Review of eWorld Procurement and Supply Conference : 3rd October 2018

09 October 2018

I went to the eWorld Procurement show last week, as the agenda / speakers looked excellent and I fancied a day out to get a clearer view of the current procurement market. It was in Westminster QEII exhibition theatre, and I’d wholly recommend it for procurement professionals if you are unaware. The “free breakfast” wasn’t actually free, but lets not split hairs in what was an excellent event.

 

Clearly I couldn’t attend every session so I have written up my learning's from the ones I attended. I’m sure the broader sessions were equally as informative.

Keynote : The Social Value Act - Chris White, Director for the Institute of Industrial Strategy, KCL

Chris explained the Social Value Act and how it came about. Its an interesting piece of legislation that takes assessment of suppliers beyond the pure financial, and looks at social, economic and environmental tests for procurement and commissioning of projects. As a relatively new procurement guy, I was unaware of the Social Value Act and was impressed with the principle that money isn’t everything – albeit I got the impression very few people in the audience were adhering to its principles. I will be looking at integration of some of these measures into the Embedded Directory algorithms over time as I really like the concept to assess suppliers on a more rounded basis, although the verification of a suppliers approach could be a complex process.

End to End Procurement Automation – Ilija Ugrinic, Director at Proactis

Ilija spoke about the tools that Proactis provide and how they are used to improve the full source to pay process, which seemed impressive. As a global procurement provider across multiple sectors they clearly have a good story, and can cover all aspects of the procurement processes.

Automation of the procurement process I think is a given. The tooling exists to assess and enforce best practice to support process improvement and automation, and reduce inefficiencies in approvals and sourcing. I have no idea how much these tools cost, and I can imagine a lot of the manual effort performed by the audience could be reduced (good and bad), but clearly there is a movement in this direction for the more progressive businesses. With increased regulation and cost pressures, I can see a clear case for this rigour and repeat-ability in a procurement process.

The one key takeaway stat I got from the presentation was that 75% of inbound calls to an Accounts Payable function were suppliers chasing payment. How ridiculous is that? If people paid their bills on time, you could reduce 75% of the effort for an AP function……

AI enabled Sourcing Automation : Alan Holland, CEO at Keelvar

Got my geek on at the Keelvar presentation, where Alan spoke about his work with mainly FTSE 250 companies who were deploying Bots to fully automate sourcing projects, reducing the time to source from weeks to hours. Clearly not everyone’s cup of tea, but an excellent insight into where Procurement could end up if AI became less cost prohibitive, and also the potential efficiencies available for more agile sourcing.

The technology as explained seemed to be VERY technical in its current form. Keelvar pride themselves on being AI experts and Data Scientists at the core, so much of the discussion regarded the “stochastic modelling” of supplier response data to drive trends and patterns. Workflow automation is pretty much a given now, but using data to inform the workflow is clearly beneficial. Much of the focus of the technology appeared to be price and discount focussed, and there was some discussion about expanding out the data models to derive Best Value based on multiple metrics (akin to the Social Value Act discussions earlier) which HAS to be the right way to go.

All that said, some of the specific achievements of the Keelvar technology were impressive. A conglomerate of companies went to tender for their car rental agreements through the Keelvar tooling, and took $13m (about 10%) out of the annual spend in a day’s auctioning process. The other interesting discussion was that because the procurement event was only a day long, and was for substantial spend, a lot of the supplier decision making could be made quickly, because you got the attention of the VP of Sales for the event (they were involved in the auction, rather than reviewing a 6 week traditional tender).

It also became clear that this technology is really only relevant to Product / Volume procurement. Services, with all of its nuances around quality, availability and capacity, is a long way from AI automation – where a long way is probably 5 years….. That said, very impressive presentation (and technically fascinating, which is why I liked it).

Procurement and Brexit Bombshell – John Glen, Chief Economist to CIPS

I’ve not heard of John before but I could watch him all day. Able to deliver quite complex and dull messaging with a sense of humour and a strong opinion, it was the best presentation of the day for me. He was clear up front that he was a devout Remoaner, but based on his statistics, you can see why. Full disclosure, I am also a Remoaner and hate the whole Brexit thing.

John explained that the Brexit vote has caused some interesting dynamics, based on a recent CIPS survey. 32% of EU buyers are actively looking to replace UK suppliers with EU based ones, and 22% of all buyers are struggling to secure supply contracts post March 2019. Clearly this makes procurement difficult, and supply of goods from UK suppliers. He also explained that the primary concern was regarding availability of skills, with UK at pretty much full employment gaining access to skills capacity is difficult, and creating a barrier into EU skills in this context has the potential to slow our economy substantially. That said, John pointed out that one of the promises of the Leave campaign was to “curb immigration”, and whereas since the vote the EU immigration figures have dropped from 178k to 87k, the non-EU immigration have grown to significantly fill that deficit. We have not curbed immigration, we’ve just swapped it for non-EU migrants.

John also walked through a very depressing study focusing on movement of goods at Dover. It currently takes 30-40mins to process a non-EU lorry because of the additional paperwork (EU lorries come straight through due to friction-less trade agreements). If we fail to implement friction-less trade, the impact on freight at just Dover will be immense. 11,000 lorries a day come through Dover from the EU, 20% of them carrying perishables. If the additional processing time for each lorry is just 3 minutes, it will create a 10 mile tailback on the travel routes into Dover. Perishables deteriorate at 5% per hour, so assuming it takes 4 hours to get through the tailbacks, 20% of perishable goods will be unsaleable by the time it has transcended customs. Bonkers.

In the CIPS survey, businesses were asked what the impact would be of an additional 30 minute delay in customers. 1 in 10 businesses said they would be concerned about bankruptcy. WTF.

Conclusions

The event was really interesting, in that it maintained focus on the core current issues for Procurement professionals in the UK. The exhibition area had some interesting suppliers, I spoke to two IT specialist procurement companies who were primarily commoditised IT product resellers, which was a shame. IT Procurement, especially around Services, has an excellent opportunity to be improved and I am re-enthused to drive improvements using the Embedded Directory. Needs a bit more thought though.

Oh, and Brexit is going to be awful. But we all knew that anyway.

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