Category Management

How to procure the right travel partner

EuanMcNeil_100.jpgThey say people do business with people they like. That may be true in organisations that have a rather flexible approach to procurement, but in the world of travel management it's often more to do with the bottom line than who plays a better game of golf...

Selecting the right Travel Management Company (TMC) to support your organisation can often be a daunting and drawn-out process, especially when you struggle to differentiate the services offered by each TMC, says ‎Euan McNeil, GM FCM Travel Solutions South Africa, a division of Flight Centre Travel Group. "The secret to finding the right match for you is to understand that what you put in, is what you get out."

Importance of logistics in supply chains: a micro perspective

TafaraSvosve.jpgToday companies face increasing levels of competitive pressure and challenges to maintain and improve profitability. There is also increasing pressure from customers and shareholders, necessitating that managers seek ways of reducing costs, while at the same time improving performance.

In a series of SmartProcurement articles, Tafara Svosve (Msc Supply Chain Management; CMILT) will focus on the role of logistics in supply chains. Our goal is to help our readers identify skills gaps they need to close to improve their logistics operations and, hopefully, improve the overall logistics performance index of their countries on a global scale.

How are you measuring your corporate travel ROI?

EuanMcNeil_HS.jpgTravel managers have traditionally been encouraged to keep their travel costs under control and to not use travel as a tool to achieve results.

These notions are being challenged by travel management companies, which believe that travel should be seen as an investment instead of purely a cost. After all, how can a business grow and achieve its goals without business travel?

In many company structures today, travel remains a fixed cost, lumped as a procurement department responsibility.

Understanding the role of Procurement will help agencies secure more client wins

JohannaMcDowell.jpgThis was the finding of Scopen Africa, whose information - obtained from the Agency Scope 2017/2018 study - indicates that 54% of advertising and media agency negotiation processes are led by marketing, while in 41% of those processes both parties (marketing and procurement) are present. The study also found that 63.7% of marketers are influenced by an agency's offering and 36.3% make their final decision based on the agency's costs, which is why procurement needs to be involved.

Procurement needs to be taken seriously by agencies, owing to its focus on selecting suppliers that are viable as well as having sustainable business models and a good track record.

When agencies are looking for business opportunities, being in direct contact with procurement will be useful, advises Johanna McDowell, Partner at Scopen Africa and CEO of The IAS (The Independent Agency Search and Selection Company).

Frenemies - making 'cents' of advertising spend

SimbarasheMsonzah.jpgThe digital marketing category has opened businesses up to new opportunities and challenges. While marketing now has the capability to reach more customers, procurement now has the numbers and visibility of the supply value chain for the marketing category. However, the digital revolution has also handed the procurement function a chance to reset historical squabbles and confrontations with colleagues in marketing.

So, what can business executives expect from these frenemies?

"Well, for one thing, they should be measuring digital advertising's return on investment (ROI) by tracking metrics that impact directly on profit and revenue", says Simbarashe Msonzah, Independent Procurement Consultant and Executive Committee Member of the CIPS Gauteng Branch.

New ways needed to procure construction projects in 2018

Stephen_Bauld.jpgManagement methodology in some municipalities is changing for the better, says Stephen Bauld. During 2017, Bauld spent a great deal of my time working on behalf of contractors, raising issues related to construction projects with municipal staff at every level. He has seen a commitment by senior management to make systems better and to listen to industry concerns to make positive changes to the process.

Is fragmentation in corporate travel playing havoc with your policy?

EuanMcNeil_HS.jpgCorporates, suppliers and travel management companies (TMCs) need to work together to help improve transparency and reduce the impact of fragmentation on costs and efficiencies.

What is fragmentation? It's when staff try to book travel within their travel policy but are forced to access different sites to source that travel other than the company's preferred procurement channels and processes.

Do SA business travellers toe the travel-policy line?

 

TravelPolicy.jpgTraveller non-compliance is an increasing area of concern among travel buyers and managers internationally, with great efforts made to persuade travellers of the benefits of compliance that extend beyond “because the company said so”.

A recent study conducted by FCM Travel Solutions and the African Business Travel Association (ABTA) revealed that the level of non-compliance among South African travellers is limited, however. At least 42% said that their travellers rarely or never booked out of policy, with a further 39% indicating that it didn’t happen often.

Is your travel technology a strategic procurement partner?

 

EuanMcNeil_HS.jpgWe’re in the throes of the 4th industrial revolution, where technology has changed the way we live and do business. Research shows that by 2020, half of the world’s business travellers will be millennials. With this in mind, it’s not surprising that the role of travel management companies has evolved way beyond making travel bookings.

Offering an online booking tool is no longer sufficient. To remain competitive, travel management companies need to draw on the latest technologies to create integrated travel ecosystems through which they can help their clients achieve specific business objectives.

Process-driven travel management has evolved into a strategic procurement function, requiring professional skills in benchmarking suppliers, issuing RFPs, negotiating contracts and collecting data for KPIs, says Euan McNeil, General Manager of FCM Travel Solutions SA, in this month's SmartProcurement.

Travel benchmarks point to behaviour massively driving costs in 2017

 

AlanLow_2013.jpgThe domestic corporate travel market is set to undergo many subtle changes in 2017, says Alan Low of category benchmarking company Pi. With a forecast of stagnant economic growth, downgrades and political uncertainty, organisations will be looking for more savings and greater efficiency.

The interplay between travellers, travel managers and service providers, such as Travel Management Companies (TMCs) will become vital to managing traveller behaviour and travel processes.

When does labour become a commodity to be procured?

 

Commoditised_Labour.jpg

Mluleki Ntlemeza, a supply chain consultant wonders if there is point at which labour should be procured by procurement, and not through traditional HR processes, in this month’s SmartProcurement.

Failed supply chain policies led to Eskom's Tegeta payments - Corruption Watch

 

BenNgubane.pngEskom failed to follow its own supply chain policies, the PFMA and Section 217 of the Constitution when making pre-payments to the Gupta’s Tegeta exploration and resources to secure coal supply, said Corruption Watch in a statement.

“We are concerned about the nature and scale of procurement irregularities at Eskom,” said Corruption Watch’s executive director, David Lewis.

Food safety reliant on efficient and transparent supply chain systems

 

FriedelSpies.jpgFood safety is a priority throughout the whole supply chain. From manufacturer, its suppliers and logistics service providers, to a retailer and ultimately the end-user, critical care needs to be applied to ensure that food safety and hygiene are not compromised.

But, how best to manage food safety across the global supply chain while adhering to regulatory requirements remains a difficulty for the food industry.

“It has become more than a necessity, but an obligation for logistics service providers to provide clients with necessary controls to ensure best practices and operations when it comes to food safety and hygiene” say Friedel Spies, Business Development Director in South Africa, ID Logistics in this month’s SmartProcurement.

PMI down 1.2 points, but began Q3 strong

pmi.jpgThe seasonally adjusted Barclays Purchasing Managers’ Index (PMI) fell by 1.2 index points to 52.5 in July. Despite the slight drop, the current level still signals that the sector experienced a reasonably strong start to Q3 2016 after a robust performance during Q2, reports the Bureau for Economic Research.

The PMI remains in line with recent Eurozone manufacturing PMI readings (a key export market for South-African produced goods). Initial data releases suggest that the Eurozone economy has so far remained relatively resilient after the UK’s brexit vote, which is encouraging for the local sector’s export performance going forward.

Purchasing commodities to achieve more than BEE compliance

 

LindelweKunene.jpgThe BEE Codes have been top of mind since the beginning of 2016, unfortunately it is for the wrong reasons. Recent headline-grabbing stories of unprecedented racial tension have revealed a greater need to intensify efforts to achieve real transformation in South Africa. Despite being seen as a complex technological commodity, the provision of printers and printing technology cannot be overlooked in achieving that transformation.


Traditionally viewed from a cost and total cost of ownership (TCO) perspective, it is essential for procurement to consider factors in addition to the costs of office output devices. Failing to observe the level to which a supplier is engaging in economic transformation, is overlooking the opportunity to move beyond mere BEE compliance and engage in economic transformation, says Lindelwe Kunene, Nashua’s Chief Human Resource Officer in this month’s SmartProcurement.

R3 600 - the cost of a purchase order in government

 

NhlanhlaNene.jpgThe central procurement office (CPO) created by Treasury to leverage volumes in the government has already led to savings amounting to billions of rand, says Finance Minister Nhlanhla Nene.


"The cost of a purchase order will be reduced from approximately R3 600… to between R500 and R750 using the new technology platforms,” said Nene, in a written reply to a parliamentary question by Democratic Alliance MP Malcolm Figg.


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