PPP Management

The Prime Minister identifies the skills in the UK and how reshoring can not only help the economy but plays to the skills of UK procurement and manufacturing professionals. http://www.supplymanagement.com/news/2014/cameron-calls-for-uk-to-become-the-re-shore-nation With rising costs in China and the Far East UK becomes more competitive.  Taking the recent Deloitte study that identifies that competitive advantage can be achieved by doing things better not cheaper; does this mean that the UK now has both tenets?

The BBC carries an article that is both encouraging yet disappointing in equal measure. http://www.bbc.co.uk/news/uk-politics-25884915 The article identifies 2 points. 1.  The government's CPO identifies appalling behaviour by IT suppliers. 2. The government limits IT contracts. Never has the phrase "caveat emptor" been more appropriate. Questions and issues abound in equal measure. The Cabinet Office minister Francis Maude said in one case a government department was charged £30,000 for changing the text on a web page. Crothers said a supplier tried to charge £65 for a laptop power cable worth around £20 Who approved the contracts that allowed for such charging? Why were the issues not raised? How many more of these contracts are in the public vaults. If contract sizes are to be limited then this has the potential to a) drive contracts to be competed by stealth; b) disjointed contracts that fail to achieve the outcomes; c) increased bidders costs and therefore overall in

Interesting developments in the Crossrail project highlights a very interesting scenario; due diligence has resulted in a re-think over the delivery methodology for rolling stock. We should applaud Crossrail in taking stock of the situation and reviewing the financing arrangements before completing a PFI arrangement.  Whilst much maligned PFI arrangements must be judged on each situation. What is perhaps puzzling is that in this instance a change in financing arrangements might delay the delivery of rolling stock; are there that many of providers of rolling stock? It might however create problems in the procurement process as it is a fundamental change to the process and may result in the need to re-compete.  In this situation legal advice is absolutely essential.

The story detailed in this Supply Management article ( http://www.supplymanagement.com/news/2014/procurement-failings-at-ni-health-trust-disclosed ) makes for sorry reading for all procurement professionals.  If the government is serious about bringing best practice to the public sector something MUST be done and be seen to be done about this.

The article in the guardian ( http://www.theguardian.com/business/2014/jan/27/oil-price-volatility-undermines-economic-growth-david-king ) identifies potential problems in oil price volatility.  Uncertain behaviours by key players can only be mitigated to a certain extent by the switch to alternative fuel sources (Shale gas). What is very interesting is this article in Supply Management ( http://www.supplymanagement.com/news/2014/airline-launches-new-biofuel-supply-chain-initiative-in-the-uae ) that announces the work by Etihad, fuel companies and technology institutes in developing biofuel to mitigate the risk of fuel supply problems.  Why is this particularly interesting? Because the owners of Etihad are part of the UAE establishment, an establishment who are owners of huge oil resources. 

The article covered in Supply Management entitled Capita fined £56k for its poor performance in court translation hides a number of issues, not only does it identify the poor performance of the service provider to meet the specification standards it contracted against it also identifies problems within the MoJ in its contract management.  It is worthy of noting that it was the MoJ that was responsible for the tagging contracts with Serco and G4S that gained notoriety for all the wrong reasons. 

A very interesting report from MooD International  on Outsourcing gets coverage in Supply Management. http://www.moodinternational.com/news/stateofrelations.html The report identifies relationship development and maintenance as key to the positive or negative perception of the service.  Key to the issue of Outsourcing is understanding the drivers of the decision to Outsource and the maturity of the organisation outsourcing the activity. An interesting point that MooD make is the question of decision making by the service provider; this specific issue is an absolute indicator of the Outsourcer's capability and reasons.  Strict cost adherence and a less than comprehensive understanding of the business will lead to a contract that does not allow for the service provider to deviate from a list of activities. The ability to capitalise on opportunities identified through effective MI (MooD's core business) is an indication of how mature an organisation who has outsourced truly is. In

Today's Independent carries the story of Vodafone re-competing its advertising provision ( http://www.independent.co.uk/news/business/news/vodafone-opens-bidding-for-600m-advertising-contract-9077185.html ) The article has the title: Vodafone opens bidding for £600m advertising contract Perhaps a slightly odd title but it isn't the semantics of language that makes the article interesting.  More interestingly it is the thought "how to judge the submissions?" that is the most thought provoking question the article raises. It re-surfaces the issue of contracting for inputs or outputs.  What are the criteria that the competition will award against - number of pages of advertisements? Seconds of TV commercials? or Increases in Sales?  The first two are input based contracting and are both measureable and directly attributable to the contract.  The last criteria - Increase in Sales - whilst measureable (albeit in percentage terms, market share or revenue are all potential m

A respected journal and an outstanding consulting firm: http://hbr.org/2013/04/three-rules-for-making-a-company-truly-great/ The two tenets of the article are: Do what you do better rather than cheaper and; Increase revenue before initiating cost cutting. Two very interesting "rules" especially when companies are usually run by CFO who see cost reduction as the most effective way of positively impacting the bottom line. The link below is to the site of the Authors. Well worth a vist and read http://thethreerules.com/rules

Europe has been faced with supplier issues in the food chain over horsemeat in beef products.  The same problem, albeit different products has occurred in China. http://www.supplymanagement.com/news/2014/fox-dna-found-in-donkey-meat-products-at-chinese-walmart Whilst many negatives can be taken from such stories, including the original audits of the suppliers and the supply chains in both Europe and China, the positive must surely be about response from the agencies and key supermarkets and the introduction by governments of more stringent procedures. The key point to remember: supplier audits and continuous validation.

Headline "G4S and Serco could pay government £4 million over failures in asylum seeker housing contracts" http://www.supplymanagement.com/news/2014/g4s-and-serco-could-pay-government-ps4-million-over-failures-in-asylum-seeker-housing This appears to be another negative story about G4S and Serco.  However read on..... "negotiations are taking place that could see up to £4 million being paid to the Home Office as a rebate for failure to hit KPI targets" Let's congratulate the Home Office for two things: 1. Setting ambitious targets and making the contractors work for them. 2.  Writing contracts that are sufficient rigour that penalty clauses are effective and that contractors are being held to account. Will the PAC applaud the work of the Home Office? Time will tell. It should not be forgotten that the subject of housing for asylum seekers is a very emotive subject and any contractor that takes on this challenge should be encouraged.  There has bee

We highlighted an excellent, if slightly surprising, story article earlier in the week about the payment times of the UK's Ministry of Defence and how such great performance, if copied across government and the private sector could really help businesses and the U economy. Today's Independent (  http://www.independent.co.uk/news/business/ ) carries 2 stories in very short order detailing developments in the Ministry of Defence's transformation initiatives. The uppermost article (on the Independent's screen)  ( http://www.independent.co.uk/news/business/news/mod-sets-sights-on-serco-and-capita-to-reform-supplies-9051822.html  ) highlights the Secretary of State's intent to build capability within the current defence procurement body, the Defence & Equipment Support organisation, following on from a failed previously initiative. The second article ( http://www.independent.co.uk/news/business/news/mod-in-new-retreat-over-bid-to-enrol-big-business-9047796.htm

The widespread adoption of the VCR coincided with , or some would say resulted in the demise of the cinema.  Many small town cinemas closed and the number of video rental outlets increased.  This interesting article ( http://www.independent.co.uk/news/business/news/cineworld-to-buy-european-cinema-chain-in-500m-deal-9050974.html  ) in the Independent today raises some really interesting questions: 1.  In a world where convenience reigns supreme and a consumer can download a movie on a mobile device or home based entertainment system how come cinemas are big business again? 2.  The tangible form of a movie for personal consumption (i.e. VCR tape or DVD) has reduced significantly and is manifested in the loss of retailers from the high street and much reduced stocking in supermarkets? 3.  In a world where people are perceived to be becoming less tolerant why are we now more willing than in a long time to sit in a cinema next to people constantly eating popcorn and drinking beverage

Political concerns over territorial claims have had a worrying impact on trade and the willingness to trade between countries.  These are no small companies, the countries in question are Japan and China. http://www.telegraph.co.uk/finance/china-business/10560302/Majority-of-Chinese-business-leaders-unwilling-to-trade-with-Japan-amid-tensions.html This national stand off between China and Japan has wider regional ramifications which if escalated could result in other countries taking sides.  A situation no one would want.

Far too often the UK Ministry of Defence is criticised for its procurement practices.  Here is a link  ( http://www.supplymanagement.com/news/2014/defence-minister-hits-back-at-late-payment-claims  )to an article that identifies current levels of payment promptness. An extract of particular interest: "the department paid almost all correctly submitted invoices within 11 days, and more than 90 per cent within five days, during the 2012/13 financial year. Legislation says that it should pay suppliers within 30 days." These figures are incredible and for a government body exceptional.  Private sector companies should take note.  What the government should now do is go that extra mile to ensure that payment terms throughout the country in both public and private sector should be no greater than 30 days. Why? Because this government claims to be a government for business and is relying on the private sector to help pull the country out of recession and establish a positive gro

The last 24 hours has seen a flurry of retailers publish their most recent results and it makes for interesting reading.  If we are to believe the Guardian (  http://www.theguardian.com/business/2014/jan/09/high-street-gloom-retailers-profits-poor-christmas-sales ) then we should expect a slip back into recession; if we take a more measured approach, as provided by the BBC's Robert Peston, then the recent figures illustrate more confidence in the economy but a growing trend for consumers to be more discerning both over product but also over price but also a much greater use of the internet for shopping.  The greater move towards on-line retailing will have significant ramifications for the supply chain. An example of the use of analytics and the spinning of these figures to suit an argument was brought home to me recently when I was enjoying a televised football game over the holiday period.  The game seemed fairly even overall but the commentators claim of one times dominance w

Today's Guardian carries the story of the Nuclear Decommissioning Authority axing the commercial director role ( http://www.theguardian.com/business/2014/jan/09/nuclear-decommissioning-authority-axes-commercial-director-role  ).  The axing of the role follows on from criticism of the body by politicians on the public accounts committee. Lose the role or change the person? usually it is the latter and not the former.  Perhaps if the new structure is more focussed towards the work at Sellafield then this might be a reason, what happens to the other sites? What is really strange is that within the same article is this: "The NDA boss appeared at before the committee alongside Tom Zarges, the boss of the NDA's private sector contractor Nuclear Management Partners (NMP) which has just been controversially reappointed to clean up Sellafield. Clarke insisted that the reappointment was the best way forward even though he admitted NMP had repeatedly failed to meet many of its t

A short article about 3D printing with massive implications. On the positive, costs are significantly reduced and inventory can be massively reduced as parts can be "manufactured" to order. What about airworthiness? Genuine tested parts? http://www.theguardian.com/business/2014/jan/06/fighter-jet-flies-with-3d-printed-parts

Good news for the UK economy, growth in the construction sector but also positive steps in developing the nuclear supply chain. Having been the world leaders in nuclear energy for many years the capability within the UK has dwindled; positive steps like this can help re-establish the UK skills in this sector. http://www.supplymanagement.com/news/2014/nuclear-sector-supply-chain-gets-ps13-million-boost http://www.supplymanagement.com/news/2014/uk-construction-sector-continues-sharp-growth