8 September 2011 | Rebecca Ellinor
Last month, we caught up with Faisal Islam, economics editor of Channel 4 News and 2011 CIPS Conference chairman, for his take on everything from the current financial crisis to attracting graduates to the profession. Here's what he told us…
Global economic outlook
It’s amazing how much rosier things were looking just two months ago. Now, all bets are off. The US economy has slowed and there’s some evidence the eurozone economy has too, partly as a result of the debt deals.
Right now, there’s a febrile atmosphere in stock and credit markets reminiscent of 2008. Business confidence, which had perked up over the past year or two, seems to have fallen quite substantially and there are question marks about economic policy in all the major economies of the world.
The world’s great central banks are trying to work out how to boost economies, while countries like Switzerland and Japan are enacting moves to reduce the value of their currency to increase exports. This will become an issue in the US and eurozone, too, and there’s a growing possibility there will be a massive policy error that results in something like a full-on currency war or trade barriers. The world’s economic diplomats have, so far, quite skilfully avoided this.
Procurement’s role in the world economy
The impact of just-in-time delivery and procurement on transmitting global economic shocks around the world is quite remarkable.
Shifts in economic temperature are spreading far more quickly as a result of super-fast procurement that’s sensitive to changes in demand – its impact is quite profound. You saw that in Japan: suddenly you have this knock-on effect globally that few could have predicted.
Furthermore, high oil/energy prices are causing a structural shift in supply chains. When I interview business leaders, they all describe the incentive to move supply much closer to demand, partly driven by the high cost of transportation. You would assume being able to produce something at its lowest possible cost would win out, but it’s changing and it’s changing because of the oil price.
UK manufacturing
There’s a lot of gloom about this, but there’s some remarkable manufacturing done in Britain. There’s a mini renaissance that must be largely driven by the 25 per cent fall in the pound four years ago. However, when I visit these places I’m struck by how few jobs it’s creating. They are very mechanised, which is obviously more productive, but not tremendous news in terms of employment.
Things are on a totally different scale in Germany. They have taken a classic strategic position – supplying the manufacturers – so they’re high up the value chain. And the engineering is truly
world-beating. Last time I looked, it was absolutely booming, sucking in labour from all around Europe to service growing markets in Asia.
Europe’s debt crisis
Even in a time of macro-economic crisis, you’ll get amazing businesses doing amazing things in Greece, Portugal and Spain, and because the value of the euro has been forced down, it makes them quite competitive. There are tons of incredible companies in some of the crisis-hit countries that will have been completely unaffected and might even benefit because they’ll have access to ever-wider pools of labour and workers.
I can’t see any reason for caution as a result of the crisis when dealing with suppliers in those countries. The only people that should be careful are those that lend money to their governments and banking systems.
Economics and David Cameron’s ‘Big Society’
In part, it’s clever politics in that it seeks to make a virtue out of a necessity, which is that the state is not going to supply the raft of services it used to anymore. There is an opportunity for business to step in and do more, whether it be helping with excess stock, spare logistics capacity, and so on. Applying an entrepreneurial, imaginative way of thinking and adding a social element to a business process is the right way to consider this.
Attracting graduates to procurement
A big issue for young people is the debt they’re getting into to get educated. Clever sponsorship programmes, bursaries and sponsorship of tuition fees are all ways that professions with fewer young people applying to can get to the forefront of everything because there’s a bunch of smart students out there looking for these opportunities.
Winning recognition and awards
You’re never going to get recognition if that’s all you’re aiming for. If you really enjoy your job, pursue it with flair and originality, and aren’t just a cog in the system, but try to shake things and apply a different perspective, you’re much more likely to have an impact and get noticed. I won awards because I really enjoy economics and explaining it.
You’ve got to be willing to take some risks as well. Too many people in British corporate culture don’t want to take the sorts of risks you see taken in the US. They worry about failing, but it’s only by doing that that you get anywhere. It means you’re trying quite hard to do something different.
• The morning keynote speaker at the conference will be UK government CPO John Collington.
Read our recent interview with him.
• Sam De Silva, partner at Manches, is holding an afternoon presentation on public sector
procurement of technology. Click here to read his piece about negotiating intellectual property clauses.
• Get Ed Worthington’s take on stakeholder engagement. The senior procurement manager for Virgin Holidays is running an afternoon session on how to create and develop a procurement strategy.
Creating value, generating growth
With expert speakers, professional guidance and abundant opportunities for networking, this year's CIPS Conference and Exhibition is an event not to be missed.
The procurement and supply chain event of the year takes place once again next month and examines how to create value and generate growth.
The CIPS Conference and Exhibition 2011 will be held at Kings Place in London on 6 October.
Attendance is essential for those who want to hear the latest thinking from professionals in the private and public sector, as well as experts on SRM, law and achieving cultural change.
Speakers include Apple’s European head of corporate procurement Adrian Turner, Ed Worthington from Virgin Holidays, the UK government’s first CPO John Collington and a CIPS/SM awards procurement professional of the year, Ian Bolger from Thames Water.
The afternoon keynote will be delivered by Ellis Watson, former CEO of Simon Cowell’s TV and music empire Syco Entertainment, and the chairman will be Channel 4 News’ economics editor Faisal Islam.
Held in association with headline sponsor MasterCard, the conference will examine procurement’s role in driving economic growth and effective change management. It also includes
a focus on career development and gives buyers a chance to network.
SM will be providing live updates throughout the event on www.supplymanagement.com and you can follow the day’s action and interact on Twitter using the #cipsconf hashtag.
Click here to download the programme [PDF document]
☛ Visit www.cipsannualconference.com to find out more and reserve your place
