category were going down.
Posted by Bernie at 12:08 PM
Large buyers pay up to 49% more on Car Hire
A recent benchmark between 9 large organisations from various industries indicate that up to 49% more might be available on local car travel deals. "One would expect that buyers with a larger procurement spend in this area will be the more cost competitive, but it turns out that quite the opposite is true," Alan Low, MD of Purchasing Index told Smart Procurement this week.
Posted by Bernie at 3:52 PM
Analysing maverick spend between multiple procurement organisations.
The bain of procurement spend analysis is trying to analyse items which have been given different descriptions by end users. Now imagine having to do this across multiple organisations at the same time!
Posted by Bernie at 7:59 PM
Exchange rates have varied impact of different commodities
Cut paper prices (delivered) continue to decline according to the Pricetrak Group Trend Index (July 2006) for all South African companies benchmarked. So much for paper prices being driven by the Rand/Dollar exchange rate!
Posted by Bernie at 5:03 PM
Air travel prices continuing down... But isn't the total cost going up?
This graph shows the index for the average SAA, BA Comair & Nationwide net economy return ticket prices (excluding taxes and VAT) for the Johannesburg – Cape Town route across a number of organizations from September 2002 to 2005. This index shows that net prices have been moving down despite the price of aviation fuel increasing dramatically (particularly in 2005). According to Alan Low, MD of Purchasing Index, new data from their research to be released within the next few weeks should confirm the trend. But...
Posted by Bernie at 7:52 PM
Consulting and professional Services under the Procurement Spotlight
As Procurement expands its influence across the organisation, many large expense categories come under a new commercial spotlight. ‘Consulting Services’, a spend category often covering an amalgam of services from strategic business consulting to IT consulting and even contract labour, poses new opportunities and challenges...
Posted by Bernie at 11:59 AM
New Leading Practice Benchmarking Service launched
Purchasing Index is launching a new continuous Benchmarker service, aimed at showing participating organisations how procurement practices are carried out in SA organizations, how it is changing over time and what are the developing trends...According to Alan Low, MD of Pricetrak....
Posted by Bernie at 4:25 PM
PC Prices drop faster than the rand strengthens
(To view the graph clearly, click on the image) The above graph represents the average purchase prices for standard desktop and laptop PCs recorded by Purchasing Index in their continuous quarterly PC benchmarking service. The graph shows that the cost of PC technology in RSA has continued to drop far quicker than the Rand has strengthened against the Euro and US Dollar. In addition the specification for the standard desktop and laptop PCs has improved dramatically in the last three years until January 2006.
Posted by Bernie at 3:29 PM
Stationery Prices continue downward trend. Is there still scope to negotiate?
(To view the graph clearly, click on the image) During the last month the prices of paper and envelopes have echoed the trend since September 2005. As a result prices are almost 15% lower than this time last year. (Based on last year's prices.) But this is not the whole picture...
Posted by Bernie at 4:26 PM
Critiscism of procurement performance : Can benchmarking provide answers?
Department X (names have been changed to protect the innocent :))was very vocal in criticizing the prices a local Shared Services department achieved on a centrally negotiated supplier agreement.
Posted by Bernie at 12:39 PM