Procurex North #PXNorth

Procurex North #PXNorth was what I did yesterday.  And great fun it was too.  Apparently I don't look anything like my picture.  Full houses all round until the last (repeat) time, and lots of questions and one to one sessions to fill in that awkward time between sessions that I would otherwise have wasted resting, eating my lunch or checking my notes for the next session...

Thankfully nothing I couldn't answer, despite the newness of the regulations - and some genuinely interesting news about a new innovation partnership in the North West which will a) be one of the first (if not the first) and b) of great potential value.  Hope to hear and share more later.

Procurex South is 10th March and has the added advantage of Digby Barker in the Supplier zone rather than me - I am running Contract Management in Southampton that day if you want to come along.

Oh, and the Yang Sing restaurant is just as good as it was when I lived in Manchester a dozen years ago.  Great night out.

New EU regulations and Procurex North

Procurex North is this week at Manchester Central on Thursday 26th  February.  Which just happens to be the day that the new UK Procurement regulations come into force for England, Wales and Northern Ireland.  So bound to be lots to discuss - and a lot of reading, rereading and arguing for us consultants to make sure we understand it before then.  Or at least think we understand it.

Procurex North is free if you are in the Public Sector, and £95 if you are in the private sector.  Hope to see you there in the Supplier zone.  I hope you will be gentle with your questions - or rather be as rough as you like with the questions but be forgiving of my answers.

businesss cards

I am moving offices, and today I decided to throw old all the business cards I have collected over the years.  It feels rather odd.  When I started you collected business cards and put them in an indexed folder of contacts.  Now we get them and put them into our database.  If we forget it takes seconds to find a contact on LinkedIn, Twitter or Google.  Those little rectangles now have a half life measured in hours.  Still feels odd though.

Innovation in Britain

Innovation and Mergers & Acquisitions were the topics at University of Bradford School of Management last night.  Jens Schneider gave an insightful M&A talk based on his experience.  TL:DR version is don't - only one in three actually generate increased value.
Rob Munro of System Growth gave an equally interesting talk about the need for Growth Engines in the UK.  I don't disagree with his message but I think we were the wrong audience - academics, consultants, MBA Students and SMEs.  I hope he manages to get the same message to where it must be heard - senior management, banking and finance (I think VCs mostly get it).

New EU procurement regulations - update

It looks like the new EU procurement regulations will be applicable to UK Central Government from 26th February (except in Scotland), and other bodies from 1 April 2015 (except in Scotland).

And I got confirmation from the publisher that we shall be printing an updated edition of Excellence in Public Sector Procurement just as soon as we can.  So I should better get on with writing.

New UK Procurement regulations - February 2015

The new UK Procurement regulations, enacting last year's EU procurement directive, have now been introduced to parliament and will take effect in England,Wales and Northern Ireland on 26th February 2015 I believe (the document linked to by www.gov.uk still helpfully has the phrase "date to be inserted" where the date should be, so I am not certain).  Scotland will follow later in the year (reminding us once again that Scotland, whilst part of the Union, is a different country with a different legal system).

These new regulations are something we have been discussing for a couple of years, and anticipating in earnest since this time in 2014 when the directive was passed.

There are some significant changes such as new procurement routes (Innovation partnership, competitive procedure with negotiation) and some more minor ones (the process should generally be faster).

If you want to know more then you can read the PDF at this link here, or attend one of the training courses that I have been plugging run by BIP Solutions or the Chartered Institute of Procurement and Supply where it will be it will be a little bit more digestible.    There is also a government discussion document about the introduction of the new regulations which is available here.

When I have had time to digest the changes, we shall also update our book Excellence in Public Sector Procurement (Emmett & Wright, Cambridge Academic 2011) which naturally will need to take account of the new regulations.  No timescale for that, but not before the summer I expect.

Bullying in the supply chain: Tesco

Following on from Sainsbury, the media is now focussing on Tesco and late payment.  The BBC had a very relevant interview with a small supplier from October 2014 to illustrate this week's story - Moo Chocolate.  Their point was that after contract Tesco decided to pay them late (or in their words to extend payment terms), and that the £6k involved was small change to Tesco but their monthly wage bill and late payment would have meant closure.

The interest on £6000 for an extra month is maybe £60 (based on 10%pa, which is probably too high as interest paid, and too low as interest charged).  I know that the cumulative sum of all these £60 is going to be a big number, but let's think about this in more detail. 

Firstly, if the buyer thought there was another £60 to be taken out of the price why didn't they go for it at the initial contract? If not, what do they think the consequences are going to be?

So, secondly, from working with ASDA Walmart years ago I believe that products are only going to be put on a supermarket shelf if they can make more money from the product than from whatever is on the shelf at the moment.  How much more?  Well I don't know.  But maybe 10% more is realistic.  Note that that is 10% more profit, not 10% more on the price.  In the case of small niche products like this chocolate bar the price is likely to be higher than Cadbury's anyway, but the profit margin will depend on a wide range of factors (raw materials, marketing, order costs, economies of scale in manufacturing, supplier power, contribution to supermarket promotions etc.).  So if the small supplier closes because of trying to get £60 extra out of the deal, you lose £60 in extra margin.  (yes, it will be replaced but if it could be replaced by something with a higher margin it already would have been).  That seems quite a risky way of doing things, unless you are absolutely certain that you can get the money out of the supplier - in which case see point 1.

And of course Tesco are now tarred with the same brush as Sainsbury, and in fact more publicly - which does not help their public relations and may have subtle longer term damage to the brand.

Was the £60 worth it?  Are the other £60s (from other suppliers) worth it?

I (oddly) hope that it is part of a considered strategy.  But I fear it was just opportunistic.

By the way, I was helping ASDA Walmart with bringing in these smaller suppliers.  The team there was well aware that small suppliers needed support before they were handed over to the "beasts" in category management who are as tough as they need to be.  And I don't underestimate how tough you need to be to do those jobs (I don't think I could) but you also have to be careful not to cross the line into being tough all the time when it is actually damaging to your long term interests

Procurex North Manchester 26th February 2015

It all seems to be Manchester this month.  Which suits me - always great to go back.
As mentioned in an earlier blog I shall be taking part in Procurex North at Manchester Central on Thursday 26th February 2015.  For those who don't recognise the location, it is the conference centre formerly known as GMex, where I once saw Prince - back when he was "the artist formally known as Prince".  Parking underneath GMex, sorry Manchester Central, tram  stop Deansgate-Castlefield, (formerly known as GMex) or St. Peter's Square (still called that as far as I know)

I shall be running the Supplier Training Zone (details here) looking at the new EU procurement regulations which are coming in (literally) any day now, sustainability and selection criteria. 

There will also be a Buyer's training zone, an E-enablement zone (where I hope to be able to sneak in to hear the latest about procurement cards), and keynote speeches from Sir Howard Bernstein (Chief Exec of Manchester City Council, and one of the architects of the great development of Manchester over the past 20 years),  Jim Hemmington (head of procurement at the BBC - don't forget to ask questions about Salford), Sally Collier (Chief Exec of the Crown Commercial Service) and several other speakers.
Plus the usual array of exhibition stands.

Always a great event - hope to see you there.

Preparing Perfect Tenders, Manchester 25th February 2015

Another course I am running in February 2015 for PASS Procurement is Preparing Perfect Tenders - also in Manchester at the Mercure Piccadilly.  The next day is Procurex North at GMex if you want to make a trip of it.

Details are here

Introduction to Public Procurement: Thursday 12th February 2015, Manchester

I am running an Introduction to Public Procurement for PASS Procurement at the Mercure Manchester Piccadilly on Thursday 12th February 2015.   Usually a very good event, with lots of  people relatively new to Public Procurement - so they often ask the most penetrating questions!

Full details on the BIP Solutions website here. http://www.passprocurement.com/public_sector_event/introduction-to-public-procurement/