Commentary

PMI push eases in November - manufacturing recovering, but needs greater demand

PMI_Dec2020.jpgThe Absa Purchasing Managers' Index (PMI) declined to 52.6 index points in November from the solid 60.9 points recorded in October. The decline comes after three consecutive upward moves and brings the index to the lowest level since July 2020.

While still signalling an improvement in business conditions, the drop suggests that the manufacturing sector's recovery is starting to lose momentum. This was to be expected as output levels for many subsectors are nearing pre-pandemic levels and will need sustained growth in demand to fuel a further output expansion, noted the Bureau for Economic Research (BER) in statement.

Procurement perspectives: leadership in procurement is vital to organisations

StephenBauld_100.jpgBy Stephen Bauld

The COVID-19 pandemic looks like it is entering the next phase. We could be looking at a long time before we get back to the new normal and leadership in procurement will help to shape the wellbeing of organisations moving forward.

The argument that organisations need to begin now to train their next generation of leaders is not intended to suggest that a programme of study will produce leaders that are great. Although it can be stated with some confidence that the systematic study of leadership will produce leaders who are better than they would be without it, great leadership is a very difficult thing.

My #1 procurement career tip: be connected

IanColcroft_100.pngBy Ian Holcroft

As you move forward with your career, remember that it is not just about the number of connections that you have - it is about the quality of your connections. As the old adage goes: it is not about what you know, but who you know.

As the majority of us spend more time working from home in the 'new normal', being connected is more important than ever.

How can Procurement best align with Finance right now? A CFO perspective

AlignProcurementAndFinance_150.jpgRight now, as the COVID-19 pandemic takes its toll on jobs, consumer spending and the global economy, many businesses are scrambling to adjust to a new financial reality. They are also coming to terms with the fact that the path to recovery remains long and mostly uncertain. Experts, including Deloitte, predict that the United States (US) economy will not bounce back until mid-2021. The Bank of England is anticipating slower recovery, as late as the end of 2021, for the United Kingdom (UK).

Within organisations, the Chief Financial Officer's (CFO) voice is one of the most critical during a crisis. But contributing directly to a firm's financial resilience is the Chief Procurement Officer (CPO), who has a strategic role in leading a firm through the tough times ahead.

Spend Matters spoke with a CFO who has many years of experience across corporate finance and public accounting, and is currently the CFO of spend management firm Jaggaer. Spend Matters asked Jeff Laborde how he sees Procurement and Finance best working together to drive benefits across a business, given their natural overlap in priorities and responsibilities.

Women push to deliver more while juggling work and life amidst COVID-19

AkashniWeimers_100.pngBy Akashni Weimers

We have all encountered some degree of awareness, whether by experience or otherwise, of the challenges that women have faced in attaining positions of power and influence in key positions. At its core, many of these challenges are attributed to the ability of a woman to balance her work role and life.

COVID-19 poses a major threat to achieving/maintaining this balance. While working from home may have cut out the morning rush, or the frustrations of finding new nemeses within traffic jams on the daily, it has also replaced this 'extra' time with homework prep, online schooling and doing the laundry...all while ensuring that your toddler is not found swinging from a lampshade; and that breakfast is ready on time (phew!).

Reinventing procurement: the case for new operating models

MatthiasGutsmann_New_86.jpegIn late July, Digital Procurement World (DPW) brought together some of the world's most progressive chief procurement officers (CPOs) for a virtual roundtable discussion on how the ever-changing digital environment can help procurement challenge the status quo and design operating models that deliver both innovation and value.

Matthias Gutzmann, Founder of DPW, gives us the key takeaways from this discussion:

Rules vs. discretion in public procurement

EricaBosio_90.jpgBy Erica Bosio, Programme Manager: Growth Analytics, Development Economics Vice Presidency, World Bank

The trade-off between rules and discretion has been a central topic of research in public procurement. Kelman's (1990) early work stressed the costs of rigid regulation in United States government procurement and made the case for discretion. Since then, research on the benefits of discretion has progressed rapidly in Europe. New research confirms that politicians do not trust the bureaucracy, even in countries with high human capital and efficient institutions.

My new paper (joint with Simeon Djankov at the London School of Economics and Professors Ed Glaeser and Andrei Shleifer at Harvard) adds to these studies with a broader geographic and theoretical focus. We cover 187 countries and the complete path of the procurement process.

The theory delivers a basic prediction: that procurement regulation is more valuable when the incentives of the bureaucrats are not closely aligned with support for social welfare. Properly motivated bureaucrats require fewer rules. Countries with weak bureaucracies need strict laws to regulate them; countries with strong bureaucracies can allow the regulator more discretion.

COVID-19 pandemic: a rocky road to a new business norm

RockyRoad_150.jpgBy Gordon Reid with input from Mieka Cleghorn, SA Managing Director, Transparent

As a semi-retired business executive, and after spending the past twenty plus years working for some of South Africa's leading companies, the COVID-19 lockdown has afforded me valuable time for some serious thinking.

Many businesses will need to change the way they operate to remain afloat. Useful insights and lessons from company closures will undoubtedly surface in time, but for now we should focus on the future and what can be done now to keep our businesses running.

The intention of this article is to stimulate discussion, thought and imagination with a view to developing a roadmap to traverse the rocky road to economic survival post-COVID-19.

Face protection masks could inject at least US$1.5-billion annually into the African economy

DouglasBoateng_100.jpgOn 27 June 2020, MarketWatch reported that the global disposable face mask market size was anticipated to reach US$23.81-billion by 2027.

On 30 June, Goldman Sachs released an extensive economic analysis of why the wearing of a face mask is a must. By studying the link between coronavirus infections and mask mandates in US states and overseas, the reputable global investment bank estimated a national directive could cut the daily growth rate of confirmed cases by one percentage point to just 0.6%.

According to the bank, the reduction could prevent the need for lockdowns that could wipe 5% off of US gross domestic product (GDP). The implications of not wearing a mask and the associated health and socio-economic consequences are no different in emerging and developing economies. The coronavirus (SARS-CoV-2) and associated COVID-19 pandemic has, however, resulted in the emergence of a face protection mask (FPM) industry.

In Africa, this rapidly-evolving sector could contribute approximately US$1.5-billion annually to the continent's economy. This is according to supply chain and industrialisation expert, Prof Douglas Boateng.

PMI: activity continues to improve as lockdown easing lifts production levels

PMI_June2020_200.pngThe Absa Purchasing Managers' Index (PMI) for June 2020 showed that conditions continued to improve in the South African manufacturing sector. This is after most of the sector came to a near standstill during the nationwide Level 5 lockdown in April 2020 and only partially returned to normal production levels in May 2020.

The headline PMI rose further to 53.9 index points in June, up from 50.2 in May.

Importantly, while the headline PMI rose to a multi-year high, this does not mean that the level of actual manufacturing production rose to a multi-year high. "Instead, the further rise in June merely means that a solid month-on-month increase was likely recorded", said the Bureau for Economic Research (BER).

Coronavirus has exposed just how delicate our procurement eco-system really is

IanThompson_100.jpgDo we need to fundamentally re-imagine what our procurement eco-system looks like? Ian Thompson, Regional Head at Ivalua, thinks so and here is why...

The self-disruptive CPO: why we need a new kind of procurement leader

BernhardRaschke_100.jpegWhat kind of future-ready procurement leader is needed to survive a rapidly-changing business world? Only a few months ago, the stock market was looking strong and the ongoing trade war between China and the United States indicated future pressure on global supply chains. No one could have predicted that schools and universities would close, companies would tell their employees to work from home and people would be stockpiling toilet paper, of all things.

16 tried-and-tested tips on running productive meetings remotely

ProductiveRemoteMeetings_200.jpgBy Michael Healy, Supply Chain Partner

The outbreak of COVID-19 has forced companies to get creative about how they connect and meet with customers and teams.

Working with cloud applications allows us to workshop, design and configure systems remotely. With apps like Zoom and Microsoft Teams, working remotely can be easy and cost effective. But making it a positive and productive experience for everyone joining in does take some planning.

Here is a checklist from Supply Chain Partner to help you get the most out of your remote sessions:

March PMI improves, but quarterly performance weakest since 2009

PMI_down_100.jpgDuring Quarter 1 of 2020, the seasonally-adjusted Absa Purchasing Managers' Index (PMI) experienced its weakest quarterly performance since 2009. The PMI averaged at 45.9 index points, compared with 47.6 in Quarter 4 of 2019.

The weak quarterly outcome was despite the PMI improving to 48.1 index points in March 2020, from 44.3 index points in February. Nonetheless, the PMI still remained in contractionary terrain for the 14th consecutive month.

PMI continues its decline to 2009 financial-crisis levels

PMI_down_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined for a fourth consecutive month to reach 44.3 points in February 2020. The 0.9-point decline brought the index to its lowest level since the second half of 2009 when the economy started to recover from a deep recession triggered by the global financial crisis.

"At four points below the average reading in 2019, the current level is only six points above the lowest point reached in 2009", noted the Bureau for Economic Research (BER) in a statement.

How the coronavirus will influence your supply chain and what to do about it

Coronavirus_150.jpgWhat key steps can you take to limit the potential effects of the coronavirus on your organisation?

On 9 February, the world received news from China that it didn't want to hear.

The number of confirmed deaths from the coronavirus had overtaken that of the 2003 Severe Acute Respiratory Syndrome (SARS), with more than 1 000 casualties.

In addition to that, the virus is spreading at an alarming rate. There are now more than 40 000 confirmed cases. And this number is increasing with as much as 20% every day.

While the virus is terrifying from a public health perspective, it is also alarming in terms of supply chain. Wuhan, China, the epicentre of the virus and now a city in total lockdown and complete disarray, is one of the world's largest industrial hubs.

Procurious Founder, Tania Seary, takes a look at how the coronavirus is affecting global supply chains - and what you can do about it.

Procurement perspectives: justifying consultancy fees

StephenBauld_100.jpgBy Stephen Bauld

One might wonder why, as a consultant for over a decade, I would write about overpriced consultants. Being in this industry, I often hear stories about the high costs incurred when securing consulting services; these stories are widespread and frequent.

Indeed, it is surprising how many consultants are so sensitive to this issue. So much so that they actually make a point of declaring in their advertising material that "we are not going to charge you outrageous fees". Much of the adverse newspaper commentary in relation to the cost of consultants to government is exaggerated.

Procurement Gold: Unleashing the real power of your supply chain

TaniaSeary_100.jpgThe human element will make or break your supply chain career. Procurious Founder Tania Seary reveals the human strengths that artificial intelligence (AI) will never replace and how to leverage this competitive advantage.


 

 

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