How to Deliver Realised Cost Savings in 2021

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Do you want to save money?

I pose this question to you not in a rhetorical sense, aiming to spark some sort of deep reflection on the meaning of life and the futility of wealth; but literally: do you want to save money?

 

If so, you’re not alone.

 

Deloitte’s 2020 Chief Procurement Officer (CPO) Flash Survey, exploring Covid-19’s impact on procurement, clearly shows that ‘Cash is King’. (Tell us something we don’t know! But here’s their data anyway…) Over the next 12 months, 66 % of organisations are planning to pursue cost reduction strategies. Cost management is the greatest priority for CPOs right now, commanding eight times more focus in daily operations.

 

(Now for the depressing bit…) With the pandemic and associated economic downturn, organisations are managing extreme risk and supply continuity issues. Many believe that the full effects of the crisis have not even yet been felt, with 70 % planning for a long economic downturn (I warned you. But read on, I promise it gets better.)

 

Deloitte’s data paints a pretty bleak picture. Covid-19 has been the grey cloud hanging over our professional and personal lives now for far too long, but the skies are clearing. These findings clearly show us the urgency that exists for companies to tighten the purse strings. But how? What are these cost reduction strategies? Deloitte don’t tell us; they are an enigma. For consumers however, the answer is usually much clearer.

 

As I write this article’s first draft on the eve of Black Friday, internalising the array of marketing communications targeting me throughout the day, Deloitte’s survey resonated with me. I like to shop, so I am a buyer. But I also like to save money, therefore the goals of the CPOs are aligned with mine. What I have learnt since joining IDDEA, is that there are solutions to cost savings when you are a corporate buyer, they just aren’t as commonplace and overt as consumer solutions.

So, what are they?

 

Realised customer savings

Through my research, I have had insightful conversations and learning experiences with IDDEA’s customers.

 

Below are three insights that really opened my eyes to the value that strategic procurement can deliver:

 

  1. A construction company needed to increase margin while maintaining the market-leading quality of their homes. Our team delivered a procurement strategy, policies, governance model, and a performance dashboard, resulting in reduced costs, and a more robust supply chain.  
  2. ROI: 14% Savings on a multimillion euro spend
  3. A large food retailer wanted to reduce the carbon footprint of their single-use plastics by 70% while avoiding cost increases. We analysed a €13 million spend, 1,200 suppliers, and 1,300 SKUs, with a focus on sustainability goals and cost reduction. 
  4. ROI of €50 for every €1 invested
  5. A leading manufacturer of food ingredients needed to consolidate their waste disposal services. They leveraged the IDDEA full-service tender process, rationalised suppliers, and negotiated improved specifications and supplier performance.  
  6. But I still haven’t clearly answered my own question…what exactly are these cost saving solutions?
  7. I have learnt that every aspect of strategic procurement can deliver value to an organisation. However, most impact and value are achieved when suppliers and buyers can align on ‘what good looks like’ from both perspectives; the vision is united, and the goals are shared. (See, I told you it got better! Read on, there’s more!)
  8. ROI €17 for every €1 invested, with 25% savings

Corporate cost savings solutions

In my experience, cost savings are most realised via optimised tender processes.

 

I’ve been fortunate to learn this from Ingrid (IDDEA CEO) and the team, who have executed over 1,000 full-service tender auctions, managing billions of euro in spend, and saving hundreds of millions in industries such as construction, retail, transport, and manufacturing. Good tender practices deliver real cost-savings for companies – but equally important, support suppliers too. Helping suppliers to be successful is a long-term strategy that delivers benefits for all.

 

I do believe in the strategic and cost savings power of procurement; and recent lessons, such as the COVID-19 PPE and the schools’ sanitiser scandals, have only confirmed my thoughts.

 

You may think, ‘Ah, but I’m in finance. We don’t need to concern ourselves with procurement processes like manufacturing companies do. Sure, we don’t even really procure goods.’

 

But in fact, you do.

 

In our experience with indirect spend, categories like IT (software and hardware), professional services, facilities management, and IP related consulting, are broadly similar across all industries. And if you are a large finance company, then optimising your tender processes for in-direct spend could save you millions! We have seen it, and we have achieved it.

 

Cost savings can be strategic

Tender management is about saving you money, but it is also about ensuring that you get the best value and quality suppliers in alignment with your company objectives.

 

Don’t underestimate the power of a robust tender process in your 2021 strategic plans, and remember to build your company objectives and values into your evaluation and scoring criteria, contracts, and SLAs. We are currently doing this for a company who wish to improve their sustainability performance. By embedding their goals into their tendering processes, we are helping them to achieve their sustainability targets, while in parallel they are achieving innovative, quality suppliers, and cost savings.

 

In our experience, when you begin think about your procurement function holistically and through the lens of your wider organisational goals, then you will achieve true strategic value.

 

I look forward to engaging with you all again in 2021. I know this has been a difficult year for us all, personally and professionally, but I do believe that the storm will clear in 2021. The hope that has kept us warm through this strange, extreme time will prevail and see us through to sweeter times.

How is Procurement Your Company’s Most Strategic Function?

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Part 1:

Try to visualise this scene. Your R&D department has just finalised your new product design. You’re excited! The development from prototype took months. Jeff from procurement happens to walk by.

“Hey, that looks cool.” He picks up your new GPS integrated, smart phone compatible, Spotify connected, ultra slim, fully waterproof fitness watch, and rubs its smooth, sleek finish. “It’s such a shame we’re going to lose the waterproof functionality.”

“What!” You exclaim. “But that’s our core functionality!”

“Really? No-one told us that. Yeah, the supplier of the small silicone O-rings, protecting the watch from the water, has ceased production. We highlighted his company as a risk, but R&D wanted to push on with the spec he designed. We suggested an alternate supplier who was developing a new type of thermoplastic rubber, but we were told we couldn’t wait that long. I think they’re now in partnership with Fast Fitness.”

“How could this have happened! Everything’s ready to go. Our marketing campaign is centred on the waterproof functionality!”

“Hey man don’t ask me; I only work in procurement.”

The evolution of procurement

Sound familiar?

The modern business landscape is dynamic and ever changing. In order to keep the pace, procurement has had to constantly evolve and adapt to these shifting trends. Globalisation, technology, consumer demands, outsourcing, and sustainability, constantly drive change in the business environment. In parallel, procurement has shifted from a function of tactical support to one of a key strategic player.

Modern industries focus more on developing their core capabilities, with 82 % choosing to outsource activities not part of their ‘sweet spot’. The reliance on suppliers has therefore increased exponentially. As the manager of suppliers, procurement has been pivoted into a core strategic role, responsible for sourcing, maintaining, and driving quality suppliers who are innovative, trustworthy, and add value to the company.

The ‘new frontier’ of procurement is the effective management of suppliers, building meaningful, long-lasting relationships that are win-win for both parties. As the critical link between company and supplier, procurement’s strategic role cannot be underestimated.

Strategic procurement is company strategy

In ‘What is the Future of Procurement?’, KPMG (2019) outline that CEOs are looking to the procurement function to adopt a wider set of strategic responsibilities than ever before.

Strategic procurement is built around the needs of the company and supports corporate planning and value systems. In order the company to achieve its long-term goals, corporate, business, and functional levels must have their strategies aligned. This ensures that the vision is united, as everyone is on the same page.

To use a simple example: The Apple brand’s quality design is a core element of the company’s overall strategic plan and unique value proposition. However, if procurement was not aligned with this strategic vision, cheap components could be sourced to achieve cost-savings (which many companies would applaud). However, this is not part of Apple’s long-term goals and would ultimately damage their brand image.

For procurement to be strategic it should:

  1. Be focused on potential risks and opportunities that impact strategic goals.
  2. Be involved in the strategic planning process and be measured in line with these goals.
  3. Be visible, supported, and viewed as an important function in the decision-making process.

Deloitte’s (2018) ‘Global Chief Procurement Officer Survey’ finds that procurement leaders are expanding the role of procurement in the wider supply chain by improving alignment between procurement and business strategies and priorities. Yet, only one in four procurement leaders consider themselves excellent business partners contributing significant strategic value.

The journal of Strategic Change (2016) finds that strategic misalignment results in reduced market share, missed opportunities (often seized by competitors), and lower profit margins.

By including the bargaining power of suppliers as one of his five forces, Porter (1979) laid the foundations for procurement’s strategic role as the key function responsible for conducting market research, identifying supplier opportunities, leveraging negotiations, and correctly managing suppliers.

For long-term strategic goals to be achieved, the procurement function must be included in companies strategic planning processes.

Procurement skills support strategy

Changing perceptions can be a slow and difficult task. The advent of Covid-19 has awakened the world to vulnerabilities inherent within global supply chains, displaying the key strategic role procurement plays in combatting such risks. However, some companies still adhere to the traditional view of procurement as a passive, administrative, cost savings function.

Top management support is vital in driving procurement’s ability to enhance overall company strategy. As procurement operates in a dynamic business environment, management must accommodate for upskilling to allow procurement teams adapt to this rapidly changing landscape.

Yet, Deloitte (2018) finds that 51 % of procurement leaders believe that their current teams do not have sufficient levels of skills and capabilities to deliver on their procurement strategy, with an alarming 72 % of leaders spending less than 2 % of their budgets on training and development.

Companies must change their structures and perceptions to facilitate strategic procurement, otherwise its ability to achieve competitive advantage will never be realised.

 

Written by; Marie Muckley

 

 

Key Brexit Preparations to Ensure your Business’s Resilience

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Key Brexit Preparations to Ensure your Business’s Resilience

As the Brexit deadline looms and with trade negotiations in a state of turbulence, Irish businesses must prepare for the change that lies ahead. From the 1st January 2021, rules for trading with the UK will change.

IDDEA CEO and strategic sourcing specialist, Ingrid De Doncker, recently spoke with Enterprise Ireland about vital Brexit preparations, such as the necessity to “forensically examine your supply chain”.

Whatever the Brexit outcome, your business can be prepared if you act now.

Ingrid explains that “in times of disruption, thinking forward to the different scenarios is the most we can do – we know that the Brexit impact will be severe for Ireland and will not only impact trade, but the whole of society.”

Ingrid shares insights from her interview in the article below, providing trade and industry disruption forecasts, while sharing actionable advice and recommendations to help your business prepare for Brexit.UK “Brexit” Leaves IP Community With Many Questions - Intellectual Property Watch

Brexit trade impacts

Brexit has been a complex journey, and while various outcomes have been explored, it is clear that Ireland will be severely impacted and that the cost of trading will undoubtedly increase. If the negotiations of a future trade agreement cannot be reached before the end of 2020, it would mean that the UK would ‘fall off the cliff’ in 2021, into a hard Brexit scenario.

It matters greatly to the future of Irish trade how chief UK negotiator, Michel Barnier, prepares for the toughest negotiation rounds in the history of the EU. It is clear that trade costs will increase in all scenarios of outcome.

The biggest economic impacts are forecasted to be felt across the agri-food sector, the pharma-chemical sector, the electrical machinery sector, and the wholesale and retail sector.

To give you context, I must highlight how the UK has always been a very strong trading partner for Ireland and Brexit will have a severe impact on Irish businesses operations. The UK is Ireland’s largest source of imported goods, and second largest export market (behind the USA). Ireland is the UK’s 5th largest export market and the 9th largest source of our imported goods.

Our important trade relationship with the UK is clearly evident. In 2019, Ireland had a trade imbalance of £14 Billion with the UK (£38 Billion import, £24 Billion export), so it is impossible to calculate the Brexit impact for Ireland’s GDP, where so many cost criteria are interdependent.

I believe that in this politically and economically unstable environment, where supply chains are interconnected and various scenarios of an agreement are still being considered, the lack of transparency and clarity will create a bullwhip effect that might create a multiplier of costs on costs.

One thing is clear: all products and services will cost more. It is just a question of how much more.

The impact of ‘regulatory divergence’, a clear regulatory break, will have severe impacts on Irish trade. Recent research papers suggest that the long-term impact of Brexit on Ireland’s total import will be a 3 %-8 % reduction, with Irish exports facing a 3 % to 7 % reduction.

If no regulatory divergence occurs between the EU and the UK, Irish goods exported will face additional trade costs of between 4 % to 8 %. If regulatory divergence occurs in the long run, trade costs for Irish goods to the UK may increase by up to 12 % to 32 %.

The importance of supply chain resilience

Whatever the financial impacts may be, it is evident that supply chain impacts will be one of the top Brexit risks for most businesses.

I strongly advised that supply chain leaders forensically examine the trail of any product or service they buy, from farm to fork, and map the links in that chain. For every product, a full supply chain map needs to be created from source to customer.

In reality, this may not be fully possible, but we should do this for the core products and services we buy and also engage with key suppliers for which the survival of our business depends on.

IDDEA’s blog on building supply chain resilience shows you how to do this.

 

Negotiations are likely to pivot around finding the best solution to six main cost areas:

  1. Tariffs: duty may need to be paid on all products.
  2. Large quotas: if Ireland’s quotas for agricultural are not maintained, there will be a significant impact for agricultural trade.
  3. Goods crossing the border: extra costs may apply in cross-border trade.
  4. Land bridge transit: 53% of Irish goods exports are transported via the UK to other destinations. Burdensome processes and administration to transit through the UK to EU will create additional costs and waiting time.
  5. Regulatory divergence: where different regulations exist between EU and UK in areas important to Ireland, such as Beef, Dairy, Processed food, Pharma, Electrical machinery, we will have to handle the costs of complying with two regulatory systems.
  6. Barriers for service trade: as for goods, similar mechanisms would be needed for services to avoid regulatory divergences and excessive trade costs.

Industries where disruptions will be felt most

Different sectors are going to be impacted differently as well. The impact on industries will be felt throughout production and employment. However, this will have a knock-on impact on the rest of the overall economy.

My research points to five industries as key in assessing the overall economic impact of a new trade relationship with the UK after Brexit:

  1. Agri-food – this sector has been long intertwined with the UK and supply chains here have been long established. Agri-food sectors are 80- 100 per cent indigenous firms, and Brexit will be felt more in the rural parts of the country where these sectors dominate.
  2. Pharma-chemicals – the pharmaceutical sector in Ireland is vibrant and has always been a part of a European and global value chain, integrated with the UK via its supply chains. Irrespective of where the products are coming from, a quarter of pharma-chemical material is trucked through the UK. Border inspections, product standards and good manufacturing practices requirements will impact the supply chains in and out of Ireland.
  3. Electrical machinery – the sector comprises computers, radios, televisions and communication equipment, e.g. mobile phones. The impact of disruption will be most felt here by the risk of regulatory divergence and it would impact employment as it is offering attractive salaries.
  4. Wholesale and retail – the sector will face substantial challenges as the UK leaves the EU. The many retail chains operating in Irish and UK markets could be facing new costs both in their supply chain and as a result of diverging regulatory requirements. Equally important, the sector would be negatively impacted by an overall drop in consumer demand resulting from Brexit.
  5. Air transport – this is complicated. Some airlines may lose access to the intra-UK market since the UK would be unlikely to allow EU carriers to operate intra-UK flights without reciprocity from the EU. This is a lose-lose situation.
  6. Financial Services – Dublin is closely connected to the financial sector in the UK and many activities conducted out of Ireland depend on the ability to service clients across Europe from Ireland. Hence, Ireland’s financial sector is dependent on a well-functioning single market for financial services.

While detail is still limited around these issues, companies should not sit on their laurels. I must reiterate the importance of supply chain link analysis and engaging with key strategic suppliers.PREPARE | Geriatrics

 

Prepare, prepare, prepare

 

A lack of detail from negotiations is not an excuse for being underprepared when the potential change is so significant. Procurement can provide a competitive advantage by being proactive in risk identification, mitigation and cost optimisation. We expect underprepared organisations to suffer profitability consequences.

Businesses must take personal responsibility for ensuring their Brexit preparations and supply chain resilience.

By now, you should have identified and assessed your business’ critical risks and created contingency plans. However, if this hasn’t been done, there are still ways to mitigate the impact:

  1. Revisit your business goals and reconfirm your product and services.
  2. Listen to your customers.
  3. Analyse your data and prioritise key suppliers and materials.
  4. Develop full transparency of supply chain links.
  5. Identify and assess all risks and opportunities in your local supply chain and in broadening your supply base.

I believe businesses should use this time wisely, focusing time, money and effort where it matters.

We will shortly see the return of employees to work and the reopening of non-essential retail outlets. Businesses will need to develop new and innovative ways of working, both in your company and with your suppliers, that are compatible with social distancing.

The agile, innovative leadership displayed by businesses during Covid-19 restrictions has prepared us for Brexit and our ‘new normal’. We have proved to ourselves that we can, and will, adapt to change. I believe that opportunities don’t just happen, you create them.

We advise you to turn Brexit into an opportunity by reassessing your operations and examining your supply chain. As Albert Einstein once said: ‘In the midst of every crisis lies great opportunity.’

To prepare for Brexit, please make use of critical resources including:Exploring God's Love

www.prepareforbrexit.com

www.dbei.gov.ie/en/Publications/Brexit-Preparedness-Checklist.html

www.localenterprise.ie/Discover-Business-Supports/Brexit/

Brexit Online Toolkit of IBEC

 

 

Written by Ingrid De Doncker

Reflecting on the Impact of COVID-19 in Ireland. Key Points from RTE’s ‘Open for Business’

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It was a privilege to appear on RTE’s ‘Open for Business’; a mini-series supporting local Irish businesses and consumers on their journey through COVID-19 recovery, helping them adjust to the new normal. At IDDEA, we help customers buy better and I was delighted to have the opportunity to make a contribution and share our expertise. Here are my key takeaways.

To fully appreciate the impact of COVID-19 in Ireland, first and foremost, we need to acknowledge four realities:

 

Distant and multi-layered supply chains are not sustainable. 

  • Over the last 30 years, many organisations made the choice to place manufacturing in low-cost economies. This created a geographic bottleneck. An interdependent global trade system became evident, but long and distant supply chains with various invisible, inflexible links were the results. Globally, we were over reliant on these low-cost manufacturing countries while supply chain links were not always clear. To give you a perspective, China accounts for 28% of global manufacturing output, compared to just 11% in the US. Therefore, over a quarter of the world’s manufacturing demand is dependent on just one country; a true bottleneck.

You need supplier options, and ideally local ones.

  • To cut costs, many businesses implemented lean production. Contextually, this means that inventory of stock was kept low and deliveries were scheduled to arrive just in time. You may now realise how this is problematic if your stock dependency lies with just one country, far away. Contingency of stock, products and supply is core to build a resilient business and, ideally, you want to have alternative suppliers within your control and closer to home.

COVID-19, the largest bullwhip effect of your lifetime. 

  • In these lean, fine-tuned supply chains, any big change in supply or demand has an immediate ripple effect throughout the whole supply chain. We call this the bullwhip effect. This occurs when inaccurate demand predictions, price fluctuations or lack of accurate communication lead to the gap between supply and demand becoming bigger and bigger up the supply chain, resulting in over or under production. In the COVID-19 scenario, the ripple started when China stopped producing and shipping to schedule. It resulted in shortages all over the world, and many invisible links in the chain become apparent and an immediate supply problem to end-consumers occurred.

We are connected and impacted by shared global economic threats.

  • While Ireland imports only around 7% directly from China, we suffered more from the bullwhip effect as we import from other countries who had been severely impacted by the restricted supply chain from China. Overall, as per the CSO, Irish imports were reduced by 23% in the last 3 months, that is 1 in every 4 Euro.

 

What does all this mean for the resilience of Ireland’s businesses?

COVID-19 came on the back of the Brexit disruptions that Irish businesses were already facing. Enterprise Ireland put in place support plans for small businesses to create contingency plans for Brexit impacts. IDDEA has been heavily involved in guiding Brexit contingency strategies for small and medium size businesses. Now local businesses have to deal with COVID-19 and its associated supply chain disruptions. It is a very testing time, but support is out there and ‘Open for Business’ highlights the main supports available.

COVID-19 has been a watershed moment for supply chains throughout the world. It has impacted Ireland greatly as we are an island nation dependent on imported raw materials from countries around the world. The risks associated with single and geographically remote suppliers highlighted the criticality of understanding how supply chains actually work. People now understand how goods and services are delivered to them, how interlinked and how dependent trade has become on world economies. Businesses are a lot more aware of the multiple risks and fragility of all the links in the supply chain.

One example illustrating the impact of this in Ireland was the shortage of PPE. PPE and other healthcare products’ life-saving properties, the importance of their quality, and how and where they’re sourced from, became a national talking-point. Hand sanitisers saw an unforeseen demand and there were few companies in Ireland producing them. PPE products ordered from China were argued to have been of inferior quality. Other industries were impacted as well. Food and drink supply chains, while robust, had to deal with moving their products with reduced air freight, ocean freight and transportation restrictions throughout all the supply chains. Well-known brands were temporarily replaced by alternative products to keep the shelves stacked. Small food producers had to close down due to resource shortages. Things were quite uncertain.

However, out of crisis came opportunity. Within weeks, factories took the decision to restructure their production lines to make hand sanitisers, gowns, masks, gloves. For example, Irish Distillers in Midleton moved from alcohol production to producing sanitising gels. Signage companies started full production on COVID-19 signs for roads and retail. Food retailers opened their kitchens to support the needs of frontline workers and local people. For example, Crust and IZZ Café delivered frequent food boxes to frontline staff in Cork city hospitals.

Businesses have looked at their supply chains and are actively seeking local suppliers or are attempting to shorten their supply chains. Smart, innovative products and services have been fast tracked, and micro, small and medium sized businesses have been the most agile to respond. For example, EcoStraws.ie, a Limerick based company, saw a gap in the market for sustainable PPE equipment and filled this niche with the world’s first plastic free PPE offering. The determination to be resilient, agile and adapt to change is a strength of local businesses that cannot be un derestimated.

 

Our advice

Still faced with so many uncertainties, companies need to take sensible steps to prepare for the effects of the COVID-19 (see our previous blog). A rigorous business approach should focus on managing risk and increase resilience for the short andhttps://iddea.ie/wp-admin/options-general.php?page=imagify long term.

For now:

  • Set up your own rapid response team and write your contingency plan. When you reach critical financial trigger points, kick start your recovery or contingency plan to mitigate the risks.
  • Review your customer base in order to set priorities, based on your sources of income.
  • Review your first tier suppliers, their suppliers (tier 2, tier 3, tier 4 etc.) and ask yourself:
  • Which suppliers are vital for the survival of your business?
  • Where are your critical products made?
  • Do you know the alternative sources and are they real alternatives?
  • Have you full visibility of the core components journey, along the supply chain, from the manufacturer to you?
  • What is the suppliers’ inventory status?
  • Review your product portfolio. If capacity or supply of your core components is reduced, then agree the rules on which products should be prioritised and which customers should be supplied first.
  • Plan to maximize cash flow rather than profits. Keep the ship afloat!
  • Keep communications clear and frequent with your employees, your customers and suppliers. Transparency and honesty is key.

It is an unprecedented time for all business around the world: it is a very scary time for 99% of Irish businesses, the micro to small and medium enterprises sector. For many, thinking inside the box will not provide the right answer. Every industry will have different risks and every business will have their own supply chain challenges . There is not one solution to the myriad of challenges we are all facing.

Focus your attention on your core competencies, your competitive advantage, and re-think your future. The world is changing, your customer will have different needs, your business will need to provide different solutions. Your perspective is key and your authenticity will make the difference in your dealings with your customers and your suppliers.

I have learnt that incredible change happens in your life when you decide to take control of what you do have power over, instead of craving control over what you don’t. Opportunities don’t just happen, you create them. Let’s take control, and together, let’s create a more sustainable future.                                                              written by Ingrid De Doncker, IDDEA

Sustainable Development Goals (SDGs): Business Responsibility & Opportunity

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 What are SDGs?

The 2030 Agenda for Sustainable Development is a shared action plan for peace and prosperity, for people and the planet, now and into the future. More and more often, articles on LinkedIn are headlined with references to ‘the triple bottom line: people, planet and profit’, ‘the circular economy’, ‘sustainability’ and so on. It is important to note that all of these concepts, and their associated beliefs, are deeply rooted in the Agenda for Sustainable Development and its accompanying SDGs.

 

The agenda was adopted by all UN Member States in 2015. At its heart are 17 SDGs which are an urgent call for countries, companies and citizens to come together and work in a global, collaborative partnership for the survival and betterment of our people and planet.

COVID-19 has highlighted the fragility of humanity. Climate change will have far more reaching effects than COVID-19, it’s just moving at a slower, less forceful pace. SDG 13, ‘Climate Action’, will be the SDG I will use as a reference example throughout this blog.

 

How & Why Should My Business Make an SDG Pledge?

Each SDG has responsibilities and actions that can be aligned to your business objectives. These performance targets are actionable indicators that companies can use to build into their business goals. SDGs can be used in business plans for economic recovery post COVID-19. Companies must future proof themselves and integrate sustainable operations; SDGs provide a roadmap to achieving this necessary move to sustainability. At a country level, a reduction in greenhouse gases would be a target in line with SDG 13. However, at a business level, a move towards the circular economy or renewable energy sources would be an example.

 

You must conduct a material assessment of your own business. Who are you and what do you do? A company with large manufacturing sites may deem switching to renewable energy more impactful than a professional service provider with one small office. Look at your operations to find the impact relevant to your business. The SDG actions will help you on this journey, while also providing ideas for business opportunity. EcoStraws.ie, a Limerick based company, saw a gap in the market for sustainable PPE equipment and filled this niche with the world’s first plastic free PPE offering. They distinguished themselves in the market, seized an opportunity for competitive advantage, while still achieving SDG actions. Find what is advantageous for your business and align you chosen SDG to this. Be realistic. SMEs could have huge impacts if they adopted one action alone from SDG goal 13.

 

Case Example: SSE Airtricity & SDG 13 ‘Climate Action’

SSE Airtricity is Ireland’s leading renewable energy provider. Their company goal is to be the leading company and driving force to a net zero carbon world (a highly energy efficient world fully powered by renewable energy). The company has onshore and offshore wind farms to produce renewable energy and they provide electric charge points. When adopting SDG 13, SSE looked at what was most pertinent, relevant and achievable to their business, revised their business plan, and aligned it to the ‘Climate Action’ goal. SSE then formulated their actionable, measurable business goals, aligned with SDG 13, to be achieved by 2030:

 

  1. Cut electricity generated by carbon by 60%
  2. Treble renewable energy output
  3. Help accommodate 10 million electric vehicles

To set their intent and commitment to the goals, SSE linked performance of the goals to executive performance and remuneration, driving action.

The benefits of this SDG are already having a knock-on effect. The drive towards a low carbon economy has resulted in 80 new job opportunities at an Irish wind farm. Partnership opportunities were also availed of with Microsoft. Both companies initiated an innovative low-carbon community engagement project with Collinstown Park Community College in Clondalkin, Dublin. The project is helping the school’s energy efficiency capabilities, which included full LED lighting across campus with the installation of full roof solar panels and batteries. In addition to cost savings, data collection opportunities allowed the school to monitor their energy usage, bridging an educational programme for Transition Year students. This in turn further built awareness on the benefits and importance of sustainability. A similar project with the Laura Lynn Foundation, led to a reduction of over €10,000 per year on their energy bill through educating and empowering the foundation to monitor its energy usage.

 

The altruistic benefits of an SDG pledge are evident with SSE Airtricity. Yet, as seen in the EcoStraws.ie example, SDGs can help spark the flame of business innovation providing competitive advantage.

 

What SDG will your business sign up for?

Remember:

  1. Look at what was is important, relevant and achievable to your business. This is where you can make an impact and achieve buy-in from your employees.
  2. Remember, SDGs are local as well as global. Projects that help your local community are just as vital as large international projects in achieving the goals.
  3. Align your business plan/objectives to your chosen SDG.
  4. Use the SDG indicators/actions to help you achieve your objectives.
  5. Be realistic. We all want to make the world a better place, but let’s do it one step at a time.

 

A Brief SDG Overview with Key Actions/Indicators:

(Please find more detail here)

1.No Poverty; Eradicating poverty, in all its forms, is the greatest global challenge. Extreme poverty must be eradicated for all people, currently measured as living on less than $1.25 a day.

 

2.Zero Hunger

Hunger and undernutrition are on the rise, affecting approximately 1 in 9 people in globally in 2017. A study in 2018 found that figures were similar in Ireland with 1 in 9 children going to bed hungry. Hunger must be ended, with access to adequate, nutritious food ensured to all people, in particular the poor, the vulnerable and infants.

 

3. Good Health and Wellbeing

 

Progress has stalled in addressing major diseases, such as malaria and tuberculosis, with over half the global population not having access to essential health services; treatable disease epidemics in the developing world must end. Women’s death rates during pregnancy and childbirth, in low and middle-income countries, must be addressed (303,000 died in 2015).

4. Quality Education

 

262 million children aged 6 to 17 were not attending school in 2017. All boys and girls must have access to free, equitable and quality primary and secondary education. Technological advances provide opportunities.

5. Gender Equality

 

All forms of discrimination against women and girls must be ended, with the elimination of harmful practices such as child/forced marriage and female genital mutilation. Women must be empowered worldwide.

6. Clean Water and Sanitation

 

785 million people lacked basic drinking water services in 2017. Universal access to safe and affordable drinking water must be ensured globally.

7. Affordable and Clean Energy

 

840 million people worldwide have no access to electricity, with access to clean cooking fuels problematic. Universal access to affordable, reliable and modern energy services must be provided. In Ireland, a 2017 study found an estimated 400,000 households lived in fuel poverty, affecting the most vulnerable in our communities.

8. Decent Work and Economic Growth

 

More progress is needed to increase employment opportunities, particularly for young people; reduce informal employment and the gender pay gap and promote safe and secure working environments to create decent work for all.

9. Industry, Innovation and Infrastructure

 

Quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, would support economic development and human well-being in developing countries. This, in turn, could attract industry and spur industrial development.

10. Reduced Inequalities

 

Empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

11. Sustainable Cities and Communities

 

Action is needed to reduce urban residents breathing poor-quality air and having limited access to transport and open public spaces.

12. Responsible Consumption and Production

 

The over-extraction of resources and the degradation of environmental resources must cease, with policies introduced that improve resource efficiency, reduce waste and mainstream sustainability practices across all sectors of the economy.

13. Climate Action

 

Climate change measures must be integrated into policies, strategies and planning. Education and awareness on climate change impact reduction and risk planning must be encouraged

14. Life Below Water

 

The adverse effects of overfishing, growing ocean acidification due to climate change and worsening coastal pollution must be addressed. Marine pollution, in particular from land based activities, must be reduced.

15. Life on Land

 

Land degradation and biodiversity loss is occurring at an alarming rate. Replanting of forests must be encouraged with the halting of deforestation. Poaching, animal trafficking and invasive (non-native) species spreading must be prevented to ensure animal conservation.

16. Peace, Justice and Strong Institutions

 

All forms of violence and related death rates everywhere must be reduced, with the abuse, exploitation, trafficking and all forms of violence against children ended.

The illicit financial and arms flows of organised crime must be prevented.

17. Partnership for the Goals

 

Strengthen the means of achieving these goals through fair and transparent taxation systems and spending of public funds. Empower developing countries by offering fair loan schemes and repayment systems.

 

A future blog will explore the SDGs that IDDEA have committed to. If your business needs help in aligning strategic processes to any of the 17 SDGs, our sustainability expert Rebecca Byrne, can help you on this journey. Find out more at our company website.

“Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.”

 

Written By; Marie Muckley

Promoting Sustainable and Innovative Procurement Culture: Business Opportunities for Public Partnerships

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What is Innovation Procurement?

Innovation procurement can deliver solutions to challenges of public interest, presenting businesses with opportunities through innovative product response. IDDEA procurement expert, Mary Ryan, provides an overview of the Innovation Procurement Brokers Project, offering valuable first-hand insight.

 

Through her involvement in Procurement Transformation Institute (PTI), Mary has had the pleasure of collaborating on the Innovation Procurement Brokers Project. The project aims to facilitate the procurement of goods and services by strengthening links between public buyers on the demand side, and innovative businesses on the supply side. Public buyers are assisted with identifying their needs and are connected with businesses able to develop innovative solutions providing for their requirements. The project provides increased opportunities for businesses, with guidance provided on public authority needs to bid for tenders.

 

The project is EU funded, where five regional schemes are being piloted in Ireland, Austria, Denmark, Germany, Ireland and Andalusia (Spain). The project will finally operate at European level, facilitating the connection of public buyers and suppliers of innovation.

 

Mary explains that “working with such a diverse group of professionals was very rewarding. All participants brought expertise and experience from their own organisations and countries. PTI is a relatively new organisation in Ireland, and through our collaboration in European projects (Innovation Procurement Brokers, Procure 2 Innovate) we can learn so much from our European counterparts.”

 

Innovation Culture and Sustainability: Sourcing Personal Protective Equipment (PPE)

Mary highlights that encouraging an innovation culture is crucial. “It is important for public buyers to look beyond existing frameworks to fit for purpose, innovative goods, that can offer benefits and improvements on what is currently available. Buyers involved in the Innovation Procurement Brokers project, are searching for an innovative solution as a replacement for an existing or new need. In Ireland, a need was identified for sustainable PPE workwear. This encouraged suppliers to think about innovation and provide sustainable solutions.

 

She continues to explain that, while there are many drivers for innovation, sustainability has become a topic of huge interest. “While interest is building in more sustainable products, buyers in the market have not yet driven the need for suppliers to provide more sustainable product solutions. In the private sector, distributors and agents are beginning to look for innovative products from manufacturers to better match sustainability requests from their end users.”

 

In many cases, an alternative solution for PPE products is already available on European markets. Sustainable clothing and equipment are something relatively new, and alternative solutions are being developed and evolving as the demand from the public and private sector is increasing. There are many examples of such innovation procurement solutions. For example, Denmark is looking at sustainable clothing for hospitals and public procurers in Belgium have written a guide for public purchasers to help them to source socially responsible work wear. As momentum grows in the area of circular and sustainable economies, the opportunities for manufacturers and suppliers to supply innovative solutions are growing.

 

Sourcing Sustainable PPE Suppliers

PTI undertook a number of research techniques to determine the best approach to source suppliers for the need identified by Irish buyers of PPE equipment. Mary explains that “we firstly held workshops to establish what the need and requirements were. I then conducted desk research on suppliers of PPE workwear in Ireland and attended supplier trade events.”

 

Mary outlines how the PTI researched recyclable options which can be applied to PPE at the end of its lifecycle. “Participants in the Innovation Procurement Brokers Project are keen to see improved product sustainability and performance. Through their search for a more sustainable solution, the public authority buyers hope to source products that will reduce carbon footprints in logistics and manufacturing. Furthermore, establishing a system which facilitates repair and recycling of products at the end of life and work towards a more sustainable solution. These measures will help to reduce waste and dependence on unsustainable resources.”

She explains that one challenge encountered was that the level of contamination at the end of life of some PPE products may not allow for them to be recycled, “however buyers are keen to understand all of the information available from the market and learn from the proposed solutions.” Mary details how she has encountered industries in the private sector who have shown great interest in recyclable PPE products.

Mary tells us that “the whole area of sustainability and circularity is a fascinating one. I developed a great understanding of these concepts and the challenges manufacturers face when developing a sustainable yet disposable product. My colleague in IDDEA, Rebecca Byrne, is an specialist in this area and her expertise was invaluable when facilitating workshop for public buyers.”

Key Takeaways

  1. Innovation procurement brokerage can provide increased opportunities for businesses to bid for tenders where they have solutions to public needs.
  2. Public authorities benefit from being connected with potential providers in the market and have access to new product innovations.
  3. By offering sustainable solutions to public problems, all stakeholders, including the environment, can experience value and success.

 

How to Learn More?

The Catalogue of Best Practices was published by the Innovation Procurement Brokers. This shows different approaches taken by partners and what was successful for them; very valuable learning for other buyers.

PTI promotes innovative solutions and is working to increase knowledge and skills in Innovation Procurement. PTI aims to improve competitiveness and the innovative mindset of Irish organisations in Europe. Please find more information here.

The ‘New Normal’ is the Triple Bottom Line: Changing Trends Emerging from COVID-19 Recovery

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In 1859, Charles Darwin’s ground-breaking text, On the Origin of Species, changed the very fabric of scientific knowledge and the way we perceive the natural world. Darwin revealed to the world that ‘it is not the strongest of species that survives, but rather, that which is most adaptable to change.’ A veil had been lifted and a new period of enlightenment began.

Never before, in our modern era, has a lesson from the past held more truth. Recovery from the global COVID-19 pandemic will require the building of businesses and societies that can thrive in the face of continuous change. The lessons businesses are learning during the pandemic are profound; the cost-effective supply chain model revealed its brittle nature, digital business transformation accelerated at lightning speed, innovative agile teams problem solved complex tasks, necessity illustrated what products are truly important, and the planet, in our absence, began to heal. We are living through a turbulent period in history, with climate change, political unrest, and COVID-19 challenging our perceptions of ‘normal’. However, we decide as to whether this can be another era of lifting the veil, of revealing important natural, political, social and business truths to enlighten and improve our ways of life, or, we can revert back to ‘normal’, business as usual, with no lessons learned.

I believe that the veil has been lifted. Today, I hope to give you a look through.

Innovation and Agile Leadership

The current crisis has ignited the spark of innovation often hampered by rigid, bureaucratic structures. The businesses that most aggressively adapted their ways of working have turned the crisis into an opportunity for innovation, solving important social problems. Dyson designed a new ventilator in ten days responding to UK hospital demand, Alibaba built an unmanned store providing essential items for citizens in Wuhan, and Irish spirit distillers are collaborating with the HSE producing alcohol sanitisers for frontline medical workers.

These innovative responses weren’t part of any business plan. Instead, small teams recognised an urgent need, shunned aside unimportant activities, broke rigid bureaucratic structures and adapted their standard operations. This social innovator transformation strengthened both their businesses and society. 47% more business ‘rising stars’ are viewed during periods of turbulence rather than stability, with 89% of ‘sinking ships’ capsizing (Bain, 2020). Agile leadership and innovation appear to be key determining factors in whether businesses sink or swim, while simultaneously brining value to profits and society.

 

Building Resilient Supply Chains: ‘Going Local’

The current pandemic has shown the fragility of global supply chains and the importance of good procurement practices. Market demands for cost competitiveness have put unsustainable pressure on supply chains. This became most evident in the personal protective equipment (PPE) global bottlenecks. The brittle, inflexible, and often obscure nature of these cost-effective supply chains has been laid bare, exposing the need for change.

A Thomas Reuters’ study, on the ‘Impact of COVID-19 on Global Supply Chains’, reveals that 63.5% of businesses foresee nationalism on the supply chain rising. This has important implications for producers and service providers who can avail of this opportunity by offering sustainable, local solutions to businesses who wish to shorten their supply chains. In turn, this will satisfy shifting consumer trends. Euromonitor’s ‘Proudly Local, Going Global’ 2020 megatrend sees consumers valuing home culture and products tailored to local tastes and preferences.

As an open economy, we should avail of our position within the Eurozone and build collaborative relationships with our local European neighbours. As we are an export and import dependant country, cooperative trade relationships within our Eurozone could prove mutually beneficial; export opportunities continue, with supply chains also shortening and strengthen.

Together, businesses and consumers can support local while also availing of the value that they desire. This ‘new buying normal’ can help boost local economies, assist small businesses and start-ups, and add value to the triple bottom line by supporting people, the planet and profits.

 

Technology: The Digital Transformation

COVID-19 has highlighted the importance of digital readiness, allowing businesses to continue operations. Digital technologies are playing a crucial role in keeping our businesses and societies functional and preventing the spread of the virus.

Remote work is redefining consumers daily routines and, as they adapt to life at home longer, drives trends towards ecommerce, home entertainment and new digital experiences. This creates strategic opportunity for businesses across products and services.

Ecommerce and digital marketing must be embraced by businesses if they are to answer to shifting consumer behaviours. L’Oréal responded successfully to the crisis by quickly moving its marketing spending online, seeing e-commerce sales rises of up to 400%. L’Oréal executive, Lumboria Rochet, explains that “we are setting ourselves up for a world where half of the business is e-commerce and 80% of consumer interactions will happen online…In e-commerce, we achieved in eight weeks what would have otherwise taken us three years to do.

B2B buyers are also embracing the digital transformation. Research shows that 70% of B2B buyers believe that virtual sales calls are as effective as in person calls for complex products, with ‘virtual experts’ being presented as new service offerings (Bain, 2020). Digital transformations will be key in building sustained competitive advantage.

Sustainability with Purpose

While researching for this article, I came across an interesting misinterpretation of the Chinese word for ‘crisis’. Many motivational speakers correctly translate the first character as ‘danger’. However, the second logograph does not mean ‘opportunity’, as many believe, instead it translates as ‘a point where things change’, with the derivative being ‘chance, good timing’.

The theme of change is again evident. Now, more than ever before, we have the chance, the good timing, to get things right and recover from this period of danger.

Since the financial crisis of 2008, we have added environmental (climate change, pollution, biodiversity destruction), social (inequality and injustice), and political (Brexit and Trump) crises to our list. We now face the current COVID-19 crisis which has brought us collectively to our knees. Evidently, something is not working. Managing Director of the IMF, Kristalina Georgieva, states that “the best memorial we can build for those who lost their lives to the pandemic is a better, greener, smarter, fairer world.” Realising how past inactions have deepened global inequalities, her proposed ‘Global Reset’, promising mass investment in people, education, society and the planet, again echoes the desire and need for change.

During the pandemic, as humanity halts, nature is healing. COVID-19 is triggering the largest ever annual fall in carbon emissions from burning fossil fuels, heading for an 8% global reduction. Crude oil is close to worthless. The waters of Venice, normally choked with diesel and petrol, are now clear and frequented with dolphins. Lions roam freely on African roads that usually teem with safari jeeps. People in India now see their neighbouring Himalayan mountains for the first time, as the cloak of air pollution lifts.

The call to action is clear. We must embrace this opportunity for a global reset and build a ‘new normal’ where we live in equilibrium with our natural planet.

For too long environmental responsibility has been transferred to the individual citizen and for too long greenwashing has tainted businesses CSR policies. COVID-19 has highlighted humanity’s fragility in the face of nature’s power. We cannot allow climate change to teach us another fatal lesson. The pandemic has also taught us that no one can prosper alone and that collaboration for the common good can be achieved. We must adopt a holistic approach to our businesses, the triple bottom line, and create social, environmental and economic value for all our stakeholders, including our planet.

Ask yourself:

What kind of business do you lead?

What kind of business do you work for?

What kind of business do you buy from?

Is this business promoting the type of ‘new normal’ you want in this world? Or are they inhibiting it?

 

The secret of change is not to focus all of your energy on fighting the old, but on building the new. Together, we can build a stronger, fairer, safer, healthier, planet. Together, we can achieve anything.

 

Written by Marie Muckley

World Environment Day – 5th June

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Today is #WorldEnvironmentDay.  This is a day where across the globe we come together to educate, celebrate  and try to help our ailing planet and each other.  This year has a significant new and urgent narrative as we all try to adapt to Covid 19 and our future beyond it.

Ireland is still in lockdown, and since early March I have not been out of my home village more than twice.  We are a resilient people with a strong sense of community, but like many others my neighbours and I have felt the walls closing in at times.  In the last few weeks I have noticed a positive change -not just in Ireland but across the globe.  The impatient demand to get back to “normal” has faded out and the strongest voices now are calling for a fairer, greener, more sustainable reboot of what we used to have.  We can rebuild a better future out of our current situation, but how do we harness this potential?

Cultural change is one of the hardest things to achieve and we can only start that journey by asking some very hard and complex questions.  Tim O’Reilly has written a truly inspirational blog post asking some of these questions.  At times it is uncomfortable reading, as he asks us to confront deeply held beliefs and concepts not only of the future, but also our past and I highly recommend you to read it not once, but several times.  Each time I go back to the post there is something new or another nuance I missed in the last reading.

https://www.oreilly.com/tim/21stcentury/

I wanted to write a blog today about how to unpack the complexity of “sustainability” and how to begin and move forward on the journey as we’ve helped so many organizations do over the last few years.

I couldn’t. I can quote you facts and figures, best practice and scientific studies about sustainability and climate change. It is a major part of my job and my life and I am proud of it. I couldn’t write that blog because today is different.

Today we join across the globe in the face of huge uncertainty.  Today is the day maybe we can stop for a moment, breathe and see the green new shoots of a future. Today is the day where we need to reflect and ask hard questions of ourselves and honestly answer those questions back.  From there, we take action.

 

Written by; Rebecca Byrne.

Top tips for attending one of the world’s largest private label trade shows; PLMA

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Private Label has grown over the past 25 years, with grocery chains experiencing a significant rise in private label of up to 60% (Oracle, 2019). The objective required of procurement professionals in the retail industry is to ‘buy better’ and compete with discounters. With the uncertainties of post-Brexit, trade tariffs need to be taken into consideration to combat future costs whilst maintaining quality for the consumer. This rapid movement to alternative suppliers will put pressure on food retailers across Ireland to react, as supply base options narrow for the demand on EU suppliers. German discounters like Aldi & Lidl have dramatically improved their offering since first arriving in 1999. With the focus now on local produce and Irish origin the larger retailers are lowering price points as the discounters compete on quality.

 

Last year I flew to Amsterdam to attend one of the largest private label trade shows, PLMA, for my third time. In my role I focus on sourcing private label products for Irish retailers. PLMA is a two-day event, with over 4,000 global exhibitors, from suppliers to manufacturers. It is one of the largest trade shows in Europe after Anuga in Cologne. It caters for both food (fresh, frozen and refrigerated foods, dry grocery and beverages) and non-food products (cosmetics, health & beauty, household and kitchen, auto aftercare, garden and household DIY) and includes suppliers for major retailers and discounters across the world.

 

Over 5,000 visitors and buyers descended on the conference to find new and existing products to compete within the retail industry and engage with potential suppliers. The annual event is important to attend as manufacturers are investing in their companies to be able to provide larger ranges. Teams of product developers and technologists are present, seeking to bring new lines to life to compete in this heavily saturated industry. The opportunities to bring value to your company are plentiful.

 

With the aforementioned rise of discounters in Ireland, neighbouring retailers across the EU have subsequently lowered prices of product to compete but have also expanded their range to include non-food goods. The non-food section increases year on year at PLMA, as there is more of a demand from consumers on retailers to provide a ‘one stop shop’ to include an array of products from clothing, garden and DIY products.

 

Amongst many others, I met Dry-Lock, one of the most impressive stands in the 2019 trade show. Large digital screens were used as walls to display video adverts of the products and how the new ‘magic tube’ technology works. Dry-Lock supply private label nappies to major retailers and have developed a new technology to compete with branded Pampers magic tube technology for more absorption than leading brands. With a very impressive resume of fast tracking to success in just 5 years from first opening their doors they have already established themselves to be serious competitors within private label.

 

 

Health is a major topic with many confectionary and cereal companies making claims of using little or no sugar, only naturally occurring. Alternatives to salt-heavy snacks were substituted for trendy ingredients such as quinoa and kale. Gluten free was also a hot topic in recent years and is in high demand along with the need of multiple allergens to be omitted from factory lines. Ireland’s population has a higher than average percentage of coeliac affected people due the high existence of wheat in the diet.

 

My 5 top tips for PLMA visitors:

  1. Have ideas on what products you are looking to target. There is a room filled with thousands of experts with innovative ideas to assist retailers and businesses to grow their current range.
  2. Navigation is key in PLMA. With over 14 halls the new app is a must for a user-friendly experience. The halls are organised into regions so that each pavilion consists of relevant products of that origin (e.g. Italian includes pasta and sauces etc.).
  3. In preparation for PLMA, once registered it is wise to communicate with current suppliers/agents that may also be in attendance on the day to catch-up and arrange a meeting to discuss product ranges etc.
  4. The majority of exhibitors included products belonging to UK and EU retailers that they cater for. This is a great benchmarking exercise to see how your products measures up across the market.
  5. Preparation is key but keeping an open mind to products is vital. Buyers may identify gaps in your product range increasing your competitive advantage over other retailers

Every year PLMA is held in the month of May. Due to the Covid19 pandemic PLMA has been postponed to December 2020.

 

Maybe I will see you then?

 

Follow the link here to discover more about PLMA: https://www.plmainternational.com/

 

Written by; Suzie Lynch

 

”Prepare To Win”- Full Life-Cycle Tender Management

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The clock slowly ticks towards the end of the game. The score is leaning heavily in their favour, but the players at both sides still power on and push for success. Each play, tactic and technique has been well prepared and planned for the win, everyone pulls together and ultimately the best team wins.

Other than having incredibly skilled players, a playbook is essential to any team’s success. A playbook for tender lifecycle management is as essential to a tender’s success as it is for a team’s. At iDDea we are proud to provide a variety of services within and beyond the procurement arena. In the first of a series delving into our specific expertise, we will look at our proven playbook for tender lifecycle management.

But before we can look at the playbook and what it entails, we must first look at what a “tender” means to us at iDDea. The word “tender” on its own is a homonym, which means it is a word that contains multiple meanings: think of bat, or matter, or pen. Imagine swinging a baseball bat at some fruit bats. The words make total sense in their context, but on its own, ‘bat’ can mean any number of things. Tender is the exact same. If you search for the meaning of the word “tender”, you can find a plethora of definitions. So, we already have a mountain to climb in relation to understanding what it means. However, since you’ve come to iDDea, it is reasonable to assume that you have some understanding of what a tender, in the context of what we are discussing means, so we already have climbed some of that mountain.

In the procurement business, ‘tender’ usually refers to the method through which businesses invite bids for a large project. At iDDea, the term ‘tender’ covers the wide range of stages and processes from the beginning of the tender, with the tender brief of what we are trying to achieve and assembling of the responsible team up until the final award of business. Other stages include the data requirement baseline, as well as market engagement, which involves testing the market to identify whether it is the right time to go into the marketplace as well as other factors, like the actions being taken by competitors. The tender also involves the drafting of the ‘fit for purpose’ specification documents, wherein time is carefully spent developing and including all documents that are necessary for the suppliers to be able to submit a commercial proposal, and the publishing of the e-tender, the post e-tender review and the blended decision matrix.

Now that we have established what the tender is and what it involves: what about the playbook for tender lifecycle management? In our playbook, there are various different aspects needed to ensure a successful tender. In each of these aspects, we place an emphasis on efficiency, effectiveness, prioritisation, transparency and interdependency.

The Tender Brief:

This is where we detail the specifics of the tender. It is important to us at iDDea that we engage with our stakeholders early in the tender process so that we fully understand the scope of their needs for the tender. What do they want to achieve? These wants and needs, the objectives and intended outcomes of the tender are made clear in the tender brief. The strategy for the tender is also established in the tender brief, which should be thorough, detailed and clear. Furthermore, we would ensure that we understand the assumptions and the risks as well and we agree the measures for success.

Lean e-Tender Process:

A key step in managing the tender lifecycle is to ensure an efficient and streamlined e-tender process. At iDDea we place an emphasis on efficiency throughout the tender journey, because we believe that an efficient tender is a successful one. In our playbook of tender lifecycle management, efficiency is kept at the forefront, so that all resources are used in the best way, and no time is wasted because tasks are clear and performed without delay. The e-tender process involves several steps. The first is supplier sourcing. We ask our customers what initial criteria are important to them in the search for suppliers, so we take care to find as many suitable suppliers as possible for a given tender. We use different channels to ensure we have a broad network of suppliers in the given market. This translates into questions in an RFI – Request for Information, where we contact potential suppliers, making an enquiry regarding the products they provide, to clarify if they are suitable to our customer to be included in our tender. Following this, once we have clarified that the supplier does provide what we are looking for, we ask the potential suppliers to provide a quotation or a proposal. The next step is supplier onboarding, which refers to the getting all the relevant information from the company as a supplier for the tender and also to train them into the rules around how to submit a compliant tender. This involves collecting all valid documentation and data and ensuring that the prospective supplier is reliable and in line with laws and regulations. The e-tender documents, that have been drafted in collaboration with our customers, are then send out to the qualified suppliers and we ensure the tender format best suits the specific tender.

RACI & Timelines:

Throughout the lifecycle of a tender, we at iDDea know that it is important to have the right people in the right places. As part of our playbook for tender lifecycle management, we make sure that each person’s role and time required of them is carefully mapped out, as well as the resources required to carry out each task. When deciding on the people responsible for tasks in a project, we think it is important to follow RACI:

R – Responsible – this is the person who is responsible for carrying out the task.

A – Accountable – this is the person who is ultimately accountable for the task. They are usually a step above the Responsible person and can help guide them.

C – Consulted – this is the person who those carrying out the task gets feedback from on how to carry out the activity

I – Informed – the person who needs to know what decisions and actions are taken

 

At iDDea we believe there should be a clear chain of command when carrying out tasks, similar to managing any project. This way, everyone has someone they can turn to for help and in the rare occasion something goes wrong, the person responsible is clear.

Supporting our stepped through process flow for assigning each person their roles, we also have clearly established timelines, so that the trajectory of each project is clear. This allows us to keep track of the progress of a project and make sure it is being carried out on schedule. In establishing these timelines, we focus on prioritisation. In doing this, we make sure that each task is dealt with when it is necessary. This means that we waste no time on tasks that do not need to be completed yet, while also ensuring that the important tasks are dealt with in a timely manner.

Additionally, by planning out timelines, we are able to manage any future risks. We implement a Risk Register, wherein we identify possible risks and pre-emptively take actions to respond to these risks. We also employ risk mitigation to reduce the possibility of risks arising throughout the tender lifecycle. We ensure, then, that risks are all identified and tracked to make sure that they do not hinder the tender lifecycle.

Team Management:

The RACI step outlined above also involves assigning the right people to the right teams. Once they have been assigned to their teams, it is important that these teams are all managed effectively so that their tasks are performed on time and performed well. Effective team management involves teamwork and communication among the team, as well as objective tracking and performance appraisals. We believe that a team will work best when their goals are clear and every member of the team know very definitely what roles they are to perform, as well as the pace the other team members are working at.

Effective team management involves effective engagement not only with internal stakeholders, like those involved in the project and [the businesses] but the external supply base as well. Throughout our proven playbook for tender lifecycle management we place emphasis on interdependency and knowledge share, and this is especially true when it comes to team management. We believe interdependency to be significant to the success of a tender because it is important for us to acknowledge that we need the input of all parties involved in the tender to make sure that it is successful, especially our internal stakeholders and external supply base, without whom the tender would not be possible. Thus, we become the translators of the needs of our internal customers and engage the suppliers in a given market to provide us with sustainable options and solutions. We again translate the options out of the market in to the blended decision matrix to obtain the optimum decision for our internal customer where evaluation criteria such as price, quality, service, account management and sustainability are intertwined to get the best possible outcome.

Results Reporting:

For a successfully managed tender, it is essential for frequent and clear reports of progress and results. At the earlier stages of the tender, like supplier sourcing, we make sure to document every step and report to fellow members of the team responsible. When it comes to results reporting, and in all of tender lifecycle management, we ensure transparency to make sure that our clients are clear on every step we take and why we take it. Further, we keep detailed records of each step of each tender stage, so that our clients can track every move being made and what the outcome was.

If we have not focused enough in our previous paragraphs on communication, reporting is all about appropriate communication. In strategic sourcing, fit for purpose communication is critical for the success of any negotiation and we will dedicate another blog only on the topic of the value of communication in life-cycle tender management.

 

Now that we have outlined our playbook for you, you too can go forth and climb mountains, win games. Have successful tenders.