Wal-Mart’s ethical sourcing – Green does not mean ethical. Despite what Wal-Mart says are some marked improvements at its supplier factories, the retailer’s recent ethical sourcing report is being met with scepticism

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As the world’s Green IT frenzy continues, e-procurement specialist Peter Robbins talks to key members of the Department for Work and Pensions’ EDT, Delivery and Transformation Group Chris Haynes Director and Damien Kennedy, head of business partnerships.
- Where do you see green IT at the moment?
- What do you see as the future of green IT?
- Where do you see procurement sitting within the future green IT agenda?

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The retailer’s cancelling of contracts, after allegations of exploitation, highlights monitoring issues, writes Roland Gribben of the Telegraph

“Supply chain issues have moved higher up the boardroom agenda as the credit crisis bites deeper amid fears that the economic slowdown will accelerate into a full-blown recession. The conventional safety kit in the shape of belt-tightening and cost-cutting is being rolled out but the uncertainties about the depth and length of economic turbulence leaves most businesses facing a considerable dilemma.

The procurement function has a higher priority and suppliers are under intense pressure to cut costs and accept tougher contract terms at a time when supply chain strategy is assuming new dimensions and the Primark case - contracts were cancelled with an Indian supplier after allegations of labour exploitation - highlights the ethical and monitoring issues and dangers tied to outsourcing in low-cost countries. “I can hear other companies saying ‘there but for the grace of God go I’,” said an industry executive.”

Tiernan Ray at Barrons predicts a bright future for Ariba, if they are able to control costs and continue the growth of subscription sales.

“SOME CORPORATE TURNAROUNDS FARE WELL IN RECESSIONS, thanks to their above-average earnings-growth. Dot-com flameout Ariba (ticker: ARBA) has the chops to be among them. Its shares have a reasonable multiple, and the software vendor has muscled up its online, commission-based marketplace, which helps companies manage supply-spending. Meanwhile, the stock’s still in the office-park dumpster.

Ariba shares hit an all-time high of $169 in 2000 amid the buzz for B2B, or business-to-business, software companies. But like other 1990s tech darlings, it couldn’t turn a profit then, and fell hard, as low as 5, in the new century: Now the shares are around 16, and Ariba’s business is showing signs of life.”

The full article and associated video can be found on the Barrons website - Ariba — Dot-com Flameout’s New Fire

Lawson’s customers can leverage the Lawson Procurement Punchout application to integrate with SciQuest’s Spend Director(TM) solution-an on-demand eprocurement platform that combines the catalog management and supplier enablement capabilities procurement professionals need with the familiar online shopping experience users want.

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The Mayor of London’s defines Green Procurement as part of the Green Procurement Code.

“Green procurement is environmentally responsible purchasing; it’s about using your purchasing power to promote productive use of resources and materials. This involves integrating environmental considerations into all stages of the purchasing process. . . . . .”

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Horses for Sources speaks to Gianni Giacommelli about technology as a business driver for Procurement BPO

“I was recently engaged in an excellent conversation witn Gianni Giacommelli, who leads marketing strategy for SAP’s BPO division, on the way forward for the Procurement BPO market. One of the aspects about SAP that has impressed me, is their strong view of BPO as a opportunity, as opposed to a threat, to their business.”

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Six months after taking up the role as editor of Procurement Leaders magazine, I took a few minutes to catchup with David Rae to talk about some of the key challenges for procurement executives and to compare the profession to that of finance.

This video interview was streamed directly from my phone via Qik, so please excuse the video and sound quality(will use an external mic next time). The great thing about these interview is they are live, uncut and accessed instantly. I am leaving the Hi Definition video to team over at Procurement Leaders. Going forward I will post the date, time and topics of planned interviews so you can join in and ask questions live.

I look forward to hearing your thoughts on the this type of live streaming video and any suggested topics or people to interview.

Here are my top five sourcing and procurement blogs which I check out everyday

• Spend Matters authored by Jason Busch
• Sourcing Innovation authored by Michael G. Lamoureux
• Supply Excellence authored by Tim Minahan, Justin Fogarty and the Ariba team
• E-Sourcing Forum authored by David Bush and the Iasta team
• Horses for Sources authored Phil Fersht

Let me know if I there are any others that I should add to my reading list. By the way I intentionally left the Procurement Leaders blog off the list, as David Rae shares a desk with me so I normally know whats going on this blog!

Whilst searching through the Ariba Spend Management Learning Center , I stumbled upon a very interesting Aberdeen report entitled CPO Rising: The CPO’s Agenda for 2008.

“The CPO on the rise is based upon demonstrated competence: Best-in-Class companies have placed 70% or more of their spend under management. CPOs and procurement departments can adopt and expand technologies and sustainable practices, such as improving internal collaboration and systems sharing; improving supplier relationships; adopting a center-led procurement strategy; and considering Low-Cost Country Sourcing (LCCS). This report addresses many more issues facing the contemporary CPO.”

What interested me the most about this report was the section on Procurement Key Performance Indicators. The report highlights that the ‘Best-in-Class’ enterprises put a greater significance on implemented / realised cost reduction savings and supplier performance (price, delivery, quality, service, etc.), whilst the Procurement ROI (savings / operating costs) and spend under management rank higher with ‘Average’ and ‘Laggards’.

The report goes on to say

“Procurement ROI, defined as annual savings generated by the procurement department divided by the total annual investment in procurement operations, is an interesting measure and one that deserves a discussion given its recent promotion by “consultants” in the marketplace. The measure misses the larger goal of business operations since CPOs, like the enterprises that employ them, should be focused on generating the largest total net return from their department. While Aberdeen views the metric as a decent relative indicator of procurement department performance (when used in context with other KPIs on the list below), it should not be a primary goal for the CPO to maximize this number. Beyond savings and efficiency metrics, 79% of procurement”

Top 10 Procurement Key Performance Indicators (KPIs)

Source: Aberdeen Group, February 2008

Procurement KPI’s is a topic is always passionately debated at the Procurement Leaders Roundtables, Aberdeen’s view seems to make sense but I love to hear, what your thoughts are on this topic. Would there be scope to agree and industry standard?

Picture Copyright: Marcela Barsse