Change

Blockchain hype has spread like wildfire... "But it's time for a reality check", says Bertrand Maltaverne, Solutions Consultant, who helps organisations to digitally transform their procurement practices.

The seasonally-adjusted Purchasing Managers' Index (PMI) edged lower to 49.9 index points in January 2019, down from 50.7 in December 2018.

Despite the decline, the index remains 2 points above the average recorded in 2018, which suggests that manufacturing started the year on fairly solid footing.

The performance of the PMI's sub-components was more mixed, with many of the sub-indices declining compared with their December levels.

Supply Management's Lucy Patchett takes a look at some of the key trends for 2019...

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) ended 2018 on a positive note, reaching its best level of the year. The PMI rose from 49.5 in November to 50.7 in December, which is just above the neutral 50-point mark and signals growth in the sector.

The headline PMI was well supported by three of the five sub-components: activity, demand and supplier performance. However, employment moved lower, while the Inventories Index edged back below the neutral 50-point mark, noted the Bureau for Economic Research (BER) in its January report.

The seasonally adjusted Absa Purchasing Managers' Index (PMI) rose to 49.5 index points in November from 42.4 in October.

This was the PMI's first increase after three straight months of declines and brought the index to the best level since July 2018.

The improvement was broad-based with four out of the five main subcomponents rising compared with October.

The distinction between direct and indirect procurement was traditionally made in the context of manufacturing businesses. However, procurement disciplines have evolved more widely into the non-manufacturing sector and, accordingly, the distinction between direct and indirect procurement has broadened.

In this month's SmartProcurement, Eman Abouzeid (CSCP, CIPS), a procurement and supply chain professional with global experience, explores some of the supply chain practicalities that arise from the distinction between direct and indirect procurement.

The Purchasing Managers' Index (PMI) remained virtually unchanged at a weak level of 43.2 points in September 2018. "The latest figure dashes any hope that the sharp PMI decline in August was a once-off occurrence", said the Bureau for Economic Research (BER) in its monthly PMI report.

The average level of the PMI in Q3 of 2018 was 46 index points, which is the lowest average since Q3 of 2017 and 3.5 points below the average recorded in Q2 of 2018.

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined to 43.4 points in August from 51.5 points recorded in July. August's level is the lowest recorded in more than a year.

Overall, the average level of the PMI recorded during the first two months of Q3 of 2018 was 47.5, which is below the neutral 50-point mark and two points below the average recorded in Q2 of 2018.

The deterioration was driven by sharp declines in the New Sales Orders Index as well as the Business Activity Index. However, inventories and supplier deliveries came in above the neutral 50-point mark in August, which provided some support to the headline PMI, noted the Bureau for Economic Research (BER).

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) fell further below the neutral 50-point mark in June. The index lost 1.9 points to reach 47.9, down from May's 49.8 points. The dip means that the average level recorded during Q2 of 2018 is only 0.3 points above Q1 of 2018's average and still below the key 50-point level. This suggests that the sector is unlikely to stage a solid recovery after output contracted on a quarter-on-quarter basis in Q1 of 2018.

Africa is deeply dichotomous. This reality confronts any procurement leader when addressing the question of African distinctiveness in the process of long-term strategic decision-making, says Dr Morne Mostert, Director of the Institute for Futures Research, in this month's SmartProcurement.

How can the procurement function adapt to the new reality of Industry 4.0? What can procurement leaders do to lead the change?

To explore possible answers to these questions, Dan Bartel, Group SVP, Head of Procurement & Logistics/Chief Procurement Officer, ABB, unpacks Industry 4.0 in the context of Klaus Schwab's 2016 book, The Fourth Industrial Revolution, in which Schwab (World Economic Forum Founder and Executive Chairman) identifies four significant effects of Industry 4.0 on businesses across industries.

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) dipped back to just below the neutral 50-point mark in May. The index declined to 49.8 index points, down from 50.9 in April. Despite the fall, the average level of 50.4 points recorded during the first two months of Q2, 2018, is not only above the neutral 50-point mark, but also higher than the 49.2 index points registered in Q1, 2018. This bodes well for a recovery in the manufacturing sector, after manufacturing output contracted on a quarter-on-quarter basis in Q1, 2018.

By Bertrand Maltaverne, a Solutions Consultant who helps organisations digitally transform their procurement practices.

To be honest, I haven't totally figured out all of the details of the inner workings of the blockchain technology. And I do not think I will ever try to as some of it is very technical. I also do not believe that Procurement professionals should do it either. However, it is important to understand the implications of the blockchain technology. Because of the way the blockchain works, it has unique characteristics that represent a breakthrough with tremendous value for Procurement.

The seasonally-adjusted Absa Purchasing Managers' Index (PMI) erased the losses sustained in March and edged back above the neutral 50-point mark in April. The index rose by 4 points to reach 50.9 index points in April. This is relatively in line with the level recorded in February and above the average recorded during the first three months of the year.

The improvement in the headline PMI was driven by increases in four of the five key sub-components, with only the Supplier Deliveries Index dipping lower compared to March. However, with the exception of the New Sales Orders Index, which is firmly in positive terrain, the other four sub-components remained below the neutral 50-point mark, said the Bureau for Economic Research.

'Procurement irregularities' has taken 3rd place on Corruption Watch SA's Corruption Report 2017 (CRW2017). Coming in at 12% of the reported types of corruption, procurement irregularities trails bribery as the most common form of reported corruption (27% of cases).

However, CRW2017 does not define 'procurement irregularities', which caused Xavier Greyling (MCIPS) to question if procurement irregularities do in fact account for only 12% of the reported cases, and, faced with the possibility of a far higher figure - what role does procurement play in what is lost to corruption every day?

The Purchasing Manager's Index (PMI) edged above the neutral 50-point mark for the first time since May 2017. The index rose to 50.8 index points in February, up from 49.9 in January. This means that the average for the first two months of 2018 is slightly above 50, which bodes well for the manufacturing sector.