Up to £2million of goods were recently stolen in a scam by fraudsters posing as McDonalds buyers. Items including laptops, TV’s and computers were targeted with credit periods obtained between 30 and 90 days.

The goods were delivered to an address in Manchester, but were never paid for. Greater Manchester Police Authority issued warnings to businesses to stay on alert as it is thought the fraudsters are now using the same scam to obtain foods, wines and spirits.

The process automation that class-leading, on demand purchase-to-pay systems can offer, coupled with integrated supplier portals, provides a secure platform whereby buyers can effectively manage their supply-chain with the assurance of compliance and control throughout all standard processes including credit checks, finalising terms of business and other legalities.

This does not however protect the supplier, who when receiving a new buyer request from what appears to be a reputable organisation, should still develop that all important supplier/buyer relationship and carry out all their necessary checks.

Although considered the quieter period for some organisations it seems things haven’t slowed down at all for procurement professionals during August and September, or here at Wax Digital. Our blog has been somewhat neglected as a result, but with many topical issues arising from recent events such as eWorld Purchasing & Supply exhibition and with ProcureCon around the corner there will plenty to blog about in forthcoming weeks we’re sure.  

One of the clear themes running throughout eWorld was that of supply chain management, which we covered in our seminar session ‘Wag the dog – managing a long tail of suppliers’.  We have seen a clear upswing in interest around issues such as:

 »        Supplier collaboration

»        Transactional document (order and invoice) exchange

»        Pro-actively monitoring CSR    

»        Insurance verification and tracking    

»        Supplier account maintenance  

which we examined in our session; including the best approach for supplier rationalisation, establishing model trading relationships and how effective supplier empowerment and collaboration can benefit eProcurement processes and compliance right through to huge bottom-line savings. 

If you didn’t get to attend eWorld or catch our session, and this subject is at the fore in your organisation, please feel free to email gateway@waxdigital.com to request a copy or watch this space for more upcoming posts.

Morrisons announced last month that they were opening their own “farming centre of excellence” in a bid to improve their understanding of their suppliers. By creating their own farm in East Ayrshire Morrisons hope to understand the practices, issues and day-to-day work that their large supply-chain faces in order to meet the demands of the leading supermarket.  

This sounds an excellent approach to improving supplier relations and supply chain management, however there are sure to be a few sceptics out there wondering how long it will be before Morrisons begin issuing best practice instructions or changes to current agreements - once they have gained a better working knowledge.  

Improving and maintaining supplier relations is of course essential to any supply-chain, and understanding the issues faced by your suppliers will support this; yet when a leading organisation declares they are ‘having a go’ themselves I’m sure they will be watched by their suppliers intently.

The UK’s major supermarkets have taken a positive stance to prevent poor working conditions through their supply chain by joining forces with the government agency GLA (Gangmasters Licensing Authority).  A recently implemented protocol will ensure that joint inspections of suppliers will be conducted to ensure working standards are upheld and to prevent the exploitation and abuse of workers. Information will be shared, and suppliers face losing major contracts, following unsatisfactory inspections.  

The launch of Tata’s Nano car in India has received attention of the global press for a very good reason. A new car for £1350 (UK equivalent)? Looking at the specification you can perhaps see why. A 623cc engine, top speed of 65mph, No radio, no airbag, no power steering and only one windscreen wiper! 

But it is not just all the extras that have been stripped out, Tata have gone to great lengths to minimise components, use less steel and have taken advantage of low production costs in India.  

By negotiating with suppliers, re-thinking their supply base and design Tata have not only made the Nano profitable, but have managed spend and production so effectively that this is a great spend management message not only to the automotive industry but other manufacturers too.

Supply chain management can be especially difficult when you have a large supplier base and especially with those that are not classified as key suppliers.  

With increasing numbers of organisations going out of business, steps need to be taken to reduce any risk to your supply chain. PricewaterhouseCoopers (PwC) recently issued this warning at a CIPS Central London event that purchasers should be on the look out for struggling vendors. 

The key is to spot a troubled supplier before real problems begin. This can easily be managed within the functionality of your Purchase-to-Pay system by tracking performance, payments, deliverables and discount requests. This should be standard practice in order to monitor SLA’s and contract terms, and again this functionality should be available from your purchasing system.   

In the worst-case-scenario if suppliers do send out the warning signs, always have a supply contingency in place for such eventualities; don’t run the risk of a supplier failure having a direct impact on your organisation’s commercial success.